Dangers of localised means tests

LSE researchers have warned about the spread of new means tests devised by local bodies. They say the tests are the combined result of spending cuts, efforts to protect low-income groups from some of their effects, and the general trend towards ‘localised’ decision making.

The researchers investigated the examples of means-tested support offered to students in England applying to go to university from autumn 2012. The support is designed partly to offset the rise in general fees.

Key points

  • Although using a common income definition, each university has designed its own system – with widely varying criteria.
  • Taken with the national maintenance grant system, these systems imply substantially different levels of support for students from lower- and higher-income families.
  • Nearly all the support systems involve significant downward steps or ‘cliff edges’ in support at particular income levels, and high marginal withdrawal rates.

The researchers point out that this kind of development introduces extra complexity and raises questions of equity in treatment. It also runs counter to other parts of government policy, such as universal credit, intended to smooth out and simplify means tests. But the government’s localisation agenda will make more and more agencies responsible for designing their own tests. The lack of a system allowing an overview of their overlapping effects, and to avoid undesirable design features, will became an increasing problem across social policy.

Source: John Hills and Ben Richards, Localisation and the Means Test: A Case Study of Support for English Students from Autumn 2012, CASEpaper 160, Centre for Analysis of Social Exclusion, London School of Economics

Links: Paper | Abstract