New report from London Councils

Date Posted: 15 June 2011

On 13th June 2011, London Councils published a new report titled 'Making Work Pay in London under Universal Credit'. London Councils commissioned the Centre for Economic and Social Inclusion (CESI) to research into the impact of the Universal Credit in London. Traditionally, London has not fared well under national benefit schemes. National benefit rates do not reflect the higher costs of living in London, nor do Londoners benefit to the same extent as the rest of the UK from moving into work.

The CESI research has now been published by London Councils on their website. Its main findings include:

  • A significant number of households will be financially worse off under Universal Credit than under the current scheme (in some cases by as much as £5,000 per year) – mainly single parents and families with two or more children;
  • Under Universal Credit, all benefit households in London will have less spending power than their equivalents in the rest of the UK;
  • There are a number of perverse outcomes within the design of the Universal Credit, in that some families will be worse off if they increase the number of hours they work. Lone parents with two or more children in London will need to earn above the London Living Wage just to make work pay;
  • These adverse impacts are a direct consequence of London’s higher childcare and housing costs not being adequately reflected within the benefit design.