Hampshire will be £400 million out of pocket a year, study finds

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HAMPSHIRE’S economy will lose £400 million a year when the government’s welfare reform changes are brought in.

Research commissioned by The Bill Sargent Trust has found the changes to payments such as child benefit, tax credits and council tax benefit will cost the equivalent to £360 a year for every working-age person in the county.

After working out how many people are claiming each of the benefits in local authority areas across Hampshire, the researchers were able to calculate how much each benefit cut and change will cost on average to areas and individuals.

The report says Portsmouth will be the hardest hit place in the county with the equivalent of £450 per adult lost. In Havant and Gosport the estimated figure is between £430 and £440 per adult.

The change will see poor communities getting poorer, according to the secretary of the trust, Geoff Phillpotts.

Mr Phillpotts told The News: ‘£400m is an enormous amount to take out of the economy.

‘The full extent of the impact of the cuts was much greater than we had anticipated.

‘It was more than we had anticipated even after we had our first report that was carried out when the changes started in 2011.

‘In economic terms, the £360 per person is concentrated on people either in work losing tax credits and housing benefits and those out of work or people who are disabled.

‘Some poorer areas are going to become much poorer as there is less money in those places to be spent.

‘These are people who spend money, they don’t save money. Local shops are going to struggle. Better-off communities will perhaps not be affected.’

The report, carried out by the Centre for Regional Economic and Social Research at Sheffield Hallam University, states: ‘The cumulative impact of the reforms will have severe consequences for many low-income households in Hampshire in terms of their ability to meet essential costs.

‘The loss of benefit income, which is often large, will have knock-on consequences for local spending and thus for local employment.’

Lynne Davies, chief executive of Portsmouth Citizens’ Advice Bureau, said the changes will have a wider-than-intended impact on the county.

She said: ‘The effects of welfare reform will be felt not only by the benefit claimants themselves but in the local economy, too.’