Britain’s welfare system ‘unfit for purpose’ with millions struggling, experts warn

Britain’s welfare system is “unfit for purpose” and in urgent need of reform, experts warned on Sunday amid fears that millions more families will struggle to make ends meet amid the dual pressures of the pandemic and the spiralling cost-of-living crisis.

The soaring price of food and rent, along with energy bills – which are expected to more than double in April when the price cap is lifted, bringing the number of households under “fuel stress” to at least 6 million – is forcing families to choose between basic essentials such as food and heat, the experts said, while growing numbers are being forced into debt and relying on food banks.

The warning comes as a damning report, due to be published on Monday, calls for rapid reforms to the social security system to protect low-income families from extreme hardship as its lead author cautioned that they “don’t have any resilience left”.

Covid Realities, a two-year study by the universities of York and Birmingham and the Child Poverty Action Group documenting the lives of 150 low-income families with children during the pandemic, says Covid has exposed and exacerbated existing problems with the benefits system.

“Our social security system is currently ill-suited to protect people from poverty, and to provide individuals with some level of security as they navigate what are often temporary challenges in their lives – for example, the loss of a job, relationship breakdown, parenting and care work or ill health,” said Ruth Patrick, senior lecturer in social policy at York University and leader of the research programme.

“This was clear before the pandemic, but Covid-19 further exposed and highlighted just what it means when your social security system is simply unfit for purpose.”

Patrick said many were struggling before the pandemic, which added to difficulties that are now being compounded by the cost-of-living crisis. “People have just been battered again and again by things and they don’t have any resilience left.”

She said many are being forced into making “impossible” trade-offs – sitting in the dark to conserve electricity or saving the heating for when the children come home – and are living in fear of the coming months, which is also having an effect on mental health. “People are experiencing stress, anxiety and insecurity about how they’ll manage now and in the future,” she said.

The report, created with parents and carers living in poverty, calls for changes to the welfare system, which it said often increases financial pressures on families because of structural issues with universal credit, which was cut by £20 a week to pre-pandemic levels in October.

Jo Barker-Marsh, 49, who lives with her 12-year-old son Harry in Manchester, said people on low incomes were already “on our knees” in 2020, but now the situation is even worse. “We’re not having the chance to recover from anything,” she said.

The former film-maker, who lost her part-time cleaning job at the start of the pandemic, said as a result of her heating bills doubling they are living in one room to conserve heat and friends are helping out with groceries.

“We’re quite used to putting a load of blankets on, but this is actually way beyond anything I can budget for. I cannot budget for an increase of up to 54% heating my home.” She said she feels “desolate and angry”.

A government spokesperson said: “We’re providing extensive support to those on the lowest incomes, including putting an average of £1,000 more per year into the pockets of working families on universal credit, increasing the living wage to provide an extra £1,000 for a full-time worker, and helping with the cost of fuel bills and rent arrears.”

Labour called for “fundamental reform” to universal credit and a cut to VAT on energy bills, and the expansion of the warm home discount scheme, which offers a one-off electricity bill discount to those who are eligible between October and March.

Jonathan Ashworth, the shadow work and pensions secretary, said: “Years of Tory economic incompetence have landed working people, families and pensioners with rocketing heating bills, punishing tax rises, rising prices and the highest inflation for 30 years, which will mean a real-terms cut in the support people rely on this April. Coming on top of the universal credit cut, this will cause real hardship for families.

“Hopeless Tory ministers claim they can’t fix the five-week wait for universal credit. But it’s clear that this system needs fundamental reform.”

Research by the Resolution Foundation thinktank found that the number of households falling into fuel stress, spending at least 10% of their budget on energy bills, will triple overnight in April to 27%, affecting an additional 4 million households.

Jack Leslie, a senior economist at the foundation, said the government needs to take urgent action, potentially offering targeted support either through universal credit or by expanding the warm home discount, or face “catastrophe”.

Related: Benefits must rise to twice as much as planned to ease cost of living crisis, says IFS

“If there isn’t policy action, there will be really significant numbers in the UK who are going to struggle to get by,” he said, adding: “This is absolutely a catastrophe coming down the track and we know it’s coming and something needs to be done.”

The combined impact of rising living costs, high rent and last year’s housing benefit freeze is also causing problems, especially in big cities such as London, along with the south-east, Northern Ireland, the Midlands and the south-west.

Darren Baxter, a policy manager at the Joseph Rowntree Foundation, an anti-poverty charity, said that across the country rent increases are “pushing far too many people into poverty”.

Victoria Benson, chief executive of the single-parent charity Gingerbread, said urgent targeted support is especially needed for single parents, some of whom are going without food to feed their children and putting childcare costs on credit cards. “They have to make that really stark choice between food or fuel. It’s really difficult,” she said.

She also called for an increase to universal credit so that single parents can afford to feed their families and heat their homes: “It seems to me that there’s something very wrong if people who are working still can’t afford to feed their families.”