Joe Shalam is Head of Financial Inclusion at the Centre for Social Justice.
In-work poverty has been described as ‘the problem of our time’. But making progress in tackling it will only be achieved if the true complexity of poverty is taken into account. While income is critically important, raising wages above an arbitrary poverty threshold, as has been prevailing wisdom for many years, simply does not account for range of issues that serve to hold people back.
For example, at the Centre for Social Justice we hear increasingly regularly from our alliance of 350 poverty-fighting charities about the ways insecure, cramped or otherwise inadequate housing is undermining people’s ability to address the problems in their lives: be that their family instability, their reliance on alcohol to get through the day, or the barriers they face progressing in work and boosting their earnings.
The CSJ’s Housing Commission has therefore called on the Government to dramatically increase the supply of truly affordable homes, so that more people have a stronger foundation from which to escape poverty and thrive. Yet, as the Commission argues in its latest interim report, the Government will not be able to achieve this alone. Business and philanthropy can play a role, too.
Looking at history we are reminded of this. One often celebrated example is George Cadbury, whose enterprising family give their name to the Victorian chocolate brand still enjoyed by millions today.
Cadbury was no ordinary chocolatier. An enthusiastic social reformer in the Quaker tradition, he and his brother sought to offer workers an alternative to the life they had come to expect in the rapidly industrialising and grimy cities of 19th Century England. So they founded a village, named ‘Bournville’ for its quaint French twang and proximity to the Bourn river, providing garden cottages in sharp contrast to the neighbouring city slums.
Still, Cadbury was a businessman. He knew that an inadequately housed workforce was an unhealthy and unhappy workforce. As such, they were also less productive for the company – particularly when stricken by what he described as the ‘evils of modern, more cramped living conditions’.
This fact remains as true today as it was then. While we have come a long way since the familiar slums of Dickensian Britain, the housing crisis gripping parts of the country is having a profoundly negative impact on businesses, the wider workforce and their families.
The report reveals that half of UK companies with 1,000+ employees say that housing issues are adversely affecting the wellbeing of their staff, compounded by long commutes to work and rising housing costs.
The economic consequences of an increasingly overburdened and low-morale workforce are also emerging. We found that a shocking two-in-three companies are concerned about how the affordability of housing is impacting their business. And 43 per cent of employers say that housing issues are having a negative effect on their business’ productivity.
Yet the report also reveals that, like Cadbury, employers today are responding to these pressures in innovative and impressive ways.
Take Nationwide, for example, who are proceeding with a multi-million pound not-for-profit housing development in Swindon. Drawing inspiration from Bournville, where ‘Ten Shilling Houses’ were offered to the workforce beyond the Cadbury payroll, Nationwide’s Oakfield development aims to provide a high proportion of affordable homes and lease these without giving preferential treatment to employees.
Elsewhere, Pret a Manger recently opened the Pret House in Kennington. Building on their long-established homeless trainee scheme, they recognised that even the most supported trainees on the programme were suffering as a result of returning after a day’s work to the chaotic ‘temporary’ accommodation they had been placed in by local councils.
As Nicki Fisher, the Pret Foundation’s head of sustainability, told us, ‘If you can imagine, having to get up at 5am after spending a night in a homeless shelter, where they’re often very crowded, very noisy, quite chaotic… we were starting to see a couple of people dropping out because it’s just very difficult to maintain coming to work normally every day’. The Pret House provides a safe and secure home for trainees to return to, thanks to a number of conditional ground rules.
We also looked abroad for inspiration. The expansion of technology firms in coastal areas of the US has resulted in the creation of new jobs in cities with limited housing, such as Seattle and San Francisco. This has contributed to steep increases in housing costs. Companies like Google, Facebook and Microsoft are responding by investing millions of dollars in affordable housing programmes.
In partnership with the Mayor of Seattle, Microsoft alone has pledged $500 million for programmes supplying ‘housing that is within the economic reach of every part of the community, including the many dedicated people that provide the vital services on which we all rely’.
Where employers are leading the way in championing housing support, they should be recognised and supported to do more. Schemes like private tenancy deposit loans, on the familiar model of a season ticket loan, are relatively inexpensive for businesses, but can be life changing to those unable to afford the (sometimes eye-wateringly expensive) upfront costs of rented accommodation. The Government should be rewarding the companies that offer this type of support with a new ‘Housing Confident’ accreditation.
The Government could also be better at harnessing employers as fuel in the engine of housing supply, by setting up an Innovation Fund in Homes England to support more not-for-profit developments that don’t fit the conventional mould. And it should do more to facilitate ambitious partnerships between both public and private employers to secure new investment in affordable Build-to-Rent developments, with thriving and mixed communities of working families.
In short, though there have been profound changes to our society, economy and labour market since Cadbury first set eyes upon the Bourn, the same level ambition is already being displayed by some employers today in seeking to improve the workforce’s housing conditions and address poverty in its true complexity. For all the government can do, we should also aim to unlock the spirit of Bournville and extend the ‘opportunity of a happy family life’ that he believed everyone deserves.