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A new Index on the effectiveness of different welfare states by the International Longevity Centre – UK (ILC-UK) ranks European countries based on their performance in a number of key welfare areas between 2003-2014. ‘Measuring state effectiveness: an ILC-UK index’ found that:

  • With approximately 15 million people classified by Eurostat as at ‘risk of poverty or social exclusion (AROPE)’, the UK is ranked 15th of 23 European countries on the ILC-UK’s Poverty and Social Exclusion Index.
  • The UK is ranked 14th on the ILC-UK’s Housing Quality Index, mainly due to its relatively high levels of housing cost overburden among the young and the working age population.
  • In terms of overall State Effectiveness, the UK is average: 11th out of 23 European countries.

Poverty and social exclusion

The Poverty and Social Exclusion Index includes indicators of the number of households earning less than 60% of the median income; of the proportion of those aged 18-29 not in employment, education or training; and pensioner wellbeing.

The UK fares worse than average in 23 EU countries, but especially so in terms of old age people at risk of poverty and social exclusion – though poverty and social exclusion remains highest amongst 18-24 year olds.

Housing quality

The Housing Quality Index is calculated on the basis of housing affordability; housing overcrowding rate, by age group; housing deprivation (e.g. leaking roof, damp walls, etc) and the proportion of homeowners (with or without outstanding mortgage), amongst other measures.

The UK is ranked 14th for housing quality, and the UK has one of the highest rates of housing cost overburden, followed only by Germany, the Netherlands, Denmark and Greece. 18-24 year olds face particularly heavy cost burdens relative to other age groups.

Given that the UK is ranked 15th for poverty and social exclusion; 14th for housing quality; 9th for health of the population; 9th for access to education; and 5th for intergenerational fairness, the UK is ultimately ranked a distinctly average 11th overall for state effectiveness

‘Measuring state effectiveness: an ILC-UK index’ urges the UK to learn from the welfare strategies of higher ranked countries, such as focusing on social protection for families, higher participation of older women in the labour force, and investing in substantial health expenditure.

It warns that ‘silver welfare’, the strategy of focusing spending on social protection for old age is the only strategy consistently associated with bad outcomes.

Dr Cesira Urzì Brancati, Research Fellow, ILC-UK said:

‘Given that the UK is currently the 5th largest economy in the world, we might expect it to rank higher than 15th in Europe for social protection spending, and expect it to allocate spending more evenly across the lifecycle.

As the UK’s population is ageing rapidly, future governments need a coherent strategy to deliver a welfare state which guarantees the best possible provision for the largest number of people across the UK.

This strategy cannot be based on what is politically expedient; instead, future governments must base these judgements on evidence. Looking at approaches to social security, health, housing and education across Europe to identify successful strategies is a good place to start, particularly in times of such uncertainty’.

Contact
Dave Eaton (davideaton@ilcuk.org.uk) or David Sinclair (davidsinclair@ilcuk.org.uk) on 020 7340 0440, or 07531 164 886.

Notes

‘Measuring state effectiveness: an ILC-UK index’ is the accompanying technical report to 'Towards a new age: The future of the UK welfare state'.

Authors who have contributed to the book include:

Professor Nicholas Barr; Professor Elsa Fornero; Sir Anthony Seldon; Sir Michael Lyons; Professor Danny Blanchflower; Professor David Bell; Professor Danny Dorling; Professor Phil Hope; George Magnus; Professor Chris Husbands; Lord Richard Best; John Philpott; Ben Franklin; Dr. Cesira Urzi Brancati; Lord David Willetts; Norma Cohen; Steve Webb; Gregg McClymont; Dr Andy Tarrant; Sally-Marie Bamford; Kieran Brett; Caroline Green; Neal Hudson; Nusrat Ghani MP

The International Longevity Centre – UK (ILC-UK) is a futures organisation focussed on some of the biggest challenges facing Government and society in the context of demographic change.

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