Making Ends Meet in Leicester

Last year researchers at Loughborough University released a report titled Making ends meet in Leicester which detailed some of the tragic effects of “an unprecedented decline in living standards” for Leicester residents since 2009. “[F]or the first time on record,” they pointed out, “the majority of people in poverty have at least one person working in their household, rather than being in households comprising retired people or non-working people or working age.”

With both Labour and the Tories no longer committed to the idea of providing affordable Council housing, the report outlined how Leicester has become “increasingly dependent on private rented housing”. In 2001 the number of Leicester households in private rented accommodation was 12,958, a figure that has now more than doubled (to 27,999 last year). 23 per cent of all households in Leicester are in private rented accommodation, which is “significantly higher than for England as a whole where 17 per cent are housed within this sector”.

making ends

The university study made it clear that welfare payments or benefits, which are diminishing in size all the time, were inadequate for lifting people out of poverty, that is, above what they referred to as a Minimum Income Standard (MIS). The Minimum Income Standard simply being…

“…the income that people need in order to reach a minimum socially acceptable standard of living in the UK today, based on what members of the public think. [C]alculated by specifying baskets of goods and services required by different types of household in order to meet these needs and to participate in society.”

The report showed how:

“In 2013, basic benefit entitlements for working age households provided just under 60 per cent of the minimum income required by families with children and just under 40 per cent of those without children (although around 100 per cent of MIS for pensioners). Moreover, these amounts assume that housing costs are fully covered by the system. However in reality, out-of-work households who own their homes or do not have rent fully covered by Housing Benefit because of the bedroom tax or high private rents will have their disposable income reduced further below the minimum.”

Problematically there are “strict limits (reference rents) on what levels of rent the state is willing to support through Housing Benefit.” This is a serious issue given that 28 per cent of households in Leicester are in receipt of some form of Housing Benefit. In practice this means that Housing Benefit levels are “frequently not enough to cover the actual rent that claimants are paying.” (“Reference rent shortfalls affect about 4,500 out of 8,000 private tenants receiving Housing Benefit in Leicester for whom information is available.”)

“[F]amilies without work must make up the difference from their general benefits, which can only increase the shortfall between these benefit levels and an acceptable living standard, noted earlier. For those working on low wages, the gap between actual and eligible rent also increase the contribution that households must make to making their rent, on any given earnings level.”

In addition to reduced state support to meet rising housing costs:

“As of April 2013, every working age individual liable for Council Tax within the city has been asked to pay a minimum of 20 per cent of this charge. This has brought an additional financial strain for many low income households. The City Council estimates that in total 25,565 households within Leicester had been affected by this change.”

In summary this means “that at least around 8,000 out of 123,000 households in Leicester, about 6.5 per cent, are at risk of serious hardship because they face a penalty that requires them to dig into already meagre benefits to help cover housing costs.”

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