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Understanding the Impact of Welfare Reforms on Britain's Most Vulnerable Communities

The UK's significant welfare expenditure, totaling £190 billion and constituting one-third of public spending, raises concerns about its distribution and impact. Following substantial cuts amounting to £20 billion by 2016, the financial strain on the poorest demographics intensified, with families experiencing a loss of up to 30% of disposable income. This has disproportionately affected older industrial towns and certain London boroughs, notably Blackpool, where adults face losses of over £900 annually. The effects of welfare reforms threaten to deepen economic disparities across regions and further entrench poverty and inequality.

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Understanding the Impact of Welfare Reforms on Britain's Most Vulnerable Communities

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  1. Welfare: On the Road to nowhere?

  2. Ballooning benefits? • £190billion spend on benefits • 1/3 of all public spending • Bigger than defence and education But: • £110billion on pensions • £100billion collected in national insurance • Benefits spend is 13% of GDP, was reducing to 2008

  3. Welfare reform • Overall, public spending is being reduced 08-16 by 13.5% • More than half of this reduction is being taken from benefits and local government • £20Billion cut from welfare benefits/tax credits spend by 2016

  4. Double/triple whammy? • £6billion through flatlining • £7.5billion Family benefits • £7Billion disability benefits • £2billion housing benefits

  5. The “poverty premium” • Stagnating wage levels • Rising living costs • Shrinking social protection • families with a child under five have, on average, lost 30% more of their disposable income than those with no children.

  6. Hitting the poorest places hardest

  7. Britain’s older industrial areas, a number of seaside towns and some London boroughs are hit hardest. • Blackpool is hit worst of all UK places – an estimated loss of more than £900 a year for every adult of working age in the town.

  8. A key effect of the welfare reforms will be to widen the gaps in prosperity between the best and worst local economies across Britain. • 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.

  9. Impacts in Lancashire • £360M loss of income, impact on local economy • Disability Living Allowance: 7K losers • Employment Support Allowance: 14K losers • Child and family benefits: 150K losers

  10. Examples of impact • Young job seeker, hit by car while cycling to JC+ appointment. Benefit sanctioned. • Pregnant woman, missed ESA appt came off of benefit, ended up sleeping in the goods entrance to Farmfoods.

  11. Universal Credit • Universal Credit. Budgeted to cost more but issues such as: • Direct payment of rent • Monthly payments • Tougher job-seeking rules and sanctions • Fewer “cliff edges”, better work incentives • simplification

  12. Future changes? • Housing Benefit abolished for U25s? • Universal benefits, eg winter fuel payments, means tested? • Child Benefit. • Pensions. Flat rate and raised retirement age. • Employment Support Allowance/JobSeekers Allowance scrapped?

  13. Myth v reality • Benefit fraud at an all time low • Restrictions on benefits for “people from abroad” at an all time high • “worklessness” untypical • ½ million families used foodbanks in past year • Poor people pay more in tax

  14. Jim’s manifesto • Policy based on fact not myth • Encourage rewarding work • Encourage social cohesion • Declare war on poverty • Declare war on inequality

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