The Housing Benefit bill is set to spiral out of control due to low wages and rising rents, official figures suggest.
Between 2010/11 to 2018/19 the amount spent on helping struggling households to keep roofs over their heads is set to rocket to a staggering £12.9 billion, or £488 for every household in the UK.
The figures obtained from the Commons Library also show that Housing Benefit paid to people in work is set to more than double, from £2.4 billion in 2010/11 to £5.5 billion in 2018/19.
Stagnating wages will also have a knock on effect on how much is spent supporting low-income households with tax credits. Currently the UK spends £21.2 billion on tax credits, but this is forecast to rise to £23.7 billion by 2018/19.
Speaking in Pudsey, West Yorkshire, Rachel Reeves is expected to say:
“The number of working people claiming housing benefit is set to double because the Tory Government has failed to tackle low pay, insecure work and the cost-of-living crisis.
“Labour will raise the minimum wage, introduce living wage contracts and get 200,000 homes built a year by 2020 to tackle the bill and ensure working people can make ends meet.”
She will also say that Labour may withdraw its support for Iain Duncan Smith’s flagship Universal Credit scheme, unless “urgent action” is immediately taken to prevent “more money being wasted” on the crisis hit programme.
Ms Reeves will say: “Today I want to make a direct appeal to David Cameron and Iain Duncan Smith.
“Labour wants Universal Credit to work. But we won’t accept more taxpayers’ money being wasted. It is in crisis and needs urgent action.”
> Yes, Rachel, but what you need to understand is that the problem with Universal Credit is not just that it’s a money pit. Its also the way in which it makes life so much more difficult for people who already have more than enough problems to be going on with.
Are Labour going to deal with those aspects ? Nothing seen so far suggests that they would anything except continue with more of the same.
Earlier this year, Welfare Reform Minister Lord Freud described the write-off of a failed £40 million IT system for Universal Credit as “deeply regrettable”.
He insisted that the programme would be delivered on time and within its £2.5 billion budget and that the scheme would benefit taxpayers to the tune of £35 billion.
Minister for Disabled People, Mark Harper MP, told the Daily Mirror that the government had “inherited an out-of-control housing benefit system from Labour”.
He added that the government were working to “build a welfare system that provides a safety net for those in need, while rewarding the willingness to work”.
Source – Welfare News Service, 05 Aug 2014
Government cuts to welfare benefits, rising living costs and stagnating wages are to blame for a ‘huge increase in the numbers of people with council tax arrears’, a leading charity has warned.
According to figures released today (13 March 2014) by the charity Stepchange, 45,561 people approached the charity for help and advice after falling into arrears with council tax payments in the last year, up 77 percent on the previous years total of 25,000. The average council tax debt was £102, the charity claims.
Stepchange says that the figures ‘highlights how the squeeze on household budgets is leaving more people struggling to pay essential living costs’.
StepChange Debt Charity chief executive Mike O’Connor said:
“More and more people are struggling to pay essential household costs. Stagnating incomes, changing work patterns, rising living costs and changes in welfare benefits are a toxic combination. Government, business and charities need to ensure that safety nets and protections are in place to ensure that short-term financial problems do not escalate into problem debt which can blight the lives of individuals, families and whole communities.”
The figures come almost a year after the coalition government scrapped council tax benefit as part of widespread welfare reforms and replaced it with a locally administered Council Tax Reduction support scheme.
Under the new system, many more low-income families – including some in receipt of state benefits – are now expected to contribute toward their council tax bill, the exact amount of which is decided by their local council authority.
Margaret Hodge MP (Labour), Chair of the Public Accounts Committee (PAC), has recently described the change to council tax support as “fundamentally perverse”, after it was revealed that 71 percent of councils were requiring households to make at least a small council tax contribution, regardless of whether they can afford to pay or not.
The PAC also found that some households, now expected to contribute toward council tax as a result of government welfare cuts, were losing as much as 93 pence out of every £1 earned, when combined with a cut in housing benefit and increased income tax and national insurance contributions.
Margaret Hodge said:
“This just goes to show, for some, work simply doesn’t pay under the new scheme. For them, work incentives have actually weakened rather than strengthened – the opposite of what the Government intended.
“Some of those 225,000 people stand to lose 97p for every extra £1 earned – a fundamentally perverse result.”
Stepchange surveyed 845 helpline clients and found that 50 percent had council tax arrears at some point over the past year, while 19 percent claimed that they had been threatened with bailiff action by their local council.
The Charity has also warned that changes to bailiff fees, due to be introduced in April 2014, could see an additional £310 added to a households accumulated council tax arrears every single time a bailiff pays a visit to a person’s home.
Stepchange has urged councils to do more to help people who fall into arrears on their council tax and ‘ensure that vulnerable people do not see their debts inflated through the unnecessary use of bailiffs’
Source – Welfare News Service, 13 March 2014
An increasing number of families in the North East are facing homelessness this winter, according to the latest statistics.
Calls to charity Shelter have increased by 12% since last year, and the number of people in the North East who called the Shelter helpline from 2012 to 2013 reached 2,490, the equivalent of more than 200 callers per month.
The charity say the figures reflect the growing number of people struggling to cope with the rising costs of living coupled with stagnating wages, and expect more families will find it increasingly difficult to keep a roof over their heads, especially as bills mount in the run-up to Christmas.
Shelter helpline adviser Liz Clare said the Christmas period is the most difficult time of year for her and colleagues. :
“The threat of homelessness is devastating at any time of year, but it seems to get worse around Christmas as the strains of the holidays close in and the weather gets cold.
“One Christmas Eve I answered a call from a mum with a disabled son. They were evicted from their home that night and had to sleep on the streets in the cold. We managed to find them a place to stay, but I’ll never forget the devastation in her voice. The sad fact is that eviction notices can come at any time of year. “
“I’ve never seen the helpline as busy as it has been this year.”
Jeremy Cripps, the chief executive of charity Children North East warned the figures could also increase following Christmas as people struggle to cope with the costs of the festive period and fall into arrears.
“What we have noticed is that a high proportion of families are there because of rent arrears or because their homes have been repossessed because of missed mortgage payments.”