A pair of low income locations in England are set to be the venue of a new pilot program experimenting with a £1,600 (around US$1,988) monthly universal basic income-style stimulus payment that will be distributed to 30 individuals over the course of the next two years.
The Guardian reported on June 4 that a “thinktank” called Autonomy will administer the plan, which includes tracking the beneficiaries “to understand the effects on their lives.”
The article appears to stem from a June report published on the firm’s website titled “A Big Local Basic Income: Proposal For a Locally-led Basic Income Pilot,” which stated that “community consultation” spearheaded by Northumbria University and a secondary UBI advocacy group “found substantial support for basic income pilots.”
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Relying on “door-knocking, workshops, roundtables and surveys,” Autonomy says it found that “the majority of respondents felt both that it was a good idea in principle and that it would be good to run pilots in their local areas.”
A control group, which will not be given a monthly disbursement, will also be assembled to compare “the difference in experience between people receiving a basic income and people not” by way of “questionnaires, focus groups and interviews,” the project adds, noting the control group will be compensated for their time.
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The control group will be paid through Northumbria University at a rate of “£17.19 per hour though in equivalent vouchers,” the report states.
20 percent of both the control group and the UBI receivers shall be “reserved for people with disabilities,” the report notes, adding that all participants will be aged 18 and above.
Director of Research at Autonomy, Will Stronge, told The Guardian that because of a “tumult of climate change, tech disruption and industrial transition that lies ahead” that society is going to “require some form of basic income.”
The report itself holds a set of values for UBI, the primary five of which are as follows (verbatim):
- Periodic: It is paid at regular intervals (for example every month), not as a one-off grant.
- Cash payment: It is paid in an appropriate medium of exchange, allowing those who receive it to decide what they spend it on. It is not, therefore, paid either in kind (such as food or services) or in vouchers dedicated to a specific use.
- Individual: It is paid on an individual basis and not, for instance, to households.
- Universal: It is paid to all, without means test.
- Unconditional: It is paid without a requirement to work or to demonstrate willingness-to-work
Such points are important to the group, it states, because some examples such as a similar pilot highlighted in a 2020 article published in The Lancet on “Universal Credit” led to “increased psychological distress but not to an increase in employment.”
Yet in spite of the values proclaimed for the project, two lower class locations are chosen as the venue for the experiment.
One is Jarrow, a town of almost 30,000 in Northeast England, which Autonomy describes as “an area of deprivation with its industries closed and the majority of homes being social housing.”
The second is a London community called Grange, home to roughly 6,500 people, which the group defines as a place that “scores comparatively well on a number of measures of deprivation.”
Stimulus funding as a method of helping those in the most extreme of needs has shown promise to be meaningfully helpful.
In Canada, the New Leaf Project and the University of British Columbia teamed up in 2020 to launch a study targeting 115 people who had been homeless for at least six months, using 65 as a control group and providing the other half a $7,500 lump sum deposit to their bank accounts, Vision Times reported in December of 2022.
Beneficiaries were screened and determined to not be suffering from significant mental health issues or drug abuse problems.
The experiment found that the prejudice that a cash infusion to this demographic would only lead to an increase in drug and alcohol spending was found to be untrue.
Instead, recipients were found to maintain an average savings balance of $1,000 12 months later while alcohol and tobacco purchases actually fell by an average of 39 percent.
“Cash transfer recipients prioritized and increased spending on recurring staples like housing/rent, food, transportation, and utility bills,” the report noted.
It added, “On average, cash recipients spent 52% of their budget on food and rent, 15% on ‘other’ items such as medications and bills, and 16% on clothes and transportation.”
The study found that even on a purely financial basis, the gain outweighed the loss, noting that “by spending fewer nights in shelters, the cash group saved the shelter system approximately $8,100 per person for a total of roughly $405,000 over one year.”
The Autonomy group’s project is not without its mainstream opposition.
The Telegraph published a June 6 article titled “Why Universal Basic Income Could Leave England Poorer” argued that although “the evidence largely suggests that providing a group of people with a basic income does not mean they work less,” that UBI programs are fueled by a “vast numbers of losers through substantially higher taxes and less targeted support.”
The outlet relies on a report by the UK’s House of Commons, paraphrased as finding that “a weekly basic income of £100 for everyone aged 16 and above and £50 for every child would cost £316bn a year.”
This figure, authors state, vastly eclipsed “the roughly £250bn that the Treasury was expected to spend on benefits, state pensions and tax credits in 2022-23.”
Herwig Immervoll, a member of the OECD think tank was quoted as pointing out that “when you move away from something that is targeted to something where everybody gets support, then you either spend much more or you reduce the amount of support that is available. That is the fundamental trade-off.”