Staffordshire University report says benefit changes could reduce City’s economy by £30m

Over £30m could be lost from Stoke-on-Trent’s economy in the next year if planned cuts to Universal Credit go ahead, according to a new report

As benefits are set at an extremely low level, the key issue is that large sections of the population are reliant upon insufficient incomes to maintain an even basic standard of living. A clear indication of this is the dramatic increase in numbers receiving food aid by food banks in the Stoke-on-Trent area.

David Etherington, Professor of Local and Regional Economic Development

More than 30,000 households across Stoke-on-Trent will be more than £1,000 worse off if government presses ahead with plans to withdraw the £20 ‘uplift’ introduced as part of the measures to help households through the pandemic.

The stark statistics are contained in a new report ‘Powering Up or Reducing Inequalities?’ which assesses the impact of benefit cuts and the withdrawal of the furlough scheme on the city.

Report author Professor David Etherington said: “Earlier this year we published a report assessing the impact of the Covid crisis on poverty and destitution in Stoke-on-Trent. The COVID-19 crisis has caused rising unemployment and alarmingly high numbers - over 50,000, a third of the working age population - claiming Universal Credit, Employment Support Allowance and other benefits.

“As benefits are set at an extremely low level, the key issue is that large sections of the population are reliant upon insufficient incomes to maintain an even basic standard of living. A clear indication of this is the dramatic increase in numbers receiving food aid by food banks in the Stoke-on-Trent area.”

The report findings, carried out in conjunction with Citizens Advice Staffordshire North and Stoke-on-Trent, reveal that:

  • The number of Universal Credit claimants in Stoke-on-Trent amounts to 30,025 comprising 18,511 and 11, 514 who are in work.
  • The numbers of households in receipt of Universal Credit in Stoke increased from 14,359 to 21,058 between March 2020 and May 2021 equating to 19 percent of all households.
  • Over 10,000 claims were made under the Coronavirus Job Retention Scheme (furlough) scheme and the Self Employment Income Support Scheme up to June 2021 and there are concerns about how many businesses can continue when both schemed are withdrawn.
  • 1,848 adults and 2,768 children from 945 families received food aid between January and August 2021, exceeding the combined total aid provided in 2018 and 2019 (source Alice Charity, August 2021).
  • Increasing price inflation and the raising of energy price cap by Ofgem is likely to have a substantial negative impact on poorer households

The report calls for an austerity impact assessment to understand how government spending cuts are impacting Stoke-on-Trent’s poorest communities and a campaign to help people to claim the benefits which they are entitled to.

Simon Harris from Citizen Advice Staffordshire North and Stoke on Trent said: “This is an especially worrying time of year for families living in our area, many of which are struggling to put food on the table and pay bills. We back calls for an extension to the “£20 uplift” in Universal Credit and the furlough scheme which is affecting many working families.”

Professor Martin Jones, Staffordshire University Vice-Chancellor and Chief Executive Designate, added: “We believe urgent intervention is needed to retain jobs in our City and address skills shortages. As a University we have a critical role to play in retraining and upskilling local people who may have lost jobs through the pandemic and providing courses that prepare people for the careers of the future.”

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