How are we doing? ONS update personal wellbeing indicators and figures at Local Authority level

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How are we doing as a nation?  How is personal wellbeing in my area?

The Office National Statistics (ONS) has been measuring wellbeing, or “how we are doing” as a nation since 2011. By looking beyond traditional measures of progress such as a healthy economy, we can provide further information on what matters most to the UK public. The Stiglitz Sen Fitoussi report, published in 2009, first acknowledged this and evidenced the increasing gap between objective measures such as economic indicators (such as GDP) and subjective measures such as individual perceptions of wellbeing and progress.

The recent update to the ONS 41 indicators of wellbeingonswheelsept16 highlights the differences between subjective and objective measures, such as

  •  unemployment levels continue to fall, but fewer people are content with their jobs
  • although there have been improvements in healthy life expectancy, individuals’ satisfaction with their health has fallen
  • despite increasing voter turnout at general elections, trust in national government is decreasing.

 

This is why we believe it is important to have wellbeing at the forefront of policy making, as by reporting only against traditional economic measures, we are painting a picture that may be misaligned with how people are feeling and what matters to them.

How is my area doing?

The personal wellbeing indicators are one of the important ways in which we can measure, subjectively, how people are feeling in the UK.

wellbeingmapThe local authority personal wellbeing estimates released today, with an interactive map and explorer, allow policy makers, local authorities and individuals to explore personal well-being in their area, compare to other areas and track changes over time.

Using this alternative dimension, measures of wellbeing can provide a broader picture of local and national progress.

→ Wellbeing indicator update → National Wellbeing Dataset

→ LA personal wellbeing estimates → Interactive Map  and Explorer

 

Guest blog: How do Mental health non-profits use evidence ?

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Here, Caroline Fiennes from Giving Evidence shares findings from a new study into evidence use in non-profit services for mental health.

UK non-profits delivering mental health services are not great at producing or using scientific evidence. This is the main finding of a new study by Giving Evidence. We interviewed 12 such organisations to understand their ‘evidence system’, i.e., how evidence is:

  • Produced
  • Synthesized
  • Shared, both ‘outbound’ from them and ‘inbound’ to them – and stored.GivingE1

These nonprofits talked of their growing interest in being evidence-based and focusing on impact (and we don’t doubt them) but in practice it’s not happening consistently. Some charities said that they struggle to find and use external research about what is effective in treating or preventing mental health conditions when designing their programmes.

One reason given is the difficulty of accessing, interpreting and applying academic / independent research – for example, much academic research is behind paywalls, so charity staff sometimes resort to sneaking into their former universities to read it, and certainly much of it is pretty unintelligible to non-researchers. Another is the claim that there isn’t much research which is relevant, although that claim is disputed by some experts and researchers.

However, charities delivering mental health services seem laudably interested in the views of their service users. Three-quarters of the charities we interviewed regularly collect user feedback, and over half have done so on a large scale.

Evaluation research

About half of these organisations are producing (or funding production of) impact evaluations, i.e., investigations of the causal effects of their interventions, and many of these seem to be simple pre/post studies, which are open to considerable errors. It may be just as well that not all of them are producing such evaluations, because doing unbiased evaluation research is a specialism which most service delivery organisations don’t have. Instead, they should (we would argue) be using reliable research from elsewhere, which few are.

One charity said that:

Evidence for us is what our users say works…that is enough for us

This concerns us, because the human mind is often misled about what works and only rigorous research can reveal the reality. Happily some of the non-profits which are involved in producing evaluation research are doing so in partnership with reputable research institutions.

GivingE2Undervalued and underfunded?

Sadly some charities we spoke to seem to be being forced to produce low quality research. Several told us that funders and commissioners require ‘evaluations’ of services but only put towards them budgets too small to allow for reliable research (e.g., with adequate sample size). Most were only £5-10k, and a few were £20-30k.

For example, one charity said that is has dozens such budgets a year, which is very frustrating because individually, those budgets only allow for research that is essentially pointless, but collectively they could enable something insightful.

Adding to the knowledge pool?

About half of these charities are producing the kind of research or impact evaluations which could be useful to other organisations. Plus, reportedly, “every contract specifies different outcomes, which makes it a nightmare to aggregate”(charity interviewee) and also prevents comparisons. We didn’t have resource to look at the quality of that research, i.e., to see whether it is reliable and useful. However, dissemination of that is weak, and that’s not really the charities’ fault; there’s no incentive for them to do so, and few channels anyway.

One charity said that part of the reason they don’t publish much is that:

We don’t want competitors to pick this [our intervention] up.

GivingE3We have encountered this in other sectors and this is a major problem (not of the charities’ making).

On the upside, amongst the charities that do produce this kind of material, we found no evidence of selective publication: we had thought we might find that material which is flattering is more often published and unflattering material isn’t, which creates publication bias, but we did not find this.

 

Brutal under-funding of mental health

This is all in a context of brutal under-funding. Mental health accounts for 23% of the UK disease burden, but gets only 13% of the NHS budget and 5% of the UK health research budget. Moreover, charitable giving to mental health is very low: it’s only £714 for every adult with mental health problems whereas donkeys get £2,047 each.

Using evidence-based mental health research to find out what works

Giving Evidence has long said that most charities should not produce causal research, which requires expertise that they don’t have and don’t need, but rather should get good at hearing from their target users about what they want and think of what they’re getting, and then finding and using causal research about what works in addressing it. That seems to be the case for charities delivering mental health services. Some organisations help with this, such as the Centre for Mental Health, and the Mental Elf.

We recommend that mental health charities work towards (and are funded and incentivised to work towards) finding and applying the relevant rigorous research, and working with specialist researchers to produce research where none already exists. We expect to work with some mental health charities on this.

→Discuss on our forum

→ What works in research use? from our Science of Using Science project.

Caroline Fiennes Biography

Caroline founded and directs Giving Evidence. She is one of the few people whose work has appeared in both OK! Magazine and The Lancet. She is on boards of the US Center for Effective Philanthropy, of the world’s largest charity rating agency Charity Navigator, The Cochrane Collaboration (specifically Evidence Aid). She is the Corporation of London’s City Philanthropy Coach, and writes a monthly column in Third Sector magazine. Caroline was named a Philanthropy Advisor of the Year by Spears Wealth Management. More information about Giving Evidence is at http://www.giving-evidence.com/about

Making Hay While the Sun Shines: Promoting Wellbeing and Emotional Resilience with Hay Festival Goers

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Professor Jo Smith shares her experience of talking on wellbeing and emotional resilience at this year’s Hay Festival.

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Since 2002, we have been encouraged by the Government to consume ‘5 a day’ to create and sustain healthy eating habits and this has now, 14 years later, become part of our everyday language and a metric we use for a physically healthy life. In 2008, the Government published the Foresight report on ‘Mental Capital and Wellbeing’, which offered a similar guide of 5 daily tasks to help us look after our mental health and wellbeing. One key problem for Public Health  is getting this message to the general public to get it similarly embedded and implemented in daily life.

I am a Chartered Clinical Psychologist and a Professor of Clinical Psychology at the University of Worcester. I am also the Lead on a Suicide Safer Project working in partnership with colleagues from the University to improve the mental health and wellbeing of students and staff as well as with local Health and Local Authority Public Health partners to contribute to a ‘suicide safer’ university, city and county through a range of wellbeing initiatives. On Tuesday, May 31st, 2016, I was given the opportunity to talk to a lay audience of over 900 members of the general public on the Telegraph Stage at the world renowned Hay Festival . The talk was one of a series of 4 talks sponsored by the University of Worcester to mark its 70th anniversary  and, as a public lecture, provided an opportunity to raise public awareness about the importance of building and maintaining positive mental health to protect against low mood and other factors that may potentially, if left untreated, contribute to mental ill health and, ultimately, suicide risk.

My talk entitled ‘The Shape we are in: Building Good Hay blog 1mental and Emotional Health’  invited
prospective attendees, in the context of a hyper accelerated 21st century culture which can present many challenges for wellbeing, to explore positive strategies for handling life’s challenges based on the 5 ways to wellbeing and to develop coping strategies to build emotional resilience for dealing with negative times in our lives.

The essence of my talk was that being mentally or emotionally healthy is much more than being free of anxiety, depression or any other mental health problem but refers instead to feeling good, functioning well and a positive evaluation of life or aspects of it where people who are emotionally healthy are equipped to handle life’s challenges and are protected by strong supportive relationships and can draw on good personal resources  and coping skills to adapt or bounce back from setbacks and difficulties in life. This doesn’t just happen but requires us to actively develop strategies in our lives to improve our emotional health, boost mood, build coping resilience and do things that contribute to overall life enjoyment and satisfaction. This includes engaging in the ‘5 ways to wellbeing’  on a daily basis as well as taking care of physical health, diet and sleep and building protective factors like strong supportive relationships, a balanced lifestyle that feeds mood and satisfaction with time off to wind down and a repertoire of stress and mood management coping skills such as relaxation, mindfulness, positive monitoring, self compassion to manage difficulties and reduce stress.

What are the 5 ways to wellbeing?Hay blog 2

5 different core components of wellbeing are described as important:

  • The first recommendation is to ‘Connect’ with people around you, family, friends, neighbours, colleagues, social activities in your local community. Investing time in developing and building connections and being part of a social community relating to and with others is important for wellbeing and personal support.
  • ‘Learn’ something new , rediscover an old interest, set a personal challenge, siggn up for a course, take on anew responsibility at work or home to build confidence and satisfaction and to keep our minds stimulated and active is the second recommendation .
  • The third recommendation is to ‘Be active’. We know exercise releases endorphins that positively influence mood. It is not only sport and exercise that has this effect , moving and doing something you enjoy will have the same outcomes whether it be playing a game, drama , dance, gardening, walking or just getting out and about in your locality. Exercise in its many forms helps us to feel good as well as improving mental wellbeing.
  • The fourth injunction is to ‘Take notice’ to be curious, aware of the world around you and how you are feeling, savouring the moment,  being mindful by taking time from doing to ‘being’ to sit, to notice and appreciate what is around you, to reflect, meditate, appreciate nature and everyday moments and experiences in our lives.  Taking notice is also associated with mental wellbeing.
  • The final piece of advice is to ‘Give to others’ unconditionally by looking outwards to those around us through doing voluntary work, philanthropy, small acts of kindness, acknowledging and helping others which can be rewarding, build confidence and satisfaction as well as building connections with people around us.

So are the 5 ways to wellbeing sufficient to achieving wellbeing and good mental health?

They will go a long way towards achieving a mentally healthy lifestyle but, as with physical health, it is also determined by our personal vulnerability to poor mental health influenced by a multitude of contributory risk factors including our gender and socioeconomic status as well as factors from birth and growing up such as inherited genetic risk for mental health difficulties, childhood experiences of parental discord, divorce and loss, bullying, trauma as well as issues in our current lives including living in social isolation, poverty and unemployment. The greater the number and the more severe the risk factors, the greater the likelihood of later mental health problems in adolescence/adulthood. That said, some people appear to be more resilient and against all odds survive and grow up as coping competent adults in spite of difficult growing up experiences which has led to a second strand of work where an important key to promoting wellbeing and mental health is understanding protective factors that enable us to be resilient (Mental Health Foundation, 1999, p9). This is where emotional resilience alongside 5 ways to wellbeing becomes important in terms of understanding protective factors that enable us to confront and cope with life’s challenges and to maintain wellbeing in the face of adversity and to bounce back when something difficult happens in life.

Hay blog 3There are a number of key things that help to build emotional resilience:

  • Activities that promote wellbeing including attention to physical health, healthy diet and sufficient sleep as well as lifestyle balance doing things you enjoy that feed mood and confidence while also taking time off and giving yourself a break.
  • Social connectedness including building social contacts, making time for social activities, keeping connected and not withdrawing or isolating yourself, instead, talking to others about how you are feeling and enlisting their support and help with problem solving and to keep things in perspective when you face difficult times, as well as seeking professional specialist support if problems persist.
  • Psychological coping strategies and skills for maintaining mood and confidence including ‘feeding mood’ with things you enjoy and which give you pleasure, positive monitoring of your successes, treating and rewarding self for small achievements, encouraging self compassion as well as stress management skills including relaxation, mindfulness, problem solving to manage difficulties and reduce stress during times of challenge.

There are a number of useful websites which provide free tools and advice about how to manage difficulties and reduce stress:

  • Psychology tools:  free information booklets about a range of problems including self management coping tools and advice.
  • GetSelfHelp: free downloadable self-help information leaflets.
  • MindEd for families: provides materials for parents and carers of children and teenagers struggling with mental health issues.
  • Be Mindful for guidance on mindfulness and how to find a mindfulness course.

This awareness of the need to build emotional resilience is now influencing the school’s curriculum to build emotionally resilient youngsters as an early inoculation to protect wellbeing throughout our lives.

Following the talk, I was humbled by the large number of emails I received in response from wellbeing leads in schools and other work places, teachers, counsellors, concerned parents and members of the general public telling me what they were up to locally/personally in terms of raising awareness about the importance of active efforts to promote wellbeing and build emotional resilience, thanking me for the guidance provided in my talk or looking for solutions to wellbeing related concerns.

“I sit in a deck chair in the sunshine, drinking my decaf mocha and reflecting on your talk with my husband; exactly as you suggested in your inspiring presentation…At least we know we are already on the right track in developing practices to support our mental health wellbeing and resilience!”

 “The session was great and helped me in a number of ways: through my roles at work (Champion of Wellbeing), being the parent of a son who has just completed his first year at Uni  and a daughter doing A Levels; as a sister of a sibling who is struggling; as the daughter of an elderly parent and finally as an individual who is considering retiring from the corporate world and searching for ‘what’s next’.

“Thank you for a fantastic talk at Hay yesterday. I loved your five a day for mental health and will try to fit that into everyday life.”

Clearly, the talk had struck a chord with audience members who were hungry and receptive to know more and take the ideas forward. We need to find ways to promote key wellbeing and emotional resilience messages in the general public so that the ‘5 ways to wellbeing’ become as much part of the vernacular as the traditional ‘5 a day’ we have learnt to consume and use as our metric for healthy living!

Reference sources:
Jo Smith

Professor Jo Smith is Professor in Clinical Psychology and Suicide Safer Project Lead in the Institute of Health and Society at University of Worcester. She is a Chartered Clinical Psychologist and was the Early Intervention in Psychosis (EIP) Lead for Worcestershire Health and Care NHS Trust, Worcester (1999-2015). Jo was formerly a Joint National EIP Programme Lead for England with the National Institute for Mental Health in England (NIMHE: 2004-2010). She has a particular interest in earlier intervention to prevent later mental health difficulties which includes an interest in youth mental health, suicide prevention and early intervention  for serious mental health difficulties.

E-mail: j_smith@worc.ac.uk

 

Guest blog and report : World Mind Matters day

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On World Mind Matters Day 2016, a global survey funded by the World Psychiatric Association (WPA), of laws and policies in 193 United Nations (UN) member states reveals the level of discrimination faced by people with mental illness in the areas of marriage, voting rights employment and right to contract. The results were published as the ‘Social Justice for People with Mental Illness’ report in  the International Review of Psychiatry in August 2016 and include these findings:

  • In 36 per cent of countries, people with mental health problems are not allowed to vote
  • In nearly a quarter of countries, there are no laws preventing discrimination in the recruitment of people with mental health problems.
  • In over half of countries, there is no explicit protection in laws against dismissal/termination/suspension of employment on grounds of health reasons including mental health problems
  • 38 per cent of countries deny right to contract to persons with mental health problems

The findings have led the WPA to create a Bill of Rights for Individuals with Mental Illness which urges ALL governments to ensure that persons with mental illness/mental disability/mental health problems are not discriminated against based on their mental health status, and are treated as full citizens enjoying all rights on an equal basis with others. 

“Those with mental illness/mental disability/mental health problems have the capacity to hold rights and exercise their rights and should, be treated on an equal basis with other citizens. The challenge for policy-makers, clinicians, and individuals with mental illness is to fight discrimination using strategies similar to civil liberties, gender equality, sexual minority (LGBT) communities, which in many parts of the world have proven to be useful.”

Here, Professor Dinesh Bhugra CBE President of the World Psychiatric Association  explains why this is important:

Mental health gives us the opportunity to Dinesh Bhugra-photofunction well, look after others and enjoy life. Often mental health and physical health are seen as completely different and in isolation from each other whereas the truth is that one affects the other. We know that if a person with diabetes gets depressed then both depression and diabetes are difficult to treat. Mental health has several aspects to it including mood, thoughts and behaviour. Different cultures add a further dimension of spirituality to mental health.

Why is mental health important? At a global level we know that mental ill health causes a tremendous amount of burden which is much greater than that caused by heart disease and cancers. Mental ill health often remains undiagnosed and affects individual functioning at work and at home creating further tensions. Cultures frame our view of the world and create our thinking processes and the way we express and deal with distress.

When an individual says: ‘I feel gutted’ they are expressing distress similar to what a Punjabi woman says: ‘my heart is sinking’.  Childhood experiences combined with experiences of bad parenting can cause problems in adulthood. Over half the mental illnesses in adulthood start below the age of 15 and three-quarters start below the age of 24. Thus preventive strategies have to focus on the vulnerable age groups.

‘Wellbeing’ is a difficult concept to define as it has different meanings at personal, cultural and global levels. Personal wellbeing has become ever more important as longevity, conflict, insecurity and environmental issues increase, and social and technological changes impact on our individual and collective lives.

Prejudice, stigma and discrimination against mental illness delay help-seeking. There is considerable research evidence to suggest that early recognition and early interventions will get people back to normal sooner. There are different types of mental ill-health or mental illness caused often by a mixture of biological vulnerability, social and psychological causative factors. Social determinants of health include poverty, overcrowding and unemployment.

Stigma against mental illness is caused by lack of knowledge and often improved knowledge may lead to changes in attitudes and behaviours making these more positive and accepting.  In small cohesive communities whether they are related to residential settings or work-place it may be easier to reduce stigma and deal with prejudice. Three years ago when 23 members of Parliament stood up in the House of Commons and talked about their personal experiences of mental ill health, that turning point really changed the nature of debate on mental health.

Mental health is everyone’s business and we all need to take responsibility for our own mental health and those in our immediate circle-whether these are professional or personal circles.

Mental ill health and major psychiatric disorders are eminently treatable and many conditions have cure rates of 90-98%.  It is important that we understand the concepts of wellbeing. We must support family members and friends as well as colleagues who may be stressed and developing mental illness so that they are able to lead fulfilling and functioning lives and can contribute fully to their community and society.

Professor Dinesh Bhugra CBE is President of the World Psychiatric Association (2014-2017) and President of the Mental Health Foundation in the UK. He is the recipient of over 10 honorary degrees. His research interests are in cultural psychiatry, sexual dysfunction and service development. He has authored/co-authored over 350 scientific papers, chapters and 30 books and is the Editor of the International Journal of Social Psychiatry, International Review of Psychiatry and International Journal of Culture and Mental Health.  Previously he was the Dean (2003-2008) and President (2008-2011) of the Royal College of Psychiatrists where he led on major policy initiatives on psychiatry’s contract with society and the role of the psychiatrist.

 

Guest blog: What Makes a Good Childhood?

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Rachel2Rachel Beardsmore,Senior Research Officer, Wellbeing; Children and Young People at  Office for National Statistics shares insights from the 5th annual Good Childhood report:

 

 

Today sees the publication of The Children’s Society’s 5th annual Good Childhood Report. The report highlights some of the key differences in well-being between boys and girls, including for overall life satisfaction, how happy they are with their appearance and mental health.

The Office for National Statistics publishes 31 measures of children’s wellbeing across 7 areas of life and our analysis of these measures supports the findings published in the Good Childhood Report. Using data from the Understanding Society survey, we found that in 2013-14, girls aged between 10 and 15 were more than twice as likely to be unhappy with their appearance as boys of the same age. Girls in their early teens are more likely than younger girls to say they are unhappy with their appearance; over 1 in 4 (26%) girls aged 13-15 said they were unhappy with their appearance, compared with 1 in 10 (11%) girls aged 10-12. The Good Childhood Report shows that between 2009 and 2013-14 things have been getting worse for girls, while for boys there has been no change. We found that teenage boys are much less likely to say they are unhappy with their appearance with just 1 in 14 (7%) reporting being unhappy.

Social media is an ever-present feature WBWKY1FQ2Iof social life, especially for the young. Our
research using the Understanding Society survey shows that there is a clear association between longer time on social websites and symptoms of mental ill-health. This is concerning, as we have found that the proportion of children using social networking websites for over 3 hours on a school night has increased from 6% in 2009-10 to 9% in 2013-14. Further analysis shows that 1 in 5 (20%) teenage girls spent over 3 hours a night on social networking sites in 2013-14, compared with less than 1 in 10 (9%) teenage boys and 1 in 20 (5%) pre-teen girls. Less than 3% of pre-teen boys reported using social networking sites for over three hours a night. We are currently looking at further research into social media use and wellbeing as part of our programme of research.

The Good Childhood Report illustrates how children’s direct experiences, such as their perceptions of the quality of local facilities and how safe they feel, are more important for their wellbeing than factors that may be more removed from them, such as local area deprivation. Similarly, our research using the Understanding Society survey shows that a child’s relationship with their parents is one of the most important factors associated with their well-being. Around 1 in 10 (10%) children who quarreled frequently with their mother, and 1 in 12 (8%) who quarreled frequently with their father, reported being relatively dissatisfied with life overall. This compares with less than 1 in 40 children who quarreled less frequently with their mother or with their father.

Overall, the majority of children in the UK report good wellbeing. However, there are some aspects of life that are experienced differently by boys and girls and by children of different ages. Our research, and that of The Children’s Society, provides insight to policy-makers to ensure all children have the best childhood possible.

→The  Children’s Society and ONS would be very interested in your views →discuss on our forum

 

 

 

 

 

 

 

Guest blog and report: The Implications of Wellbeing Research on Government Policy

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kim_engel (no 10 downing street)The Hertford Business & Economics Society, an undergraduate group at the University of Oxford, recently completed a research project looking at wellbeing and government policy. The final report was presented to the Cabinet Office in December 2015. Here, Kim Engel, one of the co-authors of the report introduces its three main proposals.

 

  1. Guidelines for civil servants

Ideally governments would carry out controlled experiments to assess the wellbeing impact of every plausible policy. The most cost-effective policies would be implemented. Then further experimentation would be used to refine those policies.

But in reality experiments require scarce resources like money, time and expertise. And there are still large methodological controversies surrounding the quantitative measurement of wellbeing. This leaves room for organisations such as the Civil Service to adopt other approaches to improving wellbeing.

We proposed the use of a brief, one-page “wellbeing table” for making speedy estimates of wellbeing impact. The table would provide space to describe the probable effects of a policy on key determinants of wellbeing such as employment and mental health. It would come attached to a one-page “information table” highlighting the main conclusions of existing academic research into factors affecting wellbeing.

  1. School and university incentivesHBESoc

A study involving more than 17,000 Britons found that “the most powerful childhood predictor of adult life-satisfaction is [a] child’s emotional health” (Layard et al., 2013). Yet schools currently have limited incentive to prioritise wellbeing. OFSTED assessments cram “Welfare, personal development and behaviour” into one section out of a total of four.

We suggested that a new section on “Pupil Wellbeing” could be introduced to OFSTED reports to give schools credit for adopting proven methods of improving wellbeing such as social and learning (SEL) programmes, healthy eating measures, and the provision of good counselling services.

Universities can also make a big difference to wellbeing in the UK. Above all they must address massive increases in the number of students with mental health problems. HEFCE statistics published in 2015 show a 125% increase in the number of students with mental health problems in the four years to 2012-13, while many universities are reporting double-digit annual growth in demand for counselling services.

We therefore proposed that the National Student Survey (NSS), taken by more than 300,000 students annually, should include a question about satisfaction with university mental health services. This would generate valuable information for prospective students, and give universities strong incentives to up their game.

We also mention the further possibility of adding the “ONS4” wellbeing questions to the NSS. By providing a snapshot of wellbeing at every UK university, this would help researchers and universities figure out “what works” for wellbeing.

  1. Wellbeing reporting

 Businesses can take a variety of evidence-based actions to improve employee wellbeing. These include improving work-life balance, promoting good health, helping employees take greater control over their work, and developing employee’s sense of the social value of their work (New Economics Foundation, 2014). Companies that succeed are likely to enjoy a boost in profits as productivity rises and absenteeism and employee turnover decline, raising economic growth and making everyone better off.

We proposed that the government should mandate large firms to produce an annual report on employee wellbeing. The reports might explain how wellbeing policies are adding value to the firm and disclose expenditure on non-financial wellbeing (e.g. social activities, counselling, physical health programmes). They would alert shareholders, employees and the media to underspending or under-performance on employee wellbeing. Firms would therefore have additional incentive to invest in employee wellbeing.

 →Full report: The Implications of Wellbeing Research on Government Policy

→ Response to the report by Ewen McKinnon, a member of the Analysis and Insights Team at the Cabinet Office

→Discuss on our forum

References

Jeffrey, K., Abdallah, S., Michaelson, J. (2014). Wellbeing at work. New Economics Foundation.
Layard, R., Clark, A. E., Cornaglia, F., Powdthavee, N., Vernoit, F. (2013). What Predicts A Successful Life? A Life-Course Model of Well-Being. Discussion Paper No 1245. Centre for Economic Performance, LSE.

 

 

 

 

Guest Blog: Bank of England’s Andy Haldane, A Recovery for the Few, Not the Many

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Andrew G Haldane, Chief Economist, Bank of England takes a deeper look at the UK’s economic recovery up to the EU referendum.

 

At least up until the referendum, macro-economists like me would wax lyrical about the UK’s economic recovery.  The numbers spoke for themselves.  GDP was 7% higher than its pre-crisis peak.  More than 2 ½ million extra jobs had been created since 2010.  Almost £3 trillion of extra wealth had been amassed.  The UK was riding high at the top of the G7 growth league table.

Yet for those of us who have toured the country, speaking not just to businesses but to public sector companies, charities and communities, the picture often painted was a far from rosy one.  For many of them, there had been no discernible improvement in their incomes and wellbeing.  The language of “recovery” simply did not fit their facts.

This posed something of a conundrum for me in my day-job as Chief Economist at the Bank of England.  Was this a healthy and wealthy recovery, as the headline numbers suggested?  Or was it an insipid, or perhaps even non-existent, one as anecdote implied?  Digging into the headline numbers began to provide some reconciliation of this puzzle.

If we look not at headline GDP but at households’ disposable income, a somewhat different picture emerges.  Not one of a relentless rise over the past three years, but of disposable incomes flat-lining for the better part of 10 years.  Perhaps as many as half of UK households have experienced a “lost decade” of income growth.

Dividing-up this income pie – regionally, socio-economically, inter-generationally – paints an even more nuanced, and uneven, picture of recovery.  For example, at present there are only two regions across the UK – London and the South-East – where GDP per head currently exceeds it pre-crisis peak.  In others words, in all bar two UK regions, there has been no real recovery even in GDP terms.

The distribution of this income across rich and poor is no less striking.  Although the distribution of incomes across the UK may well have narrowed since 2008, patterns of wealth have diverged remarkably.   While the lowest 20% of earners have been their wealth fall by around 20% since 2008, the highest-earning 20% have seen wealth rise by over 15%.

Age may have been a key driver of these patterns.  All of the £3 trillion rise in net wealth since 2008 has been harvested by those over the age of 50 and two-thirds by those over the age of 65.  While pensioner incomes comfortably exceed their pre-crisis levels, the same cannot be said for working families.  These are huge inter-generational transfers, from young to old.

So when it comes to asking “Whose recovery?”, the answer is reasonably clear:  those living in London and the South-East, those earning higher incomes, those aged over 50 and those owning their own home.  This has been a recovery for the few, rather than the many.

This pattern of gains and losses across the economy is relevant for making sense of the past and for fashioning the future.  For example, these distributional patterns may help explain why global and UK growth has remained fairly anaemic over recent years, despite large amounts of monetary policy stimulus.  Large chunks of society are feeling no better off, and hence are no more willing to spend, than a decade ago.

Looking ahead, these distributional fault-lines – regional, inter-generational, socio-economic – are not ones which can be ignored.  For growth to be sustainable and strong it needs to be inclusive and comprehensive.  There is a role for public policy, over time, to seek to close these fault-lines to achieve inclusive and sustainable rises in societal well-being.

→ Whose Recovery? speech in Port Talbot, Wales on 30 June 2016

→Discuss on our forum