Low Earners Brace For Osborne's Spending Cuts

The Chancellor will unveil on Wednesday the results of the Government's spending review to identify further savings required to eliminate the deficit by a further £20bn in public spending by 2020.

Government departments have been asked to model cuts of 25% and 40%, with reductions in budgets across Whitehall, apart from a handful of protected departments - with ringfences around schools, the NHS and defence.

In low-income cities such as Bradford in Yorkshire, that has led to uncertainty and fears about the impact the cuts could have.

Bradford West has the country's highest level of dependency on in-work benefits per household: 57,000 of families rely on benefits including working tax credit and child tax credit to top up pay which is generally low - with average wages 16% below the national average.

In what some critics have dubbed a "penalty on work", potential cuts to tax credits could cost working families thousands of pounds each year.

Among those set to lose out is Dean Palmer. Having worked as a chef, traffic warden and in a care home, his cleaning job offered zero hours contracts and average pay of £60 per week.

But working tax credits of £105 per week, housing benefit of £72 per week and council tax benefit of £4.05 per week supplemented his income, although he says he still struggles to make ends meet.

"My money goes on mainly gas, electric, buying food. I've even had to revert to using food banks, which is a bit degrading," said Mr Palmer, who is currently off work awaiting surgery.

"I can only just live now. If they're going to cut it, God knows what will happen. People will be really struggling, a lot more than they are now."

One organisation which helps low earners manage their finances says it is deeply worried about the impact of cuts on people such as Mr Palmer.

Matt Barlow, chief executive of Christians Against Poverty - a national charity based in Bradford, said: "People are living with a little bit of sense of fear that it won't take much to go wrong with something - whether that be a washing machine, or some electronic kind of good, that actually can just tip you.

"Life can just really be on a knife-edge.

"People haven't got these big buffers. If people are going to lose £1,000 per year, they simply do not have that money to play with.

"The things that might get cut might be food, might be heating, people simply struggling with the very basic necessities of life."

But the Government has said social security and benefit expenditure has increased by 128% to unsustainable levels in recent times, from £72bn in 1979/80 to £168bn in 2013/14.

Figures from the Department for Work and Pensions also show that employment is at its highest since records began in 1971.

But some say further departmental cuts - which could affect mental health and disability services, and programmes for people with drug and alcohol addiction as well as transport, environment and prisons - are likely to cost the taxpayer more money.

Lisa Batty overcame drug addiction to gain employment at the Bradford-based Bridge Project, which helps others with similar problems.

She said: "How do you expect to pull money out of something and expect things to get better?

"It will save them money in that department, but it's going to cost them money in police, and social services, insurance. It's the wrong answer really."