The cycle between work and the dole is trapping millions in poverty

With one in six of the workforce having claimed Jobseeker’s Allowance in the last two years, job insecurity is hindering attempts to reduce poverty.

It’s important that in-work poverty is now firmly on the agenda. Research by the New Policy Institute for the Joseph Rowntree Foundation shows that, for the first time, more working families are in poverty than people in workless and retired families combined (52 per cent compared to 48 per cent).

But we must not lose sight of the fact that those in poverty, whether in work or out of work, are often the same people churning from low-paid, insecure and part-time employment to unemployment, and back again.

The reality is that the churn in and out of work, due to the economic climate, has never been larger and that people are constantly moving in and out of employment. It would be careless to talk about two distinct groups of people – those who work and those who do not. That would be easy. In reality, the situation is far more complicated. Between April 2011 and April 2013, 4.8 million different adults claimed Jobseeker's Allowance: one in six of the workforce, two-fifths of whom had never previously claimed.

There is good news, though. The number of workless households is at its lowest level since 1996, when the data series started. Only a small minority of these workless households are ones where no adult has ever worked (8 per cent, or 1.5 per cent of all households). And the proportion of households who experience worklessness in a given year has generally been falling since 1996, from around 21 per cent (with 1 per cent never having worked). There was a rise in 2009 as the recession began, but now it is decreasing.

This fall cannot be attributed solely to an increase in employment, as it also reflects changing household formation. There has been a large increase in the number of young adults living with their parents. Households where no adult has ever worked are likely to contain much younger people. More than half of those in never-worked households are under 25, compared to only 13 per cent in currently workless households. Almost half (48 per cent) living in households where no one has ever worked are students.

As George Osborne said in the Autumn Statement, the labour market appears to be improving at last. Unemployment and underemployment have stopped rising and workless households have decreased. This good news masks the fact that when people do get into work, they are more likely to be paid below the Living Wage (as five million people are) and millions are trapped between poorly paid, insecure jobs and unemployment.

But the insecurity faced by people trying to get into and stay in work still remains a huge problem and is hindering attempts to reduce poverty. That insecurity means millions of people are stuck in a cycle – churning between work and the dole. It would be better if government policy and announcements reflected that.

Aleks Collingwood is Programme Manager for the Joseph Rowntree Foundation

Children's clothing is hung out to dry on a residential development in Tower Hamlets. Photograph: Getty Images.

Aleks Collingwood is Programme Manager for the Joseph Rowntree Foundation

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The tale of Battersea power station shows how affordable housing is lost

Initially, the developers promised 636 affordable homes. Now, they have reduced the number to 386. 

It’s the most predictable trick in the big book of property development. A developer signs an agreement with a local council promising to provide a barely acceptable level of barely affordable housing, then slashes these commitments at the first, second and third signs of trouble. It’s happened all over the country, from Hastings to Cumbria. But it happens most often in London, and most recently of all at Battersea power station, the Thames landmark and long-time London ruin which I wrote about in my 2016 book, Up In Smoke: The Failed Dreams of Battersea Power Station. For decades, the power station was one of London’s most popular buildings but now it represents some of the most depressing aspects of the capital’s attempts at regeneration. Almost in shame, the building itself has started to disappear from view behind a curtain of ugly gold-and-glass apartments aimed squarely at the international rich. The Battersea power station development is costing around £9bn. There will be around 4,200 flats, an office for Apple and a new Tube station. But only 386 of the new flats will be considered affordable

What makes the Battersea power station development worse is the developer’s argument for why there are so few affordable homes, which runs something like this. The bottom is falling out of the luxury homes market because too many are being built, which means developers can no longer afford to build the sort of homes that people actually want. It’s yet another sign of the failure of the housing market to provide what is most needed. But it also highlights the delusion of politicians who still seem to believe that property developers are going to provide the answers to one of the most pressing problems in politics.

A Malaysian consortium acquired the power station in 2012 and initially promised to build 517 affordable units, which then rose to 636. This was pretty meagre, but with four developers having already failed to develop the site, it was enough to satisfy Wandsworth council. By the time I wrote Up In Smoke, this had been reduced back to 565 units – around 15 per cent of the total number of new flats. Now the developers want to build only 386 affordable homes – around 9 per cent of the final residential offering, which includes expensive flats bought by the likes of Sting and Bear Grylls. 

The developers say this is because of escalating costs and the technical challenges of restoring the power station – but it’s also the case that the entire Nine Elms area between Battersea and Vauxhall is experiencing a glut of similar property, which is driving down prices. They want to focus instead on paying for the new Northern Line extension that joins the power station to Kennington. The slashing of affordable housing can be done without need for a new planning application or public consultation by using a “deed of variation”. It also means Mayor Sadiq Khan can’t do much more than write to Wandsworth urging the council to reject the new scheme. There’s little chance of that. Conservative Wandsworth has been committed to a developer-led solution to the power station for three decades and in that time has perfected the art of rolling over, despite several excruciating, and occasionally hilarious, disappointments.

The Battersea power station situation also highlights the sophistry developers will use to excuse any decision. When I interviewed Rob Tincknell, the developer’s chief executive, in 2014, he boasted it was the developer’s commitment to paying for the Northern Line extension (NLE) that was allowing the already limited amount of affordable housing to be built in the first place. Without the NLE, he insisted, they would never be able to build this number of affordable units. “The important point to note is that the NLE project allows the development density in the district of Nine Elms to nearly double,” he said. “Therefore, without the NLE the density at Battersea would be about half and even if there was a higher level of affordable, say 30 per cent, it would be a percentage of a lower figure and therefore the city wouldn’t get any more affordable than they do now.”

Now the argument is reversed. Because the developer has to pay for the transport infrastructure, they can’t afford to build as much affordable housing. Smart hey?

It’s not entirely hopeless. Wandsworth may yet reject the plan, while the developers say they hope to restore the missing 250 units at the end of the build.

But I wouldn’t hold your breath.

This is a version of a blog post which originally appeared here.

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