EHRC report: Cumulative Impact Assessment

In July 2014, the Equality and Human Rights Commission (EHRC) published  Cumulative Impact Assessment: A Research Report by Landman Economics and the National Institute  of Economic and Social Research (NIESR) for the Equality and Human  Rights Commission.

This research addresses the question of the extent to which it is possible to use
cumulative impact assessment techniques to analyse the equalities impacts of tax, welfare and spending policies. It has four objectives:

  1. To explore the various data sources and modelling and methodological issues involved in modelling distributional issues by equality group.
  2. To provide a preliminary assessment of the impact of tax, welfare and other spending changes in the 2010-15 period on people with different protected characteristics disaggregated by gender, ethnicity, disability and age.
  3. By doing so, to provide a ‘proof of concept’ for further modelling work, whether inside or outside government.
  4. To make recommendations with regard to best practice for cumulative assessment and how such assessments might be best conducted in future.

Based on the stage of development of the model to date, the report found that:

  • The impacts of tax and welfare reforms are more negative for families containing at least one disabled person, particularly a disabled child, and that these negative impacts are particularly strong for low income families. This is not surprising, given the significant reductions to working-age welfare, and the high proportion of working age welfare spent on disabled people, particularly those on low incomes.
  • Women lose somewhat more from the direct tax and welfare changes compared to men. This is mainly because women receive a larger proportion of benefits and tax credits relating to children, and these comprise a large proportion of the social security reforms between 2010 and 2015. It should be noted that these results are sensitive to the precise assumption made on the ‘sharing rule’ being used within households.
  • Households containing younger adults do better than other households; although the impact of benefit changes is relatively uniform across groups, they benefit more from changes to direct taxation (the increase in the personal allowance) than any other group.
  • In terms of public services (as opposed to tax and welfare), Black and Asian households lose out somewhat more than other groups. This is largely due to greater use of further and higher education, and, for Black households, social housing.

Jonathan Portes and Howard Reed give an overview of the research in an article in The Guardian (31 July 2014).