Financial insecurity: guidance to local authorities over winter 2021-2022

The following insights may help to inform local decision-making:

• Cost of living – the rising cost of living disproportionately affects those on lower incomes who, on average, spend a greater proportion of their income on essentials. Households in the lowest income decile spent 54% of their total weekly expenditure on housing, food and transport compared with 42% in the highest income decile[1]. Households headed by people aged under 30 years spent proportionally more on housing and food (41%) than other age groups (30% to 36%).
• Social security – Scottish Government modelling estimates that social security spend in Scotland is likely to be reduced by nearly half a billion pounds following the removal of the emergency benefits introduced by the UK Government in March 2020. Poorer households, single parent families, families with children, and families not in employment are likely to see their average incomes fall by the largest proportion. The overall poverty rate is estimated to increase by 2% as a result.[2]
• Employment - in August 2021, 94,000 people were still on furlough in Scotland. Take-up across the UK as a whole was highest for low paid jobs – 9% for jobs earning £5,000 - £10,000 per annum and 7% for jobs earning £10,000 - £15,000. This compares to 5% for all jobs on average. As low-income households are less likely than high-income households to have two adults in employment, the analysis suggests that losses for single-earner households could hit low-income households particularly hard. Furlough data suggests that customer facing sectors continued to have the highest take-up rates prior to the scheme’s closure, including Arts, Entertainment & Recreation (13%) Accommodation and Food (12%).[3]
• Debt – a recent report by the Joseph Rowntree Foundation highlighted high levels of debt among low income households, and that 87% of those who are struggling to pay bills reported that they were not in arrears prior to the pandemic. The report also states that the groups most likely to be in debt are also those most affected by the cut in Universal Credit (“families with children, Black, Asian, or minority ethnic (‘BAME’) families, and families containing someone who is disabled”).[4]