Appendix 1: Cost of Living Key Areas of Work –
Updates and Information
1
Emergency Food Update
1.1
A brief overview of the issue: Food inflation continues to rise
hitting
16.5% in the 12 months to November 2022 from 16.4% from the
previous month. This is higher than average inflation.
Food Prices Tracker: December 2022 | Food Foundation. Meanwhile
Food Insecurity is the highest it has ever been; 18.4 % of
households have experienced food insecurity in the past month
(Food
Insecurity Tracking | Food Foundation).
1.2
City-wide data and impact: Levels of food insecurity are high in
Brighton. At least 5,159 people are supported weekly through
community emergency food providers (July 22), this is an 18 %
increase from 2021, 28 % are children and young people under
18.
1.3
Emergency Food Providers are reporting an increase over winter
2022. There are several providers who are starting or
re-opening, bringing the total number of emergency food providers
in the city to 48 running out of 54 locations (food banks, meal
providers and membership-based shops where people pay a small
fee). These are supported by Brighton & Hove Food
Partnership as part of the Emergency Food Network.
1.4
The Emergency Food Network report from July 22 identified: There
has been a significant increase in people needing food help
indefinitely - 63 % of people who access food help needed to do so
in an ongoing way. 69% of organisations are reporting a
reduction in food and financial donations, 63% report a reduction
in food supply from surplus sources plus stock levels being low,
and 63% report needing to spend more money because of the increases
in the cost of food & essentials.
1.5
More than 60% of organisations are supporting a growing number of
refugees, migrants and asylum seekers. 68% saw an increase in
lone-parent families and 43 % dual-parent families. 53% saw a rise
in the numbers of people in work coming to them. Low incomes, the
cost-of-living crises and ill health/disability were the main
reasons people needed to access emergency food.
1.6
People consistently have difficulty affording food after other
bills like rent and utilities. This is a significant factor locally
given high Privately Rented Housing Sector. There are people
applying for help who have no food and no electricity.
1.7
Concerns raised by CVS partners have been reiterated by NHS
Leaders, including Stephen Lightfoot as chair of NHS Sussex,
through the NHS Confederation, in a letter to the Chancellor in
August. The letter stressed: “If people cannot afford to heat
their homes sufficiently and if they cannot afford nutritious food,
then their health will quickly deteriorate.”
Locality & specific
communities’ data and impact:
1.8
Our regional level of food poverty is slightly higher than the
national average at 11.3%, however comparably this is not as high
as London and the North-East. Overall, 59% of all households
believe that they will have to cut back on food bills to pay their
utility bills going forward.
1.9
It is reported that 43.6% of households on Universal Credit have
suffered food insecurity in the past six months compared to 8.5% of
those who are not on Universal Credit. (Citizen’s Advice
Brighton & Hove report on ‘The post-pandemic impact on
poverty and financial inclusion in Brighton & Hove
2022-2023’).
1.10
Black, Asian & Minority Ethnic households are almost twice as
likely to be in food poverty. Bridging change and BHFP are
continuing with their research on the food access needs of Black,
minority ethnic communities and refugees and asylum seekers. A full
report is expected by the end of March 23. Preliminary findings are
that:
·
Large
numbers of asylum seekers placed in hotels are seeking food access
as the food and supplies (such as toiletries) are
inadequate;
·
A
significant percentage of Ukrainian families are seeking emergency
food support;
·
Foreign students
are also seeking help as they cannot manage in the light of
increased living costs;
·
Some
referring agencies/organisations rather than supporting Black,
Asian and minoritised ethnic people were referring them onto Black
& Minority Ethnic Community Partnership or Voices in Exile
foodbanks, assuming it was more culturally appropriate, resulting
in more pressure on these services. However, users found
BMECP and VIE food banks universally welcoming and
inclusive;
·
The
respondents described a need for further support, resembling a
‘Foodbank Plus’, a space where they could meet receive
additional support with form filling, understanding letters,
signposting to services, advocacy, etc;
·
There
are barriers with receiving a referral for food banks.
·
People with
disabilities or long-term health conditions (including mental
health issues) or where there is someone in household who is being
cared for;
·
Families with
children especially single parent families;
·
Older
people (60 +);
·
Vulnerably housed
people;
·
Refugees and
asylum seekers;
·
Black, Asian and
Minority Ethnic Communities;
·
Homeless
people;
·
Young
people (16 – 25).
1.12
There are some geographical communities where there will be greater
instances of food insecurity, and this broadly follows the indexes
of deprivation.
Examples of local mitigations:
·
Supporting
cash-first (or vouchers where cash isn’t possible) approaches
through the Household Support Fund e.g., discretionary payments,
free school meal holiday vouchers.
·
Working
strategically across Food/Fuel/Money Advice via officer meetings to
share scheme experience to add value and/or reduce
duplication.
·
Communicating
money support schemes through the Emergency Food Network via
meetings and email.
·
Bulk-buying
and storage of food at the Central Distribution Hub, currently in
Moulsecoomb Hub north.
·
Supporting
the Brighton & Hove City Mission, who operate Brighton Food
Bank, to apply for a 10-year lease on 5 Preston Circus (Council
owned), subject to best consideration constraints, to bring much
needed extra central capacity for the emergency food needs of
residents, whilst also offering viable solutions to help people out
of poverty rather than just providing food.
·
Working together
to explore how to action the recommendations in the ‘Initial
Findings Report’ from Bridging Change (Food Access commission for supporting Black, Asian,
and Minority Ethnic communities and Refugee & Asylum
seekers).
·
Promoting
#foodsos campaign to increase donations of funding and food to food
banks.
·
Promoting
Healthy Start voucher scheme.
·
The
distribution of food vouchers as part of a wider piece of work with
families living in poverty via Children’s Centres and
establishing an affordable food project based in a Children’s
Centre.
·
Advancing
ways of moving beyond crisis to local food system transformation,
through long-term strategic city & region plans.
·
Reviewing
risk management procedures for food emergencies and incorporating
these into city plans and policies.
Gaps :
1.14
The most effective way of stopping people from needing to seek
support for food is to provide adequate household income. Where
this is not possible, due to funding shortfalls we must try to
provide support for the people who are most vulnerable to
malnutrition through a combination of emergency food and wider
welfare support.
1.15
Finding solutions for people who are disabled and housebound for
whatever reason, continues to be an ongoing problem. Most
food banks have moved away from a delivery service due to shortages
of volunteers. Community delivered meal services are
essential to meet the needs of people who cannot cook but also
cannot afford to pay for meals, but there is currently no available
ongoing funding for this service.
1.16
Delays in advice, support and funding services mean that being able
to provide support for people who are in absolute crisis is
difficult. Often people reach crisis before getting in
contact and present with no food (sometimes no electricity).
There are reported mental health difficulties for front-line staff
and volunteers dealing with the demand.
1.17
Emergency food and crisis responses, including those provided by
CVS partners, need funding and to be effectively incorporated into
long-term strategic planning to feed into food system
transformation.
1.18
Rising food insecurity is increasing the prevalence of physical and
mental health conditions caused by hunger and unhealthy diets.
Integrated Care Partnerships provide an opportunity to develop
strategies to tackle food insecurity. Emergency planning
through the food cell needs to link more effectively with NHS,
health and social care partners e.g., for pathway development.
2
Energy
(domestic) Update
Brief overview of the issue:
2.1
Since the winter period of 2020/21 energy prices have soared from
an average annual energy bill of £1,042 to £2,500
currently, set by the government’s Energy Price Guarantee
scheme. National Energy Action estimate that 6.7 million UK
households are now living in fuel poverty.
2.2
In May 2022, the UK Government
announced a series of measures in
an attempt to mitigate the energy crisis for those households which
are most vulnerable to the impacts of fuel poverty. Given the
package was based on an expected £800 increase in bills in
October 2022, these policies now only offset part of the impact of
the recent price increases for many households.
2.3
Energy and fuel have seen unprecedented price increases over the
past year. In response, the government provided a £150
Council Tax Energy Boost payment and an energy discount of
£400 per household through the Energy Bills Support Scheme.
Households on low incomes, pensioners and people with disabilities
are receiving additional Cost of Living payments. Recognising that
this would provide inadequate support, the government announced an
‘Energy Price Guarantee’ to limit average household
bills until April 2024. This is in addition to an energy relief
plan for businesses, third and public sector organisations.
2.4
The ‘Energy Price Guarantee’ is a backstop protection
for customers set by government, calculated by Ofgem, the
independent energy regulator. This caps the unit rates an energy
supplier can charge for their default tariffs. These include the
standing charge and price for each kWh of electricity and gas -
these are the units bills are calculated from. This does not cap
the total bill; this will still vary depending on how much energy
is used. The Energy Price Guarantee will increase from the current
limits from 1st April 2023, the price households pay for
energy will go up from this date.
2.5
While these are substantial measures, many middle to higher income
households, potentially higher energy users, will benefit more
significantly from the energy price guarantee ‘subsidy’
than low-income households and this may therefore not only leave
low-income households struggling but may not represent an optimum
use of public resources.
City-wide data and local impacts
Fuel Poverty:
2.6
The latest available data (for 2020) estimates that 12%, equivalent
to 15,814 of households in Brighton & Hove are in fuel poverty.
However, the number of households in the city struggling to pay
their energy bills has increased dramatically over recent months
due to the significant increases in energy costs.
2.7
Levels of fuel poverty in Brighton & Hove have historically
been higher than the regional average for the Southeast (8.6% in
2020) but lower than the national average (13.2% in 2020). Although
it has been difficult to pinpoint the reasons for higher levels in
Brighton & Hove than the regional average in the past, we can
assume that the older, less energy efficient housing stock, levels
of poverty and size of the private rented sector will have an
impact on levels of fuel poverty or people’s ability to
affordably heat their homes. In 2020, the levels of fuel poverty in
Brighton & Hove were lower than the statistical neighbour
average, 16.3%.
2.8
The National Fuel Poverty Statistics Report 2022 shows specific
household characteristics where the proportion of fuel poor
households is higher. For the city, the following households are of
particular relevance and will continue to be the focus of support;
Private Renters, Single Parent households, ‘ethnic minority
households’ and households including children and young
people. The ‘fuel poverty gap’ estimates the depth of
fuel poverty for households and groups; households with a higher
average fuel poverty gap do not always align with the statistics
based on the highest proportion of households in fuel poverty.
Excess Winter Deaths:
2.9
Living in a cold home has a disproportionate impact on the health
of certain groups. Exposure to cold temperatures increases blood
pressure and risk of blood clotting, heart failure/attack and
stroke. It also suppresses the immune system, diminishes the
lungs’ capacity to fight off infection and increases
constriction of the airways, increasing the risk of bronchitis and
pneumonia. When a house is damp as well as cold, mould is likely to
occur. This increases the risk of respiratory illness, particularly
asthma.
2.10
Therefore, people living in cold homes during the winter months are
at increased risk of negative health outcomes, including winter
deaths. Excess Winter Deaths (EWDs) are defined as the difference
between the number of deaths from December to March and the average
number during non-winter months. During the five winters 2015/16 to
2019/20 (most current data available), there were an average of 122
EWDs in Brighton & Hove each winter. The EWD Index is excess
winter deaths as a percentage increase of the expected deaths,
based on non-winter deaths. For winters 2015/16 to 2019/20 the EWD
Index in Brighton & Hove was 18%. This is slightly higher than
England (17%) and the South East (17%).
2.11
Nationally, most EWDs are due to respiratory and circulatory
deaths, such as stroke and coronary heart disease. Other health
conditions associated with, or exacerbated by, cold housing include
mental ill-health, arthritis and rheumatism. Indirect health
impacts of cold housing and fuel poverty include a negative effect
on: children’s educational attainment, emotional wellbeing
and resilience; adult and children’s dietary choices; and the
risk of accidents and injuries in the home.
Groups at elevated health risk from
living in a cold home are:
·
people
with cardiovascular conditions (in particular, heart disease,
stroke, TIA, diabetes)
·
people
with respiratory conditions (in particular, COPD and
asthma)
·
people
with mental health conditions
·
people
with learning disabilities or dementia
·
people
assessed as being at risk of, or having had, recurrent
falls
·
people
with disabilities
·
older
people (65 and older)
·
children
under the age of five
·
pregnant
women.
Summary of local mitigations:
2.12
Locally, co-ordination of the response is through the Fuel Poverty
& Affordable Warmth Steering Group, whose membership consists
of representatives from the Council’s Public Health, Housing,
Food Policy and Welfare, Revenues & Business Support (WRBS)
teams, as well as multiple Community & Voluntary Sector (CVS)
organisations including Brighton & Hove Energy Services
Cooperative (BHESCo), Citizen’s Advice Brighton & Hove
(CABH), Money Advice Plus (MAP), National Energy Action (NEA), East
Sussex Fire & Rescue Service (ESFRS), British Red Cross (BRC).
The steering group continues to meet on a monthly basis to
facilitate and coordinate collaboration and synergies between key
partners, projects and support available to residents in the
city.
2.13
The council’s Public Health service commissions the
city’s ‘Warmth for Wellbeing’ programme each
winter, providing money advice / casework and small grants
(Citizen’s Advice and Money Advice Plus), and home energy
checks and advice (BHESCo). In May 2022, in response to increasing
demand and the Cost of Living crisis, Public Health allocated an
additional grant fund to continue provision of money advice /
casework and small grants from June 2022 to March 2023. This is a
one-off investment for 2022/23, delivered by Moneyworks partners
Citizen’s Advice Brighton & Hove and Money Advice Plus.
Eligibility for the service is based on groups who are at highest
health risk when living in a cold home, drawn from national NICE
guidelines. BHESCo has also provided energy awareness sessions to
key frontline teams working with people with health vulnerabilities
(e.g. NHS community teams).
2.14
Further targeted support is also provided through Disabled
Facilities Grants for older and disabled people, including Warm
Safe Home Grants, and the Household Support Fund.
2.15
The Brighton & Hove Warmer Homes Programme will launch in
Spring 2023, offering funded energy saving measures to owner
occupiers and landlords in the private sector. The programme will
focus support on low income households in the least energy
efficient homes. The Council is in the process of procuring a
Managing Agent to run the scheme including managing a supply chain
of contractors to carry out the works following a comprehensive
survey of each home. More details on the scheme and how people can
apply will be available in due course. In the meantime funded
energy efficiency measures are available to eligible households
through the wider
Warmer Homes scheme https://www.warmerhomes.org.uk/
. A consortium of local authorities, led by Portsmouth City
Council, who have been successful in bidding for funding from
central government.
2.16
The council’s website has been updated with advice on
available energy support and provides a link to the Local Energy
Advice Partnership (LEAP) who can provide support and advice on
energy saving measures, as well as information on government
discounts and grants available. Additionally, the communications
plan will ensure that information on support and advice is clearly
provided, including leaflets delivered (Feb & Dec 2022) to
every household in the city providing information on key local and
national support. In December 2022, Public Health also widely
cascaded a comprehensive e-resource for the city’s frontline
workforce, listing key local support relating to fuel, food and
essential costs that service users can be signposted or referred
to.
2.17
The Council has also worked with community partners to set up an
online ‘Warm Welcome Directory’ with information on
free indoor activities and places residents can go to keep warm
across the city this winter. The directory is available at www.brighton-hove.gov.uk/warm-welcome.
Gaps:
2.18
The Brighton & Hove Fuel Poverty & Affordable Warmth
Strategy (2016-2020) supports the national strategy published in
2016 and the associated NICE guidance published in 2015. It also
supports the Brighton & Hove Joint Health and Wellbeing
Strategy priorities, including addressing health inequalities and
keeping people safe. Plans are being developed for updating the
Fuel Poverty & Affordable Warmth Strategy, linking with the
Council’s work on the cost of living crisis.
2.19
The Fuel Poverty & Affordable Warmth Steering Group continues
to explore options, including external funding opportunities, to
establish a ‘single point of contact’ to provide
coordinated access to local and national support. A CVS external
funding bid will allow this to be established, with associated
individualised energy advice, for a two-year period from April
2023.
3
Housing update
Brief overview of the issue:
3.1
With rents rising sharply across the country, UK Government data
shows that housing benefit is no longer covering the cost of
renting a modest property in most parts of England. This comes at a
time when the cost-of living is aggressively eating into household
budgets, with inflation set to push up yearly food prices by an
average of £643[1]
and energy bills expected to rise by nearly £1,570[2],
taking the combined increase in living costs for the poorest
families to an average of just over £2,213 in just one
year.
3.2
In its briefing calling for increasing social rent homes, the
Joseph Rowntree Foundation estimate that almost one million
families are paying rents they cannot afford, and that 90% of them
are in poverty - some living on more than £100 a week below
the poverty line. In addition, nearly 75% of those 1m households
are working households, with two thirds of them working full-time.
(Joseph Rowntree Foundation, Briefing, Oct 2021 ‘Renters on
low incomes face a policy black hole: homes for social rent are the
answer’)
3.3
This indicates that as well as the issue of Housing Benefit levels
not reaching average rent levels, there is an overall affordability
crisis in the private rented sector.
3.4
With approximately 40% of private rented sector homes occupied by
households in the bottom third of incomes[3],
it is less suited to the housing needs of vulnerable people
particularly given the comparatively limited security of tenure it
offers. The Local Government Association has asserted that the main
way to address housing insecurity is to tackle the unaffordability
issues, which, it asserts, is the main reason why people lose their
tenancies and become homeless.
Local citywide impacts:
3.5
Brighton & Hove has a large private rented sector, compared to
most similar cities; it accounts for 33% of all housing in the
city[i][4]
. Nationally, the sector accounts for 20% of homes.
3.6
The Office for National Statistics state that private rental prices
paid by tenants in the UK increased by 3.6% in the 12 months to
November 2022, representing the largest annual growth rate since
2008.
3.7
During 2022 we have seen significant increases in the Bank of
England base rate which is currently 3.5%. This has affected
mortgage interest rates and in Summer/Autumn 2022 there was
turbulence in the market which resulted in higher interest rates
for mortgages and the withdrawal of a number of mortgage products
on the market. These changes and the additional costs may affect
the confidence level of some landlords to stay in the market.
Conversely some landlords will have long term plans in place and
may not exit the market. There is concern though that
increased cost to landlords could be passed onto tenants with rent
increases.
3.8
There continues to be a buoyant market for Air b’n’b
and short-term let homes, which contributes to the affordability
and availability of housing nationally as well as locally. However,
this is not a regulated housing sector at present, so it is
difficult to know the exact numbers or to gauge the real
impact.
3.9
Although inflation has risen pushing up the price of day-to-day
essentials such as food and energy, and wages have failed to keep
up with inflation, rents have nevertheless increased year on year.
In a city such as Brighton & Hove with a significant private
rented sector this could push a number of the city’s
population into financial difficulties.
Rent & Housing Benefit
Comparison:
3.10
The Local Housing Allowance (LHA) is a standard Housing Benefit
rate based on the number and age of people in the household and the
number of rooms that the household needs. It was originally set to
reflect the average cost of renting different sized homes, i.e.,
the 50th percentile. In 2011 this was reduced to the 30th
percentile which meant that 3 in 10 properties should fall within
the LHA rate. The LHA is a maximum amount payable, which may be
reduced due to income and savings. Since 2011 the LHA rate has been
increasing below the rate of inflation while rents have increased
above the rate of inflation, causing the gap between rents and
housing benefit to widen. In April 2020 there was an increase in
LHA rates. The table below shows that despite these increases the
Local Housing Allowance is, for most property sizes, still
significantly less than average rents. This reduces the chances of
those on benefits finding an affordable home.
3.11
The issues of access to housing and the affordability gap for
people dependent on Housing Benefit is further demonstrated when
looking at proportions of advertised properties that meet LHA
levels. The table below shows that of the 1,937 single
households homes advertised within the Brighton & Hove Broad
Rental Market Area between October – December 2022, only 2%
were within the LHA level.
|
Single
Household Homes
|
Total
|
Within
LHA limit
|
Percent
|
|
Studio
flat
|
96
|
29
|
30%
|
|
One bed
flat
|
407
|
1
|
0%
|
|
Two bed
flat
|
648
|
2
|
0%
|
|
Two bed
house
|
88
|
0
|
0%
|
|
Three bed
house
|
172
|
0
|
0%
|
|
Four bed
house
|
526
|
3
|
1%
|
|
Total
|
1,937
|
35
|
2%
|
3.12
Drawing on a sample from the Valuation Office Agency we can
evidence that over the last year that the annual average cost of
renting has increased for all property sizes except 4 beds which
has seen a decrease of 10.3%. The highest increase was seen in the
cost of renting a room. A comparison against the LHA levels
clearly indicates how most properties are not rented within LHA
levels.
|
Annual
|
|
1
October to 30 September
|
|
Average
Monthly Rent & Inflation
|
|
Size
|
2021/22
|
2020/21
|
Increase
|
|
Room
|
£648
|
£518
|
+25.1%
|
|
Studio
|
£728
|
£708
|
+2.8%
|
|
1
bed
|
£969
|
£902
|
+7.4%
|
|
Annual
|
|
1
October to 30 September
|
|
Average
Monthly Rent & Inflation
|
|
Size
|
2021/22
|
2020/21
|
Increase
|
|
2
bed
|
£1,302
|
£1,225
|
+6.3%
|
|
3
bed
|
£1,603
|
£1,546
|
+3.7%
|
|
4
bed+
|
£2,315
|
£2,582
|
-10.3%
|
|
Brighton
& Hove LHA Rates from 1 April 2022
|
|
|
Weekly
Rates
|
Monthly
Rates
|
|
Shared
Accommodation
|
£98.96
|
£430.00
|
|
One
Bedroom Property
|
£184.11
|
£800.00
|
|
Two
Bedroom Property
|
£230.14
|
£1,000.01
|
|
Three
Bedroom Property
|
£276.16
|
£1,199.98
|
|
Four
Bedroom Property
|
£390.08
|
£1,694.99
|
y
Local impacts on specific
communities:
3.13
Families requiring 2 bedrooms or more within the city have less
opportunity than single people or couples to find rented
accommodation that falls within LHA rates. Single people under the
age of 35 who are subject to the ‘single room
allowance’ will be restricted in terms of the housing options
available to them if they are dependent on welfare benefits. There
are disproportionate impacts of the cost-of-living crisis (and the
Covid-19 pandemic) on single parent households, people living with
a disability, Black and minority ethnic households, our younger
tenants and children of our tenants, and people experiencing
domestic violence. We will need to consider the intersectional
impacts for example on people who are living with a disability, are
within the LGBTQ community, and from BME communities where there
are higher concentrations of those groups in the private rented
sector and living on low incomes. Council focus will also
increasingly be on the impacts that poverty, debt, insecure housing
or inappropriate housing, domestic abuse, unemployment and
anti-social behaviour can have on people’s mental
health.
National mitigations:
3.14
The government seeks to increase affordable housing supply through
the Homes England Affordable Housing Programme 2021 – 26
which essentially provides grant funding to registered housing
providers to build affordable homes for rent and low-cost purchase.
It has an annual housebuilding target of 300,000 homes; and an
ambition to deliver 6,000 homes for social rent a year for five
years. There is also the possibility that the government will in
future consider a national private rented sector registration
scheme.
Local mitigations:
3.15
The council provides advice to people at risk of homelessness to
try to prevent loss of secure accommodation and helps to ensure
people are in receipt of their entitled benefits to enable them to
maintain their tenancies. This also can be in relation to
negotiating with landlords and offering landlords and tenants
independent mediation. The Housing Options Service work proactively
with landlords and tenants in order to sustain tenancies, including
targeted early intervention where required. The service offers a
range of housing solutions and has a flexible and innovative
approach to sustainment issues, not limited to intervention in
arrears. We also have operational links to both statutory and third
sector organisations and agencies which allows effective
signposting to engage tenants with the support most appropriate to
their needs.
3.16
Homelessness services transformation work to improve the quality
and timeliness of our responses to people experiencing or
threatened with homelessness, as well as the quality of
accommodation provided to people housed in an emergency.
3.17
The Housing Revenue Account contributes to discretionary housing
payments to ensure there is a wider reach of support to council
tenants. The Housing service maintains a contract with Money Advice
Plus to provide independent money and budgeting support to council
tenants.
3.18
All new homes built or acquired by the council are kept at LHA rent
rates or lower, and the addition of council homes means that not
only are the homes affordable, but they also offer security of
tenure.
3.19
The council has created a rent reserve within the Housing Revenue
Account (HRA) to enable greater numbers of additional council homes
to be provided at lower living rents or social rents. The
council’s Home Purchase Policy has also been expanded and,
overall, an average of 109 additional council homes at affordable
rents has been achieved across the supply programmes for each of
the last three financial years, making the council significantly
the largest provider of affordable rented homes in the city.
Significantly, the partnership with Hyde Housing is enabling the
delivery of 176 social rented council homes in 2023 and 2024,
making a major contribution to truly affordable housing in the
city.
3.20
The council also takes steps, working with developers and
registered providers to increase the supply of affordable housing,
thereby increasing the number of local residents able to access
homes they can afford.
3.21
The council are using more modern methods of construction and
sustainability features that ensure newly build homes are well
insulated thereby addressing fuel poverty issues. In addition,
energy efficiency measures are being retrofitted to council homes
to reduce their energy consumption. The Council’s Warm
Safe Homes grant will continue to support people and families in
fuel poverty through providing energy efficiency measures to help
manage energy bills and reduce emissions. An additional
£600,000 has been made available in 2022 for these grants, in
addition to £400,000 agreed last year. This grant is
available to homeowners and private tenants on low incomes.
3.22
Further mitigations include supporting residents to apply for
benefits in order to maximise incomes alongside increases in the
national minimum wage. All contracts procured by the council
also seek levels of social value e.g., local recruitment and
apprenticeships.
3.23
The council has committed to review examples of 'ethical landlord'
charters and progress this with key stakeholders and landlords
which could contribute both to less disrepair and lower rents among
participating landlords.
Gaps:
3.24
There is a widely held view that standards and conditions in
private sector housing are much poorer than they are in other
housing sectors. There are national reports of comparatively higher
percentages of properties in the private sector that do not meet
the Decent Homes Standard, than in social housing. The English
Housing Survey 2021/2 highlighted 23% of the private rented sector
had non decent homes compared to 10% in the social housing sector.
The council are reviewing information about housing standards in
the private rented sector. It has commissioned evidence studies to
gather information on the condition of private rented homes to
determine whether there is sufficient evidence to introduce
discretionary licensing schemes.
3.25
Housing campaign organisations have also reported that private
rented sector tenants who report disrepair issues then experience
eviction as a consequence. The councils Private Sector Housing Team
visit homes where disrepair reports are made. The council has a
Private Sector Housing Enforcement Policy which provides the
council with a range of informal and formal enforcement options to
tackle disrepair.
3.26
The Private Sector Housing Team undertakes preventative and
proactive work with landlords to identify where improvements and
action are needed to avoid improvement notices. Where
appropriate it will also issue improvement notices without warning
where landlords do not engage with us or have a history
where the Council has previously taken
action against a landlord (or agent), or where the landlord (or
agent) has taken retribution against a tenant in the
past.
[1] Kantar survey,
October 2022
[2] Ofgen, October
2022
[3] Nationwide
Foundation
[4] ONS Census
2021
4
Cost
of living Challenges - Small Businesses
A
brief overview of the issue:
4.1
As well as impact on household costs, high inflation is having a
growing and serious impact on a significant element of the business
sector, particularly small and medium sized enterprise, where the
government protections are both temporary and limited. An increase
in insolvencies would be very damaging and have the twofold impact
of dampening the local economy and increasing local
unemployment.
4.2
In 2018 - The Economic Strategy Evidence Base (2018) found that 86%
of businesses in Brighton & Hove were micro, employing 10 or
less people. In total 99.7% businesses in the city are SME, making
them the lifeblood of the city’s economy. These businesses
employ a substantial number of people from across the region. On
the back of the pandemic, which suppressed business activity for
most, they are now experiencing substantial increases in energy and
supply chain costs. Unlike large businesses, there are limitations
on the financial shocks they can absorb and their ability to
cross-subsidise activities. There is a serious risk of widespread
business failure, and more government support is needed.
4.3
In November 2022 Brighton & Hove’s inflation was 10.9%
and since January 2022 the inflation rate rose by 5.5 percentage
points.
4.4
Comparison of how prices are rising across cities and large
towns:
|
Cities and large
towns
|
Inflation
rate
(Year
on year November 2022)
|
|
London
|
9.6%
|
|
Reading
|
9.9%
|
|
Crawley
|
10.4%
|
|
Bristol
|
10.8%
|
|
Southampton
|
10.8%
|
|
York
|
10.8%
|
|
Brighton
|
10.9%
|
|
Newcastle
|
10.9%
|
|
Southend
|
10.9%
|
|
Portsmouth
|
11.0%
|
|
Leeds
|
11.1%
|
|
Liverpool
|
11.2%
|
|
Plymouth
|
11.2%
|
|
Sheffield
|
11.2%
|
|
Coventry
|
11.3%
|
|
Worthing
|
11.3%
|
|
Nottingham
|
11.4%
|
4.5
Comparison of mean real wage growth across cities and large
towns:
|
Cities and large
towns
|
Mean
real wage growth
(Year
on year October 2022)
|
|
Crawley
|
-3.1%
|
|
London
|
-3.5%
|
|
Southend
|
-3.6%
|
|
Bristol
|
-4.0%
|
|
Plymouth
|
-4.0%
|
|
Worthing
|
-4.0%
|
|
Nottingham
|
-4.4%
|
|
Newcastle
|
-4.5%
|
|
Southampton
|
-4.8%
|
|
Brighton
|
-4.8%
|
|
Portsmouth
|
-4.8%
|
|
Leeds
|
-4.8%
|
|
Liverpool
|
-4.8%
|
|
Sheffield
|
-4.8%
|
|
Coventry
|
-5.3%
|
|
Reading
|
-5.5%
|
|
York
|
-5.7%
|
4.6
Nominal wages rose by -0.6% between January 2022 to October
2022. Therefore, workers living in Brighton & Hove are on
average £132.00 a month poorer in October 2022 than the
previous year. This combined with inflation pushing up prices of
goods and services means workers are facing increasing financial
pressures.
4.7
The UK’s minimum wage had risen faster than the rate of
inflation over the past two decades, but it is now falling behind.
As the cost of living is going up, workers’ wages, especially
those on the minimum wage, are being squeezed. In real terms, pay
excluding bonuses dropped by 2.8% in March to May 2022 compared
with the previous year, according to data from the Office for
National Statistics (ONS). This was a record decline. In July 2022,
the rise in the minimum wage was lower than the rate of inflation.
Inflation rose to over 10% in 2022 and commitment to providing
workers with stability and security by paying a decent minimum wage
in line with inflation is more important than ever.
4.8
As well as rising energy prices, supply disruption and the rising
cost of materials, our city businesses are facing skills shortages
and are struggling to recruit, especially in sectors that have
tended to have lower pay and poorer conditions such as care work,
retail and jobs seen as more transient such as hospitality. In
Brighton & Hove SMEs have other challenges, such as low
productivity, housing affordability for workers and a lack of
commercial space. The cost-of-living crisis is putting SMEs under
renewed pressures, and they are seeing profitability squeezed due
to the increase in mortgage rates, food and fuel prices.
4.9
To attract applicants to apply for vacant positions businesses must
now focus on selling the benefits of working for them, such as
working conditions, career prospects, training and most importantly
a wage that employees can live on.
4.10
Against this difficult backdrop, one million of the 6 million
businesses in the UK are owned by ethnic minority businesspeople.
They generate around £74 billion for the UK economy each year
and employ about 3 million workers. However
Minority Businesses Matter, a new
report by OPEN for MSDUK , shows that minority
entrepreneurs succeed against the odds, and face constant
challenges to setting up and scaling up their businesses. The
report says these challenges include direct and indirect
discrimination; disconnection from key financial, business, and
political networks; and disproportionate levels of doubt. While
these challenges hold many minority businesses back, minority
entrepreneurs also have particular strengths, notably their drive
to succeed, determination to overcome challenges and diversity of
skills, perspectives, experiences, and contacts.
4.11
Only one in five businesses in the UK is run by a woman[1]
and in 2018 Government launched a review into the barriers to
women in business - the 2019 Rose Review
of Female Entrepreneurship revealed that the advancement of female
entrepreneurs could be worth £250bn to the UK economy.
A fear of failure is actively holding back some women from creating
start-ups: one in eight working women wants to start their own
business compared with just 8 per cent of men[2].
Yet of the six million businesses currently active in the UK, just
20 per cent are run by female founders. Women also tend to start
businesses with much less available capital than male
entrepreneurs. According to the Entrepreneurs Network, nine per
cent of funding for UK start-ups goes to women-run
businesses. The other factors include psychological barriers,
juggling childcare and a lack of networks and mentors for female
entrepreneurs.
Gaps:
4.12
SMEs in Brighton & Hove do not have access to large reserves to
see them through the cost-of-living crisis and are dependent wholly
on support mechanisms put in place.
4.13
The main gaps in support for SMEs are highlighted in the
#BusinessSOScampaign which warns of mass closure and redundancies
if immediate and effective action isn’t taken by the
Government in the face of spiralling energy costs that are proving
more detrimental than the Pandemic.
4.14
The visitor economy, for example, recovered from the Covid 19
pandemic in 2021 and early 2022 but is now under pressure due to
inflation rising, rising food and energy prices combined with the
slow return of overseas visitors.
4.15
Businesses are facing spiralling energy costs and the energy crisis
is potentially superseding the pandemic with the threat of causing
irreversible damage to the high street and local economy. Margins
are being squeezed and SMEs need support beyond the energy crisis,
otherwise they may not be sustainable.
4.16
The #BusinessSOS campaign is asking for support including:
·
Suspension of
Covid loan debt repayments for up to two years (with potential
eligibility criteria)
·
Reduction
of tourism VAT to 5% (i.e. holiday and hospitality services and
packages), and;
·
Introduction
of dedicated Business Grant support for SMEs and pubs to help with
costs over the winter (with potential eligibility
criteria).
4.17
The Brighton Business Improvement District and Brighton & Hove
Economic Partnership (BHEP) are backing the #BusinessSOS campaign
seeking further government support.
4.18
The concern is these measures will not go far enough, particularly
for the SMEs in the visitor economy sector, and therefore the
council will also work with the city’s MPs to lobby for:
4.19
A reduction on VAT on energy for businesses to 5% for a minimum
period of 24 months to boost demand in the sector, and;
4.20
Capping energy prices at 2021 levels for SME’s and pubs.
4.21
The council will work with GBEB and local business representatives
to understand their members’ concerns and work with them to
continue supporting small businesses.
National mitigations:
4.22
Nationally, Government has introduced an energy bill relief scheme
for business and non-domestic customers is in place until March
2023 (criteria applies), whereby reduction to bills for eligible
customers is applied by the supplier, plus ongoing advice to
support reduction of emissions to businesses.
Local Mitigations:
4.23
Some of the key local business support initiatives are outlined
below.
Brighton & Hove Living Wage
4.24
The city council supports the Brighton & Hove Living Wage (the
‘Real’ Living Wage for the city) and advocates for the
advantages and business literacy of businesses adopting the
Brighton & Hove Living Wage. The campaign’s main
objective is to ensure employees can afford to stay in their jobs,
focus on helping businesses attract new staff and keep valuable
staff.
4.25
Launched in 2012, the Brighton & Hove Living Wage Campaign
encourages local businesses to voluntarily pay all employees the
Real Living Wage instead of the government’s national minimum
wage. The campaign is led by Brighton Chamber and supported by
Brighton & Hove City Council and Unison. Brighton & Hove
City Council has funded Brighton Chamber to deliver the Living Wage
Campaign since its inception.
4.26
The Real Living Wage is set independently and calculated annually,
based on the amount a person needs to live to a reasonable
standard. The current real Living Wage is £10.90 per hour.
The new rate is announced every November and businesses are given
until 1st of April to implement the new rate however, this year due
to rising inflation, the rate was announced early in
September.
4.27
Every week more and more employers in Brighton & Hove are
making the commitment to pay the Real Living Wage. The campaign has
849 employers that have already made the pledge and raised 4,294
salaries; ensuring that our residents receive a wage that they can
live on.
Business & IP Centre Sussex
4.28
The
Business & IP Centre
Sussex supports people from all walks of life to start
up, protect and grow their businesses by giving them access to
vital market intelligence, IP resources, training, 1:1 advice and
mentoring in a trusted and accessible space.
4.29
The BIPC is a collaboration with the British Library with a proven
track record of supporting local economic growth, as highlighted in
2019 when an
independent economic
evaluation showed that the BIPC Network was creating
£6.95 of public value for every £1 invested.
4.30
The national survey also revealed that those businesses which
started with the support of the Business & IP Centre
demonstrated strong survival rates. For the general business
population, after three years, only six in every ten businesses are
still trading, compared with an average of nine in ten for BIPC
supported businesses.
4.31
BIPC Sussex is currently delivered through an online and in-person
programme, with the regional hub in Brighton & Hove at Jubilee
Library and BIPC Locals in Crawley, Eastbourne and Hastings. In
2021/22 the BIPC Sussex supported around 1,100 pre-starts,
start-ups and existing SMEs, and was particularly successful at
helping under-represented groups in business – 68% of
start-ups assisted by the BIPC were led by female entrepreneurs and
15% by BAME entrepreneurs, compared with just 20% and 5% business
ownership respectively across the UK. 12% of the entrepreneurs we
supported have a disability, 10% are unemployed and 19% are
‘young people’ aged 16-35.
[1]
gov.uk/government/news/treasury-launches-review-into-barriers-for-
women-in-business
[2]According
to research from FreeAgent and OnePoll