Billions removed from local economies - due to Government folly

The UK ConDem coalition government in its economic stupidity and arrogance is part-way through slashing social security payments to those in need - the vast majority of the British population benefits from such payments, now euphemistically termed 'welfare' by the spinning propagandists amongst the neo-liberal élite.

For those unfamiliar with UK taxation: inter alia, all employees, self-employed and carers pay (or have paid on their behalf in the case of the latter) national insurance contributions. These monies are supposed to be used to fund social security payments: for those who find themselves in straitened circumstances (the unemployed, the underemployed & the working-poor); for those with disabilities (to help towards the extra costs they face residing in a disablist society); for those with illnesses which mean they cannot work; for the terminally ill; for parents to help raise children. It is a type of insurance scheme. As such, not everyone will need to claim; but most do at some point in their lives, even if for example only child benefit.

The ConDems have cut billions of pounds from benefits whilst they have in practice turned a blind-eye to tax avoidance & evasion by international conglomerates and wealthy individuals. In April they gave millionaires a whopping tax-break whilst at the same time cutting benefits to tens of thousands causing misery through penury, hunger (hence the concomitant rise in the use of food-banks) and increased homelessness. The ConDems in their rhetoric call this "fairness" to taxpayers. However, every adult is a taxpayer, paying a least one of the innumerable taxes in the UK: from income tax, duties, television licence fees to VAT and car tax.

[Image description: Cameron transmogrified into a Ferengi]

A week ago I reported that the BBC chose to ignore the Centre for Economic and Social Inclusion's (CESI) report commissioned by the Local Government Association (LGA), which represents all English and Welsh local authorities whatever their respective political colours.

I have taken details from pages twenty and twenty-one of the report and list below the effects in roughly ten percent of these local authorities. The reader will note that local economies are losing millions of pounds. The knock-on effect is that local businesses have less custom and end up closing. This results in even more money lost to local authorities, not taken into account in the figures listed, due to loss of business rates and so forth. Furthermore, the Exchequer loses out on corporation taxes from once profitable companies. And so on. This is economic madness all done in the name of austerity, a policy adopted in the early part of the twentieth century and which led to the length of the Great Depression.

Everybody, including the middle classes, is losing out. Only the ultra-rich continue to prosper. And this is "fairness"…

The Stats

Woking Local Authority’s economy loses c. £14,400,000.00 due to an average loss from social security cuts of £1,735.30 to 8,287 claimant households.

Burnley Local Authority’s economy loses c. £29,300,000.00 due to an average loss from social security cuts of £1,736.49 to 16,874 claimant households.

Waltham Forest Local Authority’s economy loses c. £70,400,000.00 due to an average loss from social security cuts of £1,739.64 to 40,487 claimant households.

West Somerset Local Authority’s economy loses c. £8,000,000.00 due to an average loss from social security cuts of £1,757.22 to 4,526 claimant households.

Hounslow Local Authority’s economy loses c. £57,300,000.00 due to an average loss from social security cuts of £1,758.32 to 32,597 claimant households.

Islington Local Authority’s economy loses c. £55,900,000.00 due to an average loss from social security cuts of £1,761.23 to 31,735 claimant households.

Tower Hamlets Local Authority’s economy loses c. £71,600,000.00 due to an average loss from social security cuts of £1,761.64 to 40,621 claimant households.

Luton Local Authority’s economy loses c. £55,700,000.00 due to an average loss from social security cuts of £1,770.39 to 31,448 claimant households.

Rossendale Local Authority’s economy loses c. £19,300,000.00 due to an average loss from social security cuts of £1,771.81 to 10,892 claimant households.

Blackpool Local Authority’s economy loses c. £57,600,000.00 due to an average loss from social security cuts of £1,778.63 to 32,365 claimant households.

Oldham Local Authority’s economy loses c. £72,700,000.00 due to an average loss from social security cuts of £1,788.95 to 40,652 claimant households.

Croydon Local Authority’s economy loses c. £91,700,000.00 due to an average loss from social security cuts of £1,792.01 to 51,171 claimant households.

Hyndburn Local Authority’s economy loses c. £27,700,000.00 due to an average loss from social security cuts of £1,819.52 to 15,222 claimant households.

Blackburn with Darwen Local Authority’s economy loses c. £53,500,000.00 due to an average loss from social security cuts of £1,826.31 to 29,276 claimant households.

Brighton & Hove Local Authority’s economy loses c. £67,000,000.00 due to an average loss from social security cuts of £1,830.55 to 36,591 claimant households.

Hammersmith & Fulham Local Authority’s economy loses c. £38,800,000.00 due to an average loss from social security cuts of £1,832.17 to 21,204 claimant households.

Pendle Local Authority’s economy loses c. £28,300,000.00 due to an average loss from social security cuts of £1,835.59 to 15,406 claimant households.

Lewisham Local Authority’s economy loses c. £81,700,000.00 due to an average loss from social security cuts of £1,835.65 to 44,511 claimant households.

Newham Local Authority’s economy loses c. £98,500,000.00 due to an average loss from social security cuts of £1,869.03 to 52,682 claimant households.

Slough Unitary Authority’s economy loses c. £37,300,000.00 due to an average loss from social security cuts of £1,873.91 to 19,925 claimant households.

Kingston-upon-Thames Local Authority’s economy loses c. £25,100,000.00 due to an average loss from social security cuts of £1,874.66 to 13,400 claimant households.

Redbridge Local Authority’s economy loses c. £65,300,000.00 due to an average loss from social security cuts of £1,881.08 to 34,695 claimant households.

Haringey Local Authority’s economy loses c. £81,700,000.00 due to an average loss from social security cuts of £2,019.10 to 40,487 claimant households.

Enfield Local Authority’s economy loses c. £97,600,000.00 due to an average loss from social security cuts of £2,019.26 to 48,315 claimant households.

Harrow Local Authority’s economy loses c. £51,800,000.00 due to an average loss from social security cuts of £2,046.22 to 25,320 claimant households.

Ealing Local Authority’s economy loses c. £91,700,000.00 due to an average loss from social security cuts of £2,076.59 to 44,181 claimant households.

Barnet Local Authority’s economy loses c. £81,400,000.00 due to an average loss from social security cuts of £2,105.62 to 38,664 claimant households.

Hackney Local Authority’s economy loses c. £89,300,000.00 due to an average loss from social security cuts of £2,132.97 to 41,863 claimant households.

Camden Local Authority’s economy loses c. £58,600,000.00 due to an average loss from social security cuts of £2,194.93 to 26,677 claimant households.

Wandsworth Local Authority’s economy loses c. £66,200,000.00 due to an average loss from social security cuts of 2,242.61 to 29,257 claimant households.

Brent Local Authority’s economy loses c. £124,000,000.00 due to an average loss from social security cuts of £2,774.80 to 44,688 claimant households.

Kensington & Chelsea Local Authority’s economy loses c. £57,000,000.00 due to an average loss from social security cuts of £4,068.80 to 14,048 claimant households.

Westminster Local Authority’s economy loses c. £129,200,000.00 due to an average loss from social security cuts of £5,161.14 to 25,038 claimant households.


WoWpetition

If the reader is a UK resident or a UK passport-holder resident outside the UK, you may wish to support the campaign against the War on Welfare, known as WOW. The link to the official petition and more information can be found at wowpetition.com .

BBC deliberately censoring the news?

Yesterday I was at hospital, but did my best to follow the story of the Local Government Association's latest report from the Centre for Economic and Social Inclusion (CESI) on the impact of the UK Government's (satirically labelled the ConDems) welfare reforms or in old speak, social security cuts.

I shall be quoting large amounts of text from articles in order to highlight how remiss the BBC has been in not covering the story.

Firstly, the press release for the report itself:

Ground-breaking study illustrates cumulative impact of welfare reforms

Less than one quarter of welfare recipients will be in a position to mitigate reductions in benefit payments by finding work or moving to cheaper accommodation, a ground-breaking independent study commissioned by the Local Government Association (LGA) and carried out by the Centre for Economic and Social Inclusion has revealed.

The study, which is the first ever assessment of the cumulative impact of the government's welfare reforms, compares the financial impact on benefit recipients in a given area with the local job opportunities and potential to move into cheaper accommodation.

Carried out by the Inclusion for the LGA, the study shows that by 2015–16 the income of households claiming benefit will be lower on average by £1,615 per year (£31 per week). However, a shortage of jobs and affordable homes in many areas means that four out of every five of those households are likely to need some form of assistance from their council to help them cope with the reduction in welfare.

It is estimated that the combined impact of housing reforms on these tenants is likely to be £1 billion each year. So far £155 million has been made available to councils via Discretionary Housing Payments, which represents just £1 in every £7 of the impact of housing reforms on tenants. The government's recent announcement of an additional £25 million to support tenants is welcome, but does not significantly alter the picture.

The LGA, which represents more than 370 local authorities in England and Wales, warns that unless more is done to generate new jobs and build much needed affordable and social housing, helping households cope with the welfare reductions will syphon money away from local services such as caring for the vulnerable and elderly, fixing the roads and picking up the bins. Local services are already facing the deepest cuts in the public sector, with a 42 per cent real terms reduction in councils' grant from central government across the life of this Parliament.

The report's findings have prompted the LGA to demand that the government introduce three major policy initiatives to deliver the new homes and jobs the welfare reforms require. They are:

1. Help councils deliver new homes by relaxing the rules which severely limit how much councils can borrow against their existing housing stock. Recent research shows that councils could build up to 60,000 new homes over the next five years if they were allowed to invest in housing under normal borrowing guidelines. This would deliver a 0.6 per cent boost to gross domestic product (GDP), create new jobs and reduce the benefit bill by increasing the provision of much-needed new social housing.
2. Give councils and their partners in business more influence over employment schemes so that training providers produce more people with skills that are closely matched to what employers in the area need. Earlier this year a report by the LGAshowed that personalised local approaches are most effective in reducing the number of young people out of work and training, but that such schemes are undermined by national funding, performance and procurement systems driven by Whitehall. The report showed that a localised approach would cut youth unemployment by 20 per cent, result in savings of £1.25 billion a year to the taxpayer and contribute an additional £15 billion into the economy over 10 years.
3. Immediately re-evaluate the Discretionary Housing Payments fund to ensure supply better matches demand in local areas. The government has committed to the ‘new burdens doctrine' which is supposed to ensure that any new costs or administrative burdens that are passed from central to local government are matched by the appropriate funding. The scheme should be redesigned to ensure that the government meets its responsibility.

Cllr Sharon Taylor, Chair of the LGA's Finance Panel, said:

‘In many areas welfare reform is not encouraging people into work because the jobs simply don't exist, while the opportunities for people to downsize their homes to cope with reductions in benefits are severely limited by a lack of affordable accommodation. Unless more is done to create new jobs and homes, households will be pushed into financial hardship and we will see a huge rise in the number of people going to their councils asking for help to make ends meet.

‘Local government can help generate the necessary jobs and new homes but the government has to give councils more influence over employment schemes and more freedom to borrow to build new houses.

‘Demand for Discretionary Housing Payments will significantly outstrip the money the government has made available to councils to mitigate the changes. This will have a massive impact on local government budgets, which are already stretched to breaking point by the deepest cuts in the public sector. Ministers must ensure councils have enough resources to meet demand. Local services have already taken the biggest cuts in the public sector and it would be wrong if councils had to reduce spending on other services such as caring for the vulnerable and fixing the roads to meet the new costs brought about by these changes to national policy.’

The Independent newspaper (affectionately referred to as the Indy) under the headline The real cost of benefits squeeze: £1,600 per family produced the following article as the headline story on its front cover:

Welfare cuts that are meant to get the jobless back to work are driving down the living standards of hundreds of thousands of people who are in no position

to find a job, an assessment of the Coalition’s welfare reforms says today.

Researchers, who have used data to forecast what will happen to the 1.18 million households where no one works, have calculated that 155,000 (roughly one in eight) can mitigate the effect of the cuts by finding work near their home, while another 115,000 will have the opportunity to move to more affordable housing. The rest – more than three-quarters of the total – will simply see their incomes drop, according to an independent study carried out for the Local Government Association by the Centre for Economic and Social Inclusion.

The effects will be felt all over the country, with fears that, were councils to make up the shortfall in benefit expenditure, it could force them to cut spending on roads, refuse collections and care for the elderly. The planned cuts in housing benefit are most likely to affect the South, where housing costs are higher.

The study calculates that most families on benefits will receive £1,615 a year less than they would have done under the old system – except in London, where high housing costs will reduce the incomes of households on benefit by £1,965 a year. In Westminster, in the heart of London, the average loss will exceed £5,000 a year.

Government ministers have been keen to stress that social security reforms are not supposed simply to be a cost-cutting exercise. They are also meant to encourage people to find work, for example by eliminating anomalies that mean that some people are actually better off at home claiming benefits than if they were in low-paid jobs.

“Welfare reform is about much more than saving money, vital though that is,” the Chancellor, George Osborne, told MPs in June, when he set out this year’s Spending Review.

“It is about reducing dependency and changing people’s lives for the better … Where is the fairness in condemning people to a life on benefits because the system will not help them to get back into work?” However, researchers examined the potential impact of the reforms in areas covered by 325 local councils, and found that, in 314 of them, most of the savings would come from reducing benefits paid to households where somebody works – especially in the North, where wages are lower than the South.

Sharon Taylor, chairman of the LGA’s finance panel, warned councils would be forced to raid other budgets, which were already being squeezed, in order to help tenants suffering as a result of housing benefit changes. “Demand for discretionary housing payments will significantly outstrip the money the Government has made available  to councils to mitigate the changes. Local services have already taken the biggest cuts in the public sector and it would be wrong if councils had to reduce spending on other services such as caring for the vulnerable and fixing the roads to meet the new costs brought about by these changes to national policy.”

Overall, the social security reforms will save taxpayers £11.8bn in 2015-16, but it is reckoned that 59 per cent of that will come out of 530,000 households where there is someone working, compared with 41 per cent coming from 1.18 million households where no one works. Almost half of the total savings, £5.3bn, will come from a tightening up of tax credits.

The parts of England where the reforms will hit hardest are the North-east, Lancashire, the central North-west, Birmingham, parts of London and coastal towns such as Great Yarmouth, Scarborough, Plymouth and Torbay.

Councils will be able to make discretionary payments towards the housing costs of families affected, but the £155m that the Government has made available represents just £1 for every £7 that tenants have lost.

Ms Taylor added: “In many areas welfare reform is not encouraging people into work because the jobs simply don’t exist, while the opportunities for people to downsize their homes to cope with reductions in benefits are severely limited by a lack of affordable accommodation. Unless more is done to create new jobs and homes, households will be pushed into financial hardship and we will see a huge rise in the number of people going to their councils asking for help to make ends meet.”

The TUC’s general secretary, Frances O’Grady, said: “The Government has tried to sell its welfare reforms on the back of mistruths and nasty stereotypes. However, this research exposes what a devastating impact its policies are having on communities throughout the country.

“Ministers are not cracking down on cheats as they claim, but destroying the safety net that our welfare state is meant to provide for those who fall on hard times through no fault of their own. The Government’s attack on social security provision is not only hurting those unable to find work. Millions of working families are seeing an even bigger reduction in their financial support. Rather than addressing the shortage of jobs and affordable housing that are blighting many areas, ministers are slashing local authority budgets and expecting councils to deal with the fallout from their reforms.”

A DWP spokesperson said: “Crucially this research, as the LGA itself acknowledges, doesn't take into account the combined impacts of the Government’s reforms, including the raising of the personal income tax threshold, and the benefits of Universal Credit which will make 3 million households better off.

“The fact remains that the benefits bill has become unsustainable and it’s only right we take action to bring it under control, but we are bringing in all our reforms in ways that protect pensioners, vulnerable and disabled people.”

Welfare reform: The changes

Most benefits now paid to welfare claimants are being phased out.

Six of the main ones, including the jobseeker’s allowance, income support, tax credits and housing benefit are to be merged into one, called universal credit, which will be paid monthly into a bank account.

Disability living allowance is being abolished for all adults under 65, and replaced with a personal independence payment. Claimants will not be assessed on how serious their condition is but on how it affects them.

There is also to be a cap on the total amount of benefits that can be paid to one family, equal to the average wage for working families, or £26,000 for a couple or single parent with a child, which will apply equally everywhere, regardless of the cost of housing.

The so-called “bedroom tax” applies to tenants living in homes with more bedrooms than the Government thinks are necessary – with children under 16 of the same gender and all children under 10 expected to share.

This is not strictly a tax, but a cut in benefits. One “extra” room will cost the tenant 14 per cent of their housing benefit. Two or more will cost 25 per cent.

Introducing the changes in March last year, the Work and Pensions Secretary Iain Duncan Smith said: “Universal credit will mean work will pay for the first time, helping to lift people out of the endless cycle of benefits, whilst those who need our support will know they will get it.”"

[Image description: front cover of Indy 12th August 2013 © The Independent]

At 01.13 yesterday ITN posted the following under the title

Housing benefit changes 'will affect 1.71million households':

"A study carried out by the Centre for Economic and Social Inclusion, into the impacts of the Government's radical reform of the welfare system found:

• The income of households claiming benefit will be an estimated £1,165 a year, or £31 a week, lower in 2015/16 as a result of reforms excluding the Universal Credit.
• the effect of housing benefit changes will affect 1.71 million households, 1.18 million of which contain no one in work.

• Overall 45% of working age households receive one of the main benefits or tax credits and 59% of welfare cuts will fall on households where someone has a job.
• The study also suggested that just 155,000 workless households may mitigate the effects by finding employment, and 115,000 by moving."

At 01.28 yesterday ITN posted the following under the title

Areas where welfare reforms to be 'most strongly' felt:

"A study into the impacts of recently introduced welfare reforms has said identified areas where they are likely to be "most strongly" to be felt.

The Local Government Association commissioned report said:

"The impacts of the reforms are likely to be most strongly felt in areas with the highest dependence on benefit - the North East, parts of London and a swathe of coastal towns and cities including Thanet, Tendring, Great Yarmouth, Scarborough and Torbay.""

At 12.44 yesterday ITN posted the following under the title

Welfare reforms 'will hit councils', says report:

"Councils could be forced to cut spending on roads and elderly care to support households losing out through the Government's welfare reforms, town hall chiefs warn.

The study looked at the impacts of the radical shake-up of the welfare system. Credit: ITV News

A study estimated less than a quarter of the 1.18 million English workless households affected by housing benefit cuts would be able to mitigate the impact of the reforms by moving to a cheaper property or finding a job.

This could lead to councils having to pay out to support them, according to the report, commissioned by the Local Government Association

It also cast doubt on the effectiveness of the universal credit scheme, aimed at ensuring claimants are always better off working, suggesting it was "unlikely to significantly increase employment"."


I subscribe to the Beeb's newsfeed and have it co-ordinated by feedly. At no point yesterday nor today did any post appear from the BBC covering this or even part of the story. This is really newsworthy stuff: millions of individuals affected.

Just to be fair to the BBC, in case they did post something, but somehow it got missed, I today checked using the following search terms:

"Local Government Association"

As can be seen from the screen-shot, the last item was posted on 9th August about an unrelated topic.

"LGA"

As can be seen from the screen-shot, the last item was posted on 1st August about an unrelated topic.

"CESI"

As can be seen from the screen-shot, the last item was posted on 9th May about an unrelated topic.

"Centre for Economic and Social Inclusion"

With this search I actually obtained a hit. Under the headline Newspaper review: Miliband headline woes, which hardly gives the game away for the subject sought, half way down the item the reader encounters:

"The Independent highlights "the real cost of the benefits squeeze".

The paper quotes a study by the Centre for Economic and Social Inclusion, which suggests that most families on benefits will receive £1,615 a year less than they would have done under the old welfare system.

The researchers also found that, of the 1.2 million households in which no-one works, only one in eight was likely to be able to find work near home."

And that, as far as I can ascertain, is the total BBC coverage of this story. Millions of Brits are affected; but the BBC does not consider this newsworthy. (Although oddly enough today, the BBC has published a tale of Welsh attitudes as to who should control their social security - "welfare" per BBC - budget.)

Even charities such as DRUK and AfME managed to cover it and they do not have the media resources of the BBC.

I cannot help but wonder why the BBC failed to adequately cover this story either yesterday or thus far today. Many believe it is because the organisation is now riddled with Tory or at the very least neo-liberal grandees and protégés.  It seems that Auntie only wants to include items on social security or "welfare" (to use their preferred term lifted straight from the ConDems' book of spin and propaganda) when it conveys government policy and/or perspective only.

Of course, there is another possibility. Former Times editor, and thus Murdoch man, James Harding commenced his new position as editor of all BBC news yesterday. Perhaps no-one at the BBC dared cross him?

For those interested in reading the full report it can be found on the LGA's website.