Report finds Britain’s welfare state fails to protect poorest

The evolution of Britain’s welfare state leaves it providing a ‘weak safety net’ that sees people fall into poverty and provides little protection for people whose jobs are threatened by economic change, finds new research by the Resolution Foundation.

The report, part of a joint project with the Centre for Economic Performance at LSE and funded by the Nuffield Foundation, examines how the UK’s welfare state has evolved over recent decades and how well set up it is to deal with big economic upheaval during the 2020s.

The report notes that working-age social security spending has more than doubled since the creation of the modern welfare state, but this extra spending has not been driven by more generous income support, which has consistently fallen further behind average earnings.

Unemployment support is set to fall to its lowest real-terms value in over three decades this April, at just £77.29 a week.

In part to cope with such minimum income support, welfare spending on extra cost-based benefits, including housing and children, has risen.

The Foundation concludes that while longer-term growth of cost-based benefits under both Labour and Conservative governments has helped some households cope with rising inequality in family earnings, many relying on basic income support have been left behind.

The research finds cuts to cost-based benefits since 2010 mean that Britain goes into the 2020s with a ‘porous safety net’ which offers little and highly variable insurance for workers.

Karl Handscomb, Senior Economist at the Resolution Foundation, said: ‘Our social security system has seen huge change over the past 75 years, leaving us with a benefits system that makes little attempt to provide basic levels of income support, but doing more to support households with specific costs like housing and children. With even those cost-related benefits cut back over the past decade, we go into the 2020s with a porous safety net.

‘The result is the poorest members of society are being left further behind, while many are left with little by way of insurance if their jobs are threatened by economic change. These flaws were exposed on the eve of the pandemic, and forced the Chancellor to radically reinvent our welfare system at very short notice.

‘With Britain set for a decade of economic upheaval in the 2020s, our social security system needs to be better equipped to support people through the change the future brings and the high inequality the past has left us.’

Photo by Ben White