Wales Co-operative Centre

Canolfan Cydweithredol Cymru

The definition of poverty – the income conundrum

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Whilst government and political parties will no doubt be debating their record on poverty in advance of the general election, next year, is it time for a rethink on how we define and measure it? It’s something that we’ve been considering at the Wales Co-operative Centre, given the ways in which our work supports the wider tackling poverty agenda.

Many of us working in this field have, over the years, disagreed with the relative nature of its definition. This, in my view, is one of its fundamental flaws. To cut through the technicalities if Mr Jones’ income was low enough, he would be defined as living in poverty. If his income remained the same but the rest of the nation’s income fell, he would be lifted out of poverty. He would still have the same income and the same bills to pay, but he would no longer be officially hard up. This is because Mr Jones’ status of living in poverty is related to his income compared with everyone else’s, not how well he is able to live on the money he has coming in. poverty envelopes

‘A new approach to reducing poverty should adopt a clear definition of poverty, which is based on resources and household needs, not just a narrow measure of relative income’ says a new report published by the Bevan Foundation. Its report, ‘Rethinking Poverty – Implications for Action’, points to three clear required actions; raising incomes, meeting minimum needs and essential skills.

This wider definition includes some important elements but the issue of income and money still troubles me. Why? The reason is that I have worked with many people who, on the face of it, have a moderate income but because their outgoings are so high, their disposable income is extremely low….so low sometimes that they can’t feed themselves or their family. Back to Mr Jones; if his employer starts paying the living wage, he may not be lifted out of poverty, it depends on everyone else’s income. Whether he can feed his family is immaterial.

This is where financial inclusion and financial capability are critical. Every person needs to have a safe, secure and flexible place to manage their money and the knowledge and confidence to manage it well and make the most of what they have coming in. This means access to responsible financial products and debt advice when things go wrong. Credit unions are a great starting point for many people who have been excluded from these essential services for far too long.

Teej Dew is Programme Director for Financial Inclusion at the Wales Co-operative Centre

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Written by Katija Dew

December 1, 2014 at 2:41 pm

Shocking poverty figures provoke call for more digital inclusion support

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Nearly a quarter of a million people in Wales want a job but do not have one.  More than 8,000 households were homeless in 2013 and 79,000 people needed food aid.  One in three children lives in a low income family. This is the stark backdrop to the Bevan Foundation’s new report “Rethinking Poverty – Implications for Action”, which is of great interest to us at the Wales Co-operative Centre and the work that we do that supports the wider poverty agenda.

The report argues that digital and financial skills are essential to help people out of poverty, or at least mitigate its impact.  About digital inclusion, the report says:

“Digital skills are an important adjunct to literacy and numeracy, as more and more services are either available only online, or offer time and/or cash savings if accessed online. The shift towards online benefit claims is a particularly strong driver of change. People without access to the internet and without the skills to use it are disadvantaged. There is a marked income-effect in digital exclusion – in 2013, only 1 in 10 (9%) of those in managerial and professional occupations did not use the internet compared to more than three in ten (31%) of those who had semi-routine and routine occupations.

“It is very welcome that digital skills have a relatively high profile in the 2013 Tackling Poverty Action Plan.  The plan includes the Digital Inclusion delivery plan’s targets, the targets for which have mostly been met.  The commitment to digital skills and inclusion should continue, with challenging targets for people in low income groups, with programmes of sufficient scale and impact to achieve them.”

The Money Made Clear Wales website is a great example of where people can get financial advice online

The Money Made Clear Wales website is a great example of where people can get financial advice online

The achievement of the targets in the Digital Inclusion delivery plan was due to the Welsh Government’s Communities 2.0 programme, which is led by the Wales Co-operative Centre.  How is this going to work then when Communities 2.0 comes to an end in March next year?  Well, we need everyone in Wales working to tackle poverty to take digital inclusion seriously.  Our experience is that the current practice is too patchy.  And to get this consistency we need a strong, lean leading digital inclusion project  to help all front line services deliver effective digital skills support.

The Bevan Foundation report is blunt about the nature of the challenge.  For the last eight years, there has been no improvement at all in the number of Welsh people living in poverty.  And that number is set to rise.  Yes, we need an informed debate.  But we also need action.

Dave Brown is the Director of Strategic Development & Performance at the Wales Co-operative Centre

Welsh social enterprises losing out on digital boom

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New research from Lloyds Bank shows that many SMEs are missing out on the benefits of being online, and that community groups and social enterprises are lagging behind.  As Director of Strategic Development & Performance at the Wales Co-operative Centre, I’ve looked into what the study means for social businesses here. soc ent comm 2 point 0

The Lloyds Bank research gives a snapshot of how SMEs, including social enterprises, use the internet.  The backdrop is that business is increasingly being done online: this year, UK consumers are forecast to spend £107 billion on the web, an increase of 17% year on year.

And it’s not just buying that’s going online, it’s giving too.  Charities that can accept donations over the internet, saw a 27% increase in the number of contributions they receive. In 2013, £2.5 million was raised online from 3.7 million Tweets through social media service Twitter and Just Giving. This was an increase of 448% on 2011.

And yet the facts in the Lloyds Bank UK survey are stark:

  • Around a third of SMEs and social enterprises don’t have websites
  • Social enterprises are much less likely to be online than for-private-profit businesses
  • Just 28% of community groups and social enterprises have the skills to transact online
  • A quarter of community groups and social enterprises feel that the internet isn’t relevant to them

The Wales Co-operative Centre’s experience of running the Social Enterprise Support and Communities 2.0 projects is that an effective ICT strategy is integral to the success of flourishing social enterprises.  The Welsh Government funded Communities 2.0 project has supported over 800 social enterprises and community groups, conducting ICT reviews and supporting investment in new systems to increase revenue, create jobs and improve business efficiency.  For example, the Wales Co-operative Centre’s support to Canolfan Soar in Merthyr Tydfil has helped the enterprise increase the proportion of their income that comes from trading from 35% to 65%.

Independent analysts Booz and Co. estimate full digital take up, with everyone online, could add £63 billion value to the UK economy.  The danger is that community organisations and social enterprises will continue to lag behind the rest of the economy.  They will lose out.  Our Social Enterprise Support and Communities 2.0 projects have had a huge impact already, and Wales needs specialist ICT support to social enterprises to continue.

Written by Dave Brown

November 24, 2014 at 4:29 pm

How will the new UK Government Digital Inclusion Strategy help tackle poverty in Wales?

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This month, the UK Government published its updated Digital Inclusion Strategy.  Dave Brown, Director of Strategic Development and Performance at the Wales Co-operative Centre, asks what this might mean for Wales.

The UK Government Digital Inclusion Strategy describes succinctly the scale of the digital exclusion issue as it affects the whole of the UK.

“Today, the web has 2.4 billion users worldwide. To put this incredible speed of adoption in some context, radio took 38 years to reach 50 million users, television took 13 years, web took 4 years and Facebook took just 10 months. In 2013, 89% of young people now use a smartphone or tablet to go online, up from 43% in 2010.

The web has transformed almost every aspect of public, private and work life. It has underpinned our new economy; from changing the way every workplace communicates to creating entire new industries. It is reshaping government through improved public services and improving transparency through open data.

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And it has improved people’s lives, whether through cutting household bills, finding a job or maintaining contact with distant friends and relatives. For business and voluntary organisations, going online can provide ways to reach more customers and reduce operating costs. The internet also provides broader benefits, by helping to address wider social and economic issues like reducing isolation and improving health.”

So what is to be done about the half million or so people in Wales who are left behind: those that lack the skills, confidence, motivation or opportunity to get online?  There is little in the UK Government document that relates to our specific Welsh context.  What we have got in Wales is a proud history of putting our money where our mouth is, when it comes to funding digital inclusion support.  The Welsh Government’s Communities 2.0 programme is run by the Wales Co-operative Centre, and has had a huge impact on the lives of those most excluded and most affected by poverty.

As Wales moves on from Communities 2.0, to the next phase of digital inclusion support, we need to build on the strong foundations of partnership laid down by Communities 2.0 initiatives.  Yes, practical digital inclusion activities need to be integrated into the mainstream.  But for this to be effective it needs support, coordination and leadership.  Nothing like the revolution in information and communication described in the UK Government document has ever happened before. As Wales, as a nation, responds to this challenge, it seems right to give the issue the particular attention that only a dedicated strategic project can bring.

Written by Mark Smith

November 17, 2014 at 5:44 pm

Swansea City Council at the forefront of Private Rented Sector engagement in Wales

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For the past three years, the Wales Co-operative Centre have been funded to work with private rented sector landlords and their tenants, local authorities, credit unions and support providers. The aim of our work has been to improve tenants financial capability, and in turn help then to sustain their tenancies or access more appropriate and affordable housing.

Jocelle Lovell, the Wales Co-operative Centre’s Financial Inclusion Project Manager, said credit where credit is due, Swansea City Council are taking a really proactive approach to working with their private rented sector (PRS) landlords.

Last night, I attended the annual PRS Forum at the Guild Hall, in Swansea, along with 80 to 100 other landlords.

The agenda wasn’t too busy, which helped to keep the evening focussed, and we heard short presentations from:

  • Welsh Governments Simon White on Housing Act (Wales) 2014, Renting Homes Bill and what the model contracts will look like
  • Anne Rowland (seconded to Welsh Government) on Regulation of the PRS Housing Act (Wales) 2014, the Housing Act and landlord registration and licensing and how this is going to work
  • Both of which are of interest to the Centre’s own work with the Welsh housing sector, through both Tackling Homelessness through Financial Inclusion and the Co-operative Housing projects.

The presentation which really caught my attention was by Marcia Williams of The Wallich, about the new PRS access scheme they are developing with Swansea City Council. Having consulted with landlords, they are now developing a scheme which will bring together the various local authority departments relevant to housing including environmental health and planning, along with support and advice. This one stop shop model will focus purely on the PRS, offering a wide range of services that will include; advice, pre tenancy and in tenancy support and housing management functions to landlords and their tenants.

Swansea clearly recognises the significance of the PRS and its role as a strategic housing partner, developing a very proactive approach to engaging with the sector, in order to make more properties available to meet the growing demand for affordable housing options.

The evening ended with a Q&A sessions and the raffle, where winning ticket holders received bags with Carbon monoxide detectors and small fire extinguishers amongst other things.

Written by Ieuan Nash

November 14, 2014 at 11:28 am

Does digital inclusion support do any good?

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Support for people who are digitally excluded is one of the key planks in the Welsh Government’s tackling poverty strategy.  For the last six years there has been a significant investment in this support through the Communities 2.0 programme, which is run by the Wales Co-operative Centre.  The programme is shortly coming to an end, and the Welsh Government is developing its approach to digital inclusion support in the future.  As Dave Brown, the Centre’s Director of Strategic Development & Performance, writes, it therefore seems reasonable to ask: does publically funded digital inclusion support actually lead to permanent, positive changes in behaviour around computers and the Internet?

We know that Communities 2.0 has been hugely successful in providing targeted support to individuals.  Over 52,000 people have been directly helped so far.   Countless more are supported by local delivery partners.  But do these people actually end up online?  Do they get the benefits of being connected?  Do they continue to use and develop their skills?  Thanks to a new longitudinal study by BT and Citizens Online, we know the answer.  And it’s a resounding “yes”.

The study looked at people helped by the Get IT Together project, which is supported in Wales by Communities 2.0.  They tracked people attending training sessions and surveyed them when they did the session, and again two years later.  The study found that 60% of those who did not have home Internet access at the start went on to install it.  Many without a home connection accessed the Internet through public points like libraries, or used connections of friends and family.  Clearly the message is getting through, to the extent that most beneficiaries go on to invest in the “gold standard” of digital inclusion: broadband at home.

It is the direct support to the person who is digitally excluded that brings the benefits.  But digital inclusion sessions don’t organise themselves.  One of the huge successes of the Welsh Government’s Communities 2.0 programme has been the way the Wales Co-operative Centre staff have led the planning and co-ordinating of digital inclusion activity locally.  We have brought together partnerships, secured funding and driven organisational change to put digital inclusion at the top of the agenda.

The challenge for us now is to keep it there.

Written by Mark Smith

November 10, 2014 at 4:48 pm

What financial inclusion really means and its significance in the fight against poverty…

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Tackling poverty runs through everything we do at the Wales Co-operative Centre; from helping people in some of the country’s most disadvantaged areas to improve their financial capability, to supporting people to get online and learn new skills that can help them back into work or start a business. We also work with social enterprises and co-operatives, to help develop stronger, more sustainable and better businesses.

Here, Jocelle Lovell, Financial Inclusion Project Manager, discusses the role of financial inclusion in tackling poverty…

This week (Tuesday, 4 November), I was invited to speak at ‘Advice & Support’, Carmarthenshire’s Network Event in the Halliwell Centre, Trinity St Davids, Carmarthen. The topic was ‘What financial inclusion really means and its significance in the fight against poverty’; the challenge was taking something that I could talk about all day and putting it into a 20 minute presentation.

So I started with the three key elements of Financial Inclusion:

  1. Accessibility – being able to access the financial services and products needed to participate fully in modern-day society and manage money effectively
  2. Literacy – having the ability to understand the words and numbers used in financial products
  3. Capability – having the ability to interpret the information and use it to make informed decisions appropriate to an individual’s circumstances.

Have people got the tools, the knowledge, the right environment and the confidence to manage their personal money? If not, they are financially excluded. Why is this a problem? Well here are just a few examples;

  • If you do not have a bank account with a direct debit facility you will pay more for services & utilities
  • Poor or no credit history may well exclude you from low interest loans from mainstream lenders (banks, building societies), often leaving no option other than high interest loans, payday loans or a worst case scenario using a loan shark.
  • Your choices are limited i.e. buying a product online at the best price versus using the likes of BrightHouse or Provident
  • Lack of understanding or choice can lead to ‘costly’ inappropriate decisions.

People who are financially excluded are more likely to need support from publicly funded services. The likely impact of paying more for their products and services is that they will remain in poverty. Living in poverty is becoming a social norm. Poverty is not a new problem, but following the recent years of economic decline, it is becoming more and more prevalent across our communities. There are many good initiatives across Wales that are trying to address these issues, both locally and nationally. But we still have 1 in 5 working and non working households across Wales living in poverty (Joseph Rowntree Foundation: Monitoring Poverty and Social Exclusion in Wales), along with:

  • Increased demand on foodbanks
  • Increased high street presence of modern day pawn brokers and loan companies
  • Increased demand for Discretionary Housing Payment (DHP)
  • Increased number of services being transferred online banking, welfare benefits
  • Closures of local banks and post offices.

So tackling financial exclusion must be a priority if we are to reduce the number of people living in poverty across Wales. For many, this will mean changing attitudes and behaviors towards money and educating people on the responsible options available.

Where there is challenge, there is opportunity…

In light of Welfare Reforms, reduction in public spending and recommendations from the Williams Commission, is now not an opportune time to radically rethink how we deliver services, fund local delivery strategies and generate sustainable job creation?
eud y defnydd gorau o’r rhyngrwyd a thechnoleg ddigidol.

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