The average low-income family in the UK’s most deprived areas is likely to be worse off under universal credit, according to a study by the Resolution Foundation.
The study says those living in the poorest areas will be on average worse off. The thinktank says the economies of those areas with high numbers of disabled, unemployed or single-parent claimants – all groups likely to lose out under the new system – will see falls in spending power when universal credit is fully rolled out.
On average, families will be worse off under universal credit, include places that unexpectedly voted for the government at the last election such as Blackpool, Middlesbrough, Redcar, Hyndburn and Wolverhampton. Other areas where families are on average likely to be worse off when they move on to universal credit include Liverpool, Birmingham, Glasgow, Burnley, Kingston-upon-Hull, Blaenau Gwent, Knowsley and Hartlepool.
While overall UK benefit spending will be maintained under universal credit, this masks a “substantial redistribution” of support between different areas of the country, says Resolution, with resources skewed towards families in high-rent areas like London and the south-east over the north and Midlands. The thinktank illustrates this by highlighting the effect on Liverpool and its surrounding boroughs, where 52% of all claimants will be worse off on universal credit by 2024, compared with a national average of 46%. This rises to 65% for Merseyside families with a disabled member (60% UK-wide). On average, Merseyside families will lose £7 a week. Its qualitative research with claimants in Liverpool – supported financially by Liverpool city region – found that despite official insistence, there was no evidence that claimants believed that digitally administered benefits under universal credit were an improvement on the old system.