Should it cost more to be disabled?
It costs more to be poor. It costs even more to be disabled. Can we do something about it? This is a question that has arisen from the Joseph Rowntree Foundation and Big Society Capital’s recent work on the poverty premium. Research from the University of Bristol showed that people in poverty pay £490 more a year for goods and services than people outside of it.
Many direct and indirect links have been noted with the situation faced by disabled people. This figure pales into the background of the extra costs outlined by Scope's Extra Costs Commission in 2015. This found that on average disabled people and their families pay an extra £550 a month. The direct costs of the impairment are a significant factor and extremely variable depending on the particular condition, however there are some costs which don’t have a direct linkage but have a major impact across the board including higher costs for transport, energy, housing and insurance.
There are things social investors can do. BSC and JRF have been looking at the role that social investment can play in the poverty premium. Together they have launched a new Fund, Fair by Design the first component of which is the launch of the Wayra incubator fund in Oldham.
Is there a way social investment can help solve the extra costs of disability? Big Society Capital, Big Lottery, JRF and the CriSeren Foundation recently ran a workshop to gather interested parties to start investigating any role that social investment sector might be able to play.
Where might social investment have a role?
Our intention with the workshop was to start a conversation to see if there were organisations working to combat the disability premium, which were being impeded in their development. If there were blockages in the financial system it would be useful to find ways to unblock them.
As with the "Fair by Design" programme, we looked at investment solutions and regulatory solutions to the problem faced.
Discussion of the day
There was a detailed set of discussions and we were so pleased with the contributions from the varied attendees comprising of five charitable foundations, Scope, operational charities and social enterprises including providers of relevant equipment and services, and social investment intermediaries.
Anna Bird from Scope went into detail on the mechanics of the disability premium, as highlighted by their Extra Costs Commission. The particular costs most highlighted in their research were those related to: energy, clothing and bedding, specialised equipment, transport and insurance.
Motivation who produce low cost wheelchairs for developing countries described their evolution, in particular their development of a social enterprise with assistance from a loan from CAF Venturesome. CAF recognised that their relationship with Motivation had been positive but they were not coming across many similar funding opportunities in this area. Motivation were also clear that the government capacity building grants had been crucial for their development.
Purple made the point that the offers social investment offers they had receive would take longer to process, and they currently had offers from private sector which could be acted on more quickly. The difficulty was decided on which red lines were un-crossable with regard to investor effect on social impact.
The power of the purple pound was noted, that according to DWP estimates disabled people have £249 billion purchasing power in the UK, however it was noted that there were very few products that aggregated the whole of the disabled spectrum. Some for example the Access Card from Nimbus would be relevant across the board however most solutions e.g. low quality wheelchairs would only be relevant to a minority of it.
One thing that came across strongly from a variety of speakers was the natural tension between charity and social enterprise. For example for Motivation in the UK it was felt sufficient that they were able to shake up the sector and provide an example of best practice, if the wider market then adapts then the organisation can move on to the next activity
Anecdotally it appeared that the social investment in the sector had primarily supported social care services, particularly asset-based investments such as Golden Lane Housing It did not appear that there had been much into social enterprise solutions, especially those which were non-tech based with relatively high overhead needs and lower margins.
NPC/CAF reported that there is a great need for significant funding (both grant and social investment) in supporting disabled children and young people, but currently there has very little donor appetite.
Conclusion, actions and open to suggestions
It was recognised that there are many direct linkages with the poverty premium, for example the work on assisting energy and insurance costs, so JRF and BSC will investigate how their ongoing poverty premium work could also address similar drivers of the extra costs of disability.
As a result of that work and this seminar, we hope social investors will have a clearer idea of what opportunities there might be and we are now hoping to open up this conversation and we welcome any ideas, comments or suggestions that any interested party might have.
Calls to action…
Are you an organisation working in this area who is looking at financing options, or are you an organisation aiming to provide this form of finance, please get in touch!
Let us know if you think there is a particular need for social investment or capacity building, or a combination of the two?
Is there a need for a market map for consumer needs/ demands so new entrants can get to grips with a complex area more quickly, if so who would be best to provide one?
Are you interested in working or funding work in this area? If so, get in contact.
You can contact us at email@example.com and the Twitter Hashtag #ExtraCosts has already been established by Scope. We have a lot of unanswered questions in this area. What we know for sure is that disabled people face higher costs and that is probably something beyond the social investment sector to solve. If we can get social investment to work better for disabled people that will be a start.