Tackling poverty in cities: changing policy and
the opportunities and constraints of local action
Tackling Spatial Inequalities conference, 10th September 2015
Paul Sissons, Coventry University
Anne Green, University of Warwick
Background
1. Growth of in-work poverty
2. Concerns about job quality, fragmentation of working hours, nonstandard employment
3. Changing national Government approach towards welfare and
employment policy
4. Selected devolution to cities – greater responsibility for delivering
improved labour market outcomes
Outline
• Changing policy towards
poverty
• Local levers for antipoverty policy
• The constraints to local
anti-poverty policy
• Implications for the
geography of welfare
 Draws in part on work
funded by Joseph
Rowntree Foundation
Employment and poverty
•
Workless households have the highest poverty risk
•
However, the proportion of poor households where someone works has
increased, creating growing concern about in-work poverty.
Source: NPI, 2014
The labour market since recession
• The value of real wages fell by 10 percent between 2008-2014 –
relatively uniform across the wage distribution (but higher for
young people) (Machin, 2015)
• Increase in (hours) underemployment – just under 3 million
workers want additional hours, underemployment rate now
around 10 per cent (7 per cent pre-recession) (ONS, 2014)
• Growth of zero hours contracts – 2.4 per cent of people in
employment (ONS, 2015)
• Longer-term concerns about the ‘long-tail’ of low-paid/low-skilled
work in the UK (Finegold and Soskice, 1988; Wilson, Hogarth et
al., 2003; Wright and Sissons, 2012)
National policy for employment
and poverty
• Shift away from redistribution (2010-2015; 2015-2020):
– “from a low-wage, high-tax, high-welfare economy to the higher wage, lower
tax, lower welfare country” (Osborne, 2015)
– Large cuts in welfare spending (for working-age benefits)
– Raising the income tax personal allowance
– Introducing a ‘Living Wage’ of £7.20 April 2016; £9 by 2020
• Progress on poverty becoming more dependent on employment
trends
Emerging devolution of powers to
cities
• City Deals and Local Growth Deals are part of a gradual (and
uneven) transfer of powers towards more localised control of
some areas of economic development and skills policy (O’Brien
and Pike, 2015)
• Some opportunities for LEPs developing policy focused on lowpaid workers – e.g, European Structural and Investment Funds
programme (ESIF), including on in-work claimants
• Cities therefore assuming increasing responsibility for delivering
improved labour market outcomes
The employment pathway
Local Economy
Preemployment
Employment
entry
Staying in
work
In-work
progression
Local approaches to addressing
poverty – outline
PRE-EMPLOYMENT
EMPLOYMENT ENTRY
STAYING IN WORK
INFORMATION, ADVICE AND GUIDANCE
IN-WORK PROGRESSION
Becoming work-ready:

Access to services

Personal development advice

Careers advice

Finance and budgeting

Caseworker model
Job search and application support:

Provision and access to LMI

Job search

Job match

Recruitment channels

Caseworker model
Careers information and/or advice:

Work-focused appraisal

LMI: better job opportunities (ILM
and ELM – including non-local)

Skills transferability
Pre-employment (employability):
Basic skills
Early intervention – including
secondary level VET
Pre-employment training
Volunteering
Intermediate Labour Markets
Sector Academies
Vocational skills:

Intermediate Labour Markets

Induction

Job-specific training (firm-specific)

Occupational certification

Sector-specific training

Apprenticeships
Provision of opportunities:
Work tasters/ placements
Work experience
On-site training
Provision of opportunities:

Procurement

Ring-fenced jobs

Guaranteed interviews/ jobs

Training design and demand
identification

Flexibility and work design
In-work support:

Caseworker model
TRAINING AND SKILLS
Vocational and non-vocational skills
development:

Job-specific training (firm-specific
Linking
to employment
and not
firm-specific)
opportunities/

Workplace
learning linking to
‘better jobs’

Apprenticeships
Vocational and non-vocational skills
development:

Higher level training (firm-specific
and not firm-specific)

Apprenticeships

Broadening of skills

Lifelong learning/ workplace
learning
EMPLOYER (ENGAGEMENT)
In-work support:

External ‘key worker’

Mentoring

In-work review

Flexibility and work design
Support to progress:
In-work review of opportunities
Career ladders
Career pathways
Flexibility and work design
FINANCIAL INCENTIVES
Push and pull mechanisms:
Increasing earnings:

Benefit take-up

National Minimum Wage

Better-off calculations

Wage top-ups

Stipends/ training allowances

Living Wages

Conditionality and sanctions Leeds Wage
City subsidies
Region (employers)
LEP
Access to ICT
Childcare/care provision
Transport availability and cost
Health services
Community resources
Housing services
Increasing earnings:

National Minimum Wage

Wage top-ups

Living Wages
Increasing earnings:

Career ladders to better paid jobs
SUPPORT SERVICES / ENABLERS
Access to ICT
Childcare/care provision
Transport availability and cost
Health services
Community resources
Housing services
Access to ICT
Childcare/care provision
Transport availability and cost
Health services
Community resources
Housing services
Access to ICT
Childcare/care provision
Transport availability and cost
Health services
Community resources
Housing services
Assessing local opportunities –
policy levers – individuals and employers
• Strategy and delivery of services – e.g. IAG, skills, LMI
• The ‘business case’ - can tailor policy initiatives to demands of specific sectors
locally and to addressing specific ‘business case’ issues (e.g. shortage of
recruits, skills gaps, etc.)
• Targeting funding – e.g. investment in skills
• Utilising new developments – e.g. growing apprenticeships
• Public sector ‘leading by doing’ – e.g. councils as Living Wage employers
• Procurement – e.g. Islington Council and contracting services
• Anchor institutions – NHS, Social Landlords, sports clubs and employability;
supply-chains?
• Exhorting employers to ‘do the right thing’ – Living Wage Campaigns, Fairness
Commissions, etc.; encouraging CSR
• And, need to ‘join-up’ institutions and actions….
Assessing local constraints –
1) resources and focus
• Limited resources and shrinking budgets for economic
development and regeneration (Hildreth and Bailey, 2010;
Hayman, 2012; Crisp et al, 2014)
• Focus tends to be on narrow range of ‘fashionable’ growth
sectors (Peck et al, 2013; Sissons and Jones, 2013). Less
interest in issues concerning low-paid sectors.
– Mirroring national policy in ‘ignoring the bulk of current productive
capacity’ (Mayhew and Keep, 2014; 6)
– But several low-paid sectors have high projected net employment
requirements
– 2) labour market change
Source: Working Futures projections:
2012-2022 – United Kingdom
– 3) the evidence base
– 4) Local policy as part of picture
Source: Cities, growth and poverty (2014) York: Joseph Rowntree Foundation
Austerity and household incomes
Source: Resolution Foundation (2015)
Spatial implications of recent changes
• What implications do changes have for the geography of
welfare? (Hamnett, 2009; 2014)
- Benefit cuts are hitting some places (much) harder than
others (Beatty and Fothergill, 2014)
- Some local labour markets are more conducive to
improving prospects of low-earners than others
- And, the impacts of the Living Wage may also been
spatially uneven
Conclusions
• National policy has shifted away from redistribution to focus
on labour market outcomes
• At the same time, cities are taking on new responsibilities in
relevant policy areas
• There are a range of policy levers which they can use to
support employment entry and retention locally
- Strategy and delivery of services
- Utilising business case arguments – skills shortages,
turnover, enhancing productivity
- Using new developments and procurement
- Leading by doing
Conclusions (2)
• But there are obvious limits to local action
- Key areas of policy reside at national level
- There are cuts in key budgets - fewer resources for
economic development, large reductions to adult skills
budget
- The local labour market frames what is possible, and
recent evidence on the record of employment generation
in cities is mixed (Champion and Townsend, 2011; 2013;
Lee et al, 2014)
Thank You