Welfare Reform and Work Bill Committee

Written evidence submitted by the Plymouth City Council Cabinet Advisory Group on Child Poverty (WRW 66)

Welfare Reform and Work Bill

 

We are a cross-party cabinet advisory group with a specific remit of mitigating and reducing child poverty in the city of Plymouth. Our responsibilities include championing child poverty issues with partners within the city and reporting to Cabinet on progress and barriers in reducing child poverty and. Our membership comprises:

Labour Party:

Cllr Chris Penberthy (Chair, Cabinet member for Co-operatives and Housing)

Cllr Sue McDonald (Cabinet member for Children, Young People and Public Health)

Cllr Mary Aspinall

Conservative Party:

Cllr Mrs Beer (Vice-Chair)

Cllr Mrs Foster

Cllr Mrs Bowyer

About Plymouth

 

With a population of approximately 261,500 people , an economic output of £5.2 billion and around 10 7 , 0 00 jobs, Plymouth is the most significant economic centre in the south west peninsula and the largest urban area in the Heart of the South West Local Enterprise Partnership, making it a key location for growth that builds upon the city’s key strengths in the marine and advanced manufacturing sectors.

Plymouth is also a n ambitious city with aspirations to grow our population to 300,000 and to build 22,700 new homes by 2031. Our coastline and position as the gateway to Cornwall and Dartmoor attracts over 5 million tourists a year while Plymouth’s universities contribute hundreds of millions of pounds to the region’s economy and its naval dockyard at Devonport remains the largest and most advanced in Western Europe.

However, despite a number of significant improvements and robust plans for growth, some of the key challenges that Plymouth currently has to face include low productivity, poor connectivity within the region and beyond and an over-dependency on public sector jobs. The city remains a relatively low wage economy with over 20% of the city’s households earning less than £16,000 and over half earning less than £20,000 [1] . Over 29% of adults in Plymouth are already over indebted, one of the highest levels in the country and the highest in the South West [2] . The city also faces significant challenges in terms of poor health outcomes and health inequalities. For example, the Plymouth Fairness Commission referred to Plymouth as a ‘tale of two cities’ with a gap in life expectancy of 12 years between the most deprived and most affluent neighbourhoods. Plymouth has significant pockets of deprivation with a number of neighbourhoods being amongst the most deprived in the country [3] . As of 2012, there were 10,760 Plymouth children live in poverty with higher child poverty rates than both the regional and national average. [4] The Plymouth City Council Child Poverty Needs Assessment 2012 found that many children living in poverty have an unequal start in life and will become part of a perpetual cycle where they are less likely to achieve their academic potential or secure a job as an adult. They are also more likely to experience a range of health inequalities throughout their lives.

Introduction

 

The following briefing outlines Plymouth City Council’s response to the relevant clauses of the Welfare Reform and Work Bill. Our key concern as a local authority is that some of the legislative changes included within the Welfare Reform and Work Bill will exacerbate the issues that Plymouth is striving hard to address as a city. Our belief is that measures contained within the Bill may lead to an increase in child poverty and that some of our most vulnerable residents could be those that are most deeply impacted upon. Local analysis shows that Plymouth will lose an estimated £60 million per year due to welfare cuts with up to 20% of our most vulnerable citizens being affected.

Plymouth City Council is a co-operative council and our ambition is to become a fair city where everyone does their bit. Our analysis shows that welfare changes contained within the Bill will unfairly impact upon some of our most vulnerable residents. Vulnerable groups such as those on low pay and single parent families will be those most affected.

Summary of main points

 

Ø The removal of child poverty targets and specific child poverty measures could result in a lack of national focus on the issue of child poverty

Ø Suggested replacement measures will fail to account for the increasing number of working families living in poverty

Ø Welfare reform changes will disproportionately impact on some of the most vulnerable people in society

Clauses

 

Clauses 4 – 6: Changes to the Child Poverty Act 2010

We are concerned that the removal of the child poverty targets and some of the duties on local government, such as the production of a Child Poverty Needs Assessment and Strategy, will weaken the national focus on child poverty. Whilst Plymouth City Council will retain local measures and continue with its plan of action to reduce child poverty, we feel that there is a need to retain a strong focus on child poverty at a national level to effectively tackle and reduce child poverty. Without a national focus specifically on child poverty including targets, policies and timeframes, we are concerned that there will be a lack of political will on a national scale to drive forward the child poverty agenda. Allocation of resources on a local level could therefore become more difficult going forward and negatively impact upon the good work that the city is already undertaking.

We are also concerned that the lack of a specific income measure will not capture the cohort of people referred to as the ‘working poor’. We feel that the replacement of measures of income poverty with those of worklessness could mean that a significant number of families who work but are still living in poverty could be overlooked. Without a measure of working poor, it will be hard to direct policy to address this issue both nationally and locally.

The Plymouth Child Poverty Needs Assessment, published in 2012, found that working families on low incomes are becoming increasingly vulnerable to poverty and nationally, more than half of all children in poverty live in homes where at least one adult works [5] . More than half of all children living in poverty in Plymouth (58%) live in homes where at least one adult is in work [6] . Also, since the introduction of the Welfare Reform Act 2012, Plymouth has seen an increase in the proportion of children from working families living in poverty [7] . There has also been a corresponding rise in the number of families in work claiming Housing Benefit [8] . In Plymouth, 17,900 families are in receipt of working tax credits and 66% of those are working families [9] .

Research by Oxfam argues that for people in in-work poverty, the ability to cope is sometimes even less than for those who are not in work. [10] Bearing in mind the significant number of working families living in poverty, it seems counter-intuitive to move the focus to workless households and to not have a national measure that captures those that work but are unable to sustain an acceptable standard of living.

Proposed amendments:

· Inclusion of an income- based measure of child poverty

· Inclusion of a measure of child poverty that is inclusive of working families in poverty

· Inclusion of a national child poverty target

Clauses 7 – 15: Welfare Benefits

Plymouth City Council is concerned about the impact that the welfare changes covered by the Bill, including the freezing of benefits, the reduction in the Benefit Cap and the changes to the provision of tax credits, will have on the local population. In Plymouth we have estimated the likely loss of benefit income to the city as approximately £60 million with approximately 20% of our population being affected.

Local analysis also shows that these measures will have a detrimental impact on some of our most vulnerable residents within the city. This will not only impact upon the quality of life and wellbeing of these residents but will also adversely impact upon existing deeply entrenched inequalities and may further widen the gap between the least and most deprived neighbourhoods in the city.

Recent analysis from the Institute of Fiscal Studies (IFS) [11] reports that welfare reform changes will disproportionately affect the following groups:

· Families on a low income

· Working families

· Lone parents in and out of work

· Children and young people, and families under the age of 21

This list corresponds directly with the groups that have been found to be particularly vulnerable to child poverty according to the current Plymouth City Council Child Poverty Needs Assessment [12] . In particular, lone parents have been shown to be particularly vulnerable to poverty. Research from Barnardo’s shows that 40% of children in single parent households live in poverty compared to 23% in two parent households. [13]

Removing support for those families already living in poverty or struggling on low incomes will have a detrimental effect on the children living in those families and their life chances. It could also drive levels of inequality higher and have a negative impact on community cohesion.

We would also like to echo concerns raised by the Supreme Court that reducing the Benefit Cap would have a detrimental effect on Britain’s most vulnerable children and deny them their basic rights. Lord Kerr reports findings that ‘it cannot be in the best interests of the children affected by the cap to deprive them of the means of having adequate food, clothing, warmth and housing’. [14]

Local analysis has estimated the likely loss of benefit income to the city through welfare changes contained within the Bill as approximately £60 million. With 20% of families within Plymouth being on low income and dependent on benefits, a freeze of working-age benefits will means approximately 22,500 of our most vulnerable households losing £5 a week.

Proposed amendments:

· Reconsider all changes to welfare provision outlined in the Bill due to the unfair impact on some of the most vulnerable groups in our society

October 2015


[1] ‘Creating the Conditions for Fairness’, Plymouth Fairness Commission, March 2013

[2] Ibid

[3] Plymouth City Council Child Poverty Needs Assessment 2012

[4] DWP, Households below average income, 2012

[4]

[5] Plymouth City Council Child Poverty Needs Assessment 2012

[6] What causes child poverty?, Barnardos 2012

[7] Creating the Conditions for Fairness’, Plymouth Fairness Commission, March 2013

[8] https://stat-xplore.dwp.gov.uk

[9] HMRC,  Personal tax credits statistics, 2014

[10] Poinasemy, K., When Work Won’t Pay: In-work poverty in the UK, 2011, Oxfam GB

[11] Benefit changes and distributional analysis, Institute for Fiscal Studies

[12] Plymouth City Council Child Poverty Needs Assessment 2012

[13] What causes child poverty?, Barnardos 2012

[14] https://www.youtube.com/watch?v=vvWkN5gvkjE

Prepared 16th October 2015