This report explains how we can work together to build a good society in tough times. It sets out a deliberately ambitious agenda for social renewal across Britain, rooted in today’s challenges but learning lessons from the past. We are realistic about the austerity and uncertainty our country continues to face, but believe these provide the impetus to seek new ways of addressing our problems, rather than to abandon our aspirations for society.

Britain is a rich and dynamic country. Its people are resourceful and compassionate. It is better educated and healthier than ever before. Levels of crime and drug use are falling steadily. However, our society is facing a set of challenges that are straining the social fabric and making it harder for us to fulfil our responsibilities to each other. It will take a long time for living standards to return to their pre-recession levels, while further cuts to public spending are expected regardless of who is in power after 2015. Family time is increasingly squeezed between work and care, and many of us struggle to get on the housing ladder. Young people face an uncertain future, while older people worry about how they will be cared for. Cultural anxiety, and concerns about immigration and the benefit system, are high.

The Condition of Britain programme was established in February 2013 to consider how our politics, social institutions and public policies need to change to respond to these forces that are shaping society. Many of the issues that concern people in Britain today are the result of long-term social, economic, and demographic trends – such as the rise in female employment and changes in family structure, which have driven up demands for affordable childcare. Others, like the decline in homeownership or increases in youth unemployment, have more recent origins, though they have often been worsened by the recession, slow economic recovery and spending cuts.

In some cases, the challenge is one that successive governments have failed to get to grips with, like our low rates of housebuilding and inadequate care for the elderly. At the same time, governments have often pursued free market or central state solutions that have made our problems worse, not better. The idea that either a government programme or private contract can solve complex social problems on its own is a false promise. Overreliance on such methods tends to neglect the agency and insights of people themselves, leaving huge amounts of talent and resources – in all walks of life and in all parts of society – wastefully untapped.

This report attempts to offer a comprehensive survey of British society after the crash, and to formulate an ambitious programme of social reform rooted in everyday experiences and contemporary realities. The centre-left has engaged in a critical reappraisal of its economic policies since the recession, but relatively little attention has been given to how its goals for society and its prospectus for social renewal need to change in light of our new circumstances. Yet these are urgent questions given the country’s pressing social problems and the difficulties of governing with limited budgets.

The scope of this report

This report sets out arguments and policies across a range of social policy issues, including family life, young people’s transitions into adulthood, social security, housing, crime, social exclusion, and older people’s care. It does not make specific recommendations for schools or for the NHS – while both have enormous impacts on the quality of our lives, detailed policy development in these areas has been beyond the scope of the Condition of Britain programme. However, major programmes of work elsewhere at IPPR are addressing challenges in both fields.

We also do not make recommendations for immigration policy. IPPR has recently set out a comprehensive assessment of the challenges and opportunities for reform in this area (see IPPR 2014). However, in the Condition of Britain programme we have sought to reflect concerns about the implications of migration, particularly fears about the pace of change within neighbourhoods and the social division that can emerge when the bonds that hold society together come under strain.

In this final report from the Condition of Britain programme,1 we chart a new course for social policy that seeks to learn from the past and face up to today’s challenges. The report is formed of three parts. In the first, we establish our fundamental goals for society, making the case for an active and democratic equality. We then provide an assessment of the ‘condition of Britain’ and reflect on how the central social challenges facing the country have evolved over the last two decades.

In the second part of this report, we argue that three core ‘pillars’ must underpin our attempts to pursue ‘active equality’ in Britain: spreading power and responsibility, fostering contribution across society, and strengthening the institutions that embody our collective aspirations and obligations. We assess the extent to which governments have addressed these priorities in the past, and explain how by advancing them further we can unlock the resources and capacities we need to tackle our shared problems together.

In the third and final part of the report we put forward a series of practical, costed policy proposals that seek to spread power, foster contribution and strengthen shared institutions in order to build a more equal society. We set out ambitious plans to expand affordable childcare and provide greater security for older people with care needs, adapting the welfare state to profound changes in family life and better preparing Britain for an ageing society. We argue for a social investment strategy focused on jobs, skills and homes, rather than income transfers. This includes shifting public spending on housing from ‘benefits to bricks’, and guaranteeing work or training for young people rather than allowing them access to the adult benefit system. We call for the restoration of reciprocity to the social security system and higher (temporary) benefits for those who have paid into the system. And we propose new institutions to protect people against abuses of market power, including an Affordable Credit Trust to endow affordable local lenders that are capable of competing with extortionate payday lenders.

The four nations of the United Kingdom

This report is about the condition of Britain, and our arguments apply to the whole of the UK. However, the realities of devolution mean that some of our analysis rests on data that covers only England; and some of our policy proposals are directed primarily at UK government departments that only have responsibility for policy in England. Where this is the case, we endeavour to make this clear in the policy chapters in part 3 of this report.

However, many of the recommendations contained in this report seek to preserve the ties that bind the four nations of the UK, and promote partnerships between the UK government and the devolved administrations. This includes proposals to build an independent National Insurance Fund that strengthens the link between entitlements and contributions, steps to extend employment rights for parents and carers, and efforts to boost employment among sick and disabled people.

1An interim report (Lawton 2013) detailing the findings from the first stage our research was published in December 2013.