Our social insecurity system

And benefits have already been trailing where they need to be. Since the last budget in Spring, the price of surviving has skyrocketed compared to incomes. As an example between August this year and last the price of milk increased by 44% but most benefit payments are up just 3%. This leaves household incomes well behind basic supplies. Critically, benefit uprates must be linked to the impact people are feeling on their outgoings and meeting their needs, not a different proxy.

Social security: value in decline

In fact, those in receipt of benefits have long been a political target for economic decisions. Until the Covid-19 crisis led to a temporary policy reversal, Local Housing Allowance had been frozen since 2016, meaning households on housing benefit couldn’t even cover the lowest third of rents.

All in all, it means the value of benefits has steadily been in decline and are currently among the lowest in OECD countries. This latest announcement will push those most in need of an income increase into deeper insecurity. We should all resist it and demand more from our social security.

Because, really, this is just one example of a wider shift towards an insecure support system for those most in need of stability. People are left uncertain about their future as a result of ever-changing benefits goalposts – moved by Conservative governments eight times in the last 13 years – and of what they can expect as growth in their social security.

This uncertainty extends to people’s personal circumstances. The conditionality of our system is designed as a mechanism to reduce or remove income if people aren’t deemed to have participated in things like finding work. These mechanisms have become significantly stricter this year alone, with changes to reduce people’s choices in the work they take on and the hours they take on without repercussion.

There is limited evidence that income restrictions like conditionality improve employment outcomes for this group. Limiting incomes in the face of high inflation is another approach which is likely to have similarly limited success. Many on Universal Credit, for example, are already in work or looking for work and so there is a role for employers to support new and good work rather than pushing responsibility onto claimants. RSA research finds that already 63% of young people in full-time work experience precarity, this needs to change.

Improving economic security: effective, lasting, and necessary fixes

Some changes can be made today, and within the current system, that could improve people’s security in the short term. A commitment to inflation-based benefit uprates as a minimum would be one way to support people to know what’s coming down the road. We support the campaign from a number of charities, including JRF, Turn2Us, Action for Children and more in calling for this.

Meanwhile, a reduction in the ineffective conditionality measures – which can leave people without income for months or years on end – should also be reviewed to ensure people don’t feel threatened by the system designed to support them.

And for those moving onto benefits, reductions in wait times and the codified five-week wait for a first Universal Credit payment would help to ensure those experiencing volatility are stabilised and supported by our systems.

But there are limits to what a system this clearly defined by paucity can achieve. Genuine security will only be delivered when people are supported by an income they can genuinely live on and which they know will support them now and in the future. There are lots of ways this might happen. In a partnership funded by the Wellcome Trust, this year we published research which outlines how a universal basic income might offer an alternative to our current approach.

In conversations with young people as part of this research, we heard how such a system could positively impact their financial lives as well as the type and amount of work they engage in, their ability to focus on studies, see their friends and an overall impact on their wellbeing and stress.

Some designs of a UBI could be fiscally neutral, but if we challenged ourselves to invest in the support we offer people and grow the system to one which guaranteed a minimum income standard, the impact on poverty, destitution and mental health would be unprecedented.

Regardless of the mechanism, whatever comes next for our social security system needs to make a step change from the system we have now, towards one where people’s basic needs are met and people are enabled to live well.