The Coalition Government's radical welfare reforms have resulted in very few social housing tenants being able to find jobs despite their aim of moving people dependent on benefits into work, according to a new LSE report.
Only one in six tenants have either found work or increased their hours since the reforms were introduced in 2010. Those who found work most commonly worked for family members or became self-employed. The majority of new jobs were part-time with uncertain hours.
One third of tenants are struggling financially as a result of the reforms. A majority, 63 per cent, said they were coping by reducing expenditure, in some cases on food, getting into debt to pay large bills or borrowing from family and friends.
A team led by Anne Power, Professor of Social Policy at LSE, carried out two rounds of interviews with 200 tenants in the South West of England covering big cities, coastal towns, villages and tourist centres over a two-year period to find out how the reforms are playing out in low-income communities across the UK.
The report, Is Welfare Reform Working?, provides unique evidence about how tenants and social landlords are coping under the financial pressures of welfare reform and will be launched at LSE on Thursday March 26 at an event chaired by Margaret Hodge, Chairman of the Public Accounts Committee.
Key findings:
• Two years after the introduction of major welfare reforms, many tenants are coping with the transition to new payments and reduced budgets. A majority – 126 out of 200, or 63% – said they were managing financially by reducing expenditure, in some cases on food, getting into debt to pay large bills, or borrowing from family and friends. Some ways of coping, such as cutting back on spending, are more viable than others, such as borrowing. One third were struggling financially. The vast majority of tenants are strongly opposed to resorting to payday loans, and only five per cent have done so.
• Between 2013 and 2014, one in six tenants have either found work or increased their hours. Tenants who found work most commonly worked for family members or became self -employed. The majority of new jobs are part-time and flexible hours.
• Tenants face many persistent barriers to work. These include ill health or disability, caring responsibilities for family members, high childcare costs, poor skill levels, low confidence, inconsistent work histories, lack of suitable jobs and unaffordable transport costs.
• While the majority of tenants find their links with the Jobcentre unhelpful, they are generally positive about free training opportunities, particularly those provided through Learn Direct. Job seeking tenants are eager to increase their qualifications and improve their employment prospects. Jobseekers value this kind of constructive support and wish there was more “handholding” and face-to-face support.
• Sanctions and reassessments of tenants’ benefits have the potential to destabilise households and have negative consequences not just for the jobseeker, but all members of the household. Tenants told us how sanctions, the immediate suspension of benefit payments, shift the jobseekers focus away from work, and redirect their attention to finding alternative ways to cover basic living costs. Sanctions cause debt and arrears that increase household vulnerability and decrease their capacity to go out into the job market. They also affect other low-income family members who “help out”. Often, sanctions arise from administrative mistakes, wrong judgments and decisions that are subsequently deemed unfair.
• The majority of tenants commonly go for advice to Citizens Advice and other support agencies. These service providers are highly valued by tenants, and have helped resolve problems with benefits and arrears – including restoring benefits where mistakes, wrong assessments or unfair sanctions have been imposed.
• Three quarters of the 101 tenants who were economically inactive in 2014 had a disability (slightly above the average for social housing tenants UK-wide). Despite this, 74% of economically inactive tenants contribute actively to their community and society in other ways. They care for disabled family members, volunteer in their communities or take care of young children.
• Housing association landlords have a direct interest in helping tenants manage and have already taken many steps to ensure they remain viable as businesses by not only enforcing rent payments, but increasing front-line staff, offering more training, providing more advice and participating in pilots to test the real impact of the reforms
Professor Power commented: "Four hundred interviews with two hundred 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 research was commissioned by the South West Housing Association Influence and Leadership Organisation (HAILO), a lobby group of eleven housing organisations in the South West. Its member organisations own and build homes across the region and collectively have a turnover of £900m, with 201,000 homes in management and 13,200 new homes in development to 2015.
NOTES
For a copy of the report, or to interview Professor Power, please contact Joanna Bale, LSE Press Office, j.m.bale@lse.ac.uk| or 07831 609679.
About the report's launch:
At LSE on Thursday 26th March 11-12.30pm, it will include presentations from Victor Da Cunha, Chief Executive, Curo and member of the South West HAILO Group, Anne Power, and Eileen Herden, Researcher, LSE Housing and Communities. Booking is essential. Please RSVP to lsehousingandcommunities@lse.ac.uk.
For more information on HAILO
http://www.yhg.co.uk/home/HAILO.aspx|
26 March 2015