Policy About the Poverty reduction strategy

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2. Poverty in East Devon

Accepting that there are several different definitions of poverty. The most common is relative income poverty, where households have less than 60% of contemporary median income (after benefits and taxes).  We know that 60% of median household income (including earnings, pensions, investment income, benefits and taxes) in the UK was £17,759 in 2018/19. The Joseph Rowntree Foundation’s report found that once housing costs are included in this definition, fourteen million people (22%) are in poverty in the UK.

Office of National Statistics data shows that in financial year ending (FYE) 2020, the period leading up to the implementation of measures against the coronavirus (COVID-19), average household disposable income (after taxes and benefits) was £30,800 – up 2.3% (£700) compared with FYE 2019, after accounting for inflation.

Over FYE 2020, real earnings increased by an average of 1.5%, however more recently total annual pay growth for March to May 2020 fell by 1.3%, after accounting for inflation, which will likely impact adversely on income growth rates in FYE 2021.

The increase in median income in FYE 2020 continues an upward trend seen since FYE 2013, where average household income increased by an average of 2.1% per year.

Median gross weekly earnings £ East Devon - source DCC website

Indicator 2016 2017 2018 2019 2020
Male full time workers 570 559 564 623 757
Female full time workers 420 452 450 465 529
Female part time workers 206 195 200 213 -
Male 529 514 476 563 499
Female 344 321 326 353 381
Total 414 395 393 426 423
Full time workers 519 513 496 550 554
Part time workers 207 193 191 213 196

Median household incomes (including earnings, pensions, investment income, benefits and taxation)

  2014/15 2015/16 2016/17 2017/18 2018/19
UK median income £28,783 £29,819 £30,674 £31,465 £30,918
60% of UK median income £17,270 £17,891 £18,404 £18,879 £18,551

Source: ONS, 2020, Time series of mean and median equalised household disposable income

It is difficult to accurately measure the level of poverty in East Devon, as comparable data on household income is not available at a local, district level. The Council has access to income data from CACI, but this is only available in income bands of £5,000, and unlike the national data above, it does not factor in taxation. However, this does suggests that the proportion of households in East Devon with gross incomes below £20,000 per annum and £15,000 per annum has declined steadily between 2014/15 and 2019/20.

Our Poverty – A Local Picture report produced in November 2019 was an extensive piece of research on poverty that included a local flavour and found:

  • In East Devon 15.5% of households live below the 60% of median income.
  • For East Devon it is estimated that 10,899 households are below the poverty line.
  • This translates into 23,978 people in poverty assuming average households comprise 2.2 people (Knowing East Devon).
  • East Devon’s child poverty rate is 22.3% below the national average (34%) but concerning.

While a number of the indicators have improved, poverty remains a significant issue in East Devon. The income related indicators show that:

  • Average weekly earnings for the lowest 10% of earners were £117.80 per week in 2019, which is 3.4 times less than the average for all East Devon employees (£396.80 per week).
  • In 2019, 11% of East Devon households were claiming Universal Credit and/or Housing Benefit and in 2020 this has risen to 16%.

During this strategy period we will be developing a poverty indicator dashboard to provide visibility of poverty in the district. This will recognise the multi-dimensional nature of poverty and there being no single indicator.