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Wednesday, May 22, 2024

Leeds’ lowest earners bear brunt of cost-of-living crisis, facing £12 weekly loss

Report highlights cost-of-living impact

Rising prices hit the city’s lowest-earning workers the hardest as they faced a six per cent fall in their weekly income, latest figures reveal.

A Leeds City Council report said the lowest ten per cent of earners were losing an estimated £12 per week.

In comparison, the city’s top ten per cent of earners lost just four per cent of their income in real terms, equivalent to £46 per week.

Lower earners were losing more in real terms because they spent a higher proportion of their incomes on rent, food and fuel.

A report to the council’s executive board welcomed a six-month extension to the government’s Household Support Fund (HSF), which allows councils to make cash payments to people on low incomes.

But it warned that cuts to government support elsewhere meant the HSF would struggle to provide for everyone in need.

It said: “While the extension for six months is welcome in the immediate term, the short notice, coupled with lack of any commitment regarding the long-term future of the fund, means continued uncertainty and instability within the context of welfare support.”

The report said that although the average wage in Leeds was £15.43 per hour, an estimated 44,968 full-time equivalent workers were on less than the 2023 Living Wage of £10.90 per hour.

The council’s Welfare Rights Unit, which helps people claim benefits, dealt with 1,140 enquiries during 2020/21, rising to 2,631 in 2023/24.

Enquiries to the city’s Citizens Advice service rose by 15 per cent in the third quarter of last year to 51,476.

The  Cost-of-Living Update Report said 83,621 people claimed Universal Credit (UC) in Leeds in January. It said: “The number of UC claimants has continued to increase since January 2022 and is up 13.2 per cent since January 2023.”

Inflation and reduced funding for councils, the NHS and charities was compounding the situation as organisations were forced to make cuts.

Voluntary sector organisations saw a 34 per cent fall in their paid workforce  and a 25 per cent drop in registered volunteers between 2020 and 2022, according to the latest  State of the Third Sector in Leeds report.

The report added: “Since the last Cost-of-Living Update report, submitted in November 2023, the exceptional pressure on services, staff and customers has continued.”

Support schemes in the city include the Zero Waste Leeds – Winter Coat Appeal and the Welcome Spaces Project, which supports people in a warm environment during cold weather.

Councillors will discuss the report at an executive board meeting on Wednesday (17 April).

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