Welfare reform and its impact in Leeds

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Organised by the Church Institute Leeds and Leeds Churches Together in Mission, a meeting took place on 5th March 2015 in the Oxford Place Centre in Leeds on the subject of  welfare reform. The main speaker was Diane Gill from Leeds City Council. Caroline Isle, Eddie Latham and myself attended from the Leeds Unite Community Branch.

In many ways this was a remarkable meeting as it laid bare the nature and extent of the impact in the Leeds area of the Coalition Government’s controversial welfare reforms, which were introduced on 1st April 2013. The data presented was from an authoritative source and should therefore be treated with the upmost seriousness. Diane’s presentation was clear, compelling and compassionate. Indeed, her talk, although depressing in its content, was well received by the audience at a well-attended meeting. 

First, Diane painted the context of the reforms by outlining the number of people affected by them. Although, nationally, the total spending on social security is £163 billion, by far the largest share goes to pensioners, who have been protected from the Government’s reforms, not, it should be added, that the level of a basic state pension is particularly generous. There are 55,000 working age social security claimants in Leeds, although the figure does not include those in work and in receipt of benefits such as tax credits.

In terms of different sorts of payment categories the figure of 55,000 can be broken down as follows:

  • Job Seekers Allowance 23,000;
  • Employment Support Allowance 30,000;
  • Housing Benefit 13,000.

The figures were not represented as a percentage of the working population in the Leeds area as a whole.

The impact of reforms

Following the reforms to social security in April 2013, Diane pointed out that those citizens affected include the following:

  • 6,600 tenants have lost out through the bedroom tax with an average loss of £13 per week, affecting 2,500 children;
  • 27,000 have lost out through Council Tax support cuts with an average of £13 per week, affecting 2,500 children;
  • 307 people have lost out through the benefit cap, affecting 1,444 children.

These are significant sums of money when we consider the relatively low levels of state payments and the lower limits now set by government for the annual uprating of social security, to say nothing of people who are hit multiply by a combination of government reforms. Figures in respect of the latter, however, were not given.

Diane went on to explain that since the reforms or cuts, 2,800 council tenants are in rent arrears. While not all of these cases may be down to the bedroom tax, ‘a proportion’ undoubtedly will be. As a result of the bedroom tax, there has also been ‘an increased demand on the Discretionary Housing Payments scheme’, which had a budget of £2 million and which has now been exceeded.

Following a reduction in government funding and, therefore, in Council Tax support, there has also been an increase of £5 million to collect for the tax. There has been a rise in Council Tax arrears due to cuts or, as Diane put it, there has been a ‘reduced collection rate for those previously on 100% Council Tax support’.

Another consequence of the welfare reforms and associated poverty has been a significant use of the Local Welfare Support Scheme to help families and single vulnerable people ‘under exceptional pressure to get help with food, fuel, travel and removal costs and basic household goods’. The scheme was introduced in April 2013 following the Coalition Government’s decision to abolish the Community Care Grants and the Crisis Loans for Living Expenses of the once nationally available discretionary Social Fund. So far, 5,000 applications have been made to the fund and awards totalling £1.4 million were made in 2013-14. However, funding is being reduced to £1.1m in 2015-16, with the majority of the funding now coming from Leeds City Council and some from government, which had planned originally to reduce its funding completely!

There has been an increase in the use of food banks and in recourse by people in need to high cost lenders.

Universal credit

Diane also outlined what will be involved in Universal Credit. It is slowly being rolled out nationally and is due to be introduced for single people receiving Job Seekers’ Allowance in Leeds from December of this year. It is designed to make work pay and seeks to replace a complex system with a single set of rules. A single monthly payment will be made to the claimant. The City Council anticipates that people will need help with preparation for the change, with online claims and budgeting support. There is concern about the possibility of increased rent arrears as housing costs will now be paid direct to the claimant rather than to the landlord. It was also suggested by someone at the meeting that the government has enlisted the services of Virgin Money and Wonga to help with budgeting for social security claimants!

How is Leeds City Council responding?

The Directorate of Citizens and Communities within the city council is charged with tackling poverty. The strategy or what is known as Citizens@Leeds includes the following aims:

  • integrated and accessible services;
  • tackling financial hardship;
  • helping people into work;
  • and community engagement.

The strategy also includes a welfare rights scheme which involves a 3 year contract with an advice consortium, including Leeds Citizens’ Advice Bureau and Better Leeds Communities, which is aimed at bringing a co-ordinated approach to advice provision across the city.

There is also to be budgeting support or Money Buddies Scheme which is currently being piloted. It is made up of volunteers who have had previous money or debt problems and who are willing to ‘hand hold or buddy up’ with others in debt ‘to advise and help’.

Other elements of the scheme include:

  • funding of the Local welfare Support Scheme;
  • links with Food Aid Network and the Fareshare project;
  • additional funding to the Discretionary Housing Payment Scheme;
  • initiatives to tackle debt/financial exclusion.

Part of the latter includes the aim of challenging high cost lending via:

In respect of high cost lenders, Leeds City Council has produced a short video warning against the dangers of using such services:



There is also a communications strategy associated with the High Cost Lenders Campaign, which involves the use of billboards, buses, web adverts, Twitter, Facebook and making major businesses aware of the issues.

Discussion

While it is obviously of considerable concern that so many Leeds citizens are experiencing increased poverty due to government reforms and cuts, it is encouraging that Leeds City Council has a strategy in place for trying to tackle poverty, even though the available resources cannot be enough to meet a growing need. It is also remains to be seen how successful such approaches will be, although I wasn’t clear on how or if they will be evaluated. What also needs to be factored into any assessment of need is the poverty caused by social security sanctions.

Diane Gill’s talk alerts us to what is going on in Leeds and the services available, which will be extremely useful in the work of our emerging community support centres. The data she has passed on will be valuable in assessing to some extent the scale of the problems in Leeds and in our campaigning work. However, we also need to be aware of the disciplinary effect of harsher conditions for social security for those in work and the fear of an increasingly stigmatised service should they become unemployed. Such fear can mean the continued acceptance of low paid work and poor conditions of employment, so it would be good to see a strategy that promotes decent or living wages by the City Council at the same time.  One hopes the pressure for change nationally is pursued with vigour by Leeds City Council, Unite Community and other progressive forces which have social justice and greater equality as their aims.

I am very grateful to Diane and those church groups that organised the talk. The involvement of the churches is encouraging if a successful war of position is to be engaged in against what amounts to an assault on the well-being of some of this country’s citizens, including their children!

Gerry Lavery
Leeds Unite Community Branch.

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