Gavin Kelly appointed new Chief Executive of the Resolution Foundation

Gavin Kelly has been appointed Chief Executive of the Resolution Foundation, an independent research and policy organisation working to improve outcomes for low earners.

Gavin joins the Foundation from Number 10 Downing Street where he worked as Deputy Chief of Staff from 2007 to 2010. Prior to this Gavin was a member of the Council of Economic Advisors at HMT, Senior Advisor to the Secretary of State at the Department for Education and the Department for Communities and Local Government, Deputy Head of the Prime Minister’s Strategy Unit, and a member of Tony Blair’s Policy Unit.

Before working in government Gavin was Director of Research at the Institute of Public Policy Research and the Fabian Society, and taught economics and politics at the University of Sheffield where he received his doctorate.  He is a regular commentator on issues of public policy and politics – his particular interests are economic policy, low pay, public services and social mobility.

 

Commenting on his new position Gavin Kelly, said:

“I am thrilled to be taking up my new post at the Resolution Foundation at such an important time. The Foundation has been identifying the challenges low income households are facing in the economic downturn and has made vital recommendations to government and the private sector on how to enable low earners to remain economically independent. In the months and years ahead there are few bigger issues facing the country than how best  to help  improve the prospects of millions of low-earners.” 

He added:

“The Foundation has produced some great work to date, from the pioneering research that led to the new [caps??] national financial advice service aimed at low earners to the landmark Annual Low Earners Audit. With the next Audit due this autumn, we will  publish the most authorative  assessment of the current state of low income households in the UK.  I am delighted to be leading the Foundation in this crucial work.”

 

The Resolution Foundation:

The Resolution Foundation is an independent research and policy organisation that  works to improve outcomes for low earners[1] – those people who are largely independent of state support yet often struggle to remain economically independent on relatively low incomes. There are 7.4 million low earners in the UK – living on an average household wage of £15,800. Low earners are not the poorest in society and are not in crisis – although many of them live close to the cliff edge, spending all their  income each month, leaving no room for savings or safety nets. Many of them were already in a fragile economic position prior to the recession and our findings point to their vulnerability now and in the recovery period.

 

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Notes to editor:

  1. At its broadest, we define the group as including all those with below-median income (from all sources) who are not dependent on state support. For the purposes of analysis, precise definitions depend on the data source being used. However, as a proxy, we consider the low earning group to comprise those working-age households in income deciles 3, 4 and 5: that is, with equivalised gross annual income between £15,100 and £26,200. Around 3.8 million households fall into this category in the UK, accounting for around 7.4 million adults. We define two other income groups in relation to low earners: households with above-median equivalised incomes (income deciles 6-10) are considered higher earners, while those with below £15,100 income (deciles 1 and 2) are considered benefit-dependent.

 

  1. A snapshot of a low earners situation:
  • 0.9 million low earners were in acute financial health prior to the recession. Compared to 1.9 million (26%) with chronic financial health and 2.9 million (39%) with mild financial health problems.
  • Low earners have little or no safety net – over two-thirds of low earners have less than a month’s salary in savings
  • Low earners are more glum than any other group about their personal economic fortunes, with their expectations falling almost 20 per cent since 2001
  • £10.7bn unsecured low earner household debt
  • 38% low earners have secured debt (average £81,000), 58% unsecured (average £5,000)
  • 53% of low earners struggle to keep up with bills and credit commitments (22% from time to time, 14% constantly)
  • 67% low earners not saving for a pension
  • the number of low earner households saying that they have difficulty keeping up with bills because of a fall in income associated with a reduction in working hours has more than doubled, from 0.2m in 2008 (5 per cent of the total) to 0.4m (11 per cent of the total).

 

  1. The Foundation’s current work project is on low earners through recession and recovery. The most recent analysis was on the coalition Government’s emergency budget from a low earner perspective and concluded that the package as a whole may not be progressive as the distributional assessment did not include any consideration of the departmental spending cuts due to be announced in October. Spending cuts are generally thought to hit those who are the biggest consumers of public services – the poor – most. Moreover, the analysis is presented for 2012‐13 only, and therefore fails to capture the escalating impact of some of the Budget measures such as changes in indexation, which will again be likely to fall heaviest on the poor.

 

  1. The Foundation’s first project in 2005 was on low earners and their financial health. Discovering an ‘advice gap’ for 12 million low earners of working age and a further 3 million low earners in retirement, the Foundation developed proposals for a national generic financial advice service. This proposed service was aimed at low earners – people who are not currently attractive to commercial providers of advice, nor receiving support from existing voluntary sector provision. This work fed into the Treasury’s Thoresen Review which recommended a Money Guidance service be set up. This was rolled out nationally in March 2010.

 

  1. The Foundation’s work on long-term care includes: