The effects of such dwindling social security levels are rising poverty, poorer educational outcomes for children, and further additional costs to the state through issues such as worsening physical and mental health. Evidence also shows how low benefits make it harder for people to find work, get more hours or better work, and ultimately get off benefits. The cognitive impact of poverty, alongside the costs of finding and starting work, including childcare costs, make entering employment much harder. The IPPR analysis highlights that a fundamental issue with universal credit is that payment levels are not grounded in living costs so that:
- the gap between benefit payments and the actual cost of covering the basics is £35 a week for a single person
- this gap rising to £84 for someone with added typical housing shortfall and potential deductions.
IPPR calls for politicians to come together and establish a shared goal for the future role and purpose of social security. This should involve setting a cross-party mission and creating a new independent statutory body for social security, along the lines of the Low Pay Commission, the Climate Change Committee and public sector pay review bodies. The aim would be to break away from short-term debates over specific levels and unlock a long-term focus on the role of universal credit in tackling poverty. The new committee would have the power to:
- publish an annual report to review progress and hold the government to account on agreed commitments
- monitor any impacts of changes in rates on labour market participation and social security caseloads
- advise on potential responsive interventions in the event of sharp increases in living costs
Henry Parkes, principal research fellow at IPPR, said: “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 is 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.” For more information see Towards real social security: Embedding a long-term approach to universal credit available from ippr.org.