Nottingham provides inspiration for RSA report addressing financial challenges faced by ordinary working families

Using three key policy areas as examples – health, housing and welfare, and labour markets – the RSA’s report demonstrates how issues could be viewed through an ‘economic insecurity lens’ to better inform actions and urges policymakers to do so as a matter of urgency.

It draws upon and reinforces the findings of initial work by Nottingham Civic Exchange (NCE) into Ordinary Working Families which was released last June.

Dr Paula Black, Director of NCE at Nottingham Trent University, said: “We noticed through our work looking at how Ordinary Working Families felt about their financial situation as well as the economic reality, that economic insecurity was a common theme and warranted further exploration.”

NCE’s report highlighted economic insecurity is a key feature of such households. It also found that how people felt about their financial situation differed from the objective measures commonly used.

Dr Black added: “As policymakers increasingly discuss Ordinary Working Families it is important they understand the way that economic insecurity impacts their lives and that the subjective element of how people feel is important in this. We are delighted to be working with the RSA on this programme of work and to be feeding the experiences of Nottinghamshire people and the profile of the area into such influential work.”

Matthew Taylor of RSA

The RSA defines economic insecurity as “harmful volatility in people’s economic circumstances. This includes their exposure to objective and perceived risks to their economic well-being, and their capacity to prepare for, respond to and recover from shocks or adverse events.”

This captures the subjective, felt experience of the economy, because it relates to expectations and anxieties about the future. Today’s national report by the RSA supports NCE’s regional research with a further survey of more than 2,000 adults across the country. The survey found that:

• More than 20% of adults in the sample described their current financial position as ‘just about manage to make ends meet each month’.
• Thirty-two per cent of those ‘just about managing’ in the sample had annual gross household incomes above £34,000, including 12% with incomes above £48,000. Thirteen per cent had incomes below £14,000 while the majority (55%) were in the low-middle-income rage of £14,000-£34,000.

The RSA’s work also analysed government policies from 1997 to present which have been targeted at people and households on low and middle incomes, including policies relevant to those ‘just about managing’.  A number of themes emerged including the positive impact of the introduction of the minimum wage (and later national living wage), limited impact of skills and programmes designed to get people back into work. It also highlighted significant inter-generational differences in insecurity affecting people who are ‘just about managing’ – with young people worse off than those who have benefitted from pension guarantees, free travel and winter fuel allowances.

The report also criticises ‘low road strategies’ taken by firms who are pursuing short term, cost-minimising strategies which often neglect to invest in up-skilling their workforce, holding back productivity growth and, in low-wage sectors, sustaining a high demand for poor quality jobs. This approach to growth is being facilitated by labour market flexibility and insecurity.

Report recommendations

As a result of the research, the RSA will make three long-term and three short-term recommendations at today’s launch at Nottingham Conference Centre.

Long term recommendations

• Pursuing an economy based on a renewed social contract (stronger relationships between business, policymakers, civic society and works and their representatives)
• Creating a virtuous cycle between economic security, good work and economic competitiveness (better understanding of the links between the economy, job quality and progression and economic security)
• Establishing economic security as a central priority for social policy

Short term recommendations

• Developing more strategic policy design (including intervening in the right way and at the right time, particularly at key moments of change)
• Reducing people’s exposure to the risks associated with economic insecurity (for example through preventative programmes, housing security and new models of welfare provision)
• Helping people, households and communities respond to economic insecurity (for example through increasing the take-up of financial entitlements, maximising the role of key institutions such as universities and healthcare services in improving economic security)

The report was discussed this morning by a panel chaired by Matthew Taylor and Polly Tyler – a mature student at Nottingham Trent University and single parent.

Polly said: “I hope to highlight the realities of economic insecurity as a single parent and the fact that insecurity is increasingly affecting people on middle incomes and it is becoming harder for each generation.”