The UK Government’s welfare reforms will cost Dundee’s economy almost £100 million annually by 2021, according to a report on welfare reform impact.
A report published by the Scottish Government, conducted by Sheffield Hallam University in 2013, estimated the impact of welfare reform on the city’s economy annually would be £58 million.
Subsequently, another report compiled by the university to the Scottish Government’s social security scrutiny committee in 2016 has revealed an additional loss of £36 million to the city’s economy – resulting in an estimated annual loss of £94m by 2021.
Additional changes to Universal Credit, brought in by the election of the Conservative Government in 2015, are identified in the report as the reason for the increase.
The council’s policy and resources committee will hear on Monday how the authority are trying to mitigate the impact of the move to Universal Credit in a series of support measures.
Councillors will also hear how the welfare reforms will have implications in terms of increased debt, potential increases in homelessness and demand for advice services from various organisations and the voluntary sector.
Depute policy and resources convener Councillor Willie Sawers said the report was one of the most “harrowing” the council has had to produce.
He said: “This report lays bare the cost of the UK Government’s welfare reform to the poor and vulnerable across our city.”
“The council is working hard to help individuals and I am pleased to see how various measures like the Scottish Welfare Fund are helping to mitigate the situation for some people.
“I look forward to the Scottish Government having greater control of welfare powers as this will make a significant contribution to improving the situation.
“As a council, we are working very hard with our partners and promoting innovative methods with technology to help people make the most of what is available to them.”
The full Universal Credit service is expected to be introduced in Dundee this November.
Introducing Universal Credit and Disability Living Allowance (DLA) to the Personal Independence Payment (PIP), as well as Concentrix tax credit problems people experienced in the summer, is being blamed on the increasing number of Dundee residents needing to use foodbanks.
A Department for Work and Pensions spokesperson said: “Our welfare reforms are incentivising work and ensuring we have a system which is fair to those who use and those who pay for it. In Scotland there are near record numbers of people in jobs and unemployment has fallen by 12,000 in the last year.
“Under Universal Credit, people are moving into work faster and staying in work longer than under the previous system, and by the end of this parliament we will have given local authorities over £1billion in extra funding to help local people adjust to our reforms.”