Families across the region are set to be hit hard financially as the cost of living continues to soar. As households brace themselves for spiralling costs, there are fears those on low-income in Birmingham and surrounding areas could be forced to go without food and heating for more than one day a week to survive on their budget.
Homelessness charity Crisis has combined housing benefit shortfalls with predicted hikes in food and fuel costs to estimate how much a low-earning couple with two kids would have to cut back on essentials to make ends meet. It says a ‘modest’ two-bedroom property in the Birmingham Broad Rental Market Area (BRMA), which includes parts of Bromsgrove, Solihull, Sandwell and north Warwickshire, would cost £8,078 a year to rent as of September.
However, the annual housing benefit for the family renting such a home is only £7,480, leaving a £598 gap. In 2020, housing benefit was aligned with the cheapest 30 per cent of private rentals in each of England’s 152 BRMAs – areas covered by a specific rate – so lower-earners could afford to rent in their neighbourhood.
But rates have been frozen since then, which means they fall short of the true cost of renting in many parts of the country. Crisis also predicts inflation will push food and fuel costs for parents with two children up by around £835 this year, to a total of £7,657.
Including the housing benefit shortfall and increase in shopping and energy bills, that’s £1,433 a year for a family to find in the Birmingham area. That means they would have to go without the equivalent of 1.31 days’ worth of food and fuel a week to avoid falling into arrears and facing eviction, or getting behind with bills.
A similar family in the Black Country Broad Rental Market Area would have to go without the equivalent of 1.20 days’ worth of food and fuel a week in comparison.
What’s the picture nationally?
Across England, the average low-income family with two children will face an annual deficit of £372 in housing benefit on a modest two-bed home, according to Crisis. Coupled with an estimated £835 increase in food and fuel bills, that amounts to a cost of living increase of just over £1,200 a year, meaning they would have to cut the equivalent of 1.1 days of fuel and food spending to cover the extra cost.
Overall, an estimated 69 per cent of such families could be forced to go without food and heating at least one day per week to meet rising living costs. Matt Downie, Crisis chief executive, said: “It’s deeply shameful that struggling renters will be forced to go without food and heating for several days in order to keep a roof over their head.
“Having a secure home was deemed crucial to the health of our nation during the pandemic but with all of those protections now gone and household finances being squeezed to breaking point, we’re at risk of seeing thousands of people pushed into homelessness, while for others it will become harder to leave it behind if we fail to act.”
A government spokesperson said: “During the pandemic we increased Local Housing Allowance significantly and beyond inflation, benefiting over one million households by an average of over £600 over the year. We’re maintaining that boost, keeping support for private renters above pre-pandemic levels.
“We recognise the pressures people are facing with the cost of living, which is why we’re providing support worth around £20 billion this financial year and next to help. This includes putting an average of £1,000 more per year into the pockets of working families via changes to Universal Credit, freezing fuel duties to keep costs down and helping households with their energy bills through our £9.1 billion Energy Bills Rebate.
“We have also boosted the minimum wage by more than £1,000 a year for full-time workers and our £500 million Household Support Fund is helping the most vulnerable with essential costs.”