South Wales could lose jobs and income from Universal Credit

Studies show that southern Wales will be hit hard by the roll out of the Universal Credit and other changes to government benefits. Thousands of jobs could be lost, and the area may lose as much as £1,000 per adult in some communities.

The report was provided by the Industrial Communities Alliance in partnership with the Sheffield Hallam University. While it conflicts with some other government studies such as from the Department of Work and Pensions, it does show that no one knows for certain what the impact of these welfare changes may be and there continues to be conflicting information on what may occur.

What this study shows is that south Wales, including the districts of Blaenau Gwent, Caerphilly, Carmarthenshire, Bridgend, Merthyr Tydfil, Neath Port Talbot, Rhondda Cynon Taf, Powys and Torfaen may be one of the hardest hit regions in all of the UK, and people should be preparing for it. The area may have a reduction of over £400 million in total government funding, which will hit businesses and families across the area.

The reason the loss will occur is the central government will be providing less money to the region, and it is not being offset by any other development programmes. So with less funds coming into south Wales and the various wards, there be less money available for consumers to spend, which can lead to redundancies and job losses. The Industrial Communities Alliance report goes on to show that up to 3000 people could lose their job as a result of these welfare changes.

Hardest hit areas

The hardest hit wards may be Maerdy and also the Penrhiwceiber area, however there will be an impact in all towns. The losses from those wards may be over £1000 per adult, and this will lead to many problems. Councils are preparing for increased homelessness and trying to prioritise in advance any requests for aid. Also, food banks in south Wales are also readying an increased demand from families, as those losses are significant.

Not only will families on a low income have less money for paying their bills, but local businesses in these wards will be faced with difficulties from lower consumer spending. More shops may close, which could lead to even more job loss and a cycle of a wok economy in the ward and other areas of southern Wales.

Some local shop owners have already put into place wage freezes, as they are expecting to have less money to pay for their employees income. There are also actions occurring in other wards, such as Gurnos, as those local businesses are also expecting customers to have less money to pay for the items they bought in the past.

The central government obviously does not agree with the report, as they say up to three million households will be better off with the Universal Credit System, including hundreds of thousands of children from households across Wales and these regions. So while no one knows for sure the impact of the upcoming roll out, families should be planning for losses, but hope for the best.