Is our social security system universally challenged?

Wednesday 21st April 2021 by Emma Baker
blocks falling down with one saying new normal

Is now the time to start to think about a more universal approach to social security? Emma Baker, a Consultant in our London office, summarises how Covid-19 presents an opportunity for change. Emma is currently studying for a Masters in International Social and Public Policy at the London School of Economics and Political Science part time and this blog is a summary of some of her work.  

The roadmap out of lockdown has found us tentatively and cautiously beginning to think about a world post-Covid-19. But that then begs the question: What should the ‘new normal’ look like? With all the talk of #BuildBackBetter and #BuildBackFairer, now is the time for lasting, long-term changes to our social security system. 

Covid-19 has shone a light on the existing issues with our social security system, highlighting the need for change. Income inequalities have been exacerbated and those who were already in financially disadvantaged situations have felt the consequences the most. The UK had been experiencing decades of low-income growth and the last 20 years have seen average incomes remain stagnant. A shocking one fifth of people in the UK were living in poverty in 2019/20. As seen in the graph below, the average income of the poorest fifth of people in the UK fell by 3.8% per year on average between financial year ending (FYE) 2017 and FYE 2020.  

Since the start of the pandemic, we have seen high-profile campaigns pointing out the urgent need for support. Marcus Rashford’s recent campaign calling for the extension of Free School Meals to low-income families highlights a change in public attitudes around supporting equalitypromoting initiatives. The impacts of this campaign have been felt by many and are estimated to have reached an additional 1.5 million children aged seven to sixteen, providing a vital lifeline to many families across the UK. 

All of this is occurring at a time when a greater proportion of the UK population believe that benefits are too low. Stigma around receiving benefits remains high in the UK, with recent data published by Welfare at a Social Distance showing 27% of those eligible did not apply for Universal Credit due to stigma. Despite fears about perception, there seems be a positive trend showing a reduction in benefits stigma. YouGov polling finds that since 2014, a higher proportion of UK residents feel benefits are too low while a lower proportion feel they are too high. As you can see from the graph below, belief that benefits are too low have increased since the beginning of the pandemic lockdowns in April 2020.

The combination of Covid-19 necessitating innovative policy approaches combined with shifting public attitudes supporting a more generous social security system provides an exciting opportunity for change.  

A disruption to the status quo  

There have been some positive developments in terms of social security during the pandemic that offer glimmers of hope. Although these are generally reactionary rather than proactively implemented, support has been improved during this difficult time. The following initiatives offer a blueprint for future policy 

  • Most notably for many employers and employees: the introduction of the Coronavirus Job Retention Scheme. As of 15 March 2021, a total of 11.4 million people in the UK had accessed the scheme.   
  • For those that are self-employed, the abolition of the ‘Minimum Income Floor for self-employed people seeking support may be the most noteworthy.  
  • Lastly, and to many a vital lifeline, is the blanket £20 weekly increase in Universal Credit payments during the pandemic. The decision to cut the Universal Credit uplift in the autumn is estimated to pull 500,000 people, including 200,000 children, into poverty by winter.  

The need for a more comprehensive system  

While the course of the pandemic has meant more people have found themselves in unstable employment, out of work, struggling to pay their bills and sinking into increasing levels of debt, this should have no impact on the help they receive from our government.  

While Covid-19 has now meant that more people are accessing Universal Credit it has also shone a light on the current inadequacy of Universal Credit. Regardless of the circumstances leading to applying to Universal Credit and the frequency of claims, the payment received should be adequate. The fact the £20 uplift was introduced in itself illustrates the inadequacy of the system.  

So, while these new measures are welcome, they should now inspire better social security to be the norm. This is also highlighted in a current widespread campaign, Keep The Lifeline, calling on the government to maintain the £20 Universal Credit uplift long term. The graph below shows us the need for this, with the UK falling behind the OECD average in terms of proportion of benefits received compared to previous earnings in employment 6 months after being made unemployed.  

springboard for long-lasting change  

During and following times of uncertainty and upheaval have historically been times when significant changes have been made. Just look at the ‘Golden Years’ of social security which were a direct outcome and response to the effects of the world wars.  

This moment of global crisis (economic, health, social) is the time to properly address the root causes of these issues. Covid-19 has seen countries implement the most significant and widespread public health and economic interventions in modern history and now we need to think how we can build on innovative policies for the future. Many options have been suggested to address the current crisis and create a welfare system which truly addresses need and these proposed solutions and suggestions range from the more conservative to the more radicalWe need to ensure the system works for everyone, whether in-work or out of work. Suggestions include:  

  1. For those in work this could be a Minimum Income Guarantee. Most poverty remains in-work poverty illustrating the need for more sustainable incomes, including wages which cover living expenses.  
  2. For those in and out of work, this could be Universal Basic Income (UBI). Income replacement is important for those who do find themselves out of work or jobless. UBI has gained traction in the public domain in recent years with many seeing it an increasingly viable option, particularly in the Global North.  
  3. There is also a need for services to be available and accessible for everyone, including those on lower incomes. Universal Basic Services calls for the provision of comprehensive public services, accessed because of need not the ability to pay[1]. The NHS is a symbol of national pride in the UK, but this begs the question: why healthcare and not other key services?  

Now more than ever, we need to push for values-driven, person-centred and dignified social security system which aims to reduce stigma and promote equality. 

Emma is a Consultant at Rocket Science based in our London office.  You can check out her profile here.