Here in Sandwell we expect welfare reform to hit particularly hard. A high proportion of our people depend on benefits.
There will be negative impacts on the local economy and housing market, on people’s everyday lives, on services from key partners including the third sector and on just about every council service.
Many of the welfare reforms, while coming from different pieces of legislation, will have a combined impact on essentially the same individuals and families who are already among the most deprived people in our communities.
In Sandwell, about 45,000 people are on benefits, and many will have never had to think about working out household budgets. With the move to universal credit, all benefits will come monthly in arrears and people will have to learn financial skills very quickly. People will suddenly face a need to manage their own money (paid to them direct) rather than, for example, have housing benefit paid direct to their landlord. Households with 4 or more children will be in for a shock because they will get less money unless they can find 24 hours of work a week.
This cut will be on top of potential reductions to housing and incapacity benefits, from disability living allowance and/or from having non-dependants living with them. On top of this, residents are facing a reduction in council tax discount.
About 8,000 Sandwell households in the private rented sector claim local housing allowance. At a stroke, 3,000 of those properties are no longer affordable, and all households stand to lose income:
- about £70 a week for 100 households in houses with more than four bedrooms
- about £30 a week for 600 single people between 25 and 35 (who will face living in a bedsit rather than flat).
In the social housing sector anyone in a house with “too many” bedrooms will lose about £10 a week per excess bedroom. Anyone with a grown-up child at home will face the difficult choice of squeezing more rent from son/daughter or suggesting they find their own place.
There are key risks, increased homelessness and more family instability as the same people suffer loss of income from a variety of legislative changes.
The changes will also have a cumulative impact on Sandwell itself, taking around £100 million out of the local economy and making it harder to provide jobs as a path out of poverty.
The Council is responding to the multiple challenges of welfare reform by working with partners in the voluntary and community sector to:
- build people’s financial confidence
- help people to make the most of job opportunities
- deliver Local Welfare Provision
- find imaginative ways to make best use of existing housing stock
- build a range of support to help the most affected families into work
The really hard work of helping people cope to is just about to begin.