Number of families on housing benefits in North East area doubles

Due to an unemployment rate of around 8% and increasing rents, the number of housing benefit claims that were filed in the North East has doubled since 2010. Another factor leading to this is the low pay that is being experienced by many individuals, even those that have been able to find a job.

This increase of benefits includes the cities of Newcastle, Durham County, Stockton on Tees, Gateshead, Tyne and Wear and several other major cities and towns. This part of the UK is still struggling with low wages and high unemployment rates, and in fact the number of jobless in the North East is at about 8 per cent. While that is down from the rates of a few years ago, the jobless rate is still much higher than other parts of the country.

Government data, which was provided by the Labour Party, shows a doubling of claims. Not only that, but the cost to the government is now at £1.3bn per year, which is an increase of almost 50% since 2010.

While the number of claims has doubled, the total cost incurred by the government has not increased quite as much. This is due to the work of councils in the North East that have continued to tackle fraud. There is also a continued reduction in welfare programmes being implemented by the central government.

Working people are claiming a benefit in the North East

While the unemployment rate is still 8 percent, which is the highest in the country, there are many working people that are also struggling. When considering the over 100,000 households that do not have a wage earner, and many others that are in minimum wage jobs, the challenges in the area are very great. Many of these individuals in Newcastle and other cities in Tyne and Wear are threatened by homelessness or turning to financial aid or councils for help. They do have options, and find information on rent assistance in Newcastle.

The number of working people claiming housing benefits is also greatly leading to this increase. It is estimated that this group is 36% of the increase. Even though individuals with a job do not have a living wage that allows them to afford the increasing housing costs in the area, so they too are claiming benefits. The Labour candidate, Catherine McKinnell, is attributing a large part of the increase to this.

Some of the solutions to this problem that are being proposed by Labour is to increase the minimum wage as well as cutting taxes. The thought is this will improve the economy, not only in the North East, but also across the UK. This should lead to higher wages and more people people able to afford the cost of housing on their own.

If there is nothing done to slow down the cost of housing and improve the job market, experts say that there could be a further 20% increase in the number of people that file for benefits. There will be more families threatened by homelessness and in poverty. It could even cost the government another £1.bn or more.