The amount being paid to people on welfare benefits in Brighton and Hove is expected to be cut by £9.6 million over the current financial year.
Almost 7,500 people will be affected by the changes with about 660 among the biggest losers.
Officials and politicians have expressed concern, even while many of them accept the case for change.
And to compound their concerns, last week the Prime Minister said that more needed to be done to reform the welfare state.
David Cameron said that the present system started with the best of intentions and had grown with the best of intentions. But the result, he said, was hugely expensive, complex and unfair.
He wanted benefits to provide a safety net not a lifestyle choice.
And he said: “The time has come to go back to first principles – to have a real national debate and ask some fundamental searching questions about working-age welfare.”
Those questions include:
• What it is actually for?
• Who should receive it?
• What should the limits of state provision be?
• What kind of contribution should we expect from those receiving benefits?
Mr Cameron said that almost one pound in every three spent by the government went on welfare, with £84 billion a year going to able-bodied people of working age.
He said that those who could work should work. And those who couldn’t should be helped, although not necessarily only with money.
He said: “We need to have a welfare system that the country can properly afford. The system we inherited was not only unaffordable, it also trapped people in poverty and encouraged irresponsibility.
“We inherited, quite simply, a mess of perverse incentives, mind-numbing complexity and real unfairness.
“Here are just a few examples of what’s possible in that system. Take a couple living outside London. He’s a hospital porter, she’s a care worker. They’re both working full-time and together they take home £24,000 after tax.
“They’d love to start having children – and they know they’d get some help from the state if they did so. But with the mortgage and the bills to pay, they feel they should keep saving up for a few more years.
“But the couple down the road, who have four children, haven’t worked for a number of years.
“Each week they get £112 in income support, £61 in child benefit, £217 in tax credits and £141 in housing benefit – more than £27,000 a year.
“Even after the £26,000 benefit cap is introduced, they’ll still take home more than their neighbours who go out to work every day.
“Can we really say that’s fair?
“Next there’s the situation with young people who want to leave home.
“Take two young women living on the same street in London. One studied hard at college for three years and found herself a full-time job – say as a receptionist – on £18,000 a year, or about £1,200 take home pay a month.
“She’d love to get her own place with a friend – but with high rents in her area, the petrol to get to work and all the bills, she just can’t afford it.
“So she’s living at home with her mum and dad and is saving up desperately to move out.
“Then there’s another woman living down the street. She’s only 19 years old and doesn’t have a job but is already living in a house with her friends.
“How? Because when she left college and went down to the job centre to sign on for jobseeker’s allowance, she found out that if she moved out of her parents’ place, she was automatically entitled to housing benefit so that’s exactly what she did.
“Again, is this really fair?
“This has sent out some incredibly damaging signals. That it pays not to work. That you are owed something for nothing.
“It gave us millions of working age people sitting at home on benefits even before the recession hit.
“It created a culture of entitlement. And it has led to huge resentment among those who pay into the system because they feel that what they’re having to work hard for, others are getting without having to put in the effort.”
At a recent meeting of the Brighton and Hove Strategic Partnership – the city’s public, private and voluntary sector leaders – a senior Brighton and Hove City Council official also shared some anonymised real-life case studies.
Valerie Pearce highlighted the case of an unemployed couple with four children who stand to lose £300 a week when benefits are capped at £26,000 a year.
Unless one of them can find a job with a high enough salary, they may be forced to move – possibly even out of the area.
She spoke about a 31-year-old single plumber from Hove who takes home just over £800 a month and lives alone in a flat.
But changes to housing benefit for under 35s mean that he will have to find an extra £280 a month or move in with someone else.
In another case a full-time working woman who also cared for her father, who has had a stroke, will lose more than £50 a month as a result of housing benefit changes.
The risks identified by those dealing with claimants included rising levels homelessness, debt, rent and council tax arrears.
More people, including children, were likely to end up in temporary accommodation, with families displaced and disadvantaged, greater demand for children’s social care and unpredictable movements in school populations.
Mention was made of community cohesion – suggesting worries about more crime and disorder.The same meeting heard separately about a rise in “thefts from the person” including muggings.
Those affected by rent arrears include private landlords as well as the council and housing associations.
The changes would lead to some council and housing tenants being forced to move when their children leave home.
Newly qualified graduates might then find they don’t have the option of going back home if they fail to find a job as soon as they leave university.
And decisions about whether to take in elderly relatives could be made more difficult.
At a council meeting earlier this year Valerie Pearce said that many of those on benefits could expect to receive less money while having to meet more conditions.
The government was giving the council more money for crisis loans although the sum was modest.
And more of the benefits would be administered by the council instead of government departments.
More changes take effect from next April. Some affect new claimants rather than those currently receiving benefits. But the direction of travel has been set.
Mr Cameron’s latest speech makes clear that the debate will continue and that further reforms are likely.
If a growing number of people find work, he may succeed and trim the bill for benefits.If not, officials will be trying to prevent communities like Brighton and Hove from paying the price in other ways.
Mike Weatherley, the Conservative MP for Hove, said: “Since 1997, society’s definition of the welfare state has altered. A culture of dependency and entitlement has emerged where ‘fairness’ and ‘compassion’ have become synonymous with the size of the benefits handed out by the state.
“The previous government gave little thought to the social effects that these handouts have had on the children growing up in Britain today who lack a single parent in regular employment.
“The notion that the Conservatives’ plans for welfare reform are driven by a motivation to disadvantage our society’s worst off stems from a complete misunderstanding of our intentions.
“The old notion that less well-off families are best served by throwing a never-ending stream of money at them is no longer credible.
“Millions of families are locked in a confusing web of benefits, which tramples aspiration and stifles the natural desire to provide for oneself and one’s family.
“The coalition’s replacement of a myriad of benefits, including income-based jobseeker’s allowance and housing benefit, with a single universal credit system is just one way that we are removing the disincentives to employment that have been in place for years.
“Since 1997, payments in disability living allowance have risen by 87 per cent.
“I can’t imagine that many would agree that the system has improved since then by a similar percentage.
“The current system seems far worse – and it is failing the most seriously disabled as £600 million is being funnelled into the pockets of those who no longer even require help.
“Under our present system, a hangover from the post-war years, about 57,000 families are entitled to claim £25,000 in benefits, which is more than average earnings and equivalent to the income of somebody who earns £35,000 before tax.
“In most circumstances, to claim such a large amount from the taxpayer is unjust.
“For the first time in 60 years, we have the opportunity to decide what we want our welfare system to do.
“Do we want it to continue to instil a culture of helplessness and dependence among society’s most vulnerable or do we want to create a new system which provides help to people in their efforts to build a better life for their families?
“To me, the choice is obvious.”
“This appears to be one of the most ill-thought through, headline-grabbing policy announcements that I can recall.
“There are some questions that demand answers:
- How can parents be obliged to take their adult children back into the home and what happens to those young people where they can’t “go home”?
- What protection will there be for children and young people who have left their family home to avoid abuse and domestic violence?
- What happens in those cases where the parents have “done the right thing” by moving to smaller houses once their children have moved out and there is now no spare room?
- What happens if there is no room in the parent’s home for other reasons, such as second families with children?
“I have to ask why David Cameron is bringing this proposal forward now?
“We are already witnessing the most profound changes to the benefit system in my lifetime.
“If this is such a pressing issue, why was it not identified and enacted when all the other changes were introduced?
“The BBC’s political correspondent, Vicki Young, has suggested that Mr Cameron’s speech will be seen as an attempt to reconnect with disgruntled Tory backbenchers.
“I don’t know if that is true, but if there is even a hint of reality in her analysis, it ill becomes a Prime Minister to risk a huge rise in youth homelessness for internal party expediency.
“This isn’t the pressing problem it is being made out to be.
“Those under 35 living in the private rented sector are entitled to just £77 housing benefit per week.
“Just 6 per cent of those under 25 living in the private rented sector currently receive housing benefit.
“And 92 per cent of new claims for housing benefit are from those in work.
“They are already ‘doing the right thing’ but this measure will hit young people already in jobs.
“The consequence of this proposal will be an increase in overcrowding, homelessness, begging, crime and prostitution.”