09/08/22
3 min read
On Thursday 4 August, the Bank of England forecast inflation would rise to 13%. This will worsen the cost of living crisis across the UK. Essentials including food, heat and fuel will continue to get more expensive even though prices are already significantly outpacing any growth in incomes for the majority of people. The Bank also expects the UK to soon enter a prolonged recession, with GDP shrinking by more than 2%.
Even if, as expected, inflation falls in the medium term, permanently higher price levels will already be baked in. For many people, incomes will take some time to catch up. State pensions will rise in line with inflation this year, but it is not yet known if other benefits will. The government’s recently announced pay award will mean further real-terms pay cuts for most public sector workers.
This crisis is an extraordinary event which requires an informed response. While the UK has limited control over the economic shockwaves currently hitting us, research should still aim to address its impacts. We invite research applications to our Research, Development and Analysis fund with the potential to improve people’s lives during this turbulent period.
The impact of the current cost of living crisis on people’s lives
It is often the most disadvantaged members of society who are most vulnerable to economic shocks. The strain on families living on a low income was exacerbated by the COVID-19 pandemic, as powerfully demonstrated through the lived experience of participants in the Covid Realities project. The Food Foundation has shown that the poorest fifth of UK households would need to spend 47% of their disposable income on food to meet the cost of the government recommended healthy diet.
Even before the cost of living crisis, 36% of children in families with a child under five in the UK were living in poverty. Our Changing face of early childhood series has shown that many parents are already dealing with multiple pressures. These pressures include economic hardship, balancing work and childcare, and mental health problems. What approaches may help to better support families?
Research by the Institute for Fiscal Studies has shown that total UK public spending on education has fallen significantly as a share of GDP over the last decade, even taking into account extra support provided in response to the pandemic. This spending gap is set to widen with the actual costs faced by schools estimated to be growing by more than economy-wide inflation. How can schools cope with increasing pay and other cost pressures?
The numbers of people in their 50s and 60s who are neither in nor looking for paid work has grown by more than a quarter of a million from pre-pandemic levels. Many of these people will be less able to afford everyday essentials and their prospects of re-entering the labour market are made even more challenging by a looming recession. How might such workers get the right support to re-enter the labour market when they want or need to do so?
Apply for research funding
We want to fund research proposals which provide new insight into how to respond to the cost of living crisis, across our three domains: Education, Justice and Welfare. There will be big impacts in underpinning policy areas such as in schools, the courts and the labour market but how might research help policy makers, practitioners and individuals to better mitigate them?
Applications should clearly and directly focused on improving people’s lives by informing economic and social policy, and practice. Projects should be designed to harness new or under-used data or information and apply innovative and robust analytical methods.
We can fast-track funding decisions if we identify particularly promising applications with a clear route to impact, where work would be able to start quickly to capture data in real time or would quickly produce results.
If you are able to put forward a plan that responds to these interests, please submit an outline application to our Research, Development and Analysis fund for consideration. Our next deadline is March 2023.
About the authors
Mark Franks is Director of Welfare at the Nuffield Foundation. Mark leads the development of the Foundation’s welfare research portfolio and contributes to the organisation’s strategic direction as part of the senior management team.
Before joining the Foundation, Mark was Chief Economist at the Office of Manpower Economics where he played a central role in supporting the UK’s independent public sector pay bodies, whose recommendations affect the pay of 2.4 million workers, involving a paybill of more than £100 billion.
Mark has occupied a number of economist and policy roles across Government, with a particular focus on the labour market. He has worked in the Department for Business, Innovation and Skills, the Home Office, HM Treasury and the Department for Education and Skills and in economic consultancy.
Between 2012 and 2015, Mark was responsible for leading analysis for the government of science policy, innovation and the graduate labour market. Previously, he set up a new public sector body, the Migration Advisory Committee (MAC) and led its secretariat for five years. The MAC’s advice was highly influential in developing policy in area issues including criteria for economic migration, family migration and permanent settlement.
Catherine joined the Nuffield Foundation’s Welfare team in early 2019, contributing to the development, and management of the grants portfolio. She leads on our digital society grants and manages our Oliver Bird programme of research relating to the impact of musculoskeletal conditions on wider well-being. She has co-ordinated the COVID-19 rapid response call.
Prior to joining the Nuffield Foundation, Catherine managed Research and Policy teams with the sight loss charity RNIB. Previously she worked in the Department of Health as Research Manager with the Children and Young People’s Public Health and Teenage Pregnancy policy teams.
