Community Power Podcast Series 3 Episode 5: Thinking outside the box – exploring a Universal Basic Income pilot

Episode 5: Thinking outside the box – exploring a Universal Basic Income pilot

Chris Allen

Hello and welcome to this week’s community power podcast, the series being brought to you in partnership with Local Trust. My name is Chris Allen, and in this series, we’re showcasing some incredible projects, focusing in particular on what happens when you give local people the resources, the power and the assets to make a difference to their neighbourhoods. With me is the producer for our third series, that is Kirsten Sinclair, so, Kirsten, where are we off to? 

Kirsten Sinclair

Yes well, we’re off to Grange Big Local which is located in East Finchley in London. Back in June of 2023 they launched a Universal Basic Income pilot scheme, and we’re going to be speaking with Julia Hines and Cleo Goodman on the scheme, how they involved residents, and where they hope to be off to. 

Chris Allen

Thanks. Kirsten, yes. First of all, I asked Cleo Goodman how they got it going in the first place. 

Cleo Goodman

It started off with a series of conversations led by my project, the Basic Income Conversation, with Big Locals across the UK, asking them what they thought about a universal basic income, and whether they thought this was something that they wanted to see, or, you know that in the short term, imagining if they had it now, or if they’d had it during the first wave of COVID-19, the difference that that would have made to them. 

You kind of hear on so many different levels and in so many different ways, how a little bit of extra money would just allow people to make different choices, and you know that they’re already working really hard to get through the challenges they might face, and how just a bit of unconditional income in the form of a universal basic income, which would make a massive difference. 

Chris Allen

This is really big thinking, though, isn’t it? This is, this is the kind of stuff that gets put in the too hard box too often by people. It’s the kind of thing, oh no, we can’t do anything about that. So what was it that inspired you to say, yeah, actually, even though we have limited funds within Big Local we’ve got some connections. We can do something. 

Cleo Goodman

As often happens, people who are on the ground and embedded in communities, they see this as a common sense idea as well as a big, big, difficult challenge in terms of the political project, or, you know, like the policy implementation project. If you say, ​“what if everyone had enough?” which is the question that we’ve sort of put to people, people do see that as common sense, like, why shouldn’t we all have enough? Why shouldn’t our basic needs be met? 

Chris Allen

It’s a brave road to go down. You could just have put a park in. You know that, let’s face it, but you wanted to tackle some people’s basic needs. Julia, your thoughts on that? When did you come into this picture here on what was being developed? 

Julia Hines

I came in basically when we started asking local people. We wanted to know if we had community consent. So we ran some workshops, and then we did some more in-depth consultation, which included things like going out to speak to people at youth clubs, toy libraries, school fairs, and also door knocking, and then online surveys as well. And continued also to invite people into focus groups. 

Chris Allen

When you think about it, the question is, you know, what, if everybody had enough? That’s almost like a ​“motherhood and apple pie” question, isn’t it? But you went into real research with local people as to how it is best done from that. So you must have learned a great deal from it? 

Julia Hines

I mean, I’m not standing here saying universal basic income is the answer to everything. But there are very specific problems that we see in our community. And universal basic income is the only thing I know that challenges those issues. If you lose your job, there is a gap between that happening and Universal Credit starting, and that gap, you get nothing. If you get sanctioned, you get nothing. 

And so there were all these stories of people being thrown into a chaos of debt and all of the repercussions from that, you know. Not being able to get housing benefit in that time, and therefore their housing becoming insecure. Having to borrow money from family and friends who couldn’t afford it, and those relationships being strained. And even if they weren’t strained, just being embarrassed to go and see them. Not having the money to be able to invite someone in for a cup of tea and a biscuit because you can’t afford those things. 

Chris Allen

Also being dragged down the line of being tempted by illegal money lenders or high interest money lenders all out there when you’re desperate, you sometimes turn to anyway, don’t you? 

Julia Hines

I think that’s true. So people were getting into real messes because of the gap and because of the sanctions. People were, you know, very rationally, rearranging their lives because of thresholds. So this pilot is happening in two places, and the issues are very different. In both of them, there’s Jarrow (in South Tyneside) and there’s Grange in East Finchley. And in East Finchley, the key issue is, is housing costs. 

So there were people who were really skilled but couldn’t afford to take a job that paid just above the threshold for Universal Credit, because it passport, you see, passported them [out of] housing benefit. So having to take lower paid, lower skilled work, often having to work lots of hours in order to get that topped up by Universal Credit and therefore get their housing benefit paid, and that makes no sense. It makes no sense for them. And it makes no sense for the community. And it makes no sense for the nation, because you’re losing those skills, and you’re paying more money to keep people in [a] lower position. And basic income answers all of those. 

Chris Allen

You know, I think people listening in areas such as Big Local areas or areas of high disadvantage will chime, you know, this will chime with them a great deal. But you must also have some stories of the desperate state that people get into, really, as they try to find their way through all this? 

Cleo Goodman

The stories from layers of people, right? You know, we all interact with challenges in our life, and you know, like the way that our income finds us, it changes over the course of our life. You know, I think often the big ones are job losses, you know, and that’s often through no fault of your own. It’s the organisations and the businesses that are struggling financially as well and can’t keep people on, and that can completely disrupt peoples’ lives. And, you know, getting back on the job ladder after a knock to the confidence like that is a really big deal. 

Another massive part of it is, you know, unpaid care, and people needing to shift their working hours or work around other really important work which they’re doing unpaid to care for family members. Or people who are active in their communities that set up projects, you know, food banks. And, you know, we hear from them that they only are helping so much. When you ask anyone who’s experiencing any of these things, you know, what would be better? You know, what do you need? And it’s just a little bit more of a stable income. 

Chris Allen

We’re finding through, you know, what’s called the cost of living crisis – been a phrase that has been around for a while now – that many people are dropping into these needy situations that weren’t there before, perhaps haven’t experienced it before, and some people in communities have obviously lived in this cost living crisis all their lives. And maybe they’re more resilient because they’re used to it, but it’s taken a lot of other people by surprise. It’s somewhere they’ve not been before, and then they’re having to make some incredibly difficult decisions they’ve not had to face before. 

Julia Hines

And one of the things about basic income is that it it means everyone gets it. So everybody knows how much they would need, in the same way that at the moment, everyone knows what their electricity bill is. And I think the other thing that people often say is, ​“oh you know, if you do this, you should, you should be giving people financial education”, and I’m all in favour of financial education. Our Big Local has paid for financial education lessons. But poor people are really good at budgeting. 

Chris Allen

It’s sometimes very patronising to say that, because actually, I think people who have less money in life are better at financial budgeting than anybody else at all. I’m sure they’re better than, you know, than me, because I have you know, privilege in my life, and therefore don’t have to think of the things that people have. So Cleo, take us through how you define a basic income. You know, how do you work it out? 

Cleo Goodman

The central features of a basic income are five characteristics. So a lot, you know, at the heart of a basic income is how it’s paid. The simple bit is the five characteristics. The first couple are just making it an income. So it’s paid on a regular basis. You know that there’s always going to be another payment in a week or in a month, depending on the frequency there. But like any other form of income, it’s a regular payment. 

The second is that it’s paid as cash. You know, it’s money. It’s not a voucher, it’s not a discount, it’s not you know anything like that. It’s money that you can choose to spend on whatever you want. So it allows, you know, it allows you to meet your own needs and give you that choice that other forms of social security or other programmes might not. 

It’s paid to the individual. So this is a very pointed characteristic that’s quite different to other forms of social security that might be calculated on a household basis. This is about supplying every single person with an income of their own. 

The fourth, which is perhaps the most important characteristic, is that it is completely unconditional. There’s no conditions put on this payment. You don’t have to jump for any hoops. It’s automated, so you don’t have to sort of fill out any paperwork or go for assessments to deem whether you’re eligible for it. It’s paid as a right. 

And the final one, which is what makes it such a big and comprehensive idea, is that it’s universal. So everybody would get a basic income. Usually it’s proposed as a flat rate. You might have a slightly lower level for children, a slightly higher level for retired adults, if it replaces pension. But pretty cohesive across the board. 

In terms of how much it would be, obviously, that massively impacts the effect that it would have. If it’s the £1600 a month rate that we’re looking at in the pilot proposals that we’ve made, that is significant income that’s possibly enough to live off of – depending on this budgeting question, how good you are at the budgeting, you might be able to just live off of it – or it’s a foundational income that you can top up. You have to then think about the back end, like, how are you funding this for everyone you know, how are you making sure… 

Chris Allen

That was my next question? Well done. 

Cleo Goodman

I know that, that’s always where people want to get a straight answer. 

Chris Allen

Absolutely.

Cleo Goodman

We’ve done a lot of work with several researchers, including two economists Stuart Mansley and Howard Reed, who have done a lot of work on this. And their proposal is, you start with a modest basic income. So a fairly low rate starter scheme, I think, is about £73 a week for a working age adult, so much lower than this, this other, other rate. But even with a low payment like that, you would be bringing poverty rates in the UK down to the lowest on record. You would cut child poverty by half. 

So even, even with a low level basic income like that, it’s very worth doing from an impact perspective. And the great thing is it’s, also doesn’t, it’s fiscally neutral, which means that you don’t have to do anything May day. You don’t have to make any big, major changes. It’s just small changes to the benefit system and the income tax system to make that a completely feasible and affordable basic income model as a start. 

Chris Allen

Let’s talk about the whole unconditional and universal aspect here, because it’s been said on some other universal benefits that well, actually it costs more to try to target it to people than it does to give it to everybody. I suppose. Are you thinking here as well that some people who get it do feel, ​“well, actually, I don’t need it, I can give it away somewhere else”. Is that part of the thinking as well that actually it’s cheaper to do it this way, but also people then have given their own, they’re giving their own choice as to what they do with the funding that they, the money that they get. 

Cleo Goodman

Absolutely and like Julia said, that’s that’s definitely something that we hear all the time. When you talk to people about it, people that are more financially comfortable tend to just be like, ​“whoa, whoa, whoa, I don’t need this.” 

Chris Allen

“I don’t need a heating allowance”, because heating is a good example, here, isn’t it on this one. So it gives, it’s actually also giving more freedom to people, putting a bit of a safety net in there, as well as trying to help people rise above the debt. Because we’re here about, you know, we’re combating a downward spiral here. It’s not about just sort of lifting people up and ​“aye you’ll be okay”. It’s when people do get into this downward spiral, as you outlined earlier, with regard to their jobs, with regard to then their income, with regard to their housing, that then you get more and more desperate. So it being universal, Julia is a real linchpin here, isn’t it, although some people would say, ​“but that’s not fair”. 

Julia Hines

I mean, it is the thing that people feel in times of scarcity, where there’s a lot of poverty that you know you need to target. But I think the answer is that you can make thresholds higher, but you’re still going to have to pay for all that testing of thresholds. You’re still going to have to do all of that. And to be clear, we’re not suggesting that immediately the whole system, you know, should swap over to the level of basic income we’ve chosen to trial at. 

We’re going to have a control group, and we’re going to have a group of 15 people that we pay a basic income to for two years. So for some people, they won’t be better off if they’re on the trial. And in some ways, that’s the more interesting people, because those people are betting on themselves that in two years on a basic income without having to worry about sanctions, they can have spent some time starting their own company, or they can have spent some time training to put themselves in a better position at the end of it. 

Chris Allen

This sounds to me very much like giving more dignity to people. And we are seeing it a little bit more in the distribution of food. You know, move away from food banks towards community shops, where people become members of it. The food is discounted, but actually, people go out and do their shopping, as opposed to give it, being given the food and the, you know, your local pantry, another national example of how that’s being done. So it sounds to me here about in terms of helping support people around the approach and the mental health that putting dignity back into people’s lives is a key part of it Julia? 

Julia Hines

Absolutely, it gives people agency. People who go to food banks don’t largely need help with shopping. They know how to shop. They just don’t have enough money. 

Cleo Goodman

The sort of two things that we’ve learned most robustly from these pilots globally is that health improves when you have a basic income, and the pathway that’s been proposed around that is a reduction in stress. So that tends to be something that we see happen. The other is around work. So obviously, often when I talk to people about basic income really early on, what they say is, ​“well, people are just going to give up their jobs. They’re just not going to do any work.” So what then does the evidence show. People both stay in paid work because they get to keep their income from their paid work on top of their basic income, and also do work that is meaningful to them. And the two groups that that’s not true for are parents of young children who are spending more time with those young children and young people who stay in education longer. 

Chris Allen

So it incentivises people, it motivates them. It actually lifts them out of the stress and anxiety that they have to live with constantly, which impacts on both their mental and the physical wellbeing. 

Cleo Goodman

Perhaps less that it incentivises people, but just more, you need a certain amount of money to be able to do anything, and if you guarantee that people have that certain amount of money, they can pay for a bus to go to a job interview, they can buy their child a book in their youth, and then that kid grows up reading. You know, you need a certain amount of money to be able to fund a proper life, like to be able to fund engaging with your community and showing up and volunteering. All of us that have experienced that know that that’s the case. 

Chris Allen

What happens next? Where’s this going? From what you’ve learned from what’s happening? What do you hope will happen next? 

Julia Hines

So we are currently looking for funding, and we hope to have that in place by the end of this year, and then start a two year trial. The trial will be in two places, in London and in Jarrow. And it will be 15 people getting 1600 pounds a month, and then a control group that is matched who are paid for the work that they do for us. So being interviewed, being part focus groups, that kind of thing, but they won’t get a basic income. So we’ll have a comparison. 

Chris Allen

Are people watching what, what you’re doing? Because I think it’s going to come back to, is there going to be a return on this investment if I put it that way? Is there going to be greater productivity? We’ve talked here about mental health and wellbeing, which, you know, are absolutely critically important. But the kind of questions the economists are going to ask are, is there going to be more productivity from people? 

Julia Hines

I think we are. Cleo did an amazing job in June of 2023, with launching our proposal and it, it became a real, I mean, it was a real, water cooler moment. People were really thinking about the idea. It feels radical. 

Chris Allen

It is radical, Julia. Well done to you. You know, thinking outside the box. 

Julia Hines

Yeah. So I think people are certainly watching. 

Chris Allen

Tell us about the launch, your insights, what happened around the water cooler and all that, and your hopes. 

Cleo Goodman

Yeah. I mean, the hope is that that we continue to be able to build momentum. I think, like, you know, I think the power of this is that it’s really hard not to listen to because it’s come from communities and from people that, you know, governments are supposed to be in service of. It’s from the electorate, you know. And I think that’s the thing with basic income, it is a big idea, but it is a common sense idea to the people that it would make the most difference to. And that’s why we’re, yeah, we’re working with those people to make that case unignorable. 

Julia Hines

It has been like a real privilege to hear all the stories from my neighbours about their lives. And it has also been very exciting for both Jarrow and the area around the Grange estate to feel like they, that their voices are heard. Because those are not voices that are often heard. People who are on welfare are terrified of change, and this isn’t welfare because it’s for everybody. It’s fair. Everybody gets it and what you do with it, that’s up to you. 

Chris Allen

That was Julia Hines and before that, Cleo Goodman from Grange Big Local but also reaching out to Jarrow as well. What struck you most what we heard there, Kirsten? 

Kirsten Sinclair

What really stuck out to me most was the fact that communities were able to think outside of the box and come up with this very innovative idea. When you give communities the power to come together and to come up with solutions, you get really interesting products, such as a universal basic income scheme. 

Chris Allen

Thanks. Kirsten, yeah, people are going to be really intrigued by this, because it is thinking outside the box. Where can they find out more? 

Kirsten Sinclair

Yes, you can find out more on our Local Trust website, where we will post this episode of the podcast and we will put everything in the show notes. 

Chris Allen

That’s great. And Kirsten, I look forward to you joining us next time on the community power podcast brought to you by Local Trust, discovering what happens when you give local people the money, the power and the assets to make a difference to their neighbourhoods.