DRAFT – TPB – NOT TO BE CIRCULATEDOCTOBER 2010
FOCUS EVALUATION CHAPTER: PLACES
This chapter aims to set out the evidence context for the places in Scotland that experience most severe poverty, and then to focus on the pivotal role that housing, and affordable housing in particular, plays in tackling poverty.
Specifically in terms of places, interpreting housing more broadly than just the physical quality of a house, but also as a factor in contributing to the make-up of a community, leads to a broader consideration of ‘neighbourhood effects’ – the effect that living in a particular area has on individual outcomes other than housing, e.g. health, employment, etc. A variety of mechanisms through which the neighbourhood effect could work have been suggested, including role-model effects, peer-group influences, social and physical disconnection from job-finding networks, a culture of poverty leading to dysfunctional values, discrimination by employers and/or gatekeepers, access to low-quality public services, and high exposure to criminal behaviour (van Ham and Manley, 2010).
However, Scottish Government analysis of this area of research has found that quantitative analysis of large data sets has tended to conclude that neighbourhood effects are marginal when compared to the importance of individual and family characteristics in explaining economic and social outcomes. But the analysis also finds that the available quantitative research is likely to have underplayed neighbourhood effects due to methodological limitations in capturing the complexity of neighbourhoods, especially the social and cultural impacts of neighbourhoods – factors which have been identified by qualitative research.
At the same time, clear data is available, via the Scottish Index of Multiple Deprivation (SIMD, see below), that strongly and comprehensively illustrates the spatial concentration of poverty and other factors detrimental to well-being – poor health, limited education standards, crime and low quality housing. These relationships are clearly complex and in many cases persist over the medium to long term rather than having immediate impacts. As such, whilst it is difficult to prove causality between poverty and place rather than between individuals and poverty, it is extremely clear that the spatial correlations between the two are extremely high.
Thus, the role of the wider concept of place in the context of poverty is best thought of as one that is complex to capture but is vital in understanding the reasons for the spatial distribution of poverty and,hence, the ways in which the lives of those subject to poverty may be best improved. Limiting the analysis to the direct impact of housing is more straightforward and allows more immediate conclusions, albeit still with causal caveats, to be drawn.
The first section below, describes SIMD in more detail and briefly examines how deprivation concentration has changed over time and the age profile of deprivation concentration. The remaining bulk of this chapter consists of a more detailed analysis of the impact of housing on poverty.
Measurement
In terms of the measurement of the spatial concentration of poverty and lack of well-being, since 2004 the Scottish Index of Multiple Deprivation (SIMD) ( has been used to highlight areas of multiple deprivation across Scotland, and track their progress. The most recent version, SIMD 2009, was published in October 2009 and results from it are presented in the map below which illustrates the SIMD deciles.
SIMD identifies small area concentrations of multiple deprivation across all of Scotland in a consistent way. It combines 38 indicators across 7 domains, namely: income, employment, health, education, skills and training, housing, geographic access and crime.
The overall index is a weighted sum of the seven domain scores. SIMD provides a relative measure of deprivation which means that the main output from SIMD - the SIMD ranks - can be used to compare areas by providing a relative ranking from most deprived (rank 1) to least deprived (rank 6,505). SIMD cannot be used to determine 'how much' more deprived one data zone is than another e.g. it is not possible to say that area X, ranked 50, is twice as deprived as area Y, ranked 100.
SIMD can be used to identify Scotland's most deprived small areas on the overall index and each individual domain, commonly by applying a cut off such as 10%, 15% or 20%.
Whilst SIMD 2009 does show some changes in the areas of Scotland which have the highest concentrations of multiple deprivation, four in every five datazones that were in the 15% most deprived on SIMD 2004 are still in the 15% most deprived on SIMD 2009.
Glasgow continues to have the highest concentrations of multiple deprivation in Scotland but it has seen a fall between SIMD 2004 and SIMD 2006 and again to SIMD 2009. This fall has meant increases in other Local Authorities due to the relative nature of the SIMD, however the concentrations of deprivation are becoming more spread out across the country.
The five local authorities with the most datazones in the 15% most deprived in SIMD 2004 contained two thirds of the 15% most deprived datazones in Scotland. By SIMD 2009, the five local authorities with the highest numbers of deprived datazones contained only 57% of the deprived datazones in Scotland, with the 7 highest containing two thirds of the deprived datazones.
How much churn is there in the 15% most deprived areas?
There are two key types of churn which affect the most deprived areas in Scotland. One of these is Area Churn - the extent to which the most deprived areas (as measured by the Scottish Index of Multiple Deprivation) are stationary over time or whether deprivation moves around. The other key type of churn is population churn - the movement of people in and out of deprived areas over time.
Area churn - The three editions of the Scottish Index of Multiple Deprivation (SIMD 2004, 2006 and 2009) are used to highlight areas of concentrated deprivation by ranking Scottish datazones from the most to the least deprived. By comparing consecutive versions of SIMD we can to measure the rate at which the most deprived areas are stationary or improving relative to other areas. When doing this however, there are some issues to bear in mind: SIMD measures only relative change, datazones differ in size and the indicators used change between indices in different years. Another key thing to consider is that regenerating deprived areas is a slow process and the SIMD indices only cover the period 2004 - 2009 so we may not expect to see dramatic changes over that period.
Between the versions of SIMD there is some movement of datazones into and out of the 15% most deprived. The degree of churn is relatively low. Eighty three percent of datazones which were in the bottom fifteen percent in SIMD 2004 were still in the bottom fifteen percent in SIMD 2009. Where there are improvements relative to other areas they are generally small and most areas which moved out of the 15% most deprived moved from just below the threshold to just above it. Thirty-three percent of those areas in the 10 - 15% band in SIMD 2004 had moved out of the bottom 15% by SIMD 2009. Among the more deprived 0 - 5 % band this figure was only five percent. Similarly the vast majority of those areas which moved into the most deprived 15% were from just above the 15% boundary.
Population Churn - The extent of population churn between areas is difficult to measure however there is evidence that its net effect is for poorer people to move into, and for more well-off people to move out of, deprived areas. This means that area-based regeneration initiatives are fighting against the flow of population churn. Researchers at GlasgowUniversity examined the flow of people moving around within the UK (although they ignored people moving into or out of the UK) using data from the 2001 census and their findings supported this. However they found that the overall effect of this flow on the composition of deprived areas was modest, around 1 or 2 residents per thousand per year.
What is the overlap between the bottom three income deciles and deprived areas?
People in the bottom three income deciles are more concentrated in the 15% most deprived datazones than the rest of the country. The chart below shows that in the most deprived datazones 50 percent of people are in the lowest three income deciles compared to 27 percent in the rest of Scotland. This difference is larger for children. For pensioners however there is little difference between the 15% most deprived areas and the rest of the country. This suggests that whereas low income families with children are more concentrated in deprived areas, low income pensioners are spread more evenly across the country.
While people with low incomes are more concentrated in deprived areas, most of them live in other locations. Around three quarters of people in the lowest three income deciles live outside the 15% most deprived datazones.
The following graph shows that the proportion of people with low incomes is higher in deprived areas than in the rest of the country. One third of people in the 15% most deprived datazones are in relative poverty before housing costs compared to less than one sixth in the rest of the country. However poverty is not only in deprived areas. Although poverty is more concentrated in the 15% most deprived datazones, three quarters of those in relative poverty are in the 85% less deprived datazones.
Housing and Poverty
Introduction
Housing interacts significantly and directly with poverty, with poorer people tending to live in poorer types of housing. People may also lose their homes, or be at risk of losing these when they experience a fall in income due to loss of employment, under-employment, and/or increasing debt, and thus fall into poverty or worsening poverty. The current economic climate, which has significantly affected housing, means that increasing numbers of people, including homeowners, may be experiencing financial hardship, and in more extreme cases, poverty; though it is likely that low interest rates have offset the likelihood of this for many households.
Poverty has been defined in various ways and may be considered in either absolute or relative terms, with particular permutations within each of these. The Joseph Rowntree Foundation, for example, defines poverty in relativistic terms as something that is evident when someone is so short of resources that they are unable to attain the minimum norms for the society in which they live. The definition and whether it ought to include social norms continues to be a focus of critical debate amongst policy makers and academics. The most common poverty measure used by the UK and Scottish governments operationalises an aspect of relative poverty (before housing costs) which is not sensitive to social norms, but is based on the proportion of households with incomes falling below a certain threshold. This type of poverty is less rare in ‘owner with mortgage’ households, and is most prevalent amongst social renters and households which are owned outright[1]. The Scottish Government spent over £500m on housing in 2009-2010, however, according to combined data from the Scottish Household Survey and Family Resources Survey between 2004 and 2008, 18 and 20% of Scottishhouseholds were living in relative poverty (Scottish Government, 2010), though the accuracy of these figures is uncertain.
Housing and the effect that this can play in alleviating poverty cannot be considered in isolation from a broad range of other social variables. This is recognised in Equally Well (2008a) which highlights three key areas which are fundamental to tackling health inequalities. One of these is that the physical conditions in which people live exert a significant impact on health. Further, that good quality housing is necessary for good physical and mental health, and that homelessness is best tackled through partnership working (to meet the 2012 target). The Scottish Government acknowledges that more general action on poverty, employment and physical and social environments will interact positively with housing improvements.
There have been several developments in housing which may be argued to have had an impact on reducing poverty, albeit indirectly. Housing benefit is a subsidy which allows households to pay rent either in full or partially for a home, whilst a range of government initiatives in housing have allowed those on lower incomes an opportunity to enter the housing market at the lower end, through the Right to Buy (RTB) social housing and the Low Cost Initiative for First-Time Buyers (LIFT) schemes, for example. However, terminating provisions for the RTB in new social housing are currently proceeding through proposed legislative change.
The Scottish Government’s National Performance framework complements the Early Years Framework (2009a), and Equally Well (2008a),which form a coherentapproach to addressing disadvantage in Scotland. Achieving our Potential (2008b) sets out the government’s framework approach to tackling poverty, including longer term measures to tackle poverty and the drivers of low income. The report draws attention to several key areas that need to be addressed to break what is recognised as the inter-generational cycle of poverty. These include focussing on particular drivers of policy, including inequalities in attainment of children and young people in Scotland, as well as the lack of good quality, accessible and affordable housing – particularly, within more deprived areas. To deliver good quality affordable housing for all, the Scottish Government aims to implement the approach set out in Responding to the Changing Economic Climate: Further Action on Housing (2008c)through a range of measures including affordable housing investment, exempting new social housing from the right to buy, increasing finances for LIFT, funding the provision of debt advice and the home owner support fund.
Poverty is a feature of contemporary Scotland, and is primarily an urban phenomena in terms of its extent and intensity (Johnstone and McWilliams, 2005:159), though it is increasingly recognised that that there are significant levels of poverty in rural areas (Scottish Government, 2009b). For example, in 2007/08, 18% of individuals in urban areas were in relative poverty (before housing costs); whilst in rural areas the figure was 14% (Scottish Government Statistics[2]).
Much political and policy attention has been directed towards the problem of poverty in West Central Scotland, where Glasgow and its environs have some of the highest levels of poverty across the whole of the UK (other areas such as Dundee also have high poverty rates). The proportion of working-age people in receipt of out-of-work benefits is more than twice as high in Glasgow, but also Inverclyde and West Dunbartonshire, than in some other parts of Scotland (The Poverty Site JFR, 2010). Similarly, Glasgow evidences the lowest employment rate in Scotland (DWP, 2007), with 45% of the 5% most deprived areas in Scotland also in Glasgow (Scottish Government, 2009).
Caution is currently urged in interpreting poverty data in Scotland, since this has attracted recent criticism. The Scottish Government income and povertystatistics team are therefore undertaking a project which aims to improve the income information in the Scottish Household Survey. One of the key aims of the project is to provide estimates of relative poverty at a local authority level that are better than those which are currently available. In the meantime there is local authority level proxy poverty data
Research by the Joseph Rowntree Foundation illustrates that the child poverty rate in Scotland is now among the lowest in the UK, at 25%, a rate which has remained at that level for three consecutive years. The number of pensioners in poverty in Scotland has decreased by more than 100,000 since the late 1990s, whilst the number of working-age adults in poverty has stayed broadly similar since the late 1990s. Within this group, however, ‘in-work’ poverty has risen. In addition, the extent to which working-age adults claiming out-of-work benefits are concentrated in particular ‘pockets of deprivation’ in Scotland has barely changed in the last decade (Kenway et al, 2008).
Poverty and Housing in Scotland
In terms of addressing poverty and its relationship to housing, the Scottish Government is committed to the social regeneration of deprived communities. Action targeted at regenerating communities includes supporting the six Urban Regeneration Companies (URC) throughout Scotland to help transform the most deprived areas, and to lead improvements in employability, educational attainment, community safety and health in those areas. In addition, £435 million has been committed through the Fairer Scotland Fund (of which around one third of this is allocated to Glasgow) to assist people living in poverty, tackle high levels of multiple deprivation and overcome barriers to work; and £30 million of Wider Role funding supporting the work of Registered Social Landlords to reduce poverty and financial exclusion in communities.
Housing Benefit/Local Housing Allowance
Housing Benefit and Local Housing Allowances are reserved to Westminster and supplied by the Department for Work and Pensions. These benefits have significant impacts on the relationship between housing and poverty, though it is the amount left over after housing costs which is generally used as a measure of the standard of living. The benefit is available to those whose income falls below a certain threshold or who are in receipt of state benefits. Local Housing Allowance does not apply to council tenants, or those renting from a housing association. It was introduced nationally from 7 April 2008 and now applies to most new claims by private tenants. Housing costs met by Housing Benefit or Local Housing Allowance do not prevent all households in receipt of these from living in poverty, since housing costs must be met. It is the income levels after housing costs which are significant in determining whether a household is living on a low income or at poverty level, terms which are often used interchangeably. However, the Scottish Government’s economic strategy solidarity target aims to increase overall income and the proportion of income earned by the three lowest income deciles as a group by 2017.