Slum city: how Manchester will be hammered by welfare reforms

Article published: Tuesday, February 5th 2013

The Economist magazine might list Manchester in the top 50 most expensive cities in the world, but the Coalition government’s welfare reforms will see an explosion in homelessness, debt and slum landlords.

Boarded up flats in Miles Platting. Photograph: Gene Hunt/flickr

Boarded up flats in Miles Platting. Photograph: Gene Hunt/flickr

That’s according to a new report to Manchester City Council’s Economy Scrutiny Committee, which reveals the local impact of reforms including Atos disability assessments, “bedroom tax” housing benefit penalties and cuts to vital crisis loans.

Thousands of low paid workers, the unemployed, people with disabilities and lone parents will be hit hard in a city which the Greater Manchester Poverty Commission has found to have the fourth highest level of deprivation in the country and 38 per cent of its children growing up in poverty.

Wages in Manchester are over £40 per week lower than the national average and 18 per cent of working age adults in the city rely on out-of-work benefits, around half of which are due to mental and physical ill health.

 

The impact of welfare cuts include:

  • At least 12,300 social housing tenants will be clobbered by £14 to £25 a week “bedroom tax” penalties for having spare rooms
  • Manchester lacks sufficient social housing of a suitable size to accommodate all tenants forced to move. Rising homelessness and people leaving the city is expected
  • Almost 7,000 people may lose between £54 and £77 each week in Disability Living Allowance due to controversial computer-based assessments by the government contractor Atos
  • Up to 41 per cent of incapacity claimants in Manchester have been deemed fit for work since October 2008 in Atos assessments condemned as “inadequate” and causing “avoidable harm” by the British Medical Association
  • Over £45m will be taken out of the local economy as a result of the reforms, “only a proportion of which” will be recovered by people moving into work

Tens of thousands of the city’s poorest will also pay higher proportions of council tax due to the government slashing council tax benefit and passing responsibility for administering support down to local authorities.

Social cleansing

Poorer wards with low employment and a high number of people with disabilities such as Harpurhey, Miles Platting, Newton Heath and Gorton, in addition to Sharston in Wythenshawe, will be hardest hit by the reforms.

Levels of personal debt are considered “likely to rise” as households struggle to make ends meet, with a high risk that people may resort to exorbitant “pay-day loan companies and other money lenders”.

Rent arrears and homelessness are expected to increase due to a lethal combination of such pressures and moves from October 2013 to bundle housing benefit into a single monthly Universal Credit paid to claimants rather than directly to landlords.

In an echo of London mayor Boris Johnson’s alarm at the prospect of “social cleansing” the report warns that new caps on housing benefit for private renters will force tenants on lower incomes out of expensive neighbourhoods and into poorer areas in the north and east of the city.

These renters may fall prey to slum landlords as housing benefit cuts “worsen conditions at the bottom end of the market” and incentivise the private rented sector to “target poor quality niche markets in already heavily disadvantaged areas”.

And ‘no DSS’ signs will make a comeback as “more reputable landlords may be reluctant to offer tenancies” to people on housing benefit.

The report also notes that 8,800 lone parents claiming income support have since May 2012 been expected to seek work once their children are over the age of five, despite a scarcity of jobs with hours flexible enough to fit around caring responsibilities as pointed out by the charity Gingerbread.

Human cost

The reforms will be implemented at the same time as the council is slashing its local services due to government cuts. Council officers say there will be a “significant impact on the services supporting families” in poorer areas.

Mike Stevens, director of neighbourhood services for Manchester City Council’s social housing wing Northwards, told Mule there would be “a real human cost to these changes”.

While Stevens said Northwards would do its best to assist people who need to move due to the reforms, he added that many people wish to remain in their homes and there could be difficulties in finding suitable housing for those who have to move.

“We simply don’t know whether we have the right mix of properties to be able to rehouse everyone who wants to move within a fairly short time”, he explained.

Stevens said the organisation was carrying out “an intensive door-knocking campaign to make sure they are aware of their options”. Northwards will also refer people to credit unions and their money advice service to try and help tenants cope with the changes without being forced to resort to payday loans and other expensive forms of finance.

He warned however that “the cumulative effects of the ‘bedroom tax’ and the changes to council tax benefit, as well as a general squeeze on household finances, means that we have to be prepared for a situation where some people will find themselves in difficulty.”

He added, “If it were as easy as people finding a job and moving off benefits then it wouldn’t be anywhere near as big a problem – but people’s lives are often more complicated than that, especially so in the current economic climate.”

Richard Goulding

More: Cuts, Features, Manchester, Welfare

Comments

  1. Good job they dropped plans to exclude young tenants from Housing Benefit, although no doubt that proposal will return eventually.

    Comment by Tudor on February 6, 2013 at 1:15 pm
  2. A fairly good article on the worsening state for the thousands of the less fortunate of Manchester’s residents. One point though Richard, the council is not cutting front-line services because of the Government cuts. The are spending money inappropriately on needless ego-projects, whilst deciding themselves to cut essential services. They had a difficult choice to make, but instead kept with their master-plan and cut the services, especially the less fortunate, need. The council is not blameless in this crisis, and it is sad, that there has never been an investigation into how this council has manged it’s finances

    Comment by Patrick Sudlow on February 6, 2013 at 8:23 pm
  3. Homelessness is and will remain very, very low in Manchester – if you use the true meaning of the word rather than the modern one, which regards some people as homeless even thought they spend every night with a roof over their head, usually the same roof for months on end.

    As for the ‘bedroom tax’, this will mean that available bedrooms owned by the public will be better allocated to people who need to use them, not left with people who had a need for them once but not any longer.

    This will reduce homelessness and overcrowding.

    I know a woman with a 3 bedroom semi council house which she has lived in alone since her children left home over a decade ago.

    Why should the taxpayer help fund two bedrooms which are empty nearly every night?

    They should be used as fully as possible.

    Many private homeowners downsize when the kids have left home, so I don’t think it is unreasonable to expect those who live in taxpayer owned houses to do the same.

    Comment by pete on February 7, 2013 at 11:14 am
  4. Homelessness means without a home. A roof over your head is NOT a home.

    The woman you refer to has raised 3 children who now contribute to the country’s economy by paying taxes. Having dedicated her life to raising these children, why should she not be allowed to stay in the home she has obviously lived in for most of her life? If her children left home a decade ago, I assume she must be approaching retirement age. I, as a tax-payer, am very happy that my taxes allow an elderly woman to remain in her home, among the community she knows.

    Forcing elderly people out of their homes is abhorrent to me and to many people. It is not their fault that the country is in an economic crisis.

    Must we really force her to move in order to prop up the economic crisis that was caused by the banks and the wealthy bankers that live in them? I doubt very much any of their elderly parents are being forced to move home.

    I find these cuts, as do may others, an appalling attack on the most vulnerable members of society. Punish the people responsible for the crisis, not the innocent victims of it.

    Comment by Jane on February 7, 2013 at 3:34 pm
  5. Housing associations and council ALMO’s were vested with honouring the councils responcibility of SAFE, AFFORDABLE and STAKEHOLDER COMMUNITIES.

    Pitty that the same companies were only realy set up to GET RID OF COUNCIL DEBT (£860,000,000).

    Manchester rented some 86,000 POOR QUALITY, SUB STANDARD and delapadated homes in DEPRIVED (some might say made that way) communities, to milk the government for money!

    Estate management looked to constant bail outs to keep EMPLOYEES and their PENSION funds safe. URBAN TASK force, SRB, Regeneration, URBAN, objective 2, ERDF, ESF, EU. Locally estate management 2000, housing choice, and that lovely “housing market renewal”. 10 years ago, the housing declared TOO MANY HOUSES were causing a problem to “market values”, so they sold or knocked them down.

    The very residents who were sold down the river with “housing options” and told they would get done up to “DECENT HOME STANDARDS”, on bank loans based on residents RENTAL income, are now being asked to “consider” to leave.

    No one lost their job for any of this inadequacy, many got pay rises and better contracts, guaranteed work and benefits far outweighing any received from those who were supposed to benefit. Instead they bleat on about keeping the business afloat, they are bound by banks and are failing already.

    Many are applying like crazy to BUILD HOMES? To increase “stock” a traditional farming term!

    This process seems to have taken these “unprofessional” by surprise?

    Floundering for answers, they blame the residents for not getting ready?

    So when community gateway and community asset trusts were offered, as an alternative, which are allowed to create SHARED responsibility and mutual ownership, these residents could NOW BE EXEMPT from this tax.

    Instead, “shared ownership” currently ONLY supports those residents in NEW apartments they BOUGHT on 50/50 deals for exorbitant prices when the industry was wetting itself with glee at the NEW AGE of milking City residents. (but at least they are a better “class” of neighbourhood now)!

    So why is it that the government could reduce the cost of social housing, by getting rid of HOUSING MANAGERS, STAFF and the entourage of hangers on who NEED poor people to feel important?

    Oh ye, they are the tax payers!

    Captain Cae Os

    Using a simple model, I am now exempt from bedroom tax, I saved the government the equivalent of £70 a week in housing costs, my landlord charges me £300 per year, rather than £4,000 in HB for the same work.

    So that means that the spare £3,700pa that goes on flash offices, swanky expenses and irrelevant wages of people who don’t know what to do about this problem.

    Mainly because THEY HAVE NO PROBLEM, till it affects their bottom line.

    Their is no shortage of poor people needing their professorial help?

    We should be helping them create a better world, so F**K off.

    SOCIAL HOUSING IS A JOKE, and you can see who’s laughing ALL THE WAY TO THE BANK.

    Comment by Captain Cae Os on February 8, 2013 at 1:13 pm
  6. Jane, the woman in question is 52, married briefly years ago to a man who is not the father of either of her children.

    Her children are both mothers who don’t work and are supported by the taxpayer and live in taxpayer funded small flats.

    The woman complains that her daughters have not been given 3 bedroom houses of their own by the taxpayer, just as she was. Of course, she does doesn’t stop to think that if middle aged people with no kids at home are allowed to hog such houses until the day they drop dead then younger people with children are going to find it difficult to get one.

    Resources owned by the public should be used as efficiently as possible.

    Allowing public tenants to have the convenience of spare bedrooms, something which many people who buy their own houses cannot afford, is a waste of public money.

    Comment by pete on February 11, 2013 at 11:35 am
  7. I agree completely , Jane .

    Comment by Dodger on March 27, 2013 at 11:49 am
  8. Spot on Jane

    Comment by Adie on August 22, 2013 at 12:47 pm
  9. Well said Jane .

    In full agreement.

    Comment by Dave on January 16, 2014 at 7:37 pm