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WMIC Issue 21: A run on the bank – Reports shed light on poverty in the region

Published: Tuesday, 8th May 2018

With the Trussell Trust publishing its latest figures on the use of their food banks, West Midlands in Context takes a look at some of the recent reports.

A run on the bank

Perhaps one of the higher profile manifestations of poverty is the use of food banks. Of all food bank providers, the Trussell Trust is the largest, accounting for about two thirds of all emergency food aid facilities in the UK. Its latest figures published last month are a useful indication of the extent of food bank usage across the country.

Their figures show that during the last financial year, the Trust distributed over 1,300,000 three-day emergency food supplies, 13% more than the year before and up from 347,000 in 2012/13.

It is hard to draw comparisons between regions as the number of Trust food banks varies between places, but just looking at the West Midlands, the figures show that just short of 120,000 three-day emergency supplies were given out in region in 2017/18. This was up from around 111,400 last year, and from 41,400 in 2012/13.

Poverty rates

Looking at poverty more generally, last month, a House of Commons briefing set out that in 2016/17 there were 10.4 million people living in relative poverty in the UK before housing costs were taken into account. With housing a costly and unavoidable expense for many people, once housing costs were factored in, this rose to 14.3 million, an increase of 300,000 on the year before.

Measured across a three-year period 2014/15 - 2016/17, for both before and after housing costs the West Midlands had the UK’s joint second highest relative poverty rates. With some 400,000 children considered to be living in poverty after housing costs, the region’s rate of child poverty of 34% was also the joint second highest in the UK.

According to the Institute of Fiscal Studies (IFS), this situation is unlikely to improve soon. The Common’s briefing draws attention to IFS projections showing the proportion of children in relative low income will “increase sharply”, assuming no change in government policy. The briefing notes, however, that these projections pre-date the latest 2016/17 poverty estimates.

Looking at the West Midlands, the IFS’s projections suggested that the region would experience the one of the higher percentage increases in after housing costs poverty in the UK. The geographical impact in these projections being partly dependent on “the extent to which poorer households in each region are dependent on income from earnings rather than benefits”.

Premium rates

A sometimes-overlooked facet of poverty is that low-income households can pay more for their services than better-off ones. In March, the Social Market Foundation (SMF) outlined a “poverty premium” made up of the “extra cost that households on low incomes incur when purchasing the same essential goods and services as households on higher incomes”. These costs accrue, for example, through paying bills on receipt rather than by direct debit, using pre-payment meters and missing out on “bulk discounts”, such as season tickets for public transport.

The report considers different ways of quantifying the poverty premium. Among their conclusions, the SMF suggest that in defining a poverty premium measure, it could be “adopted and adapted” by regulators such as the Competition and Markets Authority, Ofgem, Ofcom, Ofwat and the Financial Conduct Authority to “give an insight into whether market outcomes are fair, and how to address existing premiums”.

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