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Austerity's affect on homelessness and poverty

In an effort to tackle the growing public debt since the 2008 economic crash, multiple governments from 2010 onwards have looked to save money through public spending cuts, under Austerity, and encourage private investment. During the same period, homelessness has risen by 165% since the Coalition Government of 2010 and currently 320,000 people find themselves homeless in the UK. Austerity has meant that much of the housing and benefits policies prior to 2010 underwent a complete revamp, seeing people struggle. The ‘Bedroom Tax’, Localism Act and Universal Credit are just some of the newly created Austerity-policies causing huge issues. Dr Cooper, a lecturer of criminology and social policy, believes Austerity has had ‘drastic effects’ on homelessness.


Accommodation and social services have been heavily cut over the past 11 years and when coupled with a policy-restructuring, the outcome has been a poorly functioning system. The Localism Act of 2011 saw social housing organisation subsides roughly cut by half. To make up for this loss, the organisations were allowed to introduce ‘affordable rents’, which is 80% of the market rate and significantly more expensive than the original ‘social rents’, just 50% of the market rate. Local authorities no longer had to adhere to governmental targets too and were now allowed to assess their own local needs. This in turn saw rent rises in both the social and private rents sector and with the newly introduced benefit caps, many struggled cover the full cost at the time and still do now. The increasingly unregulated housing and rental market since 2010 has meant that under this Act, ‘affordable rents’ were 46% higher than social rents in 2014/15. Evictions have, therefore, become more common as a result and at one stage an average of 115 per day were being carried out. The Act has seen those with vulnerable housing situations taken under the wing of the private sector for the first time ever, exposing them to high rents and insecure landlords and contracts.

In relation to services, from 2010-17 accommodation services, offering crucial help, have been cut by 23%, services offering shelter have seen a 21% loss in bed spaces, and in 2010 the Government cut £1 billion from state-funded homeless shelters. This all comes at a time where demand for these services and beds have increased dramatically, leaving the most vulnerable behind. Bed space has become such an issue that people may remain on healthcare units longer than necessary because of this, creating more issues.


The most influential benefits policy on this crisis has arguably been Universal Credit (UC). UC replaced means-tested benefits and turned 6 different payments into just one monthly payment. The main criticism of UC is that individuals face a 6 week wait until they receive their first payment. This makes it much harder for those applying for or keeping accommodation as many landlords often turn down those on UC. Moreover, benefits are not keeping up with rent prices. Private rents increased by 24% between 2010-17 and a BBC report found that those under UC as a council tenant had debt arrears of £400 or larger than those on housing benefits. It’s estimated that 3.2 million families lose roughly £2500 per year under UC, thus seeing benefit claimants increase.

The Housing Allowance was also restructured during Austerity and sees those under the programme receive 30% of the average rent of an area. However, this clearly means that 70% of the area will be higher. The limited housing available may not be suitable for the individual’s needs, meaning they may need to take the higher-priced housing. To cover the excess, individuals will often use their already slashed benefits to cover the cost, leaving very little behind. Additionally, an average annual cut of £570 to those under housing benefits was introduced in 2015 and the infamous ‘Bedroom Tax’, enacted 3 years before, cut benefits by up to 25% depending on the amount of spare rooms in your rented accommodation.

Austerity has clearly had a significant impact on the shameful rise of homelessness in the UK and the British Medical Journal concluded this very point too, despite Austerity architect George Osborne disputing this. It has only helped to push more people into poverty and out of society. Median earnings have only increased by 3% from 2010-17 whilst rents have skyrocketed, so how can we expect those hit by welfare cuts to afford this basic human right? How long before we all acknowledge the true effects of Austerity?

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