William Eichler 10 October 2017

Benefit freeze ‘biggest policy driver’ of poverty, think tanks finds

Benefit freeze ‘biggest policy driver’ of poverty, think tanks finds image

Real terms cuts to working-age benefits and tax credits are set to drive almost half a million more people into poverty in 2020, think tank reveals.

A new briefing by the Joseph Rowntree Foundation (JRF) shows the four-year freeze on working-age benefits, introduced in 2015, is the ‘biggest policy driver’ behind the rise in poverty and will result in 470,000 more people living in poverty in 2020/21.

Higher than forecast inflation means the hit to low income families of the freeze will be almost £0.9bn more than the £4bn originally expected from this cut in 2020/21.

In 2019/20, when the freeze is due to end, a couple with two children in receipt of Universal Credit will be £16 per week (£832 per year) worse off than they would’ve been had benefits kept up with prices since 2010, JRF found. A lone parent with two children is £13 per week (£676 per year) worse off.

Both figures are the same whether out-of-work or working full time for the National Living Wage.

JRF called on the Government to use its Autumn Budget to ensure the incomes of the least well-off keep pace with the cost of essentials, by unfreezing benefits and uprating them in line with rising costs.

It recommended unfreezing targeted income related benefits such as tax credits, Universal Credit, the Local Housing Allowance and Job Seekers Allowance, over more widespread benefits such as child benefit.

‘People who are just managing at best are being hit in the pocket by the freeze on benefits and tax credits,’ said Campbell Robb, chief executive of JRF.

‘It means millions of families are finding life even harder to make ends meet - whether paying for the weekly food shop, covering energy bills or finding enough money to pay the rent.

‘While the Treasury gains from this policy in the short-term, more children living in poverty has costs the Exchequer an estimated £6.4bn per year in lost tax revenue and additional benefit spending.

‘The focus should be on making sure low-income family budgets keep pace with the cost of essentials, while reducing the benefit bill through increasing employment and enabling people on low pay to increase their earnings.’

PWLB hike: A rise too far? image

PWLB hike: A rise too far?

What impact will the increase to the Public Works Loan Board rate have on councils’ housing and other capital schemes? Neil Merrick investigates.
SIGN UP
For your free daily news bulletin
Highways jobs

Home Support Coordinator

Kirklees Metropolitan Council
£22,462 - £23,836 per annum
You will work within a supportive and experienced team of people dedicated to helping adults maintain their health and wellbeing. Kirklees, West Yorkshire
Recuriter: Kirklees Metropolitan Council

Recruitment Open Day for Social Workers

London Borough of Bexley
Up to £48,156 per annum
Participants will have the opportunity to speak with staff and managers about how Bexley offers... Bexleyheath, London (Greater)
Recuriter: London Borough of Bexley

Job Hub Lead (Regents Park)

Camden London Borough Council
£40,829 - £47,360 per annum
Exciting opportunity for someone experienced in supporting people into work to lead the development and delivery of a new neighbourhood Job Hub, in... Camden, London (Greater)
Recuriter: Camden London Borough Council

ASC Occupational Therapist - Early Intervention Team

Essex County Council
£30300 - £41425 per annum
Essex County Council (ECC) is one of the largest and most dynamic local authorities in the UK, serving a population of 2 million residents, and has a England, Essex, Braintree
Recuriter: Essex County Council

Director of Inclusive Growth and Public Sector Reform

West Midlands Combined Authority
£110,000
The role requires someone with a talent for innovation and a passion for designing and implementing public services. West Midlands Region
Recuriter: West Midlands Combined Authority

Local Government News

Latest issue - Local Goverrnemnt News

This issue of Local Government News explores how councils can tackle modern slavery and trafficking in their supply chains, finds out more about Cambridge's first cohousing scheme and the launch of a new project to build a shared service pattern library for local government.

This issue also contains a special focus on children's services and how councils are protecting children following local safeguarding children boards being abolished.

Register for your free magazine