Select Committee on Social Security Minutes of Evidence


APPENDIX

THE REPORT OF KEY INDICATORS OF POVERTY AND SOCIAL EXCLUSION

INTRODUCTION

  32. This appendix summarises our current project, funded by the Joseph Rowntree Foundation, on indicators of poverty and social exclusion in Britain.

  33. We are now working towards a report, based on a carefully selected choice of around 50 "key indicators", which will be published later this year. We have already produced an interim report, listing our proposed indicators and their rationale. This interim report has been subject to widespread consultation amongst poverty groups, academics and government departments. Over the next six months, we will be consulting further on our analysis of particular subjects and indicators. We have discovered a very strong consensus in favour of publishing regularly a group of well-recognised statistics which could monitor progress in this area.

  34. "Key indicators" and "success measures" are similar concepts and we hope that the work we have done on the former will help the Committee in its inquiry into the latter. However, insofar as they are being put to different uses, key indicators and success measures are not exactly the same. We suggest that a regular report on key indicators of poverty and social exclusion would be of value in its own right, in addition to governmental success measures for welfare or other reform.

PURPOSE OF THE REPORT

A Prototype Report

  35. In producing a report built around key indicators of poverty and social exclusion in Britain, we are seeking to create a model, or prototype, that could be reproduced on a regular basis. Such a report could act as a framework for an informed public debate on poverty and social exclusion, providing a substantial amount of information which over a number of years shows the pace and degree of change.

  36. To fulfil that role, a report has to meet a number of conditions. First, it needs to be published regularly with each key indicator being updated in each edition. It also needs to be published for many years, since signficant reductions in poverty and social exclusion take time to occur. Second, there must be a consistent set of indicators from one report to the next, in order to allow for the steady tracking of often slow-moving effects. Third, it needs an impartial tone, while reflecting the contending points of view that tend to surround many indicators, especially those to do with low income. Finally, it must be accessible if it is to serve and interest a wide audience rather than a specialist one.

  37. The Bank of England's Quarterly Inflation Report is itself something of a model for this report. Its regularity, as well as the consistency and continuity of its content, help to keep monetary issues in the public eye, thereby helping to boost the importance that is attached to them. A Poverty and Social Exclusion Indicators report would likewise provide a focus on the people who otherwise get forgotten by conventional indicators of progress.

  38. The Bank is also important as an example of an official and authoritative institution that is nevertheless independent of government. We believe that a regular poverty and social exclusion report needs to be the responsibility of a similar independent yet authoritative organisation, rather than government itself.

The Wider Context

  39. There are a number of reasons why such a report is timely. At the United Nations World Summit on Social Development in 1995 the UK, along with over one hundred other countries, signed up to reporting its progress on eradication of poverty. Our report would form one element of a positive British response to this iniative.

  40. The UN's Human Development Report, which has gradually become a well established institution in its own right, shows how a wide selection of indicators can increase and alter public understanding of the problems. It presents international comparisons using a definition of poverty which focuses on "denial of choices and opportunities" as well as lack of material resources. The way it ranks and marks progress over several years using a constant set of variables has gained it wide attention.

  41. This year, the Prime Minister has spoken of "an anti-poverty strategy of the same ambition and breadth" as that of the 1945-51 government. If a strategy against poverty is to succeed, then it needs to be widely shared and understood. Not just by politicians, their civil servants and a handful of experts, but the public too needs some means of tracking what is going on and gauging both the successes—and the failures—of what is being attempted. An authoritative, regular, public report will allow this tracking to take place.

CONTENT OF THE REPORT

Definition of Poverty and Social Exclusion

  42. The report adopts broad notions of both poverty and social exclusion. On poverty, while the numbers of people below a given level of income remains a central reference point, other contributory factor are examined, including the duration of time on low income and the frequency of such spells. In an era of much increased income and job flexibility, this approach seems more helpful than the more traditional focus on those deemed to be "in poverty" as a result of having a low income at some point in time.

  43. "Social exclusion", understood as much diminished access to the means necessary to participate in society, is also seen broadly, ranging from inadequate education and poor health to fear of crime. For those of working age, lack of paid work is a major component of social exclusion, but it is not synonymous with it. The causes of social exclusion may lie in the performance of many social institutions, from the labour market to the family and may be measured by the extent of unequal or unsatisfactory outcomes produced there.

  44. In many areas, poverty (a lack of resources) and social exclusion (a lack of access or normal opportunity to participate) overlap. Some of the most important indicators occur at this meeting point, for example in forms of ill-health, where data shows a strong relationship between the incidence of ill-health and low income. In these cases, the report is concerned with the extent to which those on lower incomes are more likely to suffer these linked disadvantages.

The Need for a Narrative

  45. Fifty key indicators is a very small number with which to represent the essentials of poverty and social exclusion. A figure like this, though, seems quite as large as a non-specialist audience can reasonably be asked to digest. One requirement is that the key indicators should, as far as possible, reflect wider conditions. An example of this is the incidence of respiratory disease among children. This is obviously important in its own right but it is also a measure of more general living conditions, both within the home and the external environment.

  46. Even so, the wider significance and content can only be made clear by embedding the indicators within a narrative which "tells a story" about poverty and social exclusion in Britain, using the indicators as the principal but not the only source of evidence.

  47. We have chosen to structure the report into chapters which divide the population by age group: children, young adults up to age 25, adults between 25 and pensionable age; adults of pensionable age. These are topped and tailed by a chapter on income, which we find needs to be treated as a whole, and a concluding chapter on communities, which allows us to treat the very important geographical and spatial aspects of poverty and social exclusion.

  48. While tracking progress over time will be the report's main purpose, it will also show the geographical variation of poverty and social exclusion, providing a sense of how different areas compare both on an absolute level and in terms of rates of improvement. It will also include international comparators, which place the British situation in context.

Choice of Indicators

  49. Each chapter is arranged around a number of subject themes. Ultimately, we believe that the success of the report is providing an accurate reflection of poverty and social exclusion depends on how far these themes capture the most important elements of disadvantage for people.

  50. While a wide range of data can be used in the more detailed analysis and commentary, with such data varying from one report to another depending on the issues being assessed, we believe that it is important that the same clearly defined and regularly produced numbers are used each time to get an overall "headline feel" as to the direction that things are moving. The current list of indicators is given in table 2.


TABLE 2
Current list of indicators

ChapterSubject theme Chosen indicators

IncomeDistributionPer cent individuals below ½ average income Ratio of income at 10 percentile of the income distribution to 90 percentile of the distribution
DurationPer cent below ½ average income during the whole of the last three years Per cent who have spent at least one period below ½ average income in the last three years
Geographical Spread Per cent constituencies with twice the average proportion of individuals on income support
Subjective Perspective Per cent heads of households reporting difficulty in "making ends meet"
ChildrenEconomic Circumstances Per cent children in households with no-one in employment Per cent children in households below ½ average income
HealthPer cent babies born underweight Per cent children admitted to hospital for respiratory illness Mortality rate amongst children due to injuries and poisoning
EducationPer cent secondary schools achieving ½ the average rate of pupils passing GCSEs Per cent primary schools with high concentrations of children on free school meals
Social StabilityPer cent households with children accepted as homeless/in temporary accommodation Per cent children excluded from school Per cent children aged 10-16 years cautioned or indicted for offences Per cent children with divorcing parents Per cent health authorities with twice average conception rates amongst girls under 16 years
Young People
(aged 16-25)
Economic circumstances Per cent applying for DSS hardship funds Per cent below the minimum wage
Health and well-being Per cent presenting as drug addicts mortality rate due to suicide
Barriers to workPer cent constituencies where unemployment is twice average for 18-25 year olds Per cent 18-25s with a criminal record Per cent with no qualifications
Adults
(aged 25-59/64)
Economic Circumstances Per cent workforce economically inactive Per cent unemployed one year or more Per cent workforce below ½ median male hourly rate of pay
HealthPer cent constituencies where standardised mortality is more than two years below average Per cent self-reporting general poor health Per cent admitted to hospital for mental health treatment
Working ConditionsPer cent workforce without statutory employment rights and/or below the NI earnings limit Per cent working unsociable hours
Longer Term Prospects Ratio of training hours for adults without post-compulsory education to those with post-compulsory education Per cent individuals with pension provision other than NI contributions
PensionersEconomic Circumstances Per cent on state retirement pension and means tested benefit alone Per cent of expenditure spent on "essentials"
Health and Disability Per cent pensioners whose activities are limited by ill-health or disability Per cent reporting anxiety/depression
Access to ServicesPer cent being helped to live independently at home Per cent without a telephone
CommunitiesSocial Cohesion Per cent individuals meeting people socially once a week Per cent individuals involved in a civic organisation or group Per cent individuals expressing satisfaction with their neighbourhood
HousingPer cent overcrowded households Per cent households with no central heating Per cent homeowners with more than six months of mortgage arrears Per cent households moving in the last year
Crime and its costs Per cent postal areas with twice average insurance premiums rate of repeat victimisation


COMPARISONS WITH THE SUCCESS MEASURES

  51. Although "success measures" and "key indicators" have much in common, the different uses they are to be put to is important. On the basis of our work on key indicators of poverty and social exclusion, we would both draw a number of "lessons" for the success measures and highlight a number of points where the contrasts between success measures and key indicators are sharpest.

    —  Care is needed to avoid measures that could be targeted directly by government, in a way which did little or nothing to alleviate the underlying problem that the measure was supposed to reflect.

    —  The progress of such measures needs to be reported upon regularly, and accompanied by a narrative which both describes and explains what has happened. Published in isolation, the measures would be open to simplistic, and very likely misleading interpretation. If they are to represent a real challenge, then it is inevitable that some measures will show failure rather than success. A rounded appraisal would help to ensure that success and failure could be conveyed in a non-sensational way.

    —  The fundamental difference between "success measures" and "a key indicators report" is that of "ownership". Defining and defending measures of the success of its policies is properly up to Government, whereas a key indicators report designed to present a wider and balanced picture of poverty and social exclusion must belong to an impartial body.

June 1998


 
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Prepared 29 June 1998