Austerity has drained the welfare state – preserving social benefits can no longer compensate for this


Many low-income people will have breathed a sigh of relief when UK Chancellor Jeremy Hunt announced in his fall statement on November 17, 2022, that he would increase his benefits from 10.1% in 2023. This almost matches the rate of inflation.

The past decade of welfare reformhowever, combined with low pay meant that even before the cost of living crisis, many people could not afford the basic necessities of food, heat, rent, shoes and school uniforms. Hunt’s decision to tie inflation is commendable, but it is not enough to compensate for the years of cuts to the actual value of the benefits in the UK. And the low levels of government support he announced, to cope with rising energy costs, will have an additional impact on the poorest households: energy prices are expected to be three times higher than ‘two years ago.

The Chancellor’s announcement that more than 600,000 Universal Credit recipients would be trained to increase their working hours or earnings. At the same time, legal wage floors continue to fall below living wages calculated independently.

This means that many people will be forced to work longer hours to poverty wages. It also means that the Chancellor assumes a nationwide availability of work, despite the fact that the poorest places are less likely to provide decent employment opportunities.

But the Conservative government’s Fall 2022 statement did not happen in a vacuum. It follows a decade of austerity, including disastrous – and unequal – cuts to welfare notable result. To research by economists Christina Beatty and Steve Fothergill shows that people in some parts of the UK have faced much bigger cuts in benefits than others.

A map of local authority areas in Britain showing the estimated annual losses suffered from 2010/11 to 2020/2021 by benefit claimants, due to welfare reform.
Christina Beatty and Steve Fothergill, Author provided

Previous rounds of austerity cuts have affected people and places in many ways. From individual and the social levels at the broadest health and economic well-being of the nation, these measures hit systematically the poorest the hardest.

Now, as then, the government has repeatedly justified such cuts, citing a lack of alternatives. This time around, the cuts are gradual, but they will nonetheless harm local communities. Research has long shown that “efficiencies” tend to be a false economy.

Our new search details how the implementation of the universal credit system, driven by austerity, has significantly compromised the state’s ability to care for its most vulnerable citizens. A decade of welfare reform means the previous, more human-centric approach has been replaced by digital interfaces and punitive, algorithm-based decision-making. For many people already on low incomes, it has made their lives worse.

Universal Credit, which began to be implemented in 2013, combines six previously means-tested benefits into a single package and is being phased out as claimants increase their working hours. The idea behind consolidating these payments was to get people working, while reducing errors, fraud and administrative costs.

Our case study focused on Great Yarmouth in Norfolk, the first poor urban setting to roll out the new welfare scheme. The slow transition to Universal Credit has left many without income for up to six weeks. What is the government called an “advance”, but better described as a loan to cover this period, meant that many people were indebted even before receive their first payment.

People were dealt with quickly and harshly, minor infractions – like being late for job center appointments, forgetting to log in to the system or expressing frustration with the inflexibility of the system – were punished. Sanctions were often imposed which would suspend or even terminate their social benefits.

One of our interviewees compared their experience to the 2016 film by British director Ken Loach I, Daniel Blake, which tells the story of a single mother of two, Katie, and an older man, Daniel, 59, as they navigate UK social security. Loach portrays with great clarity the rigidity and punitive qualities of this system, which operates not with human compassion but with disciplinary sanction.

If the universal credit system offers value for money in economic terms is unclear. However, the human cost at which this occurs is undeniable.

The rigid requirements of a digitized system, combined with punishments, don’t know when someone needs encouragement or a release. He fails to see that the suspension of social benefits is highly counterproductive to people’s well-being.

Austerity, of course, took many shapes including a blow to local government budgets which influenced how local authorities supported local social infrastructure. Adult and child Social Protection, homeless services, youth club funding and emergency grants have all been hit. It was the same for education and special educational needs in particular, as well as health care. All of these services can be seen as fundamental elements of the local welfare state – a Welfare state increasingly in tatters.

A woman looks at a shelf in a food bank storage room.
The growing use of food banks shows that after more than a decade of austerity, the UK cannot afford further cuts to welfare.
HASPhotos | Shutterstock

The strains caused by the shrinking local support system as well as welfare reform can be seen in Great Yarmouth, as in many other parts of the UK. The fabric of our multi-ply social safety net is fraying.

Homelessness in the UK double from 2010 to 2019. The need for Trussel Trust food banks has increased from 41,000 in 2009-10 to 2.1 million in 2021-22. People have been unable to pay rent and council tax due to changes to the low level of benefits they receive.

Government grants to children’s centers have been reduced as 500 had to close between 2010 and 2018. These included Great Yarmouth’s Priory Centre, a once bustling community center that had started as a Safe start centre, to support parents and children from all walks of life. A former mentor described the crucial role he played in catalyzing community solidarity:

We’ve had people come into the club who are homeless or say, ‘I haven’t eaten in 3 days’, and it’s like, ‘OK, bear with me, I’ll see what I’m up to. have. I had other participants who said, “Actually, I live there, I’ll see what we have. As difficult as the times are, the community is coming together. People always want to support and share what little they have.

A volunteer support worker at another center explained how upstream preventive interventions moved from the state to the third sector. In fact, the third sector stepped in to fill the holes left by a retreating state. She summed up how the state’s role has become minimalist, as state services struggle to afford to do the essential work of prevention and ongoing care support: “They pick up the pieces, put them in a paper bag and return them.”

Two women with a bicycle and a man with a pram on a sidewalk.
Delays in Pôle Emploi appointments penalized universal credit recipients.
1000 Words | Shutterstock

The void left by this declining welfare state has been filled in several ways. Libraries provided much-needed computing, internet access and support to find a job – a requirement for Universal Credit – and to complete benefit claims themselves. Volunteer-run charities, such as the Great Yarmouth Unemployed Workers Centre, have also stepped in, but these are often micro-charities, with limited capacity and unreliable funding.

Rising roaming and municipal rent arrearsnot to mention despair and Burnout among staff and residents make it clear how much the UK cannot absorb further rounds of cuts.

So before we get too excited about the UK chancellor’s decision to almost provide an inflation-matching increase in benefits, let’s remember the context. Communities like Great Yarmouth have seen a decade of public spending cuts. People who depend on benefits were already struggling to find ways to cope with a system that often failed to meet their basic needs. The benefits system is often seen as punitive, difficult to access and frustrating. And even before the recession, many local economies are experiencing little expansion, which could provide opportunities for people.

Let us remember that the austerity cuts in public spending are, in fact, ideologically motivated. These are political choices with real and lasting consequences in the communities. The corresponding inflation is useful, but it is not enough.


Comments are closed.