Uncovering the regional cost of welfare reform

Wednesday 3 February • Reading time: 4 minutes

Our researchers have charted the effects of welfare reform in our post-industrial heartlands, seaside towns and inner-cities.

Communities across the UK used to rely on manufacturing, mining and heavy industry jobs. 

But as deindustrialisation took hold from the 1970s onwards, many of these once-productive regions fell into generations of unemployment, incapacity and low pay. Welfare payments replaced wages — and for decades were part of everyday life.

Welfare reforms, introduced in the 2010s to reduce government spending, hit these post-industrial heartlands harder than more affluent areas of the UK. The worst-hit local authority areas lost four times as much money per person as the least affected.

For the last decade, Sheffield Hallam researchers Professor Christina Beatty and Professor Steve Fothergill have been at the forefront of bringing the uneven effect of welfare reform to the public eye.

With funding from diverse institutions ranging from the Scottish Parliament, the Joseph Rowntree Foundation and Oxfam, their research was featured on front pages, debated in the House of Commons and delivered to UN committees.

This is the story of innovative, meticulous work that exposed uncomfortable truths in the UK — and nationwide reforms that took a very local toll.

"Widening the gaps"

In 2010, the Conservatives gained power in coalition after 13 years out of office. Austerity and welfare reform became lead policies for George Osborne’s Treasury as it sought to reduce government spending.

Professor Beatty and Professor Fothergill had studied labour markets, unemployment, hidden unemployment and incapacity since the early 90s, based at Sheffield Hallam’s Centre for Regional Economic and Social Research (CRESR).

Their knowledge of post-industrial Britain put them in a unique position to understand the impact of the new government’s policies.

To do so, the researchers tapped into a vast range of official statistics. They drove the Treasury's figures down a local level to provide district-by-district analyses.

Their method showed cumulatively and visually how various cuts to unemployment, housing and disability benefits would impact on households of different types in different areas.

This was important because most welfare policy takes little or no account of place. It applies consistently across the UK, regardless of the wide economic and social disparities between, say, St Albans and Barnsley. It was ex-industrial communities with high unemployment that would be hit hardest.

But other areas stood to lose out too. Seaside towns, for example, have high levels of private rented accommodation, low wages and a seasonal economy. Blackpool — a seaside town in a post-industrial region — was to be the worst affected area in the country.

London boroughs such as Tower Hamlets, Haringey or Hackney were also at risk. There, spiralling rents and living costs meant budgets were already tight, so the cuts to housing benefit, and the new benefit cap, hit particularly hard. 

In short, policy changes that were being widely referred to as nationwide were anything but. Instead, these reforms worsened the situation for specific communities that had already suffered the most, while scarcely affecting more prosperous regions at all.

As one of the team’s early reports said:

Headlines and hearings

This research had a sustained influence for most of the decade — evident in its extensive media coverage and thousands of academic citations. 

The initial report, Hitting the Poorest Areas Hardest, was the subject of heated debate in the House of Commons after it ran on the front page of The Financial Times. For their work in sponsoring and publicising the research as the basis of its Austerity Audit, the FT received a prestigious Editor and Publisher (EPPY) Digital Publishing Award for Best Investigative/Enterprise Feature.

A 2016 study, The Uneven Impact of Welfare Reform, followed up the previous work by looking at the impact of the additional policy changes brought in following the 2015 general election. Larry Elliott, Economics Editor of The Guardian, remarked that: “Policymakers should read [Beatty and Fothergill's work]. So should anybody who wants to understand where Britain is, economically, financially and politically. It explains a lot.”

And policymakers did read their work. Secretary of State for Work and Pensions, Amber Rudd, met Professor Beatty. Her opposite number on the Labour benches, Owen Smith, helped convene a Westminster seminar and said “the legacy this Tory Government will leave behind is being drawn in the maps and statistics in this report. Poorest areas will be hit hardest”.

Five studies were commissioned by the Scottish Parliament alone, and in total Christina and Steve have given around 100 talks at select committee hearings, conferences and events, including sessions with the UN Committee on the Rights of Persons with Disabilities and the Equalities and Human Rights Commission.

By mid-2016, the human cost of austerity and welfare reform was clear. 

A new political landscape

Much has changed even since the 2016 report — as the EU departure, two general elections and an almost unrecognisable political landscape will attest.

But for a ten-year-old programme, austerity remains a sticking point for the Government, despite their pledge to 'level-up' the post-industrial areas their welfare reforms affected the most.

Without the tenacity of Professor Beatty and Professor Fothergill’s research, the true regional effects of austerity may not have been so noticeable or controversial.