□  Responding to the variability and diversity of the poor

Another important lesson of poverty reduction, particularly relevant in the context of partnership development and cost recovery, is that the poor's ability to make use of a service varies. Their use of a service generally increases and decreases in relation to a range of dynamic factors and livelihood assets. Poor people develop complex strategies to ensure their survival in a crisis, or simply to cope with seasonal variations in their poverty. These might include a variety of mechanisms to increase income and strategies that result in the reduction of household expenditure. In particular, the economies that poor households make by cutting down on education, health care and food, and cutting back on the utilisation of services. Participatory assessments are useful in explaining the composition of these strategies and the importance of reducing household expenditure in services during a crisis.6

This variability is an important issue in the design of new approaches to service delivery. In essence, the degree of access and the need for improved water and waste services will change over time. Service delivery approaches must respond to the poor's need to upgrade during plentiful times, and to downgrade during lean times. Interventions that do not provide the poor with the flexibility to change service demand and expenditure, but result in fixed outgoings, reduce the range of strategies that the poor can employ to cope with their poverty. Irrespective of the standard of service they receive, this will increase, not decrease, the vulnerability of the poorest.

It is also necessary to recognise that there is a great diversity in the capability, vulnerability and capacity of low-income groups. Urban areas, communities, neighbourhoods, households and individuals experience different levels of poverty and are affected in very different ways. Low-income communities are often said to be 'poor', as if there is only one idea of 'poor'; but in practice, urban poor communities are heterogeneous, and poverty responses must respond to the diversity of their problems, needs and priorities. Box 5.3 provides an income/assets-based picture of this diversity in the context of Nepal.

Various poverty assessments show that a significant difference between the poorest urban dwellers and their slightly-less poor and better-off poor neighbours lies in the way households prioritise service needs and fund service expenditure. The very poor spend no money whatsoever on water, sanitation or solid waste services; the middle-poor spend some on water, and none on sanitation or solid waste, and they cut back on water expenditure in a crisis. The better-off poor are willing and able to pay for water and solid waste services, but do not always prioritise sanitation services. They are likely to maintain this expenditure through difficult times, but cut back in emergencies. They have more choice about the adaptations they make and are thus less vulnerable. This is developed further in Box 6.14.

A range of urban poverty initiatives have emphasised the importance of assessment processes that give a voice to all the members of the community and respond to the variability and diversity of their needs. Lessons emphasise that while service provision may be improved, the access various groups and individuals have to these services will remain unequal without mechanisms that redress marginalisation. Most large-scale private sector interventions envisage the low-income group as homogenous, or as a geographically defined area requiring one common solution. These attitudes can be even more entrenched than they were in previous methods of municipal provision. Few have begun the process of disaggregation, which recognises the varying capacities of the poor. Yet the small-scale private sector often works effectively with this diversity, giving poor householders a choice of service and financial options.