Report claims Plymouth will be amongst worst hit by welfare reform

Plymouth’s economy will be amongst the hardest hit in the UK by the Government’s welfare reform, according to new national research revealed by Plymouth City Council.

A report by researchers at Sheffield Hallam University claims that when the welfare reforms have come into full effect they will take almost £19 billion a year out of the UK economy.

The 'Hitting the Poorest Places Hardest: the local and regional impact of welfare reform’ report says the impact of the reforms will vary widely between different areas, with the worst affected places facing financial losses that are twice the national average.

It estimates the total loss to Plymouth is £93 million per year and the financial loss per working age adult will be an average of £551 per year, compared to the national average of £420.

That estimate places the city in the band of council districts most affected by welfare reform.

The researchers compiled the table after calculating the combined impact of major welfare reforms that are currently underway, including changes to the housing benefit local housing allowance and the bedroom tax, the household benefit cap, the disability living allowance, incapacity benefits, child benefit and tax credits.

Thousands of Plymouth families will be affected by welfare reforms, with a reported 17,000 Plymouth households impacted by the changes in Council Tax benefit alone.

Council Leader Tudor Evans said: “This research shows Plymouth families will be hit hard by the welfare reforms and it underlines the economic impact on Plymouth as whole. Not only is the Government withdrawing this money from Plymouth households, it is taking away money that would have been spent locally.

“The report clearly shows that the effect of these changes will be to make the gaps in prosperity between different parts of the country even bigger.

“The study shows the real impact of what’s ahead for us and gives us important information that the Government itself is not providing.

“The Council is working extremely hard with its partners to support families affected by the changes and to address the damage being done to the city’s economy. For example, our Plan for Jobs includes a wide range of initiatives to create jobs and help people into work, including the £20 million investment fund and the 1000 Club, which is helping young people find work. However, this report highlights the scale of the challenges we face in dealing impact of Government changes that are causing untold damage to the economies of towns and cities that can least afford it.”

The government have insisted that the reforms are fair and are necessary to reduce the large welfare bill and to tackle the deficit. The Secretary of State for Work and Pensions, Ian Duncan Smith, said earlier this month that changes were right and would ensure that "people find work always pays".