Tackling Poverty in Leicester

While all people in poverty are short of money, when we talk about poverty we understand that it is relative, and that it means different things to different people.

Relative poverty: the Government’s annual survey Households below average income sets the “poverty line” at 60% of the median UK household income. In other words, if a household’s income is less than 60% of this average, HBAI considers them to be living in relative poverty.

Absolute poverty is where a household’s income is less than 60% of the median as it stood in 2011.

Alternative definitions of poverty take into account necessary costs such as housing and childcare. The aim is to recognise what most people would consider the minimum standard of living in today’s society. So we are looking at different types of poverty: firstly where people don't have the basics – for example, they have to rely on food banks. Then there is a form of poverty where people are excluded from society because they can't afford things that are widely viewed as standard – for example, being online.

Current data shows that one in five households in the UK has an income below the poverty line, after their housing costs are taken into account. 30% of children live in households below the poverty line (after housing costs). This is almost double the poverty rate (16%) for pensioners.

The Child Poverty Action Group (CPAG) talks about poverty being about more than just money, but “a lack of money is the defining feature of being poor”. The sociologist Peter Townsend, who was a founding member of Child Poverty Action Group, defined poverty in 1979:

"Individuals, families and groups in the population can be said to be in poverty when they lack resources to obtain the type of diet, participate in the activities and have the living conditions and amenities which are customary, or at least widely encouraged and approved, in the societies in which they belong."

This shows how important it is to understand that poverty is relative – you are poor if you are unable to live at the standard that most other people would expect. A child can have three meals a day, warm clothes and go to school, but still be poor because their parents do not have enough money to ensure they can live in a warm home, have access to a computer to do their homework, or go on the same school trips as their classmates.

The Social Metrics Commission developed  “A New Measure of Poverty” in September 2018. It measures poverty not purely on household income and its relation to average earnings. It tries to understand the resources available to people and the extent to which those resources meet the needs of the household. This approach takes into account debt and inescapable costs such as housing, childcare, social care and disability-related costs. This report was updated in 2020 and further adapted to take into account the impact of the pandemic.

The Minimum Income Standard (MIS) is a research method developed by Loughborough University to identify what incomes different types of households require to reach a socially acceptable living standard. The measure is based on what the public think we all need for a decent minimum living standard. The Joseph Rowntree Foundation (JRF) publishes an annual report on the MIS. Their 2019 report concluded that “after a decade of austerity, many households with low incomes both in and out of work are being held back from reaching MIS”.

The report noted:

• "Even if people work full time on wages that have been improved in the past four years, they may still be being held back from what they need.
• "One reason so many families are falling further behind is rising costs.
• "The key problem is not rising costs but the failure of incomes to keep up with these costs. On their own, higher minimum wages are not systematically bringing families closer to MIS, even if they work full time. This is because real-terms cuts in in-work benefits are holding people back."

A Minimum Income Standard for the United Kingdom was updated in July 2021.