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Universal Credit cuts risk undermining levelling up

Housing associations across Liverpool City Region are warning that ending the £20 uplift on Universal Credit will plunge people into poverty, harming the local recovery and the Government’s levelling up agenda.

The £20 increase was implemented in the early days of the pandemic to help struggling families, but the Government has confirmed plans to remove it in Autumn.

Members of the Liverpool City Region Housing Associations (LCRHA) group have worked with tenants throughout the pandemic on applications for Universal Credit, as families saw their income reduced as a result of redundancy or furlough.

Bronwen Rapley, Chief Executive of Onward Homes and Chair of LCRHA, said: “Liverpool housing associations have seen first-hand the difference the £20 uplift has made for our customers. Removing it now, before we see any real signs of recovery, will damage living standards at the worst possible time. It will negatively impact public health in the Region and cut off the future opportunities we are all seeking to create.”

There has been opposition to the plans from charities, organisations, religious groups and MPs across the political spectrum, who worry that Universal Credit recipients face losing around £1000 a year.

Sir Peter Fahy, chair of the board of Plus Dane Housing, said: “The £20 uplift was a good move by the Government in the early days of the pandemic. Whilst we are now seeing improvements in the operation of Universal Credit, removing the £20 uplift risks undermining the progress made and the future of this signature Government reform.

“This is an issue impacting working families on low incomes who see Universal Credit as a springboard to becoming increasingly self-sufficient. Providing a reasonable amount to live on is particularly important during these uncertain times.”

More than 70,000 people in the region (71,230) claim the benefit. The number of claims for Universal Credit has risen 74% since April 2019, with a 63% rise between March and April 2020 when the first lockdown hit.

In addition to the direct impact on those claiming Universal Credit, removing the £20 uplift will damage the Region’s recovery by hitting spending in local businesses. The LCRHA group has raised concerns about the impact the reduction is likely to have with MPs.