Turning Down the Heat 4 - September 2023 update

Cover image

How the cost-of-living crisis continues to affect North
Staffordshire
September 2023 Update

Introduction
Background
Why this hits Stoke-on-Trent hard
Energy
Housing
Crisis Support
So what can CASNS do to help?
Conclusions and recommendations

1. Introduction

In August 2022 we published the first edition of ‘Turning Down the Heat’ that looked at how the cost-of-living crisis was affecting people in North Staffordshire. In that report we outlined how rapidly rising prices were affecting people and driving the demand for advice, especially around energy, food, housing and debt.

The report was updated in December 2022 and June 2023 and this latest iteration brings us up to September 2023.

Figure 1 above shows the trend of enquiries involving five key cost-of-living related topics since January 2019. Since 2021 people needing help with these issues have been turning to Citizens Advice in increasing numbers.

Unsurprisingly we saw a spike in demand during the winter, especially during the cold snap before Christmas. However, since then, demand for all the issues together has remained high from local people struggling to cope with the lengthening crisis.

The fact that this crisis has been affecting local people for more than nearly 2 years now is significant as households’ resilience is being further tested as savings run out, but the pressures remain and, in some cases, intensify.

The data relates to those clients identified as living in Stoke-on-Trent, Newcastle-under-Lyme and Staffordshire Moorlands who have sought advice from the Citizens Advice service on issues affected by the rising cost of living, with comparisons to previous years in some cases.

I am grateful to our national association, Citizens Advice, for pulling the data together and producing many of the charts. This version of the report updates that data the end of August 2023.

The case studies are of actual clients who have sought our advice, but I have changed their identity to protect their confidentiality. Finally, we have updated the recommendations for actions made in the previous reports.

In the first report in August 2022, it appeared that there were few prospects of imminent improvement and therefore a sustained response was needed to avoid a local humanitarian catastrophe. Unfortunately, the forecasts of how long the crisis would last have proved accurate and this is now becoming normal life for many local people rather than an exceptional event.

Nationally, in April 2023 benefits rose by 10% and further rounds of the Household Support Fund were announced. Targeted financial support has continued from April but at a reduced rate and the Energy Price Guarantee (EPG), which kept costs for a typical user at £2,500 p.a. during the winter, was extended for a further 3 months at this level. In July Ofgem’s price cap fell below the EPG level, which then rose to £3,000 and remains a provision in reserve
should energy prices rise again.

But we should not be complacent or think the crisis is over: inflation remains high, interest rates are still rising and energy costs remain at least double what they were in the winter of 2020/21.

Consequently, every day we are seeing in our waiting rooms and on our phone lines how the cost-of-living crisis continues to hit local families from all sides through the daily struggle to afford energy costs, food and rent.

Simon Harris
Chief Executive
Citizens Advice Staffordshire North & Stoke-on-Trent
September 2023.

2. Background

It is misleading to believe that the current cost of living crisis has come out of nowhere or is simply the result of a unique sequence of events. On the contrary, the warning signs have been clear to see for some time.

In August 2017, in preparation for a Town Hall meeting organised by the Bank of England in Stoke-on-Trent to look at the financial impact of the 2008 financial crash, credit crunch and resulting recession, we compared of our debt caseload in 2006/7 with 2016/17. The box below summarises the main changes:

	Cases	Debt	Average
2006/7	1,088	£24,563,710	£22,577
2016/17	3,836	£16,245,353	£4,235

This showed nearly 4 times as many cases were opened in 2016/17, but each with a much lower level of debt. Part of the explanation for this was a significant shift in the types of debt brought to us and the growth in priority debts (mortgage, rent, utilities, council tax and fines – debts where non-payment can lead to the loss of something significant).

In 2006/7 priority debts accounted for 26% of all the debt issues brought to us by clients. By 2016/17 they accounted for 59%. This reflected a wider trend observed across the Citizens Advice network that more and more clients were struggling with their day to day living costs and paying for their essentials, while far fewer were experiencing problems with consumer
credit.

By 2016 consumer lending was growing again and this could have masked the issue of the increase in priority debts, except for the growing number of clients with so-called deficit budgets, where their reasonable outgoings exceeded their income, which was a notable feature of debt advice during the 2010s and has been even more prominent since 2020.

In “Negative Budgets: A new perspective on poverty and household finances (February 2020)” Citizens Advice identified a growing trend since 2016 of clients with a negative budget, rising from 32% of debt clients in 2016/17 to 38% in 2018/19 and the size of the monthly deficit rising from an average of £167 to £203 in the same period.

Both trends suggest that there was a growing number of people struggling to get by well before 2021 and the first signs of a significant increase in fuel prices.

Alongside this, other agencies highlighted the precarious financial position of many households. In their “Financial Lives 2020” survey, the Financial Conduct Authority (FCA) identified 10.7 million households with characteristics of low financial resilience, defined as people who “are over-indebted or have little capacity to withstand financial shocks. For example, they could not withstand even a £50 a month reduction in their income or losing their main source of household income for even a week”.

The FCA estimated this figure represented one UK household in every five. 7.8 million of these households were indebted and 3.8 million were in financial difficulty.

The report also looks at the level of financial buffer households held to withstand sudden financial shocks and concluded that 39% of adults (20.3 million) lacked 3 months living costs in savings. They also found that:

5.1 million were usually overdrawn, often using an overdraft facility to pay for essential living expenses.
2.8 million had persistent credit card debts;
5.6 million had at least one high cost loan;
3.5 million had mortgage arrears at least 4 times their annual household income.

At the time the main concern was COVID-related job loss or income reduction due to furlough, but such persistent levels of financial insecurity create a significant cohort of people at risk of serious financial problems should they experience a sudden financial shock such as an increase in energy bills or the cost of food or petrol.

Taken together these factors demonstrate why the recent and continuing increases in the cost of living are having such a damaging effect.

"Sarah” receives Universal Credit and is unable to work due to several health conditions including sleep apnoea. She uses a CPAP machine at night and not doing so can be potentially fatal.

When she contacted us “Sarah” had £0.86 worth of credit left on her electricity meter to last her 4 days until her next UC payments was due and was at serious risk of running out of credit and cutting herself off.

We gave “Sarah” a fuel voucher with which to top her pre-payment meter and helped her claim Personal Independence Payment to increase her weekly income and entitle her to an additional cost of living support payment.

3. Why this hits Stoke-on-Trent hard

While this report covers the whole of North Staffordshire, the underlying problems are especially acute in Stoke-on-Trent. Newcastle-under-Lyme and Staffordshire Moorlands are each affected significantly but the scale of the problem in Stoke-on-Trent is much greater.

The Government’s latest figures on fuel poverty, published in April 2023 [1] showed that with 22.9% of households classed as fuel poor, Stoke-on-Trent had the second highest rate in the country after Birmingham. This showed a light increase from 2021 (21.8%)

Newcastle-under-Lyme had 18.0% of households classed as fuel poor and Staffordshire Moorlands 18%, significantly lower than Stoke-on-Trent but still above the Staffordshire-wide figure of 15.8%.

The LILEE [2] assessment looks at the energy efficiency of the properties in an area and the residual income left once an amount required to adequately heat a home is taken into account. The relative poverty of Stoke-on-Trent along with the poor energy efficiency of many of the city’s properties combine to make the city especially vulnerable to spikes in energy prices.

The problem is particularly acute in wards such as Hanley Park and Shelton (35% of households were fuel poor in 2021), Etruria and Hanley and then the main social housing estates such as Abbey Hulton and Townsend, Bentilee and Ubberley, Meir South and Trent Vale and Springfields [3]
.

In August 2023 the claimant count in Stoke-on-Trent was 8,870 people, or 5.5% of the adult population, claiming out of work benefits and required to look for work. While lower than at its peak, it is still 21.2% above the pre pandemic levels and places Stoke 28th out of 309 Districts and thus in the top 10% of local authorities.

32,257 people in Stoke-on-Trent are receiving Universal Credit, the principal means-tested benefit for working age people. This is a rate of 19.7% of people and places Stoke-on-Trent 31st out of 309 Districts.[4] The figure is significantly lower in both Newcastle and the Moorlands. Again, the rate in Stoke-on-Trent has risen since December, but this may partly be the result of the natural migration of claimants off legacy benefits and on to UC, but it is also likely to be the result of the increase in the claimant count.

Despite having the 51st highest rate of Pension Credit claimants, it is still estimated that some £10.3 million of Pension Credit is unclaimed by approximately 2,500 people, each of whom will be receiving up to £80 per week less than Parliament says they need to live on, which would make a crucial difference in the current climate. In addition to this, they will miss out on those payments, including the £650 cost of living payment for which receiving Pension Credit is one of the qualifying criteria.

Similarly, it is estimated just under 2,000 people may be missing out on Universal Credit, another qualifying benefit for cost-of-living payments, and at an average of £77 a week. Money that could make a huge difference to household budgets.

A smaller number of people are estimated to be missing out on disability benefits, but some 300 individuals will be significantly worse off as Attendance Allowance, Disability Living Allowance and Personal Independence Payments not only provide valuable extra income (roughly £77 per week per recipient) but also act as qualifying benefits to other help and support including a £150 cost of living payment.[5]

Poor energy efficiency, low wages (in 2022 wages in Stoke-on-Trent were 86% of the GB average, 92% in Newcastle and 101% in Staffordshire Moorlands) [6] and high levels of benefit reliance make Stoke-on-Trent especially vulnerable to the cost-of-living crisis.

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[1] Sub-regional fuel poverty data 2023, published on behalf of BEIS by the ONS.

[2] LILEE = Low Income Low Energy Efficiency

[3] Fuel Poverty note 2021 – Steven Johnston, Stoke-on-Trent City Council

[4] Figures from ONS via NOMIS, and the DEP’s Stat-Xplore, collated by Steven Johnston, Stoke-onTrent City Council, for the September Universal Credit and Claimant County Summary

[5] Unclaimed & Underclaimed Benefits estimate Stoke-on-Trent July 2022 – Steve Johnston Stoke-on-Trent City Council, for the Stoke-on-Trent Hardship Commission.

[6] NOMIS.at nomisweb.co.uk reporting the ONS annual survey of hours and earnings

4. Energy Costs

Much attention remains rightly focused on the rises in domestic energy bills since 2020/21, as indicated by movements in Ofgem’s price cap. The price cap is a mechanism to prevent suppliers charging excessive amounts for domestic energy while ensuring that bills reflect the true cost of supplying gas and electricity to households.

Figure 2 below shows the movements in the price cap.

The purple bars represent the figure quoted for the cost of the annual usage by a typical user at the Ofgem price capped standard variable tariff, up to April 2022.
The plumb bars shows the maximum per year a typical user paid under the Government’s Energy Price Guarantee (EPG).
The green bars represent the latest figures for what a typical user will pay under the actual Ofgem price caps until October 2023.
The orange bars are Cornwall Insight’s forecasts for the price cap in 2024.

A major intervention was the introduction of the Energy Price Guarantee from October 2022. This capped a typical user’s costs at £2,500 p.a. until the end of June 2023, saving typical users £728 p.a. compared to the Ofgem price cap. Before April the saving was significantly higher (the difference between the green and plumb bars).

From July 2023 the Ofgem price cap fell below the Price Guarantee level, saving typical users about £450 a year.

However, the typical user is still paying twice what they were paying in the winter of 2020/21, will do so throughout the rest of 2023 and more or less this amount throughout 2024 if the forecasts are accurate. These higher prices will have applied a significant pressure to household budgets for 3 years if these predictions come true.

The Government also introduced significant changes to the cost-of-living support it provides to households, from April 2023, as summarised in Figure 3.

So, although bills fell by around 20% in July 2023, that is in the context of many households losing £550 p.a. of financial support, some of whom will have some of that loss offset.

To look at it another way we can compare it to the Standard Amount of Universal Credit (UC). In 2022/23 a single person receiving the Standard Amount of UC received £334.91 pcm. If they are a typical dual fuel user, they paid £208 pcm for their gas and electricity, or 62% of their UC.

From April 2023 their Universal Credit rose by 10.1% to £368.74 pcm, and their capped energy payment remained at £208 pcm, taking up 56% of their income. But when you factor in the changes to cost of living support, the additional help they receive falls from £1,200 in 2022/23 to £900 in 2023/24. As things stand their energy costs in 2023/24 will be £2,144 [7] compared to £2,235 in 2022/23 or £91.50 lower.

Overall, in 2022/3 our single, healthy UC claimant should have received £434.91 pcm from UC and cost-of-living support and in 2023/24 they will receive £443.74 pcm or £10 pcm more. Add in £7.62 less each month they will be paying on fuel and they will notionally be £17 per month better off.

But with the annual inflation rate for food standing at 11.4% in August 2023 [8] (down from 19.1% in April) they would only have to spend around £4 a week more on food to see that small increase wiped out.

Despite a significant uprating in benefits and the continuation of government cost-of-living support, albeit at a reduced level for some, many of the poorest people locally will continue to struggle to meet their fuel costs for the foreseeable future.

The Energy Price Guarantee is scheduled to end in April 2024. However, from July 2023 onwards it is there as a safety net, should energy price rises push a typical user’s annual bill above £3,000.

How is this affecting our clients?

Figure 4 shows the cumulative number of clients who have sought advice on energy issues in each of the past 4 years.

The dark green line, representing 2023, had outstripped each of 2019, 2020, and 2021’s annual totals by the end of May and continues the worrying trend that emerged during 2022. At the moment 2023 looks likely to outstrip 2022 by around September or October.

Despite the introduction of the Energy Price Guarantee in October 2022, the number of clients needing help with their energy costs has continued to rise sharply. This has been affected by seasonal factors, as would be expected but the numbers of people needing this help now are still significantly higher than before the crisis.

Figure 5 below represents similar data: the number of clients with queries about domestic energy, each month from January 2019 through to August 2023. This chart clearly shows the upward trend over time. Although demand fell back from April yo July it oicked up again in August and remains at historically high levels. The spike in demand in March 2023 is clear to see and linked to changes in the price of domestic energy from April

Figure 6 below shows the monthly totals of queries about domestic energy debts. Concerns about paying for energy are now feeding through into problem debt, where the client is in arrears with their energy and potentially facing recovery action by their supplier. March 2022 saw a peak in such issues. That peak was passed in January 2023.

Since then we have seen a fall in the number of local people seeking help with fuel debts. However, the number of prople advised in May 2023 was higher than in October 2021, when the energy crisis began to bite and clients needing help are now above their pre-pandemic levels. Since then the numbers have declined. We expect them to increase again during the winter.

Despite measures to limit prices, including the Energy Price Guarantee, and the other support available, the persistence of the current circumstances is driving people into energy debt.

The ONS has reported that 44% of UK adults are using less fuel in their homes due to cost of living increases [9] as families find various ways of trying to make ends meet and the proportion of Direct Debits failing has risen five times between February 2019 and July 2023 as prices have risen [10]

Ideally, we would hope that energy companies would help customers, especially those vulnerable by reasons of health, age, or family circumstances. Unfortunately, this is not always the case and the following case studies show how our help was needed to intervene with energy companies to ensure payments were affordable and the families concerned were able to maintain their supplies.

“Alan” is a single father whose son stays with him four nights a week. “Alan” works full-time and therefore is not entitled to any benefits.

He has got behind with many of his financial commitments and is receiving debt advice. When we explored his situation with him, we discovered that he was struggling to budget effectively as he is not confident when dealing with numbers. As a result, he is in arrears with his energy account and has defaulted on a payment plan.

We contacted his energy supplier and negotiated a new payment arrangement that “Alan” believes he can maintain and have advised him on simple money saving tips which should saver him a significant amount over a year.

Alongside this we looked at simple energy saving measures such as turning his central heating down by one degree, draught proofing doors and windows, turning off appliances, washing clothes on a cooler setting and not overfilling the kettle, all of which will help him manage.

“Alan” commented after his interview: ‘thank you so much for speaking to me again. I wasn’t sure after I broke my payment plan last time. I can’t thank you enough for what you do. You make things seem so easy and have taken a weight off my mind.’

While Alan wasn’t entitled to any additional support, we were able to give him plenty of tips and advice on how to manage his energy supply better and reduce his costs. This will help him get his finances back on track and survive the cost-of-living crisis.

The price cap or price guarantee has been at twice the level we saw in the winter of 2020/21 for a year and a half now. In 2020/21 there was price competition in the energy market so many customers will have been paying well below the price cap. For many the differential is even higher now that everyone is being charged at the price cap level. The fact it looks like remaining at this level for the foreseeable future is extremely concerning.

In fact, when the withdrawal of government support for dual fuel customers is factored in, then Citizens Advice estimate that typical direct debit dual fuel users will actually be paying £32.22 per month more for energy in January to March 2024 than they did in January to March 2023, when the EPG and Energy Bill Support scheme mitigated the higher unit costs. [11]

Alongside this, while cost per units are falling the standing charge continues to rise and will rise in October 2023 by 2% [12]. Increases imposed since 2020 mean that in October 2023 typical households will be spending £130 a year more on something they cannot influence. None of the energy efficiency measures they can use or anything they choose to do to reduce their usage will impact on the standing charge.

But it is not just energy prices that are the problem families are being squeezed from all sides as inflation drives up housing costs and the cost of food.

[7] Calculated by averaging the price cap annual estimate across the year for both 2022/23 and 2023/24

[8] ONS Cost of living insights: food

[9] ONS Cost of living insights: Energy.

[10] ibid

[11] Winter Warning: The urgent case for energy bill support this winter - Citizens Advice

[12] Standing charge - National Energy Action (NEA)

5. Housing

In the summer of 2022, we reported an increase in the number of clients who were struggling to pay the rent. This has increased significantly since we emerged from the COVID lockdowns and has been due partly to the general squeeze on household budgets and partly to an emerging trend where private landlords have increased rents to add further pressure onto hard pressed households.

These increases are quite legal, but in many of the most challenging cases they are increasing the rent significantly above the Local Housing Allowance (LHA) [13] level so that the gap between the rent and the available support is growing. Nationally private rents are rising by 5.3%, which is the largest annual increase since the ONS started recording this data in 2026 [14]

Such is the state of the local housing market that private sector rents have been above the LHA ceiling for many years. However, in most cases the gap was affordable. This is becoming less and less the case. In some cases that we have seen the rent was previously below the LHA level and has now risen above it.

“Phil” is a single man unable to work due to ill-health. His income is Universal Credit, and his landlord is now proposing to increase the rent from £400 a month to £750 a month, an 87.5% increase.

“Phil” cannot afford this increase, which will take the rent well above the LHA level. Unfortunately, his choices are accept the new rent or leave, as the landlord has also issued a Section 21 notice.

“Phil” has applied to the local authority for a new property.

As well as adding significant financial burden to hard pressed families, such rent increases can threaten their security of tenure. The example above is one where clearly the increase is unaffordable, and the tenant is unable to increase his income.

In “Phil’s” case and “many others, the proposed rent increase is also well above inflation, and it appears that landlords may be taking advantage of the shortage of private rented
properties to inflate rents.

However, since then we have seen mortgage rates rise as underlying interest rates rise to combat persistently high inflation.

This is putting additional pressure both on homeowners who are now facing the prospect of mortgage arrears and potential repossession as their payments increase significantly after a prolonged period of relatively low interest rates. We are seeing more mortgage possession cases being listed at the county court than we have done for a long time and have represented at more such hearings than we are used to.

Alongside this the alternatives are limited. Social housing is in limited supply and much privately rented accommodation is expensive, frequently above LHA levels, and often of poor quality. In Stoke-on-Trent the proportion of households privately renting rose from 13% in 2011 to 20% in 2021 [15].

The Government has committed to amend the law to remove so-called ‘no-fault’ evictions and the Renters Reform Bill is currently passing through Parliament. However, our concern is that it may be too little too late as many households may find themselves priced out of the rental market or vulnerable to eviction from arrears as rents rise. Two months’ rent arrears can make the tenant vulnerable to eviction under a mandatory ground to which there are only very limited defences.

As mortgage rates rise, we have also seen landlords either passing this increase on to tenants in the form of rent increases or exiting the market altogether, further reducing the housing stock.

All of puts further pressure on hard-pressed family budgets.

The chart above shows that queries about homelessness, especially threatened homelessness (the orange line), have been climbing since the pandemic as landlords resume recovery action and the courts reopen. This category seems particularly susceptible to peaks and troughs, and while there was slow down in recent months, we expect this to pick up again, especially as mortgage rates rise.

The situation for social housing tenants is different but also concerning. Fewer clients living in social housing are seeking advice about rent arrears than we would expect. One reason for this is that social landlords whose tenants are in receipt of Universal Credit are continuing to collect the arrears and ongoing rent direct from UC. While this ensures that the arrears do not increase, and the rent is paid it does leave significantly less money per week available for other expenses, which may simply be shifting the problems elsewhere.

Ministry of Justice statistics show that rent possession claims issued in April to June were up 24% on the same period in 2022, which shows how these pressures are moving through the system.

The comparable figures for mortgages show a 15% increase on the previous year, which represents a slowing down compared to January to April when the numbers were 40% higher than 2022. This is almost entirely due to interest rates rising continuously and the Bank of England base rate hitting 5.25% in August 2023 compared to 1.75% in August 2022. These increases have consequences and a rise in possession actions is one such consequence.

“Jakob” lives with his wife and 2 dependent children in their mortgaged property, their mortgage still has £75,000 outstanding but the house is valued at around between £350,000, Their monthly payments £800 p/m on a variable tracker 2.25% above base rate and they currently in arrears of £1500.

“Jakob’s” wife has recently become severely ill, and he has had to give up work to look after her and their two children, due to the loss of both of their incomes he is worried about how he will meet the mortgage payments and the stress is starting to affect his own mental health.

“Jakob’s” wife is receiving disability benefits and “Jakob” has claimed carers allowance for looking after her, in total they receive £1,586.73 per calendar month in benefits, their mortgage payments alone take up more than 50% of their income. “Jakob” has told us he has used up all of their savings to try to keep up with the payments and has been in touch with the lender and negotiated a lower payment for the next 3 months.

He is very aware that there has been a 0.25% base rate rise in the last week, which will increase his monthly payments further.

Unfortunately, it is “Jakob’s” best option to sell his family home before it is repossessed.

[13] Local Housing Allowance is the main form of financial support for private tenants. It is calculated with reference to a ceiling, based on rents in the local ‘broad market rent area,’ above which support will not be paid, but above which the landlord can charge rent. LHA rates were frozen in 2020 and are based on the bottom 30% of rents in a market area

[14] ONS Cost of Living Insights: Housing

[15] NOMIS census figures for both 2011 and 2021.

6. Crisis Support

The cost-of-living crisis has been characterised often as a choice between heating and eating. For some of our clients it has already gone beyond that as they can no longer afford either.

This has been reflected in the queries about foodbank vouchers and emergency payments, both of which have increased significantly.

Since December 2021 we have been distributing funds from the Stoke-on-Trent Household Support Fund to families struggling to meet their fuel and other costs and referring people into the Staffordshire equivalent. This money has then given out as either fuel vouchers redeemable to top up pre-payment meters or as cash grants to energy suppliers, or as supermarket vouchers for those needing to buy food. We also have access to fuel vouchers
and funds provided by other funders such as British Gas Energy Trust and the Energy Saving Trust.

While an invaluable stopgap to avert crises, such emergency payments are not a long-term or sustainable solution to the underlying problem of unaffordable energy or food costs.

Figure 8 shows the number of people who approached us for food or fuel bank vouchers or other emergency payments between January and August compared with the previous four years.

Demand for crisis support was strong throughout 2021 and 2022, outstripping the 2021 total by August 2022. Since January 2023 it has risen dramatically so that 2023’s total passed 2021 in March and is on track to pass even 2022’s total in June. The rate of increase is truly alarming and demonstrates how many local people have now become dependent on crisis support as the continuing cost-of-living crisis has eroded what few financial resources they possessed.

This has also changed the nature of much of our front-line work. Traditionally we have given our clients knowledge and confidence along with the advice and advocacy we provide. Currently we are being approached by unprecedented numbers of people for direct financial and practical support: foodbank vouchers, supermarket vouchers, fuel vouchers and crisis cash payments. It is common now for more clients to attend drop-in sessions needing crisis support than are seeking advice.

The longer that prices of essential items continue to rise at their current rate, then the greater the demand will be for this type of support.

Figure 9 shows a longer-term trend for queries about this support and how they often respond to seasonal factors. However, there has been a marked increase in the demand for crisis support since January 2023, Having fallen back in July we have seen a sudden and steep spike in demand in August, which is likely to continue as we move into the autumn.

The following charts show who is approaching us for help from foodbanks.

Housing Tenure – not surprisingly tenants feature prominently among the clients seeking crisis support. Social tenants and private tenants continue to dominate these figures, following a similar pattern.

Interest rate rises and rising mortgage costs have prompted a steady increase in owner occupiers needing this type of support.

It should be noted it isn’t always possible to record housing tenure, so these figures are a sample of the total number seeking this type of help.

Household type – single people remain the most frequent group seeking crisis support, usually because they receive the lowest levels of benefits. There has been a noticeable increase in single parents since Christmas 2022, while demand from couples with children spiked in March 2023 and the demand from couples has been less but is still rising.

Health and Disability – an adequate diet is essential to maintain good health. It is concerning that clients who report a disability or long-term health condition (usually, one in three of our clients) are so prominent among the clients struggling to access food and other basic items. People with disabilities or long-term health conditions outnumber or match the numbers of fit and healthy people needing crisis support.

“Tasnia” has two children, and whilst looking for work receives £1,039 per month in Universal credit and £157.08 a month in Child Benefit.

“Tasnia” has contacted us as she is currently struggling to pay her bills. She’s recently been notified that her electricity bill of £150 per month will increase to £210 and her gas costs will rise by £60 per month. She couldn’t afford to make the payment in September as both her children needed new school uniform and is worried about how she will cope going forward into winter as her income will remain the same whilst her outgoings increase by £120 a month.

We gave “Tasnia” a fuel voucher and foodbank voucher to tide her over and referred her to our Potteries Moneywise team to look at maximising her income and applying for charitable support to cover her water charges as well as any other energy saving measures or additional support that she or her family may be entitled to.

7. So what can CASNS do to help?

Our approach remains three-pronged. We aim to:

Maximise people’s income and access to additional support;
Minimise their unnecessary spending; and
Optimise their energy use.

Maximising income – we have recognised that ensuring local people claim all the social security benefits and tax credits that they are entitled to is vital and this has been a priority of ours for over 30 years.

In the current situation it is even more important both to ensure people can cope with rising costs and access the government support that is available. In 2023/24 people receiving means-tested benefits are entitled to a £900 cost of living payment, paid in three instalments. We know that locally Pension Credit is hugely under-claimed, and we will do what we can to encourage those entitled to claim it. We are delighted that Stoke-on-Trent City Council have
funded us, Disability Solutions West Midlands, Saltbox and Age UK Staffordshire to run a benefit take up campaign over the next 18 months or so.

Personal Independence Payments and Attendance Allowance are less under-claimed but there are still disabled people missing out on these benefits and thus will miss out on the £150 Disability Cost of Living payment due in the Autumn.

Alongside this we work hard to ensure those who need it can access the emergency and crisis support available such as foodbank referrals, fuel vouchers and the household support fund, as well as other charitable support to help with a wide range of costs.

This includes accessing schemes such as Severn Trent’s Big Difference scheme, which supports vulnerable customers with their water charges. The figures below show how big an impact that can have.

Between April 2022 and March 2023, we have helped people:

access £5.8 million of additional benefits.
access £2.3 million of other financial help including emergency and energy-related payments.
write off £1.2 million of debt.

Minimising unnecessary spending – this is a staple part of debt advice and increasingly the money management support we provide. It involves agreeing a sensible monthly or weekly budget with clients, to ensure they can cover their essential expenses. This may involve looking at subscriptions and other spending that may not be essential and can be stopped.

It also involves looking at better deals on essential items, such as eligibility for social tariffs for broadband services and money saving around water and other similar costs.

Optimising energy use – before October 2021 a large part of this was helping clients find a better deal on their gas and electricity accounts. However, since then there has been no effective price competition in the domestic energy market and this area of work ended.

Instead, we have focused on energy saving measures, including referring clients to other services who can supply and fit physical improvements to properties, advising on simple changes clients can make to reduce their energy use, advising on the support clients can access through their energy supplier and on the schemes available such as the Warm Homes Discount and Priority Service Register.

Some people with complex circumstances need expert advice and are especially harshly hit as “Tom’s” case, below, shows. Here coping with the cost-of-living crisis is complicated by the effect of having to migrate to Universal Credit. In this case the combined effect of the benefit changes and changes to cost of living payments can leave some of the most vulnerable people worse off.

“Tom” lives alone and receives Personal Independence Payment (PIP) for both his care and mobility needs. During 2022/23 he moved to Stoke from the East Midlands and therefore had to claim Universal Credit (UC) instead of staying on Income Related Employment and Support Allowance (IRESA).

In 2022/23 this move left “Tom” £78 a month worse off because UC is less generous in respect of disabilities than IRESA had been, despite providing some transitional protection to help people cope with the change.

In April 2023 benefits were uprated by 10% but this has not benefited “Tom” by anything like this amount when all his income is taken into account.

At the end of 2022/23 his Universal Credit entitlement was £1,106.43 pcm. On top of this he received £679.90 PIP and the equivalent of £108 pcm of cost-of-living support (even though these payments were not paid monthly).

This totalled £1,894.33, of which £297.24 a month was paid to his landlord to cover his rent and £14.59 pcm to the DWP to repay an advance payment.

From April 2023 “Tom’s” UC remains at £1,106.43 a month because the transitional only keeps his UC at the same rate as it was when he claimed, as that was higher than the amount, he would have received had he claimed UC for the first time. It will remain there until the amount he would get on a first claim catches up and overtakes this amount. The effect is to keep “Tom” on the same income for several years, denying him any increase.

However, “Tom’s” rent rose by 7% in April and his UC housing element was increased to cover this, but this only reduced his transitional element by £90 a month, the amount of the rent increase.

His PIP did increase by 10% to £748.58 pcm, but his cost-of-living support reduced to the equivalent of £87.50 pcm.

Overall, taking all these into account, he is £27.46 pcm (£6.33 a week) better off in 2023/4 compared to 2022/23, which is equivalent to 1.7% of his monthly disposable income and a long way below the rate of inflation.

8. conclusions and Recommendations

As this report demonstrates the Cost-of-Living Crisis is a multi-faceted issue. While there has been much attention focused on energy bills, rising inflation increasing the cost of food and other essential items and rising rents add further pressure to household budgets already stretched to breaking point. Each issue would be serious enough on their own, but when they come together the impact is massive.

This is clearly an issue of major concern for local people many of whom are struggling to cope with the rising cost of energy. We have spoken to many clients who switched off their heating as soon as the weather warmed up in the spring, as they cannot afford to pay their bills, and are, once again, extremely anxious about switching it on again later in the year.

Add to that the pre-existing circumstances of a poor city, with many sub-standard and thermally inefficient homes, inflation at levels not seen for fifty years and rising interest rates and it is hard to see how many people in the city, in particular, will cope in the coming months without major improvements in the support available and major changes to the domestic energy market.

The deepening crisis also raises serious questions about whether there can be a genuine market in domestic energy in the future. The current arrangements of state-sanctioned price fixing clearly denies customers any benefits of a functional market. Any variations to the price cap prices are emerging very slowly and tentatively and tend to be only for suppliers’ existing customers.

There is only so much we and other organisations can do to help people: we can maximise their income, help them make their money go further and share advice and tips on improving their energy usage but if that sometimes feels like building sandcastles in the face of a tsunami then that is because the scale of the problem is so huge.

The current support provided by government and the recent uprating of benefits and the National living Wage in line with inflation, are welcome. A simpler set of additional support payments will help, but as demonstrated above, the overall support is falling in net terms, as historically high prices persist not just for gas and electricity but also for food, rent, mortgages and many other essentials.

Locally water charges rose by 7.2% in April 2023, adding further pressure to hard pressed budgets.

This is clearly a crisis as serious and persistent as COVID, that threatens the health and welfare of many people across North Staffordshire and beyond. The response therefore needs to be bold and proportionate.

The measures we are proposing will be expensive. Not implementing them will also be expensive, probably more so, with additional costs falling on the NHS, social care and other public services. The choice is still not whether or not additional money is spent, but how much, when and where.

Therefore, we recommend:

An immediate cost of living supplement of £20 per week paid to every household receiving Universal Credit or Pension Credit in addition to the April uprating and the £900 payment.
More generous targeted cost-of-living support than is currently in place and for the current payments to be continued for as long as inflation remains above target and the energy price cap remains above the October 2021 level.
An unfreezing of and increase equal to CPI in the Local Housing Allowance.
The reintroduction of some form of rent regulation to keep proposed increases affordable.
The government to make good on its promise to repeal Section 21 of the Housing Act and end no-fault evictions as a matter of urgency.
The introduction of a social tariff for vulnerable customers’ domestic energy bills that is set on a sliding scale linked to means-tested benefits and focuses the cost on unit charges rather than the standing charge.
That Ofgem take steps to reduce the price cap further and other measures to reintroduce price competition into the domestic energy market.
The continuation of locally distributed crisis funds as a safety net for those customers who risk losing essential services despite the measures listed above.
Investment of funding in targeted benefit take up campaigns to help boost incomes, focusing on means-tested and disability benefits.
Increased investment in renewable energy.
Increased investment in improving the thermal efficiency of the local housing stock

Download the report as a PDF

This entry was posted on September 4, 2023