Towards a Better Poverty Action Plan #2

In a recent blog post I suggested that it is time to start thinking more widely about poverty in Wales, so that the focus is on whether people have sufficient resources to meet their needs.  This article explores what we mean by resources and what the implications of a broader approach might mean for policy and action. 

Resources or Income?

Conventional measures of poverty focus exclusively on income, whether from employment or benefits.  A broader understanding of poverty looks at people’s material resources. These obviously include people’s income, which remains extremely important, but also include assets such as savings, housing, pension funds or investments as well as “negative assets” such as debt. 

Assets make a difference because they provide a cushion against sudden fluctuations in earned income, or can even be a source of income in themselves.  For example, it is entirely feasible for someone to have a low income but considerable assets – the state pensioner living in a large home or with a substantial shareholding for example.  Similarly,  debt can reduce even a reasonable income to naught – the family saddled with a large mortgage, negative equity and income just above the poverty threshold spring to mind. 

Resources could change policy

The implication of focusing on a wider definition of material resources is extremely significant. This is mainly because it moves the public policy agenda on poverty away from ‘getting people into jobs’ as the only solution.  This is not to say that jobs are not important – they are, and are of course the most important way in which most people get their assets.  But they are not the only issue, especially for people are not of working age. 

Focusing on resources in the broad sense means that thought needs to be given to:

• ensuring people in work have a wage and hours of employment that are sufficient to avoid poverty – the question of work quality therefore comes into play;
• keeping people in work when they already have it – so avoiding short-term, temporary contracts where possible;
• supporting people’s progression in work, for example, through in-work training;
• ensuring people receive the benefits to which they are entitled, in a timely way, and at an adequate level – whether they are retired, in-work or out of work;
• helping people to accumulate (modest) assets, to manage and realise them when required (which is why credit unions are so important);
• providing advice and support to people to avoid unmanageable debt, and offering affordable alternatives.  
  

None of this gets away from the centrality of income (and in particular earned income) to whether or not someone lives in poverty.  But with the Welsh Government’s hands so firmly tied on the tax and benefit system, action on debt, security of employment and advice on benefits can make a difference to the experience of poverty particularly to people living just above or below the poverty threshold. 

What do you think?

We’d really like to know what you think about this idea – should the focus of Welsh Government and others only be on income? Or do assets, debt and other resources matter? What can the public and third sectors do? And what about the private sector? Have your say here or over on our Facebook page http://www.facebook.com/BevanFoundation

This post is one of a series of articles in the run up to the publication of the Joseph Rowntree Foundation’s report ‘Monitoring Poverty and Social Exclusion in Wales’ in September 2013.  See other posts in the series by clicking on the Poverty Wales 2013 category on the right.  

Victoria Winckler is Director of the Bevan Foundation.