New research claims Blackpool is going to be hit harder than any other place in the country by the Government’s universal credit welfare reforms.
According to a report by Sheffield Hallam University’s Centre for Regional Economic and Social Research (CRESR), the seaside town will experience an estimated loss of more than £900-a-year in welfare benefit payments for every adult of working age, when the reforms eventually kick in – a figure four times greater than the losses that will be experienced in parts of Hampshire.
The research also claims that once the reforms have come into full effect, £19 billion-a-year will be taken out of the economy – the equivalent of £470-a-year for every adult of working age in the country.
Britain’s older industrial areas, a number of seaside towns and some London boroughs will be hardest hit areas, according to the report. And, whilst most of the south and east of England outside London will escape comparatively lightly, the three regions of northern England (the North West, the North East, and Yorkshire and the Humber) alone can expect to lose around £5.2 billion-a-year in benefit income.
The authors of the report claim the key effect of the welfare reforms will be to “widen the gaps in prosperity between the best and worst local economies across Britain.”
Other key findings include:
- As a general rule, the more deprived the local authority, the greater the financial hit.
- The biggest financial losses will arise from reforms to incapacity benefits (£4.3 billion-a-year), changes to Tax Credits (£3.6 billion-a-year) and the one per cent up-rating of most working-age benefits (£3.4 billion-a-year).
- The Housing Benefit reforms result in more modest losses – an estimated £490 million-a-year arising from the ‘bedroom tax’ for example – but for the households affected the sums are nevertheless still large.
- Some households and individuals, notably sickness and disability claimants, will be hit by several different elements of the reforms.
- The financial impact of the reforms, however, varies greatly across the country. At the extremes, the worst-hit local authority areas lose around four times as much, per adult of working age, as the authorities least affected by the reforms.
The report concludes, “The impacts of welfare reform are very substantial – an estimated loss of income of approaching £19bn a year once all the reforms have been fully implemented, or an average of £470 a year per adult of working age across the whole of Britain. For some of the individuals affected by the changes the loss of income is much, much greater. What is also clear, however, is that the financial losses arising from the reforms will hit some places much harder than others…
“As a general rule, the most deprived local authorities across Britain are hit hardest. The loss of benefit income, which is often large, will have knock-on consequences for local spending and thus for local employment, which will in turn will add a further twist to the downward spiral. A key effect of welfare reform will therefore be to widen the gaps in prosperity between the best and worst local economies across the country.”
The research comes at a time when the RLA is working hard to secure the facility for landlords and tenants to have the housing benefit element of universal credit paid directly to landlords. Direct payments would mean that tenants would have peace of mind, knowing that their rent had been paid. In comparison, there are very real fears across the housing sector that without this facility, many tenants will default on their rent payments leading to higher rates of evictions and homelessness.
Just last week, a petition was set up urging the Government to allow, “…tenants and landlords the right to have the housing element of Universal Credit paid direct to landlords”.