A new report from the Institute for Public Policy Research (IPPR) warns that the United Kingdom is on a concerning trajectory toward achieving its lowest-ever benefit levels by 2030.

The IPPR report sheds light on the alarming decline in social security support over the past half-century, urging a renewed sense of purpose for the country’s welfare system.

In 1971, out-of-work benefits accounted for 20.1 percent of a man’s weekly median pay. However, this figure is predicted to plummet to just 11.2 percent by the end of the decade, even when factoring in optimistic assumptions about government policies related to the cost of living.

The consequences of this dwindling social safety net are well-documented, with rising poverty rates, compromised educational outcomes for children, and increased costs for the state due to deteriorating physical and mental health among the population.

What does this mean?

The IPPR report underscores that low benefit levels pose substantial obstacles to individuals seeking employment, securing more working hours, or accessing better job opportunities. The cognitive strain of poverty, combined with the expenses associated with finding and starting work, including childcare costs, significantly hinders the transition to employment.

A key issue highlighted in the report is that Universal Credit payment levels do not align with the actual cost of living. Recent efforts to evaluate benefits based on essential living expenses reveal a substantial gap in support.

IPPR’s analysis reveals that, on average, the shortfall between benefit payments and the necessary expenses for basic living stands at £29 per week for a single person, rising to £78 for those facing typical housing shortfalls and potential deductions.

In response to these concerning trends, IPPR is calling for a bipartisan approach to redefine the role and purpose of social security. This initiative includes establishing a new independent statutory body for social security, akin to the Low Pay Commission, the Climate Change Committee, and public sector pay review bodies.

The envisioned objectives of this initiative are:

  1. Publishing an annual report to evaluate progress and hold the government accountable for agreed-upon commitments.
  2. Monitoring the potential impact of changes in benefit rates on labor market participation and social security caseloads.
  3. Advising on responsive interventions in cases of sharp increases in living costs.

Henry Parkes, Principal Research Fellow at IPPR, expressed his views, saying, “Benefits should provide enough to live on but they have never actually been calculated in relation to the costs people face day to day. This has only been made worse by policies like the benefits cap, the two-child limit, and a sharp reduction in support with housing. It’s time to rethink the role of our social security system. At the moment, it’s not providing enough for families to survive, and that is bringing further costs to us as a society and economy.”

Melanie Wilkes, Associate Director for Work and the Welfare State at IPPR, emphasised the urgency of the situation, stating:

“Universal Credit could offer a crucial lifeline to households who are struggling on low incomes. But it is completely out of sync with the costs families are facing and, as a result, is failing to protect many from poverty. We need politicians to move from debates about social security grounded in outdated stereotypes and misperceptions, towards a shared long-term ambition for the purpose and shape of our social security system.”

The IPPR’s report serves as a stark warning about the future of the UK’s social security system and urges a unified effort to address the impending crisis.

 

 

 

 

Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.