Welfare reform – Liverpool counts the cost


A unique analysis of the Government’s welfare reforms shows the most vulnerable in Liverpool have been hit by multiple changes and it is costing millions of pounds in crisis payments and support.

Liverpool has become the first local authority in the country to carry out a Cumulative Impact Assessment to examine the impact of more than 20 changes on its own residents.

The aim of the assessment is to help Liverpool City Council identify those most affected and ensure the city and its partners are providing high quality benefits, debt and budgeting advice and support.

It builds on Sheffield Hallam University research1 published in March 2016 which suggested that welfare reforms have cost the city’s economy the equivalent of £157 million per year, set to rise to £292 million per year by 2020/21.

The report – which uses the Government’s impact analysis reports and data held by the council – shows the changes to working age benefits since 2010 have affected around 55,000 households (one in four) – with the long term sick and disabled, children and women disproportionately hit.

The lower Benefit Cap affects 743 families – 80 percent of them single parent households – resulting in an average loss of income of £42.67 per family each week2.

It is being launched in the Great Hall at St George’s Hall in Liverpool on Friday 10 March at 11am.

The city council – which has had a 58 percent cut in central Government funding since 2010 and has to find another £90 million of savings by 2020 – is having to use around £7 million a year of its own reduced funds to help with rent top ups and crisis payments.

The headlines include:

• 3,400 households with long term sick and disabled residents have been affected by the Under Occupation Penalty (Bedroom Tax)

• Families with children have been hit by a freeze in child benefit, reductions in Housing Benefit rates in the private sector, the Under Occupation Penalty and the Benefit Cap

• Younger people aged 16-29 accounting for almost 35 percent of applications for the Liverpool Citizens Support Scheme, which makes emergency payments for people in crisis

• Single private tenants aged 25-35 have seen a cut of around £34 per week in their Housing Benefit

• Women account for 60 percent of those affected by a cut in Council Tax Support and 65 percent of those hit by the Under Occupation Penalty

Mayor of Liverpool Joe Anderson said: “This is the first time ever that a complete picture has been pulled together of the impact of the welfare reforms that the Government has implemented since 2010.

“It shows clearly that some of the most vulnerable people in society have been repeatedly affected by the changes that have been made and will be hit again with changes that are coming down the line.

“Councils are on the frontline of picking up the pieces of decisions inflicted by Whitehall, which is why this work is so important for us. It will help us shape the support that we are able to offer now and in the future so that we are as well placed as we can be in dealing with people living on the edge who are going to be tipped into crisis as a result of the reforms.

“In the coming year, we are setting aside an additional £2 million on top of the £7 million we already spend, introducing a Liverpool Lottery to support organisations which help the most vulnerable in the city, and our own not-for-profit energy firm – the LECCY – to help those in fuel poverty. But these innovations will only go a relatively short way to offsetting the impact of austerity – we are fighting against a strong incoming tide.”

The Bishop of Liverpool, the Right Reverend Paul Bayes, said: “A measure of a true and just society is our attitude to the poorest and the most vulnerable in our society. This report provides a statistical analysis of that measure and it makes hard reading.

“It does not surprise me that the brunt of cutbacks and difficulties are shouldered by those in poverty, the long term sick and the disabled, nor that people face double and triple whammies as the different cuts strike them over and over. It does not surprise me; but it angers me. It angers me that we allow this to happen repeatedly to our sisters and brothers, to our children, to our neighbours. It angers me that our hard-working local politicians are forced to make heart-breaking, difficult decisions over where best to spend their very limited resources. It angers me that central government seems not to recognise both the injustice and impracticality of their funding regime.

“I don’t want to see a society where our children starve, where our fellow citizens are punished for being disabled, sick and in need. In today’s world, in today’s Britain we should be investing in support for people. We should not punish, attack and demonise the very people who need our help most.

“I am most grateful for the work of the officers of our city council in producing this excellent report. A single resource cut on its own is bad enough. But when we look at the whole picture it becomes catastrophic. We need to change. We are and could be a better society than this.”

Councillor Jane Corbett, Cabinet member for fairness, social inclusion and equalities, said: “Contrary to the Government’s narrative, many of these are hitting families where there is someone in work. All it is doing is dragging more children into poverty and affecting their life chances.

“At the same time, they are shifting the responsibility to sorting it out from central Government to councils, housing associations and other partners while we are facing massive cuts to our budgets.

“Populist rhetoric around savings to the benefits bill must be set against the reality which is a huge cost to the public purse of paying Discretionary Housing Payments and the social consequences of housing families in temporary accommodation when they are evicted because they can’t afford their rent.”

Further work will be carried out on the impact of welfare reform changes on disabled people, families with children, the level of debt and which areas of the city have been hardest hit. These will be incorporated into a final report published later this year which will help the council to further develop its approach to support those affected by welfare reforms.

Liverpool Waterfront