On Wednesday 23 November the Chancellor will unveil a new budget plan for Britain until the end of this parliament in the traditional Autumn Statement.

Download press release

We don’t yet know what measures he will announce in the first official economic statement since the Brexit vote.

The Government, however, has announced no new benefit cuts over the course of this parliament and the Prime Minister has repeatedly expressed her commitment to support the group of ‘just about managing’ families.

Policy in Practice analysis featured on the front page of The Guardian today shows that the cumulative impact of welfare reforms already announced will continue to hit the pockets of low earning households through to 2020.

A unique approach to analysis: 187,000 real households

Policy in Practice has been working with over 30 local authorities across the country over the past two year, helping them to assess the impact of welfare reform on each individual low income family through our software and consultancy services.

This household level approach, combined with our policy modelling software, shows the cumulative impact of each single policy change policy change announced across four different government departments from 2013 to 2020.

Our analysis focuses on a cohort of 187,475 real working-age households and is based on Housing Benefits and council tax support data shared with us on an anonymised and aggregate basis by 17 local authorities across England, Scotland and Wales.

cumulative-impact-of-welfare-reforms-to-2020-policy-in-practice

The cumulative impact of welfare reforms on 187,000 households across a spread of seventeen local authorities across the UK.

Key Findings

  • Working households are hit hardest at £48.90 per week due to cuts to Universal Credit, rising private rents and the benefits freeze.
  • Out of work households are £33.54 per week worse off on average, impacted mainly by the benefits freeze.
  • The average hide the fact that some individual households are losing much more due to specific welfare reforms such as the benefit cap, or the combined impact of multiple reforms hitting the same family.
  • The loss from welfare reforms across the households in the sample is £381m, while the amount provided by central government through Discretionary Housing Payments is £10m.

This means that the families affected, along with limited support from local authorities and other local services, will be left struggling to plug the gap.

Director of Policy in Practice, Deven Ghelani said:

“The Government has announced no new Benefit cuts over the course of this parliament.

“However, our analysis shows that the cumulative impact of reforms already announced will continue to hit the pockets of low earning households through to 2020.

“Policy in Practice is being asked to help Local authorities to be smarter and ever more targeted about who gets what support, but their resources are limited.

“Central Government should help by taking action to lower rents, look again at the benefits freeze, and invest in work incentives under Universal Credit to ensure work pays as well as under the current system.

“Without mitigation, low income households that are already struggling will be pushed further into debt, with knock on consequences for society and the public finances.”

Find out more

  • Sign up to read more analysis on which families will be hit hardest in following the Autumn Statement in a new post from senior analyst, Giovanni Tonutti
  • Learn more about how our household level analysis is helping local authorities to identify and engage households affected by welfare reforms by viewing our case studies and other resources, events and past webinars
  • Contact us to learn more

Register for an upcoming webinar

TitleDateStart TimeDurationRegister
How Autumn’s income shocks will hit low income families The factors that have kept many low-income families out of poverty in the past year are changing, meaning many thousands will be worse off.

Families are set to be hit by big income shocks with the ending of furlough, the reintroduction of the Minimum Income Floor, the loss of the £20 a week Universal Credit increase and the ending of the Benefit Cap's grace period. New data analysis from Policy in Practice predicts significant losses for some families who will struggle to cope and who will need the support of frontline organisations to help them through.

In this webinar we will explore what the Autumn may bring for low-income households and how support organisations can work now to prevent hardship and prepare for an increased demand for services.

Join this webinar to learn:

- How much different households are set to lose when Covid supports are withdrawn
- What support tools are available for individuals and organisations
- Best practice advice from a frontline organisation

We will be joined by Monica Kaur from the Money and Pensions Service.
29/9/202110:30 BST1.3 hours
Register
How Kent County and district councils collaborate with data to tackle poverty Covid has turned our world upside down. Many residents in Kent, as elsewhere, have experienced financial hardship whilst, for organisations, the pandemic has been the catalyst energising them to work differently.

In summer 2020 Kent Districts and Communities Recovery Cell set up a group to focus support to residents at risk or already experiencing financial hardship because of the pandemic. Residents unused to facing financial hardship suddenly needed help to navigate support and advice systems. The group knew that things are likely to get worse for Kent's residents before they get better as furlough ends and families who were just about managing are tipped over the edge.

In a first for local government, Kent county and district councils have boldly chosen to collaboratively share their data to get powerful cross-county insights that will drive their poverty prevention activity. The information will help them to target of a wide range of campaigns to residents such as employment support, free school meal take-up, public health interventions, housing initiatives and benefits take up.

Importantly, the project has transparency built in so that councils can very easily benchmark with each other to identify and share best practice in a safe, collaborative way.

Join this webinar to hear:

- Kent County Council's vision for greater collaborative working with districts
- Maidstone District Council's drivers for districts to collaborate with their data
- Folkestone and Hythe District Council's impact achieved so far from data-led poverty prevention campaigns

We will be joined by guest speakers, Zena Cooke, Corporate Director Finance at Kent County Council, Steve McGinnes, Director of Mid Kent Services at Maidstone District Council, and Jane Worrel, Revenues and Benefits Senior Specialist at Folkestone and Hythe District Council.
20/10/202110:30 BST1.3 hours
Register
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6 Comments. Leave new

  • Your figures seem very conservative. Using your UC calculator we are going to be £400pm worse off / loose a quarter of our income just from the move from Working Tax Credits to Universal Credit even before all the other factorsyou mention!!

    Reply
    • Jethro Martin
      December 16, 2016 15:16

      Hi Rob,

      Thank you for your comment.

      Those with certain circumstances may be worse off under Universal Credit (UC). For example if you are working you might lose some of your work allowance and if you are disabled you may receive a lower amount of benefit.

      Without knowing more about your circumstances I can’t give you much advice, though if you are struggling you may be able to apply for a ‘budgeting advance’ – you can find more information on that here.

      If there is anything else we can do to help please post here.

      Reply
  • Hi Deven,
    Looks like really interesting research. What is your methodology for calculating real incomes, in terms of estimating inflation 2016-2020? If you could let us know, I’d be very grateful. We would like to be able to quote your research but difficult to do so without this information.
    Best wishes,
    Sarah
    New Economics Foundation

    Reply
    • Giovanni Tonutti
      November 22, 2016 13:41

      Hi Sarah,

      Our methodology accounted for:
      – Inflation rate based on the latest OBR estimates (March 2016), with a yearly average inflation rate of 2.3% up to 2020.
      – Increase in private rent prices was modelled using regional or borough-level (for London authorities) historical data as provided by the VOA.
      – Social rents were reduced by 1% p.a.
      – National Living Wage and Personal Tax Allowance raised respectively to (£9 p/h and £12,500).

      Should you need any furhter info on our approach, feel free to send me an e-mail at giovanni@policyinpractice.co.uk

      Best,

      Giovanni

      Reply
  • Peter Williams
    November 21, 2016 08:02

    where do i find the underlying report? The press release is insufficient

    Reply
    • Deven Ghelani
      November 21, 2016 11:14

      Hi Peter,
      Thanks for the feedback. The analysis was carried our specifically for this article, as such there is no formal report although the press release has been updated to includes additional information on the methodology. We will be releasing additional analysis and the basis for our findings tomorrow, and throughout this week.
      Best wishes,
      Policy in Practice.

      Reply

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