Chancellor George Osborne has been warned the social cost of cutting welfare to Wearside families could outweigh the saving.
Denise Irving, of Sunderland Citizens’ Advice Bureau, said staff had seen a distinct change in the type of problems they were dealing over the last decade.
Whereas ten years ago, the office was dealing with clients who had taken on more debt than they could afford, it was now seeing families who were struggling simply to make ends meet.
The Chancellor pledged to cut £12billion from the welfare bill in yesterday’s Budget, capping benefit payments to £20,000 a year outside London, freezing benefits for the next four years and limiting family support through tax credits and universal credits to two children, affecting children born after April 2017.
“The benefit cap and the freezing of working age benefits rises is worrying for us, because we see a lot of families are already facing significant financial pressures,” said Ms Irving.
“What we are finding now is that the kind of debt people are facing is changing.
“There has been significant shift from the problems with consumer credit we were mainly seeing ten years ago to people struggling with household bills such as rent and council tax.”
The social impact of increased debt could cause serious problems, she added.
“The significant increase in terms of the impact on people’s health, stress and family breakdown that comes from debt means that the cost of the policy may actually mean we are worse off then we would have been without these welfare cuts,” she said.
The office deals with about 6,000 cases a year, the overwhelming majority of them linked to debt.
“Eighty per cent of our calls are related to debt,” said Denise.
“It is a comparatively small percentage of the population we deal with – we only see people when they are really at the end of their tether, so the issues we are dealing with are likely to be much greater. A lot of families are just getting by.”
It was vital people sought advice as soon as possible, she said.
“People should ask for help much earlier and not wait until they have the bailiffs at the door or are facing eviction.” said Denise.