One might assume poverty is a condition that exclusively affects those living in developing or third-world countries; however, a life blighted by poverty is an everyday reality for thousands of people in the UK. Below we look at some key indicators on poverty in the UK in a bid to understand the current situation, and we consider how some charities are channelling their entrepreneurial spirit to alleviate poverty on a local and national scale.
How Many Are in Poverty in the UK?
The question of measuring poverty in the UK is inherently difficult due to there being no unified definition. Most studies, including those used by the government, use disposable household income as the principal means of measuring poverty. One briefing from the House of Commons (titled: Poverty in the UK) used relative low income – “household with income below 60% of the median in that year” – and absolute low income – “households with income below 60% of (inflation-adjusted) median income in some base year, usually 2010/11” – as a measurement of poverty. Using these parameters, the House of Commons found that in the 2016/2017 financial year, 10.4 million people were in relative low income and 8.9 million were in absolute low income. Both figures are taken before housing costs are deducted.
The briefing states:
“Over the longer-term, there has been a reduction in poverty rates since the late 1990s for children, pensioners and working-age parents, although the likelihood of being in relative low income has increased for working-age adults without dependent children.”
However, predictions from the Institute of Fiscal Studies indicate the “proportion of children in relative low income will increase sharply between 2015/16 and 2021/22, assuming no change in government policy.”
Newly released analysis from the Social Metrics Commission, who use new calculations for poverty measurement, puts the number of people in poverty in the UK at “14 million, including 4.5 million children”, or just under a quarter of the population.
How is the Government Tackling Poverty?
The Social Metrics Commission’s analysis indicates a strong connection between workless parents and families living in poverty. To combat this, the Conservative government has created an environment in which businesses can thrive, resulting in unemployment being at its lowest level since 1975. Thanks to tax cuts and changes to benefits, incentives for working are encouraging more people to seek jobs. Similarly, increases in tax-free income allowances (up from just over £4,000 in 2000/01 to almost £12,000 in 2018/19) give those on the lowest rung of the employment ladder more money each year.
According to reports, another way in which the government is alleviating poverty is by using particular measurement parameters, thereby changing the definition. The aforementioned House of Commons briefing, titled “Poverty in the UK”, noted that income-based measures of poverty have long been criticised for ignoring the root causes. Similarly, the briefing highlighted how “The Welfare Reform and Work Act 2016 removed four child poverty targets previously set out in the Child Poverty Act 2010”.
Poverty Alleviation: Innovations and Strategies
Innovation is ubiquitous in business, but the same cannot often be said for charity. However, organisations like Action Hunger are challenging this conception. Action Hunger has created a vending machine that is exclusively for homeless people. The charity issues cards to homeless people who can then use the card for three transactions a day from the vending machine, located in Nottingham. The programme offers a lifeline to those in severe poverty by providing fresh fruit, water, and sandwiches as well as essential items like sanitary towels, toothbrushes and antibacterial lotion. Products are donated to Action Hunger or offered by redistribution organisations; Action Hunger then stocks the vending machine.
Unlike many other homeless charities, Action Hunger’s vending machines offer a 24-hour, 365-day service. The cost of maintaining and restocking the vending machine is relatively low, meaning the scheme could easily be transferred to other locations around the UK for a short-term poverty solution.
Sheffield Money was another innovator tackling poverty by offering an alternative to the high-interest rate payday lenders. The local council created the lender and integrated debt advice into the scheme, thereby advising and educating residents in personal finances.
The final innovator on our list is the Live and Work scheme, based in the West Midlands, which makes use of the Empty Homes Community Grant Programme to provide subsidised accommodation to apprentices and those in graduate positions. Launched in 2015, Live and Work renovated empty properties and now offers accommodation to 32 people at the cost of just £42 per week, along with support staff.
Do you have any examples of innovation in the charity sector? If so, post below!
In these financially tough times, charities need innovators to create inventive solutions to those daily social issues that affect people’s lives. Find out how you can hone your innovative and creative ideas with a business qualification by contacting our course advisors.