Research finds cuts to benefits are deepening poverty

Cuts to benefits have pushed Leeds residents to rely on risky methods of raising money, such as borrowing from loan sharks, a new study has found.

The University of Leeds report has highlighted the impact of the cost-of-living crisis, with the most disadvantaged communities going cold and hungry.

Analysis by the Joseph Rowntree Foundation (JRF) has previously identified that the government has cut the real value of benefits in seven of the last 10 years.

‘The economic gap between Leeds and the rest of the UK has widened in recent years, pushing some into deeper, more severe financial crisis,’ explained lead author of the report, Dr Daniel Edmiston, of Leeds’ School of Sociology and Social Policy.

‘Rising inflation is increasing the risk and severity of poverty. Rather than acting as a safety net at this difficult time, the social security system is functioning as a debt collector for many with 45% of Universal Credit claimants losing up to 25% of their entitlement due to benefit deductions, recovery of advance payments or arrears.’

According to the study, the lowest-income households in Leeds are missing more than £18 million per year in Universal Credit payments, undermining the Levelling Up agenda.

‘Meanwhile, demand for local support services and charitable food aid is soaring,’ said Dr Edmiston. ‘To minimise energy use, some people are only using a microwave or kettle to prepare meals with knock-on effects on their physical and mental health.’

He added: ‘Locally, invaluable work is being undertaken by Leeds City Council and third sector organisations to try and support those worst affected by the cost-of-living crisis. Whilst many organisations are providing a crucial lifeline, their capacity is constrained given the current funding climate.’

Dr Edminston said other parts of the country are likely experiencing the same level of poverty, while several local authorities have reported funding challenges for the coming year.

Chancellor Jeremy Hunt recently announced a move to bring benefits and pensions in line with inflation which is expected to help, but the report also calls for further action.

Leeds researchers suggest introducing a minimum income guarantee and abolishing the five-week wait for Universal Credit could further support low-income households.

Local improvements, such as funding focused on assisting people in debt and a review of services to ensure the most disadvantaged aren’t missed, are also important.

Photo by Aaron Doucett