26 Mar 2015

New report reveals impact of welfare reform on working age tenants

The London School of Economics (LSE) has published a new report today, ‘Is Welfare Reform Working?’, commissioned by the South West HAILO group of housing associations, including GreenSquare.

Following the government’s radical overhaul of the welfare system, the study looks at whether the new regime has been successful in moving people from benefit dependency into work. Researchers at LSE, led by Professor Anne Power, conducted a series of interviews with 200 social housing tenants in the region. 

Professor Anne Power said: “Four hundred interviews with 200 tenants over two years paints a powerful and painful picture of low income tenants struggling to cope with falling incomes. Social landlords are offering more support but can’t close the gap.”

The study shows that in the South West the results of the government’s reforms are mixed. While one in six tenants has moved into work, this is often in part time and insecure employment, and four out of five working tenants still rely on benefits in some form. This combination of low pay and benefits is the ‘new normal’ for many.

Howard Toplis, Chief Executive of GreenSquare, said: “We felt that it was essential that we were part of this study, which helps us to understand the impact of Welfare Reform on our residents, and how they have been coping with it.

“The study has shown how residents are having to adapt to new payments and reduced budgets two years after the introduction of major welfare reforms. The results will help the government understand which parts of the system are working well and, more urgently, what must  be improved or changed.”

 Other key findings from the study:

Between 2013 and 2014, one in six tenants either found work or increased their hours. The majority of new jobs are part-time and flexible hours.

Many are cutting back on food and utilities in order to make ends meet, and are borrowing more.  This is difficult for tenants, and probably not sustainable in the long term. Mainstream financial services don’t offer products for this group.

Job Centre sanctions can work, but are not always appropriate. They’re not effective for more vulnerable customer groups, and other solutions are needed.

Many tenants face persistent barriers to work: disability and poor health, as well as caring responsibilities, can limit their work prospects. Transport costs are cited as a particular barrier in the South West.

- Tenants rate the service from CAB very highly; this sort of support can deliver the outcomes government is aiming for. 

The LSE team make a series of recommendations, which include:

Supporting Citizens Advice and keeping their doors open – many are being threatened with further cuts due to reductions in local authority grants.

Sustaining the supportive and job-related services provided by housing associations.

Making Jobcentres more people-centred so staff hear the truth about real tenants’ problems and can help practically. 

Avoiding benefit suspension and sanctioning without notice, except in cases of proven and extreme abuse.

Reforming the withdrawal of the spare room subsidy to be more flexible. 

- Supporting housing mobility support schemes to make it easier for under-occupiers to down-size.

A summary of the report can be viewed at:

http://sticerd.lse.ac.uk/dps/case/cr/casereport90_summary.pdf

 

 


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