The cost-of-living crisis: is the nation’s health paying the price?

Key:

• AC:    Anna Charles

• TB:    Torsten Bell

• HB:    Helen Barnard

• MG:   Marie Gabriel, CBE

• CR:    Cormac Russell

AC:    November 2022, the UK is facing its longest recession since records began and a historic drop in living standards.  The country is in a cost of living crisis with energy prices rising and everyday items like food and clothing becoming more expensive.  I’m sure that, like many, lots of our listeners are already feeling the pinch, and for those who are the hardest hit we’re hearing of people having to make impossible choices between staying warm or feeding their family.  What will all of this mean for the nation’s health?

Welcome to The King’s Fund podcast where we explore the big issues and ideas in health and care. I’m Anna Charles, Senior Advisor to the Chief Executive at The King’s Fund and in this episode I’m going to be investigating the cost of living crisis, the impact it might have on our health and wellbeing and what the health and care system can do in response.

Let’s start by finding out more about the current economic situation and what the cost of living crisis really means.  Now, I am certainly no economist so I went to meet the experts to help me understand the basics.  First I spoke to Torsten Bell, Chief Executive of the independent cross-party think-tank, the Resolution Foundation, which focuses on improving living standards for those on low to middle incomes.

Torsten, the Resolution Foundation recently described the current situation as a ‘cost of living storm’, can you tell us what you mean by that?

TB:    Well I think most households, you know, just going out trying to get the food the last year will have felt it’s pretty difficult, whether you’re poor, middle or richer it’s been a pretty tough year.  Obviously the bit about it that’s received most attention, and understandably so, is that we’ve got inflation at 40 year highs.  We’re not used to double-digit inflation in modern Britain but we’ve been living with it for the last year and that’s being driven in particular by fast rises in the price of essentials.  Energy and food are the two that particularly worry us because when you increase the cost of essentials that isn’t something that those on lower incomes can kind of opt out of to avoid the impact of high costs. And then when we look further ahead we’ve also got other things that are contributing to pretty difficult times for our living standards.  We’ve got housing costs rising, that was already happening for renters over the course of the last year, and then mortgages will be going up significantly in the course of the next few years, and then if the Office of Budget Responsibility or the Bank of England are right then we’re also on course for rising unemployment of somewhere between half a million and a million people over the course of the next few years.  So that’s why this isn’t just one individual problem, it’s a lot of things coming together.  The big picture for them is that Britain’s getting poorer and that it’s going to be particularly hard for those on lower incomes.

AC:    Very recently on 17th November the government set out its economic plans so what’s your take on the announcements that were made and the extent to which they will or won’t help address the crisis that you’re talking about?

TB:    So Jeremy Hunt as the new Chancellor’s autumn statement broadly does two things, it set out how they intend to provide energy support for households from next April when the existing support comes to a close, and broadly what he’s doing is weaning British households off the high levels of support that have been announced this year and slightly more targeting that support on poorer households. And he’s doing that in two ways, increasing the cap on energy costs that Liz Truss introduced, the energy price guarantee, raising it from the current £2,500 to £3,000, and then he also repeated but made slightly more generous Rishi Sunak’s lump sum cost of living payments and those are going to be paid over the course of the next year.  The effect of those two things is to broadly reduce the amount of energy support next year compared to this year by about 60% but to make that more focused on poorer households.  He’s then in the longer term saying the country is poorer, the size of our economy is lower, the cost of our borrowing, our debt interest payments are higher, and he’s saying, “I’m going to respond to that not by trying to do anything really drastic in the short term but I’m going to have taxes going up slowly and steadily over the course of the next few years and then I’m going to introduce spending cuts from 2025 onwards compared to what spending levels would otherwise have been and that’s how I’m going to keep public finances sustainable,” and by that he means have debt falling as a share of GPD.  It’s not an incredibly tight approach to the public finances, it’s what you historically would have seen as a fairly loose approach compared to the last ten years, but the country has significantly poorer and our debt interest costs are going up very significantly.

AC:    Okay.  So more pain to come further down the line possibly.

TB:    Yeah, I mean, definitely for public services unless this economy starts growing.

AC:    And you mentioned some of the recent economic shocks we’ve had, COVID and of course this is all off the back of a decade of austerity, so is it surely going to be harder to bear some of those constrains to public spending with that being the context that we’re starting from?

TB:    Yeah, I mean, as always in life, it’s not very helpful but it is true in this case to say we wouldn’t start from here, and that’s true for public services and it’s actually true for households as well.  So we’ll do public services first.  It’s obviously much harder to cut public service spending after a decade of austerity than it was at the beginning of it, which I think is one of the reasons why the government is back-loading, basically saying, “Well see you after the next general election before we try to cut any more spending” because they can see the data, like everybody can, which is many, many public services are not performing in the way that anyone would like.  Those working in them are having a pretty tough time and those using them are not finding that they are providing the level of service that they would like. So that’s on the public services side.

On the household side one of the reasons why this crisis right now feels so difficult for households, and even more difficult I think than we’re seeing in lots of other European countries who are also having the same gas price rises that we are suffering, is because British households, their living standards have been really suffering from a toxic combination of high inequality that’s basically left with us from the 1980s and very low growth which has been the legacy of the last 15 years, particularly low productivity growth. That has meant almost no wage growth between the start of the financial crisis and the pandemic starting, and then we’re obviously now seeing actual real wage falls because inflation is much faster than wage growth right now. So going into this crisis with no wage growth means that then when we are hit with higher energy bills we don’t have lots of kind of fat to cut in our household budgets.

AC:    Having spoken to Torsten, I wanted to understand more about what effect the cost of living crisis is having on people’s daily lives and who will feel the impact of this most sharply.  To find out I sat down with Helen Barnard, Associate Director at the Joseph Rowntree Foundation, an organisation whose work focuses on understanding and solving poverty in the UK.

HB:    So I think there are kind of three broad ways that this is landing on people. So the first way is the immediate day to day hardship and I think what is particularly worrying is the large numbers of people who are having to go without essentials, really millions of people who are reporting having to skip meals or not have enough to eat, not being able to turn their heating on, not being able to have hot showers, all of those kind of real basics.  That is affecting people on low incomes and it is particularly affecting very badly disabled people and carers, many of whom have extra costs because of their disability.  Families with children are also really struggling, particularly single parents and families where you haven’t got two people in work because you’ve got a young child or whatever it is.  So that’s the kind of immediate hardship, has actually been deepening for the last few years but it has taken a real dive.

I think the second way is debt.  So an awful lot of people are getting into arrears with bills, are also borrowing to try and keep up with their bills and therefore taking on more debt.  And of course one of the issues about that is even, you know, if we look forward a year or two when we might hope that the immediate economics are better, that debt doesn’t go away and there are people who are racking up debt that I suspect they will never be able to pay off.  And then the third way is the impact of all of that on people’s health, their relationships and their prospects.

AC:    And I read that the Joseph Rowntree Foundation, your organisation, estimated earlier this year that more than one in five of the UK population are living in poverty, that’s around 14.5 million people, so that’s so many people.  And in that group are there people struggling at the moment who we wouldn’t necessarily previously have considered as being particularly at risk of poverty and its impacts?

HB:    What we are seeing is in a sense there is a layer of people who were just about doing okay previously who probably aren’t eligible for a lot of the help that’s been put in, particularly more targeted help, but didn’t have the kind of incomes, the kind of buffer that lets them absorb energy bills doubling in a year.  We’re already seeing, we’re going to see more, people who were previously just about alright being pulled into really not being able to cope, and of course for those people they’re probably less likely to be in touch with service providers, they’re less likely to have experience of how you get some of the help that you’d be entitled to because they haven’t needed to in the past.

AC:    And that presumably includes a lot of people who are in work?

HB:    Also, I mean, if you take people who were already in poverty more than half of them were in working households.  About three quarters of children in poverty now have at least one parent in work.  Quite a few of them actually will have two parents in work.  So actually it’s interesting if you go back…  You know, if you look over the last 20 or 30 years the kind of…  If you imagine who is in poverty, if you went back 30 years you would imagine a family with nobody in work or a pensioner, an older person - that has completely turned around.  If you imagine who’s in poverty now you should be imagining somebody who probably is in work but they’re in a low-paid insecure job, they’ve got their shifts changing week to week, they’re renting probably, although there are a fair number of homeowners in poverty but for the majority they’re renting.  There’s loads of people in the private rented sector so they’re facing really high rents, not a lot of support and quite often really poor quality homes and lots of insecurity. But also it’s always worth saying half of people in poverty are either disabled themselves or live with someone who is and we don’t talk about that enough, the way that being disabled, you know, massively increases your risk of living in day to day hardship, and the systems we’ve got are not protecting people from that.

AC:    And in the work we do at The King’s Fund we can see there’s a lot of evidence for that two-way link between health and poverty and the people living in poverty have a higher risk of poorer physical and mental health across a whole range of measures.  Can you say a bit from your perspective about that link between poverty and health and then what that means for the impact of the current situation and what that’s likely to be on people’s health and wellbeing?

HB:    Yeah, absolutely.  So, you know, if you just look at the stats, somebody who is on a low income and in poverty is significantly more likely to experience a mental health condition like depression or anxiety, they are also more likely to experience physical health problems, respiratory illnesses, they’re more at risk of heart attacks, they’re more at risk of stroke, all those things.  And of course we saw it during the COVID pandemic in a particularly I think stark and tragic way that you were far more likely to die of COVID if you were in poverty and if you were living in a deprived area.  So the stats show that there is this concentration of ill health among people on low incomes, but you’re right, it’s a two-way impact.  So on the one hand, living on a low income basically means in a lot of ways that you are living with an incredibly high level of stress, you know, if half your mind is always trying to balance “How am I going to make sure my child has enough food tomorrow and try and pay the bill and not get evicted and I can feel the debt racking up”…  And there’s been some qualitative research where people have talked about how that feels, they say it’s like carrying this cloud around above you, you’re always worried.  And so the toll that takes…  You know, things like sleeplessness, you know, the real basics, if you can’t sleep because your so worried about how you’re going to pay the bills…  We all know you have a few bad nights, you don’t feel great, if that goes on for years because you are stuck that is incredibly serious for your health.  And we know that there is now a lot of medical physiological evidence the way that living with that high and sustained level of stress because of poverty, it affects your immune system, it affects your heart, it affects all those things, so you’ve got that.  So living with poverty is very bad for your health.  It also means of course you are often stuck in a house that’s not very healthy so you’re living in a house that’s cold, that has damp, that can be straightforwardly dangerous, and because you’re on a low income you don’t have power, you don’t have the power to say, “Okay, my private landlord isn’t fixing this, I’m going to walk away and find somewhere better to live” or, to be honest, “My social landlord isn’t sorting this out.”  You know, we’ve seen recently the incredible tragedy of a child dying because of this but it’s also tragic that’s not an isolated incident.

AC:    Well Torsten and Helen have painted a stark picture there in terms of the scale of the crisis and the very real impact it’s already having for individuals and families.  So having heard all of that, I want to explore what the health and care system can do in response and here to help me do that are Marie Gabriel and Cormac Russell.  Marie is Chair of the North East London Integrated Care System and Chair of the NHS Race and Health Observatory.  Cormack is the founding Director of Nurture Development, a social enterprise focused on community development, and is an expert in working collaboratively with communities to bring about change.

Marie, Cormac, thank you for joining me.  We’ve heard from Torsten and from Helen about the big picture impact so I’d like to start by asking you both about whether that resonates with what you’ve been seeing locally in the areas you work in.  Marie, what are you hearing about in terms of the communities your organisations serve in North East London?

MG:    It does resonate, very much so.  We are recognising…  Particularly I would like to sort of pick out in North East London the challenges of financial uncertainty and actually the increased risks of mental health problems and the lower mental wellbeing associated with financial stress.  There’s a real challenge around food security, and we know that an unhealthy diet is the leading cause of disease of England, including Type 2 diabetes, heart disease and some cancers, fuel poverty, as we know, and the impact that has on increased respiratory and cardiovascular disease, and also we are noticing that the cost of living is affecting access to necessary medication.  So there was a recent study by the National Pharmacy Association indicating that asthma inhalers were among some of the drugs most commonly not taken because of cost of living concerns and worries about paying the prescription.

CR:    These are issues of social injustice rather than purely medical issues in that kind of very narrow sense over the course of a long, long period of decades, not just of the last decade.  I think one of the things that’s striking is that in some cases the positive deviance in this is where we are seeing some communities that are getting organised from the grassroots up. So, you know, the idea that individually and at a household level people are more vulnerable and more exposed - and those that are economically marginalised are certainly more vulnerable and exposed because of what’s going in - is absolutely the case, there’s no question.  Within those groups those that are organised and more connected for power are beginning to shape the conversation.  It doesn’t mean that they’re not in distress or that there aren’t very serious social justice issues that actually have to be addressed but I think there’s a growing recognition that the liberation out of this particular social injustice, this justice crisis, isn’t going to be funded, it’s going to have to come grassroots up, it’s not going to come just from the top down, and I think that’s an important point to make from the outset.

AC:    Can you say a little bit more about what you think people leading or working in the health and care system can be doing to help support people and communities through all the challenges that you just described?

MG:    One of the things that we’ve agreed to do together is try to take coordinated action and there’s a vast amount of things happening already across integrated care systems.  And in North East London that includes help with keeping homes warm so they’re supporting people around draft excluders, insulation of roofs, the information and clear advice to people in different languages.  So 53% of our population is black minority ethnic and we have a high number of asylum seekers and refugees who have an even harder time of things.  You know, we’re looking at warm spaces and open up buildings supporting the voluntary sector.  We have boroughs, for example, like Newham who are turning what were COVID champions into cost of living champions so they can go out into their communities and support people with the challenges that they have.

Some of the other things that we’ve been thinking about is how do we take a population health approach to this, so really thinking about who we need to target with our work.  We know that certain communities will be impacted more than other communities.  That includes black and ethnic minority communities, those with a life-limiting illness, people that need additional support that uses power in their home, so like mechanical ventilators.  Unpaid carers, single and young parents, younger people under 24 years of age are communities that are more at risk and more financially vulnerable than others, so taking that population health approach.  So we are trying to target those communities and make sure that our approaches are flexible in the face of the challenges that we face.

The other thing that we’re trying to do is – probably picking a bit up on what Cormac was saying – is what can we do to raise awareness of the impacts nationally at a national level and how can we impact on others, so, you know, whether we can write to utility firms to ask them to support those running care equipment at home, and how can we work across London to be working towards being living wage employers.  And the London Health Board are actually working with the Institute for Health Equity who are actually doing some research into what are the interventions that have the most impact for people who are experiencing financial hardships, so really trying to think about what we can do across and learning from each other in terms of best practice, reducing duplication.

We’ve also got some work that’s ongoing in our own North East London around prescriptions and actually how we can support people to afford their prescriptions so they don’t have to choose in the same way as they’re having to choose between heat and eat.  Signposting has been really important and how we can use social prescribers and frontline staff within that.

AC:    Just listening to you there, Marie, I’m really struck by how everything you’re describing there rests on a really multi-sector approach.  None of that sounds like it’s the NHS working on its own, it sounds like it involves local government, businesses, the VCS, alongside the NHS, have I understood that correctly?

MG:    Yes, that’s really true.  And the other thing that I know that we’re looking at is how can we work with schools.  And I spoke earlier I think about the levels of child poverty in our boroughs that existed already but have increased and actually how can schools…  And I work with school support so not to forget that sector’s a really important and vital sector.

AC:    Cormac, can I bring you in at this point?  Reflections on what Marie’s described there.

CR:    Yeah, well I suppose first of all recognising even in the absence of stronger trade unions than maybe in other countries that we have a vocational responsibility to try to use the assets and resources we have available to us to really mitigate the crisis, and I think we have amazing frontline colleagues, people in commissioning, people in procurement, who really are, you know, four square shoulders to the grind on this one.  So we have a massive I think asset available to us but it’s only one tool for social change.  The other tool for social change is communities themselves.  So I think part of the challenge is to not fall into the trap which is the assumption that communities are passive, when in fact they’re very active, they’re very creative.  There’s a lot that I would say, arguably, communities can do that institutions can’t.  So I think one of the things that we can do, if we’re lucky enough to receive a salary or we have the privilege of working within a system that has political prestige or other forms of assets, that we make sure they’re as community oriented and as in service of community as possible.  And I think a way of doing that is to recognise we won’t lift communities out of this crisis by putting them down so we have to actually lift up the strengths and the assets and the capacities that communities actually have and some of which may be invisible.  So making the invisible visible and really precipitating much deeper community development principles.

I think one of the things that’s difficult within health and social care in the UK is that sometimes in the effort to try to ensure that individuals and households, particularly those that are vulnerable, receive the support that they need we can have a very individualistic view of what health means.  So I think thinking about the neighbourhood as a primary unit of health is useful because it enables us to do that cross-sectoral working but actually in a way that’s inch-wide and mile-deep.  My fear is that in the face of a crisis we go mile-wide and inch-deep so an awful lot of our interventions don’t actually stick and don’t give uplift to communities, they’re very individualist, very crisis oriented and very instrumental, and the more crisis drives the conversation, the more that is the case - we know those trends exist.  So somehow I think another thing that we need to figure out is if we work in a more place-based way how can we do that in a way that takes account of all those who are at the margins of communities.

There’s also something about recognising that poverty has a postal code as well as particular target groups and particular vulnerable groups and we need to recognise the whole gamut of challenge, and one of the ways I think of doing that is get more serious about neighbourhood pool budgets and working within a neighbourhood focus.  Not exclusively but definitely I think we could do more about that.

MG:    I think I’d like to agree with Cormac.  Place is important but so is neighbourhood and actually within that the community and voluntary sector, and actually through those how we need to have sustained support for our communities.  Trust is really important.  So we learnt through COVID that those communities that did not trust us were least likely to take the vaccination and those are the communities as well that are most likely to have the worse outcomes from having COVID.  And so how we build that trust is really building on the strengths of those communities and realising it doesn’t always need to be the public sector but to be able to understand and work with and sit back and allow that community to lead is really, really important.

AC:    And, Cormac, I can see you nodding along to those points about trust that Marie’s making.

CR:    Absolutely.  I think all of this work is contingent on going at the speed of the trust.  If we go faster, no matter how innovative our interventions will be, we’ll leave communities behind and we will ultimately hit our targets and miss the point, and that’s happened over and over again.  And we have to legitimise that speed and that way of working at scale by saying it’s a crisis and we have no other choice. I really appreciate Marie’s point, I think if we can’t actually build trust…  And also relocate authority at times, be generous and actually sometimes relocate money, relocate resource, not just responsibility, so that we’re not gaslighting communities.  So I think, yeah, absolutely it’s all about trust and all about believing in communities.

AC:    I’m so struck from what you’re saying about how we started off this episode talking about this as a national crisis and something that everybody can see and feel every day but actually it’s very, very local in terms of what the impacts are on specific communities and very local in terms of how you can then work effectively with those communities to actually make a difference.

One thing I did want to touch on is that of course everything we’ve been discussing is also affecting health and care staff too.  So the NHS Providers Cost of Living Survey was published in September, that found that staff were struggling to afford to come to work, it found that 27% of Trusts had already set up food banks for their staff, and then in the social care sector some recent work by the Health Foundation found that even before the cost of living crisis hit one in five residential care workers were living in poverty, that compares to one in eight of all UK workers.  And, as we all know, it’s been a really difficult few years for staff working in health and care, not least because of their experiences during the COVID-19 pandemic.  So with all of that in mind, what responsibility do health and care organisations have to help and support their own staff through the cost of living squeeze?

MG:    Absolute full responsibility to support and help their staff through this cost of living crisis as integrated care systems where both NHS and social care staff…  And we know that terms and conditions for social care staff are not on a par with NHS staff.   We know that a high proportion of staff’s salaries in London particularly go towards rent and that leaves them with less money to do the other essentials that they would need, and they are people within our communities.

AC:    Cormac, is there anything you’d like to add on that point?

CR:    A lot of agreement.  A couple of practical opportunities, I think.  If transport is an issue, and of course it is because it’s adding to the burden of cost, well why can’t we use that opportunity to actually have a long overdue conversation about returning, for example, social workers to a patch social work model rather than a casework model which clearly isn’t actually working either for the social worker or for the family that they’re trying to serve in a lot of instances, this crisis model which isn’t actually getting to depth.  So I think moving into the likes of Buurtzorg and models like that where we’re looking at localised neighbourhood workers cooperatives and where people can actually work in and serve in their own neighbourhoods, ideally across the life course of their career so they’re working across people’s life course from birth to death and in between will really radically change the nature, I think, of a lot of this crisis.

And one final thought would be we could also begin to look at things like how we’re using procurement very creatively, so really starting to insist that every good, every product that a public sector body procures is procured from local vendors, and if there aren’t local vendors then oblige them through, you know, the appropriate Social Value Act or whatever legislation is available to us to ensure that they do what’s necessary to develop the space for those industries to grow from the local context so we’re investing and developing the local environment.

MG:    The action that we take now should be longer term action.  We can use this opportunity to really energise what we’re trying to do in terms of residents accessing employment opportunities, and so we should be looking at our own staff and thinking about who do we target, who do we need to support, particularly in career progression.  And we know, for example, that black minority ethnic staff do not progress at the same rate as their white colleagues so, you know, what more can we do with better employment practices that enable to target those that are going to be most likely to be financially vulnerable as well as putting in that additional support?  What long term work can we do so that there’s a sustained financial resilience and community resilience post what I hope will be not too long a period of financial instability for our staff and our communities?

AC:    Well that’s all we’ve got time for today.  Thank you to Marie Gabriel and Cormac Russell for joining me and thank you to Torsten Bell and Helen Barnard for lending their insights and expertise earlier in the episode.

If you would like to find out more about The King’s Fund’s work in this space we’ve recently published a long read exploring the role of the health and care system in tackling poverty.  You can find a link to this in the show notes and you can also find a link there to sign up to and join our free one-day virtual event, Time for Action on Poverty, which is taking place in December.  We hope to see you there.

You can find the show notes for this episode at all of our pervious episodes at www.kingsfund.org.uk/kfpodcast.  This episode was edited by Bespoken Media and thank you also to our podcast team for the episode, Ruth Robertson, Ian Ford, Charlotte Wickens, Dave Buck, Jen Thorley and Sarah Murphy.  Don’t forget to subscribe, share, rate and review this episode wherever you get your podcasts and you can also get in touch with us via Twitter – our account is @thekingsfund.  And of course thank you for listening, we hope you can join us next time.

The UK Government – provide an overview of government support available for those needing help with the cost of living, this includes information related to income and disability benefits, bills and allowances, childcare, housing and travel. They additionally have a guidance page on receiving an extra payment to help with the cost of living if you’re entitled to certain benefits or tax credits.

Citizens Advice – have a webpage providing an overview of the help you can get, including information on budgeting, financial advice, mortgage advice and more. You can also check which benefits you can receive and find out options for getting out of debt.

Mind –have a webpage outlining ways you can find support if your mental health is being impacted by the cost-of-living crisis.

Turn2us – have a free, confidential and independent helpline to help people facing financial difficulty, and resources to find out what financial support is available.

National Debtline – provide free debt advice and resources on a range of debt issues.