Better off in work? case studies

These case studies on the local impacts of welfare reform are intended to illustrate both:

 - How the impacts of welfare reforms (excluding Universal Credit) and responses by Local Authorities vary for areas with different characteristics; and

- The returns from work for different groups of households that are not in work, both under Universal Credit and the current system.

The case study areas have been chosen to illustrate a range of impacts/ losses for different types of local authorities. This draws on the modelling of individual welfare reforms set out in the "Local Impacts of Welfare Reform" report, supplemented with analysis of local rents and modelling through the Future Benefits Model and the Census. 

The Future Benefits Model, from Ferret Information Systems, consolidates into a single model all changes to tax and benefits rules announced since June 2010.  For each local authority, the model incorporates rental values for social and private tenancies where available from local authority sources (or rental values from the National Housing Federation and Valuation Office Agency where LA data is not available), and mortgage figures based on average housing values for each authority assuming a 30 per cent mortgage. The model also incorporates the impact of actual local Council Tax Support schemes, assuming a liability of £1,250 per year.  The model then produces projections of net household income under both the current system and Universal Credit for a range of household characteristics.  It also then projects what those household incomes would be with different hours of work. 

Alongside this, the Census allows us to estimate to Local Authority level the number of households with different characteristics – single and couple; working and not working; renting and owner-occupying; number of children. 

By combining this data, we can estimate the number of households with different characteristics and their incomes based on all current rules.  We can also then compare this with Universal Credit in the future, and model returns from working at different hours.

This analysis represents a best estimate from the available data.  Any questions should be directed to in the first instance.

25 September 2013