A blog post by
Director of Policy & Research
This is not just a health crisis we face. It is also an economic one. The necessary measures we’re all taking to prevent the spread of coronavirus have caused an economic shock that, early signs show, has led to a steep increase in unemployment and drop in incomes.
In response, and to the government’s great credit, a series of measures have been brought in at significant speed and scale. The Coronavirus Jobs Retention scheme aims to keep companies running and people employed and paid. Universal Credit has been strengthened with more money in the standard rate, alongside an increase in the Local Housing Allowance.
National governments with devolved powers are also bringing in extra protection, most notably £45 million has been put into the Scottish Welfare Fund so that local councils can get money to those that need it most.
But is all this enough? Whether this extra support is sufficient to anchor us from poverty is of great importance to us all, but not least to people who may need a food bank.
Food banks are facing significant challenges. Many of their volunteers are older and must be shielded, and teams are having to transform the way they work in order to continue providing emergency food safely. Through it all food banks need a supply of suitable food. We’ve seen an outpouring of public generosity – businesses and individuals have stepped up to support, volunteers and staff are showing characteristic versatility and courage. But even with all this support, there is a limit to the number of people food banks can help.
We’ve seen a million people apply for Universal Credit over the past few weeks. Inside the Department for Work & Pensions, thousands of civil servants have been redeployed to process all these new claims. Just as we expect our National Health Service to be there to support us with the health crisis we face, our benefits system must likewise be ready to mitigate the worst effects of the economic crisis we also face.
But a decade of austerity measures, particularly cuts to working age benefits, has weakened our protection against poverty. The need for food banks has soared 73% in the last five years. Our State of Hunger research shows the average household income of people referred to food banks is just £50 per week after housing costs. The majority of people – 86 per cent – were getting support from our benefits system. People with disabilities, single mothers, people with long-term illnesses or mental health problems were among those more likely to need a food bank.
In this extremely fast-moving and complex situation, it is difficult to gauge how effectively the emergency measures announced by the Chancellor can repair our safety net, but it is unlikely that it will be able to catch everyone. At time of writing, for example, there is still a five week wait for the first Universal Credit payment. Though people can get money very quickly in the form of an ‘advance’, that money needs to be paid back so will be deducted from subsequent monthly payments.
In light of this, we are urgently calling on our government to:
- Pause all deductions from benefit payments, including repayment of the advance payments people take out to tide them over in the long wait for their first UC payment
- Increase child benefit payments to support parents at a time when family incomes are likely to be reduced (especially for those whose children normally receive free school meals)
- Ensure that people are able to access local crisis grants easily and promptly should they find themselves in a crisis, enabling them to purchase their own food and essentials
As the economic crisis unfolds we will monitor the situation and we have assurances that the government will do the same. We are currently working with food banks to gather data on demand for emergency food. We have also commissioned research to help us better gauge the future impact of the economic crisis on food bank demand, and how effectively new measures announced will mitigate that.
This virus has affected the whole nation and it is right that a decent social security system be put in place to help people make ends meet and put food on the table, as our Prime Minister wrote last week.
As this outbreak has unfolded, we have seen many acts of kindness and community across the UK. There will still be adversity to face when this is over, but we must not lose the power we have when we come together as a country to make sure support is there for each other.
It’s exactly that mix of compassion and concern for justice that led to the creation of our NHS and benefits system 80 years ago. And it’s exactly that mix of compassion and concern for justice that should ensure in the future, our benefits system is there to stop all of us from being swept into poverty, whenever we need it.