Cost of living crisis

Millions of people across the UK are struggling to cover their essential household costs nowadays. The 'cost of living crisis' means we’re all paying a lot more for energy and food, and things like rent and fuel.

Some people are cutting back on how much they spend on food, or eating less, so they can pay for heating. Many people are falling into arrears, or using credit to pay for essentials, making the problem worse. Sadly, the situation isn’t going to get easier, even as temporary support measures are announced, further challenges are ahead.

Cllr Kam Rai, Deputy Leader of Redbridge Council, and Cabinet Member for Finance, Leisure and Culture, said:

“We know that times are tough right now for households across our borough, and that the rising cost of living is affecting everybody in different ways. We’re here to help and support local people to navigate these incredibly challenging times.

“Through our Household Support Fund, the council has made 90,000 awards of financial assistance for food, energy, household bills, kitchen equipment and other essentials, like warm clothing, blankets and washing products, for people in crisis, and we have set aside more money to carry on providing this help.

“In addition, we have identified £750,000 in unclaimed benefits, provided school free meals during holidays to ensure no child goes hungry and take pressure off parents, awarded £700,000 in funding to food banks to continue their valuable work, and sent 5,000 ‘warm packs’ to low-income pensioners to help them with their energy bills this winter.

“We’ve now launched this website to help residents through this crisis. It provides access to an extensive network of services, information, and advice, in partnership with the local community. You can find out about help with your income, your bills, your housing costs, and information about keeping yourself mentally well, fit, and healthy. We’ll update it continually with new advice, support, and information so residents can trust is as their main source of advice, so please share with your family, friends and neighbours.

“Redbridge Council is stepping up support in every way to help local people get through these challenging times, and we will continue to press our case to Government to ensure that the borough gets the funding it deserves, and no one gets left behind.”

How the cost of living crisis is affecting people

A cost of living crisis refers to a scenario in which the cost of everyday essentials like energy and food is rising much faster than average household incomes. 

You may have heard the term inflation used a lot in relation to this. Inflation simply measures how fast costs have risen year on year, expressed as a percentage. The most recent rate of inflation was recorded in November as 9.5 per cent. This means that the cost of everyday essentials is about 9.5 per cent higher than in November 2021. 

The crisis we’re experiencing currently is particularly severe because there are several different factors pushing up prices, rather than just certain items becoming more expensive. 

How councils are affected by the cost of living crisis

The cross party Local Government Association (the LGA) has warned that soaring inflation and energy prices could put council services at risk. The sharp spike in inflation and energy prices is an unprecedented crisis which could not have been predicted by either central or local government when the Government finalised the local government finance settlement earlier this year and councils set their budgets in March.

Analysis by the LGA has shown that inflation, energy costs and projected increases to the National Living Wage will add £2.4 billion in extra cost pressures onto council budgets this year alone, rising to £3.6 billion in 2024/25.

The rising cost of petrol has meant that many Redbridge families filling up the tank has become much more expensive recently. Redbridge Council manages 275 vehicles in our fleet including dustcarts, vans, minibuses and small lorries, so our fuel costs have risen by around £500,000 per year already. 

Energy bills have soared. As a result, many households are being more careful, switching off lights and limiting charging devices. For Redbridge Council turning off street lights isn’t an option, when we’re trying to keep streets safe for local people, so increased electricity costs mean keeping street lights on will cost an additional £2.1m next year.  

Cllr Kam Rai, Deputy Leader of Redbridge Council said:

“There are trying times ahead for all of us in Redbridge thanks to the rising cost of living, but I am confident that this is another challenge we will rise to as a community. Our Council has already been forced to make £230M of savings thanks to Government cuts but we have never stopped fighting for local people or delivering the services our neighbours need and deserve.”

Why are prices increasing rapidly?

Some of the pressures pushing up prices include:

• A high demand for oil and gas outstripping available supply. The Ukraine conflict has exacerbated this further, with a large amount of supply usually coming from Russia
• Pandemic support awarded by the government coming to an end, such as reduced VAT rates for hospitality businesses
• Disruptions to global supply chains, partly driven by Brexit and the pandemic
• Reduced staffing levels across various businesses for the same reasons

Are poorer households worse affected by the cost of living crisis than richer ones?

Even if the inflation rate were the same on average for lower-income and higher-income households, the impact is still likely to be felt more for those at the bottom. Poorer households have less disposable income and less flex in their budget if and when costs increase. While a richer household might be able to absorb higher energy costs, for example by reducing how much it saves, that option may not be available for many low-income households.