Latest Public Sector News

08.11.17

Benefit cuts expose low-income families to future recessions

Planned benefit cuts will expose low-income households to the risk of future recessions, according to a report by the Institute for Fiscal Studies (IFS).

When the cuts are fully in place, if the falls in earnings that were seen between 2007-08 and 2011-12 were repeated again, the poorest 30% would see their net earnings fall by 53p for every £1.

The Office for Budget Responsibility has said that there is a 50:50 chance of recession in any five-year period.

The IFS says that economic uncertainty is currently high and warns that when the next recession does hit, low-income households will receive less support from the tax and benefit system.

Amongst the changes being rolled out are cuts to child tax credit, a freeze to many working-age benefits, as well as the introduction of Universal Credit.

Andrew Hood, senior research economist at IFS, said: “When governments change the tax and benefit system they should consider the impact on the support the system will provide to households when the next recession hits.

“Planned cuts to working-age benefits will leave low-income households with children in particular more exposed to any future downturn in the labour market, by reducing the extent to which earnings losses would be offset by increased entitlement to benefits.

“This is particularly important since many in this group have little or no savings which they can draw on during a period of temporary difficulty.”

Have you got a story to tell? Would you like to become a PSE columnist? If so, click here.

Comments

There are no comments. Why not be the first?

Add your comment

 

related

public sector executive tv

more videos >

last word

Prevention: Investing for the future

Prevention: Investing for the future

Rob Whiteman, CEO at the Chartered Institute of Public Finance (CIPFA), discusses the benefits of long-term preventative investment. Rising demand, reducing resource – this has been the r more > more last word articles >

public sector focus

View all News

comment

Peter Kyle MP: It’s time to say thank you this Public Service Day

21/06/2019Peter Kyle MP: It’s time to say thank you this Public Service Day

Taking time to say thank you is one of the hidden pillars of a society. Bei... more >
How community-led initiatives can help save the housing shortage

19/06/2019How community-led initiatives can help save the housing shortage

Tom Chance, director at the National Community Land Trust Network, argues t... more >

interviews

Artificial intelligence: the devil is in the data

17/12/2018Artificial intelligence: the devil is in the data

It’s no secret that the public sector and its service providers need ... more >

the raven's daily blog

Northern Powerhouse Partner aims to connect the North once again

02/09/2019Northern Powerhouse Partner aims to connect the North once again

In February this year, official Northern Powerhouse Partner, Cognitive Publishing, delivered EvoNorth 2019.  The two day event was designed to amplify and highlight futur... more >
read more blog posts from 'the raven' >

editor's comment

25/10/2017Take a moment to celebrate

Devolution, restructuring and widespread service reform: from a journalist’s perspective, it’s never been a more exciting time to report on the public sector. That’s why I could not be more thrilled to be taking over the reins at PSE at this key juncture. There could not be a feature that more perfectly encapsulates this feeling of imminent change than the article James Palmer, mayor of Cambridgeshire and Peterborough, has penned for us on p28. In it, he highlights... read more >