Welfare reforms 'will worsen regional inequalities'


Government welfare reforms will "further entrench deep-seated regional inequalities across Britain", campaigners have claimed after a new report said poorer areas will be hit hardest by new changes.

The research says the effect of reforms taking effect from next month will be disproportionate across the UK, with much of southern England outside London escaping relatively lightly.

The Sheffield Hallam University team said all ten areas that will lose the least amount of money are all in the south-east of England.

The study, commissioned by the Joseph Rowntree Foundation (JRF) and Oxfam, has looked a raft of new welfare changes which will take almost £13 billion a year from claimants by 2020.

It estimates that couples with two or more dependent children will lose an average of £1,450 a year, while lone parents with two or more children lose an average of £1,750 a year.

The study says that 83% of the overall financial loss will fall on families with children and 15 of the 20 hardest-hit places have more than the national average share of households with three or more children.

And it says that nearly half the total loss will fall on tenants in social housing. The research team said that, on average, working-age social sector tenants will lose more than five times as much as working-age owner-occupiers.

Among the other findings announced by the Sheffield team are that 12 of the 20 hardest-hit places have an Asian population of more than 10%.

Report authors Professor Christina Beatty and Professor Steve Fothergill, from Sheffield Hallam University's Centre for Regional Economic and Social Research (CRESR), said that changes in tax, the minimum wage, social sector rents and childcare entitlement will go some way to offset the losses.

"But it is unlikely that the full financial loss will be offset," Prof Beatty said.

Professor Fothergill said: "Many individuals and households in more prosperous parts of the country will barely notice that welfare reform is under way. For others however, the financial consequences will be only too obvious."

Rachael Orr, Oxfam Head of UK Programmes, said: "This report confirms that social security cuts will further entrench deep-seated regional inequalities across Britain, hitting some of our most deprived communities the hardest.

"These cuts suck money out of already struggling local economies and are likely to push people on low incomes, particularly families with children, into hardship.

"The Government's promise to raise the minimum wage closer to a living wage is a step forward but it is no substitute for a proper national poverty strategy that prevents future cuts from unfairly falling on people living in the poorest places."

Brian Robson, Policy and Research Manager at JRF, said: "Positive steps like the National Living Wage will help to build a society with higher wages and less need for welfare. But we're not there yet, and reducing support before people are able to offset the losses will leave many families struggling."

The research team said it looked at welfare reforms that have been announced since the 2015 general election and that will be implemented in stages from April 2016.

These include reduced tax credits, especially for larger families; limiting housing benefit in the social sector to the private-rented rate; restricted entitlement to housing benefit for 18-to-21-year-olds and the extension of the benefit cap.

A Government spokesman said: "The Government is determined to deliver a new settlement for the British people, one that will create a higher wage, lower tax and lower welfare economy.

"Our welfare reforms ensure that the system is fair both for those who need it and the taxpayers who fund it.

"But there's more to be done, which is why we are introducing a new National Living Wage which will boost the pay of up to six million people.

"Together with the further increases to the personal allowance this year people will keep more of the money they earn by paying less income tax.

"We're also taking action to support working families by freezing fuel duty, helping councils to freeze council tax bills and offering thirty hours of free childcare to working parents, because evidence shows that the best route out of poverty is work, not benefits."

The Government pointed out that while people in social housing are clearly more likely to be affected by changes in housing benefit, an additional £800 million was announced last summer for local authorities to administer on Discretionary Housing Payments between 2016/17 and 2020/21 and another £70 million was set aside for this purpose at the last spending review.