The Government's Welfare Reforms

The Government's welfare reforms have far-reaching impacts on individuals, on the local economy and on councils' own finances. ANEC, together with its member authorities and partners, has prioritised work on welfare reform, which is a key issue for local government and the communities it serves.

The reforms include:

  • Capping of household benefit payments, so that no non-working household can receive more in benefits than the median earnings for working households, after tax and national insurance;
  • changes to housing benefit, so that any household deemed to be under-occupying their council or housing association home will lose part of their benefit;
  • introduction of Universal Credit - a single benefit, claimed online and paid monthly, that will replace a number of existing benefits;
  • replacing Disability Living Allowance for working-age claimants by a new Personal Independence Payment;
  • replacement of the Social Fund (which provides assistance in emergencies) by a new localised service administered by local authorities; and
  • council tax support has passed from central to local government, with a 10% reduction in total funding; each authority has to develop its own scheme for support, with protection for pensioners and certain vulnerable groups.

Most of the reforms came into effect in April 2013, with the benefit cap later in 2013 and Universal Credit rolled out between 2013-2017.

It was estimated that over half the households in the North East would be affected in some way by the reforms. A study by Sheffield Hallam University estimated the annual loss to the North East at £940 million; the North East is the hardest hit region, along with the North West.

Additional demands for advice and support have fallen on councils at the very time when they are having to make unprecedented levels of budget reductions.

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