StepChange responds to Commons Work and Pensions Committee report on the welfare safety net

_{31 July 2019}

Today the House of Commons Work and Pensions Committee releases a report examining the welfare safety net.

StepChange shares a number of its concerns and recommendations, and joins the committee in urging the DWP to:

• Take measures to ensure deductions from benefits do not worsen problem debt for the most vulnerable - more than two thirds (71%) of StepChange clients say these deductions have caused them hardship, with many struggling to pay for essentials like food, clothes and heating
• Ensure debt repayments are taken into account in all future poverty measurements
• Increase the rates of frozen benefits in line with the Consumer Price Index plus 2%, then uprate benefits at least in line with inflation
• Restore Local Housing Allowance rates to a level where 30% of rented homes in any area are affordable to everyone, alongside ensuring benefits are tethered to the real cost of living. Seventy-two percent (72%) of StepChange clients receiving Local Housing Allowance report it does not cover their rent; a figure which rises to 90% among those renting privately

Peter Tutton, Head of Policy at StepChange Debt Charity, said:

"The Work and Pensions Committee rightly call out the gaping holes in a safety net too many are falling through. Time and again, we see our clients falling into problem debt due to a lack of financial resilience to life shocks like redundancy and illness.

"Our latest research shows that people who had experienced a life shock in the past two years were three times as likely to be in problem debt than those who had not.

"Clearly, the capacity of the welfare safety net to prevent people falling into debt is at breaking point. That’s why we echo the committee in calling on the government to thoroughly scrutinize the close links between debt and poverty.

"We need to see debt repayments taken into account in all future poverty measurements, while DWP must ensure deductions from benefits do not worsen problem debt for the most vulnerable. Finally, as the benefits freeze begins to thaw, we must see an increase in Local Housing Allowance to a level where market rents are genuinely affordable to people on low incomes."