The cost of poverty for local authorities is set to rise as the welfare reform programme continues and more people on low incomes will be in need of support.
Policy in Practice has analysed the cumulative impact of welfare reform across Great Britain for the Local Government Association. In light of the complex changes introduced, this work shows the overall impact on local populations and highlights the key challenges for local authorities.
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About the project
Policy in Practice, in partnership with the Learning and Work Institute (LWI) and the Local Government Association (LGA), has analysed the cumulative impact of welfare reform across the whole of Great Britain. The aim is to provide an holistic picture of low-income households and their changing circumstances, and in turn help local authorities shape support strategies and responses to the reforms.
The latest analysis builds on previous work into the local impacts of welfare reform, carried out by LWI and published in 2013. Using data from the Family Resources Survey, together with our Benefit and Budgeting Calculator, Policy in Practice has both modelled the cumulative impact of welfare reform today, and projected what the picture will look like in 2020.
We have identified four challenges around welfare reform that are of particular relevance to local government and outlined corresponding recommendations. These are outlined in detail in the report.
Further analysis to show dynamic behaviour over time
Our analysis is based on a single snapshot of household circumstances and therefore cannot take into account possible dynamic changes in behaviour as households adjust and respond to new circumstances. Instead, the aim is to show the impact of welfare reform up to now, and based on this what the picture looks like for 2020.
Follow up analysis will be carried out to gain a more dynamic understanding of how welfare reform is affecting households over time by taking several snapshots of low-income households across Britain. The results will provide a more dynamic understanding of how welfare reform is affecting households.
As Universal Credit roll-out gathers pace and other reforms announced recently begin to take effect, this approach will give local government answers to a new range of relevant questions. These include:
- Is Universal Credit achieving its stated aim of supporting households into employment? Do these households stay in those jobs for longer?
- Do people who are negatively affected by reforms change their behaviour and/or adapt to their new circumstances?
- To what extent is the broken link between the LHA and rents leading to an increase in temporary accommodation or homelessness?
- Do people fluctuate into and out of poverty?
- What do the above tell us about what local support should look like?
Policy in Practice has taken a similar approach to track over half a million low-income households in London. Click here for more information.