EventsFinancialGroupsImpactNewsOCFMark Fransham presenting at OCF Webinar May 2022

The post-COVID world is looking difficult at the moment, with the perfect storm of the pandemic, Brexit and the continuing war in Ukraine.  At our cost of living crisis webinar on 11 May, we explored the data behind the headlines and how local charitable organisations are responding. 

The session was hosted by Imam Monawar Hussain DL, an OCF trustee who has recently completed his year as High Sheriff of Oxfordshire. We started with a presentation from Dr Mark Fransham, Senior Researcher at the Department for Social Policy and Intervention at the University of Oxford, on the causes and effects of this crisis. Here is a summary of his key points and links to further reading.

The background to the current cost of living crisis is 15 years of almost constant economic crisis – credit crunch, austerity, Brexit, covid – during which earnings and disposable income have grown extremely slowly by historic standards. See living standards since 2008 from the Institute for Fiscal Studies.

Added to this economic background is the rise in inflation, from 1% in March 2021 to 6.2% in March 2022. Mark’s shared view that inflation was expected to head towards 10% is already holding true, as inflation rose to 9% this week, when April energy price increases were included in the figure.

The headline around the big rise in energy prices, caused by the lift in the energy price cap, is unfortunately not the only increase in household expenditure. There has been a rise across all expenditure items year on year – petrol up a third, clothing/footwear up 10%, food up 6%. See the Office for National Statistics release on consumer price inflation.

How this affects households depends on their pattern of expenditure. For example, low income households spend 14% of their income on food (against 9% for more affluent households). See more on family spending from the Office for National Statistics.

So overall the cost of living is rising faster for low income than high income households. See the Institute of Fiscal Studies article ‘The cost of living crunch’.

The energy price cap is reviewed every six months, so there could be another increase in October. The Resolution Foundation estimate that by the winter, when energy costs are highest, 80% of the lowest income households could be in ‘fuel stress’.  

The value of average wages is expected to fall in real terms, as will the value of working age benefits and the state pension, with more people in poverty as a result. See the Resolution Foundation article on the Spring Statement.

Around one in five children were already living in households in poverty in 2019 in Oxfordshire, housing costs are very high, with much energy inefficient housing stock, and people in rural areas relying heavily on private transport, the costs of which are rising rapidly. Although Oxfordshire is relatively affluent on average, our county still has a large number of households living at or near the poverty line who will struggle to cope with these price rises.

This view of the data was shared with on the ground experience from our next two speakers, who have seen more local communities disadvantaged and struggling. Teresa Archer, Chief Officer at Citizens Advice West Oxfordshire, shared that over 27,500 people were supported by Citizen’s Advice across the county in 2020/21. Benefits advice is always their top query, followed by debt. During the pandemic, employment advice overtook housing advice as the next biggest issue. So far this year, they have supported 1,500 more people than usual, with a shift in queries to energy bills.

Fiona Steele, Director at Good Food Oxfordshire, confirmed that people who had never before accessed their services are now using food banks. 10 to 14% of people in Oxfordshire are experiencing food insecurity, which equates to around 70,000 to 90,000 people. Food poverty action plans are in place and communities, built around emergency food provision at the start of the pandemic, are still running, sharing resources and learning from each other. OCF will be running a grants round focused on cost of living support in the autumn.

Our community of webinar attendees also shared a variety of support advice and resources. Please get in touch if you would like to have this information.

Watch the whole webinar recording and download Mark’s presentation