The impact of welfare reform changes in London

By: GfK & NPI
Published: June 2014

The impact of welfare reform changes in London

The studies found that:

  • For many households in London Universal Credit is unlikely to counter the effects of the Local Housing Allowance (LHA) changes, regardless of how much work is done.

  • London’s high rents mean that, even if households work more hours, they cannot possibly neutralise the impact of the LHA changes.

  • The national LHA cap can leave those working full-time below the poverty line.

  • Lower LHA rates do nothing to improve the incentive to enter paid work.

  • Social housing has the highest work incentive as well as the lowest cost to government.

  • The research found a growing sense of insecurity amongst the families studied. There was a strong fear of eviction or homelessness amongst a number of the families interviewed.

  • Many participants reported feeling stuck, unable to move because of the costs of moving and the lack of affordable alternative accommodation.

  • There was a low understanding and awareness of discretionary housing payments.

  • Those affected by a reduction in LHA felt there was little they could do until they were evicted by the landlord or taken to court for rent arrears.