Read: Businesses and government must pull closer together for long term cost-of-living protection

The cost-of-living crisis, alongside daily tales of missed meals and cold homes, has exposed a further harsh reality. Many people have little or no savings to fall back on when times get tough. Figures from November 2022 show that nine per cent of adults in the UK had savings of £100 or less, with 17 per cent having no savings at all. That means just over a quarter of the population are critically vulnerable to the inflationary pressures that affect day to day spending. Some are using credit cards to pay their bills, others turn to loan sharks.

It’s a bleak picture and one that is set to continue, despite expectations that inflation will ease. The Government has stepped in with significant support – capping the unit cost of energy, providing direct payments to the most vulnerable households and appointing a Cost-of-Living Tsar to strike new business-led initiatives – but it can’t keep writing cheques indefinitely. We need to find new ways of harnessing public and private innovation to drive solutions.

Businesses across the country have already been using their expertise and experience to find ways to help that are tailored to the particular needs of their colleagues, customers and communities they serve. They’re keen to do more. In an uncertain world, they recognise they can play a key part in putting the economy on a sounder footing and helping individuals build greater financial resilience that will help them weather the storm of any future financial crises.

I convened the Purpose Coalition’s Cost-of-Living Taskforce to explore how a deeper partnership between government and the private sector could help the country move from short-term crisis support to longer-term solutions that would improve long-term resilience. Our findings have been published today in a Cost-of-Living Action Plan which identifies five key areas where government and private sector interventions could make a significant difference, with recommendations for further action.  

We’re calling on the Government to adapt the successful workplace pensions scheme - where contributions are made by employers, employees and government - so that workers can access cash at crisis points throughout their working lives, rather than have their savings locked up until they retire. Employers should automatically enrol workers on a government-backed ‘rainy-day’ savings scheme that would provide a better balance for households in times of financial turmoil. The recommendation would boost people’s resilience to any future cost-of-living squeezes by allowing workers, businesses, and government to contribute jointly to the crisis fund.

In the shorter term, we need to transform the way in which people can access cost-of-living help. Often it’s too fragmented - or just too difficult, especially in times of stress - to find details of the support available. We’re proposing that the Government creates a centralised platform on its ‘Help for Households’ website which would give users access through a one-stop-shop to a range of unique information on the cost-of-living support available to suit their individual circumstances. Many organisations have built up extensive information on their customers which could be used to develop better tailored help. The single site could also work with local authorities to include information about support specific to local areas and with the Cost of living Tsar who could link in approved third party offers.

The cost-of-living crisis has seen a huge rise in the number of people seeking mental health support, with all the attendant pressures on the NHS. Research shows that young people, whose education already suffered during the pandemic, are particularly badly impacted. Those at university are not only dealing with living away from home, often for the first time, but with additional worries about the punishing costs of food, heating and rent. Many arrive already in debt. As the country’s future workforce, their poor mental health needs to be addressed as a matter of urgency. Universities rose to the challenge during the pandemic, introducing measures to support mental health and wellbeing. There now needs to be a coordinated strategy for universities and the private sector to work together to provide greater targeted support for students, with private sector organisations encouraged to financially support university hardship funds for students, especially where they already have close links with a university.

The cost of childcare is proving to be one of the biggest challenges to a fully-functioning workforce. The current system is limiting growth. It’s too expensive and it’s a barrier to parents, usually women, being able to return to the workplace on a full-time basis, if at all. All too often, they’re forced to rely on piecemeal, unstructured care arrangements which can have an impact on children’s early development as well as on parents’ productivity, working hours and pay.  We’re recommending that the Government makes childcare costs tax deductible for children over three months old rather than at three years old, alongside an increase in the ceiling for eligibility from £100K to £150K to discourage higher-earning parents from working less to stay below the cap.

Much of the focus of the cost-of-living crisis has been on energy prices. For vulnerable households in particular, the cost not only forces them to make difficult choices about heating their homes or putting food on the table, it creates huge uncertainty about whether they’ll be able to keep their energy supply on in the future. We need to treat personal energy security as seriously as national energy security. So we’re proposing that the Government seeks cross-party support to establish a Royal Commission on Personal Energy Security to examine the consequences of giving households the right to an unbroken supply of gas and electricity, making it illegal to cut off someone’s supply. 

The report also contains examples of what Purpose Coalition members have been doing over the last few months to improve conditions for their employees, their customers and their communities. Their actions, and their willingness to explore and develop new ideas as Taskforce members, highlight the contribution that purpose-led organisations can make to shaping a fairer and more prosperous society. As the Chancellor reviews his options for this month’s Budget, I hope that the Government will give serious consideration to these clear recommendations which will help ensure a more resilient future.