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Welfare reforms forcing social housing tenants into poverty

Eleven housing associations in the South West of England have joined forces to tackle the employment issues faced by residents in affordable housing as a direct result of the changes to welfare reform.

HAILO (Housing Association Influence and Leadership Organisation) commissioned Professor Anne Power at LSE to conduct a study, looking at how the government’s welfare reform programme will influence tenants’ work opportunities in the south west. HAILO’s interim baseline report entitled ‘Work and welfare reform–impacts in the south west’, includes interviews with 200 working age social housing tenants, and brings to life a snapshot of tenants’ circumstances at the beginning of welfare reform.

Money

HAILO’s key findings are:

  • The bedroom tax is having a widespread impact, with many tenants unable to move to smaller properties or unwilling to leave their homes.
  • Rising costs are leading tenants to rely on a range of coping strategies including cutting back on food and utilities, dipping into savings, selling their belongings and borrowing money.
  • Tenants report losing confidence in their ability to manage their finances. 190 out of 200 tenants interviewed say they are struggling or just managing financially.
  •  57% of households have no-one in work; although most would like to have a job, disability, ill-health and caring responsibilities are cited as the main barriers to work.
  • Over four in five working  households rely on benefits.
  • Four fifths of tenants think it is difficult to find work, due to lack of experiences, qualifications and confidence.
  • Incentives to work are not always clear to tenants due to the prevalence of low wage work and insecure contracts.
  • Tenants fear that DWP administrative delays prompted by moving into and out work may cause sudden shortfalls in household budgets, leading to arrears, debt and poverty.
  • Travel costs are a barrier to work, especially in rural areas where a car is essential to reach job.
  • Almost seven in ten  do not feel well informed about welfare reforms.Job Centre

The baseline report concludes that:

“Generally, the baseline findings show that tenants view the welfare reforms as a great uncertainty that has the potential to disturb carefully managed, but limited household budgets. Welfare reform is leading to cuts in income for almost half of the tenants interviewed and is resulting in the growth of debt and rent arrears.

“Tenants are already struggling financially due to reduced income from work or benefits, particularly those affected by the bedroom tax, and tenants are anxious about their ability to find and hold down work.   Almost all tenants report high levels of anxiety around coping day to day due to reduced resources and uncertainty about their economic future and impending benefit changes.”

Case studies in the report highlight the real issues faced by families. One interviewee said:

“I'm not paying the bedroom tax. I just don't have any surplus money. I have one spare room. I'm falling into arrears and the end result may be that I'll be homeless. I’ve had to use all my savings to cover my expenses while I've been unemployed over the last two years. I think eventually I'll be in serious trouble with the housing association if my debt builds up. There are hundreds of others looking for a one bed flat - I don't think I'll be a lucky one.”

Another interviewee observed:

“Moving from Job Seekers Allowance onto tax credits is just not fluid at the moment. They don’t even have a tax credit form at the Jobcentre. You have to apply at HMRC and it seems to take weeks. If there is a problem with your forms no-one gets in touch with you. It's up to you to chase people constantly and that's expensive for me on the phone! “

Paul Crawford, Chief Executive of DCH, and Chair of HAILO, says: “Recent welfare reforms are intended to encourage benefit-dependent households to become more self-reliant, find and hold down work and take up training opportunities. This research looks at whether the government’s policies are delivering the expected outcomes, and what we as affordable landlords can do to support our residents." 

The research will provide HAILO members with independent evidence of what’s working and what is not.  HAILO’s final report will be published in the autumn of 2014 and will address three main questions:

 Does welfare reform encourage people who are currently unemployed into work?

 Does welfare reform encourage people who are currently working to work more?

 What are the main barriers to work for tenants and why do some tenants opt not to work?

This will enable HAILO to demonstrate to Government the adjustments needed in order to ensure that reforms truly lead to fulfilling employment for those who can work, while providing a fairer system for those who can’t.

Ends

Notes for editors:

For a copy of the report and more information, please contact:

Bernice Williams, Head of Communications at DCH on 01392814561/07772 892513 or Bernice.williams@dchgroup.com|

Joanna Bale, Senior Press Officer, LSE at j.m.bale@lse.ac.uk|

or 07831 609679

 Monday 24 March 2014

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