Chapter 12. SOCIAL INCLUSION ISSUES IN RURAL AREAS Cathal O’Donoghue, John Lennon, Jason Loughrey, David Meredith, Jim Walsh 12.1

INTRODUCTION

One of the main objectives of government in Ireland is “to be recognised as a modern, fair, socially inclusive and equal society supported by a productive and prosperous economy.” One of the primary objectives of economic policy is to improve the welfare or wellbeing of the population and that furthermore, that economic policy should strive to improve fairness and social inclusion within society, particularly in relation to lowering the rate of poverty. Significant issues in relation to the Social Inclusion objectives are:  The persistently higher poverty rate in rural areas and the rising poverty rate within rural towns  The high jobless household rates in Ireland relative to other countries and in particular the higher share amongst rural towns. This has been exacerbated due to the economic downturn but is a long term structural issue. When achieving this goal we must acknowledge that there are both demand side and supply side issues, where demand side relates to the issue of job creation and supply side relates to the search and taking up of employment. While there are significant demand side issues, in relation to improving the environment for job creation, in this section, we focus more explicitly at the supply side and in relation to measures within the tax and social welfare codes that can improve demand side incentives. Within the area of social inclusion our focus is on measures that:  Reduce poverty and social exclusion  Increase the incentive to work  Reduce the cost of employment In terms of the local labour markets, employment rates in the open countryside and rural towns are currently below the national average, but for small and medium sized towns, the employment rates were higher than the national average. In addition, employment rates have fallen at a faster rate than in urban areas. Thus rural areas have experienced quite significant employment volatility. We thus argue that tax and social policy should be utilised to reduce this volatility. 12.2

SOCIAL INCLUSION POLICY AT NATIONAL AND EU LEVEL

The Government policy approach to tackling poverty and social exclusion is set out in the National Action Plan for Social Inclusion 2007-2016. The plan sets out a comprehensive programme of actions to reduce poverty. The plan provides a strategic 1

framework to facilitate greater co-ordination and integration of structures across Government. It sets out 12 goals and over 150 targets and actions across government departments and agencies to achieve the plan. The plan is based on a lifecycle approach which places the individual at the centre of policy development and delivery. The four lifecycle stages are children, people of working age, older people and people with disabilities. The plan also identifies as a priority the tackling of poverty in urban and rural areas. The plan states:  The overall aim is to build viable and sustainable communities, improving the lives of people living in disadvantaged areas and building social capital…..rural disadvantage can manifests itself in a number of ways. Declining or slow-growing populations, migration of younger people from rural to urban areas, lack of services, lack of employment opportunities, low income farming households, higher dependency levels and isolation are examples…..social exclusion is frequently the results of multiple disadvantage. There are three high-level goals in relation to disadvantaged communities:  high quality housing  access to healthcare services via primary care teams  integration of migrants, in particular in education system There is a range of actions contained in the plan in relation to disadvantaged communities which aim ‘to enable communities as far as possible to identify and address issues and challenges in their own areas’. These include community and voluntary activities, fuel poverty, broadband, financial exclusion, community-based programmes and services. National Social Target for Poverty Reduction A key element of the national action plan is national social target for poverty reduction, which sets out the Government’s ambition for reducing and ultimately eliminating poverty. The target is to reduce consistent poverty to 4 per cent by 2016 (interim target) and to 2 per cent or less by 2020, from the 2010 baseline rate of 6.2 per cent. In addition to the headline target, the Government has agreed to set new sub-targets for reducing poverty among children and jobless households, and for Ireland’s contribution to the Europe 2020 poverty target (see below). The implementation of the target is supported by annual monitoring of progress towards the target and related indicators (called the Social Inclusion Monitor), and an integrated ‘social impact assessment’, which incorporates poverty impact assessment. National reform programme for Ireland under the Europe 2020 Strategy The national reform programme (NRP) is a government policy statement in support of the Europe 2020 Strategy to promote jobs and growth in a smart, sustainable and inclusive way. The strategy has five headline targets, including a target in relation to poverty, namely to lift at least 20 million people out of the risk of poverty and exclusion by 2020. The poverty target is supported by other social targets in relation to employment and participation in education.

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The NRP sets out Ireland’s contribution to the Europe 2020 target, which is to reduce by a minimum of 200,000 (4.4 per cent) the combined population in consistent poverty, at-risk-of-poverty or in basic deprivation, from the 2010 baseline of 31 per cent. The 2013 Update of the NRP outlines an ‘active inclusion strategy’ for meeting the target, with three main components: 

Adequate minimum income

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Activation and inclusive labour markets

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Access to quality services.

Adequate minimum income relates to the key role of welfare payments and other social transfers in preventing households from falling into financial poverty. Irish social transfers continue to perform effectively in reducing the at-risk-of-poverty rate by 60 per cent, rising to 69 per cent if pensions are included. Various aspects of income support policy continue to be under review to improve their efficiency and effectiveness. Activation and inclusive labour markets refer to the importance of unemployment as a cause of poverty, in particular the high proportion (24 per cent) of the population aged 0 to 59 years in jobless households (the EU average is only 10 per cent). Jobless households are a high risk group for poverty, with a particular concern about child poverty. Adults in jobless households are furthest from the labour market and experience significant educational and social class disadvantages. The 2013 review of the Programme for Government has as a priority to make sure that economic recovery does not bypass jobless households. Active labour market policies are key to addressing the employment needs and capacities of jobless households in an inclusive labour market. Measures include the rollout of Intreo, the new integrated employment and support service, reform of working age schemes, and improvements in employment support programmes, including rural-specific schemes, to enhance their effectiveness and efficiency. Access to quality services is especially relevant to the prevention of child poverty, especially in the formative years of a child’s life. The lack of such services in childhood can lead to the perpetuation of poverty in adult life. As highlighted by a recent European Commission recommendation, prevention is most effectively achieved through integrated strategies that combine to support parental employment, adequate income support and access to services that are essential to children’s outcomes. In this regard, Budget 2013 provided new funding of €20 million to improve services for children in three discrete ways: an area-based approach to child poverty, an extension of the school food programme and increased provision of after-school childcare places. European policy response to rural poverty Eliminating poverty and social exclusion is one of the main priorities of the EU. There are a number of European policies which impact on rural poverty and social exclusion:  Europe 2020 Strategy (discussed above)  EU regional policy supports job creation, competitiveness, economic growth, improved quality of life, infrastructural development and sustainable development.. 3

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EU Common Agricultural Policy aims to ensure a fair standard of living for farmers and to promote balanced development of rural areas. The rural development programme supports employment and prevents social exclusion in rural areas. EU Social Investment Package is a 2013 initiative to address the worsening social situation in Europe. It identifies ways by which member states can modernise their social protection systems through better administration, integrated approaches, and lifelong investment.

A recent issue of the EU Rural Review outlines the role of EU rural development policy in enhancing employment, reducing rural poverty and strengthening social inclusion. Governance and consultation on social inclusion policy The Social Inclusion Division in the Dept of Social Protection is responsible for coordinating the implementation of social inclusion policy across government departments. It also has a remit to undertake research and policy analysis on poverty, and supports the application of poverty/social impact assessment. The Social Inclusion Division is represented on the Senior Officials Group on Social Policy, which reports to the Cabinet Committee on Social Policy. Involvement of and consultation with stakeholders, especially those experiencing poverty, is an important feature to social inclusion policy. The Social Inclusion Forum is an annual event to monitor progress on poverty and social exclusion. An expert group advises on the research and monitoring work of the Division. 12.3

INDICATORS AND DATA ON RURAL POVERTY AND SOCIAL EXCLUSION

Ireland has adopted the following official definition of poverty:  People are living in poverty if their income and resources (material, cultural and social) are so inadequate as to preclude them from a having a standard of living which is regarded as acceptable by Irish society. As a result of inadequate income and resources, people may be excluded and marginalised from participating in activities which are considered the norm for other people in society. (National Anti-Poverty Strategy, 1997) In line with this understanding of poverty as a relative and multi-dimensional phenomenon, Ireland uses three indicators to measure poverty (see diagram 1):  at-risk-of-poverty (income below 60 per cent of the median)  basic deprivation (lacking 2 or more basic necessities)  consistent poverty, which captures those who experience both at-risk-of-poverty and basic deprivation, i.e. multiple forms of poverty.

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The data on the national poverty indicators are taken from the Survey on Income and Living Conditions (SILC), undertaken on an annual basis by the Central Statistics Office. The latest available data are for 2011; the 2012 results will be available at the end of 2013. Poverty rates in rural areas The poverty rates for rural areas are summarised in table 1, along with comparable figures for the state and for urban areas.1 Table 12.1 Rural Urban State

Poverty rates in rural and urban areas in 2011

Consistent poverty Risk (%) Share (%) 7.1 39.7 6.8 60.3 6.9 100

At-risk-of-poverty Risk (%) Share (%) 18.8 45.3 14.2 54.7 16 100

Basic Deprivation Risk (%) Share (%) 21.8 34.2 26.2 65.8 24.5 100

Source: CSO, SILC, 2011 Consistent poverty In 2011, the consistent poverty rate was 6.9 per cent (this equates to 316,000 people). There is little variation in the consistent poverty rate between urban and rural areas. In rural areas, the rate was 7.1 per cent, while the rate in urban areas was 6.8 per cent. The distribution of the population in consistent poverty is strongly concentrated in urban areas, at 60 per cent. Rural areas account for 40 per cent. This reflects the shares of the total population.

Urban areas refer to cities; suburbs of cities; mixed urban/rural areas bordering on the suburbs of cities; towns and their environs with populations of 5,000 or over (large urban); mixed urban/rural areas bordering on the environs of larger towns; and towns and their environs with a population of 1,000 to 5,000 (other urban). Rural areas relate to mixed urban/rural and rural areas. 1

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Consistent poverty has increased in recent years, from 4.2 per cent in 2008 to 6.9 per cent in 2011. In rural areas, the increase was from 4.3 per cent to 7.1 per cent. There was a similar increase in urban areas. At-risk-of-poverty The at-risk-of-poverty rate was 16 per cent in 2011.2 The at-risk-of-poverty rate in rural areas in 2011 was 18.8 per cent. In comparison, the rate in urban areas was 14.2 per cent. Rural areas account to 45 per cent of the population at-risk-of-poverty, compared to 55 per cent in urban areas. The at-risk-of-poverty rate has increased from 14.4 per cent in 2008 to 16 per cent in 2011. The trend in rural areas shows no change: 18.7 per cent in 2008 and 18.8 per cent in 2011. A significant increase in at-risk-of-poverty has taken place in urban areas, albeit from a much lower base: 11.9 per cent to 14.2 per cent. These figures are in keeping with the historically lower household incomes in rural areas. Basic deprivation In 2011, the basic deprivation rate was 24.5 per cent. The basic deprivation rate in rural areas in 2011 was 21.8 per cent, while the rate in urban areas was 26.2 per cent. Of the population in basic deprivation, 34 per cent is in rural areas, and 65 per cent in urban areas. Basic deprivation has increased considerably since 2008, from 13.8 per cent to 24.5 per cent. The increase has been greater in urban areas, rising from 14.3 per cent to 26.2 per cent. In rural areas, basic deprivation has increased from 13 per cent to 21.8 per cent. Table 2 presents a breakdown of three main indicators used in the national social target for poverty reduction, using five locational categories. Table 12.2 2011

Poverty indicators used in the national social target, by location in

4.9% 9.6%

Children in consistent poverty 8.1% 13.2%

10.1%

14.9%

31.5%

7.5% 6.5% 6.9%

8.1% 8.3% 9.3%

24.6% 24.3% 24%

Consistent poverty Cities & suburbs Towns and envi with pop=>5000 Towns and envi with pop 1000 100 persons/km2); Thinly populated area (