Benefit deductions are deepening poverty in Leeds

Leeds residents are increasingly having to borrow from loan sharks and high-interest lenders to meet their basic needs because of issues with their benefits, according to new research.

The University of Leeds report found that people in some of the city’s most deprived areas are going cold and hungry as the cost of living crisis deepens.

According to the report, “Deep Poverty: Everyday Financial Crisis in Leeds”, cash deductions from the already low level of their benefits are having a devastating impact.

People in Beeston, Armley, Gipton and Harehills are among some of those worst affected with people regularly skipping meals, not using gas or electric for weeks and pawning their personal possessions.

“The economic gap between Leeds and the rest of the UK has widened in recent years, pushing some into deeper, more severe financial crisis,” explains lead author of the report, Dr Daniel Edmiston, of Leeds’ School of Sociology and Social Policy.

Rising inflation is increasing the risk and severity of poverty. Rather than acting as a safety net at this difficult time, the social security system is functioning as a debt collector for many with 45% of Universal Credit claimants losing up to 25% of their entitlement due to benefit deductions, recovery of advance payments or arrears.

According to the report, more than £18 million per year is being “withheld” in Universal Credit payments alone from the lowest-income households across Leeds, undermining the Levelling Up agenda within and between regions.

As a result, many of those claiming benefits are trapped in a poverty-debt trap and are increasingly turning towards short-term, high interest loan providers and loan sharks to buy essentials such as food, gas and electricity.

“Meanwhile, demand for local support services and charitable food aid is soaring,” said Dr Edmiston. “To minimise energy use, some people are only using a microwave or kettle to prepare meals with knock-on effects on their physical and mental health.”

To minimise energy use, some people are only using a microwave or kettle to prepare meals with knock-on effects on their physical and mental health.

He added: “Locally, invaluable work is being undertaken by Leeds City Council and third sector organisations to try and support those worst affected by the cost-of-living crisis. Whilst many organisations are providing a crucial lifeline, their capacity is constrained given the current funding climate.”

Similar experiences are likely to be replicated across the country as a result of the national cost of living crisis, said Dr Edmiston. As part of his research, which was supported by the British Academy and Wolfson Foundation, Dr Edmiston worked with a wide range of agencies including Leeds City Council, GIPSIL, Hamara, Touchstone, Money Buddies, BARCA, Better Leeds Communities and Citizens Advice Leeds.

The report recommends national changes including increasing benefits in line with inflation, introducing a minimum income guarantee and abolishing the five-week wait for Universal Credit. Locally, improvements could be made including extending and protecting funding focused on breaking the poverty-debt trap, and reviewing services to avoid those on the lowest income “slipping through the cracks”.

Interview testimonies

“I was supposed to be keeping it for my daughter, but I actually sold my wedding ring and engagement ring just so I can top up the electric.” (Jenny, female, white, 25-34)

“I think it was a weekend and my gas and electric had gone, so I ended up selling my phone just to put it on over the weekend because I couldn’t get any money.” (Ellie, female, white, 25-34)

We wanted a Pot Noodle or something. To boil the kettle, I pulled the floorboards up in the house and the skirting boards off the wall as well and burnt them in an open fire to boil the kettle.(Warren, male, white, 45-54)

“If you haven’t got electric, what are you meant to do, just starve? I’ve been in bins before to try and feed. It’s horrible. It is so horrible. It is, it’s the worst feeling ever.” (Alice, female, white, 35-44)

“I have to turn off every plug it is mad and I´ve even heard round here everyone´s blooming electric meters beep all the time [on emergency credit]… it´s awful and you can´t do it and then I´ve been here before for like two weeks without electric.” (Alice, female, white, 35-44)

I’m sick every morning, that’s how bad my anxiety is… like managing finances, whatever I’ve had in place, nothing’s working. I’ve got this looming headache of a situation where come next month I might not have a roof over my head, and it’s like, what’s next? Where do I go? There’s no doors open for me. (Keiran, male, white, 35-44)

“I wouldn’t like to have anybody live like this, because it’s not good.  This is not good, because this is heart attack material.  I had a heart attack, and basically I had a stroke.  It’s not good for you. I actually felt better when I was in the hospital because I knew there was people around me looking after me.” (Abel, male, Black, 55-64)

“I’m depressed to death. If it weren’t for [friend] coming and helping like go to the shops for me and stuff like that, I reckon I’d have had committed suicide a long time ago. I’m being serious. I don’t, I don’t go nowhere. I don’t do nowt.” (Wesley, male, white, 45-54).

Official responses

In response to the findings of the research, Tracy Brabin, Mayor of West Yorkshire, said: “I pay tribute to the fantastic work underway across West Yorkshire to provide food banks, warm spaces and debt advice for the most vulnerable. But the findings in this report are absolutely appalling – it is a stain on our national conscience that people are cold and hungry in the sixth richest country in the world. For months we’ve been calling for an increase to Universal Credit, but the government is idly standing by while people suffer. Enough is enough. The Chancellor must act in this week’s Autumn Statement to provide a plan to save our economy, protect our households and rescue our public services.”

Cllr Mary Harland, Leeds City Council’s Executive Member for Communities, said:  “This report makes for distressing reading. Our welfare system should be supporting people to break out of poverty, not causing it. Leeds City Council is absolutely committed to tackling poverty and inequalities and we continue to review our support to make sure residents get what they need, such as through our recent ‘cash first’ welfare support scheme pilot. If you live in Leeds and can't afford to pay for essentials such as food, gas and electric, please call our Welfare Support Team on 0113 376 0330 or visit one of our community hubs.”

Chief Executive of Citizens Advice Leeds, Dianne Lyons said: "This research from Leeds University underlines what we've been seeing at Citizens Advice Leeds for many months now. People who were already struggling are now in absolute crisis, unable to pay for the necessities of day to day living. Leeds City Council and many local charities are doing extraordinary work to help people through the cost of living crisis, but the real solutions depend on national policy decisions.”

Further information

“Deep Poverty: Everyday Financial Crisis in Leeds”, is authored by Daniel Edmiston, Emma Hyde and Thomas Adnan-Smith, from the University of Leeds. The research is supported by the British Academy and Wolfson Foundation (WF21\210269). 

Photo by Jon Tyson on Unsplash