This diagram shows exactly where the government is going wrong on poverty

Please don’t be put off by the diagrams. I am trying to help us understand the dynamics of government’s poverty expenditure. To help the current government understand just where its money
is going.  

In the top diagram I am trying to illustrate what kind of money the post-war Labour government was imagining would be spent over time on four categories of government expenditure: on prevention of poverty, the emergency of poverty, coping with poverty and the cure of poverty. 

This in essence is what government spends its money on when tackling poverty, although they call their budgets by other names. PECC is my shorthand for that expenditure, though bear in mind it’s just me trying to simplify and grasp the dynamics of what government is actually doing when it spends our money.  

Get the latest news and insight into how the Big Issue magazine is made by signing up for the Inside Big Issue newsletter

In 1948 aspiration was the name of the game. Poverty was going to be phased out of society. Slum housing was going to be a thing of the past. Education, housing and health were going to transform the impoverished, uneducated and often-ill British working classes into a more skilful and socially mobile class of prosperous workers.  

The first diagram represents government’s aspirations for all with the creation of the welfare state in 1948. Over the ensuing years there would be enormous amounts of Prevention spending, preventing poverty and misery ever occurring.  

Subsequently there would be a paltry amount of Emergency spending by the Treasury because you would have had all of that emergency-busting investment in preventing the problem ever arising in the first place. Big government emergency spending would be a thing of the past. And an imagined reduction of those people whose only inheritance would be the inheritance of poverty.  

Next in the 1948 aspirational diagram comes Coping. Coping is holding the poor’s hand while they remain in poverty. Aspirationally this would, like the amount spent on emergency, be minuscule. With so much prevention going on you wouldn’t have to hold the poor’s hand and give them a little bit more every now and then.  

• When it comes to poverty prevention it’s minds we must change – before anything else
• Poverty prevention is our best hope. Here’s some tangible ways to keep people warm, dry and fed
• The UN’s damning verdict on UK poverty must inspire us to force change

Leading to the vastness of the Cure budget. You would be moving people out of poverty and not just letting them tick over. The ‘give the poor more’ school of social intervenors that dominates parliament and society now would hardly exist.  

I invented PECC because I wanted to alert government and the public to just how much we spend on maintaining people as poor people. And it is very expensive ‘keeping people poor’.  

Alas the next diagram shows what the reality on the ground is 77 years later in our current climate of poverty spend. The 2025 diagram has none of the imagination of better times that the creation of the welfare state projected forward for us. It shows the harsh reality that we have spent those 77 years building up to.   

Problems for ourselves: now in the region of 40% of government expenditure is spent on the damage caused by poverty.  

Today we have very little social investment in stopping poverty happening; in Prevention. We have a large-ish budget spent on the next category, Emergency, because of the lack of prevention.  

But the behemoth is the money spent on just holding the hands of people in poverty, the next category, which is Coping. 

Social security rarely brings security. It rarely brings opportunity to get out of poverty. So it is largely a hand-holding exercise. 

It devastates the lives of many people who are caught in the poverty trap; and their children who will mainly inherit the poverty that their parents themselves inherited.  

The last category in this sad 2025 reality is Cure. It is, like Prevention, a Cinderella.  

I hope I have shown you why we need to get real about poverty. Once we had hope; but we have lost it over 77 years. Now’s the time to get real about those budgets that are spent on maintaining the poverty status quo.  

Let’s hope His Majesty’s government finds this useful. For, make no bones about it, ‘it’s expensive keeping people poor.’ 

John Bird is the founder and editor-in-chief of the Big Issue. Read more of his words here.

Do you have a story to tell or opinions to share about this? Get in touch and tell us more. Big Issue exists to give homeless and marginalised people the opportunity to earn an income. To support our work buy a copy of the magazine or get the app from the App Store or Google Play.