Incapacity benefit changes cost Borders £7 million

scales home welfare
scales home welfare

A university study has revealed that Scotland’s most deprived areas will take the biggest hit when the full range of welfare reforms, currently underway, come into effect.

It is estimated that the 
Borders will lose £7million in incapacity benefit and £6m in tax credits.

The study was done by the Centre for Regional Economic and Social Research at Sheffield Hallam University, and their results suggest that when fully implemented, the welfare reforms will take more than £1.6 billion a year out of the Scottish economy; equivalent to around £480 a year for every adult of working age in Scotland.

The biggest financial losses will arise from reforms to incapacity benefit (£500 million loss a year), Tax Credits (£300 million loss a year) and the 1% up-rating of most working age benefits (£290 million loss a year). This compares with £50 million for Housing Benefit reforms (‘bedroom tax’).

Borders losses are estimated at: incapacity benefit £7 million (2,100 individuals affected losing an average £105 a year); Tax Credits £6 million (7,200 households affected losing an average £85 a year); the 1% uprating of working age benefits £5 million (£70 yearly loss per adult).

Scottish Parliament’s welfare reform committee heard evidence from the researchers on Tuesday, committee convenor Michael McMahon concluding: “We have been hearing during the past year people’s concerns about the reform and to see these numbers in black and white demonstrates just how bleak the picture is.

“Coping with disability is physically and emotionally difficult, even if the incapacity is short lived. It is also expensive and our research has highlighted that in Scotland, for the 144,000 working age adults adversely affected by incapacity benefit loss is on average £3,480 a year. I don’t see how this is supporting people in their time of need or helping people break out of the cycle of poverty.”

Professor Steve Fothergill, said: “Welfare Reform is a deeply contentious issue and in documenting the impacts, our report does not attempt to comment on the merits of the reforms. However, it is important that the impact on different places is fully exposed because this is a key dimension that is too often overlooked. The impact on different places is also one of the yardsticks by which the reforms should be judged.”

Deputy Convener Jamie Hepburn MSP said: “Our figures also show that the changes to tax credits affect more people more significantly than the ‘bedroom tax’. If people were outraged before, imagine how they will feel after reading this research.”