Welfare Reform in the East Midlands The Story So Far · fi nancial impact of Welfare Reform in the East Midlands will be around £1.3 billion by 2014/151. So far, the available evidence

Welfare Reformin the East Midlands

The Story So Far

February 2014

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Welfare Reform in the East Midlands

The Story So Far | February 2014

Foreword Page 2

Executive Summary Page 3

1. Introduction Page 5

2. Universal Credit Page 7

3. Council Tax Support Page 14

4. Household Benefit Cap Page 15

5. Housing Benefit: Under Occupation in the Social Housing Sector Page 16

6. Housing Benefit: Local Housing Allowance Page 17

7. Discretionary Housing Payments Page 18

8. Welfare Assistance Schemes Page 19

9. Conclusions and Next Steps Page 22

10. Statistical Annex Page 23

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Cllr Jon Collins

Chair, East Midlands Councils

The Government’s package of welfare reform measures will have far reaching consequences

for both communities and councils across the East Midlands.

Councils are key delivery partners for Government and closer to the people most impacted

by the changes. For the reforms to be successfully implemented, it is vital that councils work

together with each other and with the relevant Government departments.

That is why we have asked Allen Graham, the Chief Executive of Rushcliffe Borough Council,

to work with councils across the East Midlands to understand the emerging impacts on both

councils and communities.

Key areas of work have included the collection and analysis of emerging data from across the

East Midlands, some of which was shared with a very well attended EMC Member briefing

event in November 2013, and working closely with the three pilot authorities for Universal

Credit in the East Midlands: Melton Borough Council, Rushcliffe Borough Council and West

Lindsey District Council.

Welfare Reform is still in the early stages of implementation and the full impacts will not be

known for some time. This report therefore represents an initial ‘snap shot’ up to the end

of 2013. However some clear trends are starting to emerge - as well as some very useful

examples of innovative practice from councils across the East Midlands.

This report also highlights those issues that EMC will focus on as it continues to work with

councils and the LGA in sharing intelligence and good practice. In particular, it identifies

where EMC may lobby and influence in order to improve current arrangements to support the

effective roll-out of Welfare Reform.

Foreword

Cllr Martin Hill OBE

Vice Chair, East Midlands CouncilsCllr Neil Clarke MBE

Vice Chair, East Midlands Councils



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Research published by Sheffi eld Hallam University in April 2013 suggests that the overall

fi nancial impact of Welfare Reform in the East Midlands will be around £1.3 billion by 2014/151.

So far, the available evidence suggests that Welfare Reform is having a mixed impact in the

region. Some reforms such the implementation of the ‘Benefi ts Cap’, whilst receiving widespread

media coverage, do not yet appear to have had a signifi cant impact in the East Midlands.

However, the information collected to date indicates that council tax and housing benefi t

caseloads across councils in the East Midlands is static or increasing, despite unemployment

falling in recent months. There is some evidence of rising levels of rent arrears and a decline in

council tax collection rates, both indicators of economic stress. Those in low paid employment

appear to have been most aff ected by the reforms, partly due to associated changes to the tax

credit system.

Diff erent types of authority and place face diff erent types of challenges. Some urban areas and

coastal towns have been particularly aff ected by the Local Housing Allowance reforms due to a

strong reliance on private sector housing stock to meet social housing needs and relatively high

rents. Applications for Discretionary Housing Payments (DHP) and Council Tax support schemes

have increased more in urban areas – particularly Derby, Leicester and Nottingham. Councils

have concerns about the long term funding for DHP by Government.

The absence of ring-fencing by Government of funding for Local Assistance Schemes has been

welcomed by councils, and there is evidence of emerging innovative practice to meet local needs

more eff ectively as a result. However DWP has recently confi rmed that funding will end from

2015/16.

Executive Summary

1 The Local and Regional Impact of Welfare Reform, Sheffield Hallam University, CRESR, April 2013



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Key messages from councils in the East Midlands include:

• There is a need for greater local freedom and fl exibility for councils to address

the under-supply of aff ordable housing;

• There are specifi c concerns about the availability of suitable housing stock,

particularly smaller properties and one bedroom accommodation;

• There is a need for greater freedom and fl exibility for councils to support

people into employment and deliver strong local economies;

• There is a need for a greater acknowledgement of the impact on local

authorities of new burdens and absorbing the cost of administration of welfare

reforms, including the impact this has on the ability of local authorities to plan

strategically;

• There is a need for local knowledge and discretion in supporting people with

particular needs or vulnerabilities, both with claiming Universal Credit and

managing the impact of the reforms using the ‘Community Budgets approach’;

• There is a need for local authorities to consider how they will make provision

for welfare assistance beyond 2014/15; and

• All of the above must be adequately and appropriately funded.

Further research will required to fully understand the ongoing impacts on Welfare Reform on

both communities and councils in the East Midlands.

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1: Introduction

1.1 Following the enactment of the Welfare Reform Act 2012 which gave greater powers for councils to localise welfare support, the Welfare Reform Steering Group was established in 2013 and meets on a quarterly basis. The Group is chaired by Allen Graham, Chief Executive of Rushcliffe Borough Council, and comprises senior officers from:

• Rushcliffe Borough Council

• West Lindsey District Council

• South Northamptonshire District Council

• Leicester City Council

• Charnwood Borough Council

• Bassetlaw District Council

• Derby City Council

• Nottingham City Council

• Kettering Borough Council

• Melton Borough Council

• Nottinghamshire County Council

• Derbyshire Dales District Council

• Newark & Sherwood District Council

• Broxtowe Borough Council

• East Midlands Councils

1.2 The focus of the work has been to consider:

• Progress and updates from the Universal Credit pilots.

• Impact of the introduction of localised Council Tax Schemes.

• The extent of properties affected by the under occupancy provisions.

• The impact of the benefit cap.

• The introduction of local welfare assistance schemes.

• Implications for revenues and benefits staff of the introduction of Universal Credit.

• Preparation for the introduction of the Local Support Services Framework.

• Community budget models in respect of the Local Support Services Framework.

• Credit union partnerships.

1.3 The Steering Group has already highlighted to the Department of Work & Pensions (DWP) the need for greater involvement of local authorities in the introduction of welfare assistance schemes. Intelligence on implementation to date has been shared with the LGA to inform national discussions with the Department for Communities and Local Government (DCLG) and DWP.

1.4 A key area of work has been the collection and analysis of data. The data collection is ongoing and initial findings by individual local authority as at the end of 2013 can be found in the Statistical Annex which comprises Section 10 of this report.

1.5 Forty two councillors attended the EMC Member Development event on Welfare Reform in November 2013. Participants included East Midlands Councils, the LGA, pilot local authorities, representatives of both unitary and borough councils and the voluntary sector.

1.6 Members considered their initial response to the reforms to date. The key messages were:

• Engagement with those affected by the reforms is unlikely to happen until the changes are implemented.

• Housing stock availability is a key issue as is the impact of changes to tax credits.

• Local government will be central to the delivery of Universal Credit.

• The National Debt Service could be located in local government.

• Local authorities should have a bigger role in delivering the Work Programme.

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• There are opportunities for local government to be actively involved with the Local Support Services Framework (LSSF). An announcement on the LSSF is expected imminently.

• Other broader issues discussed were the impact on local economies of the reduction of benefits, the housing revenue account borrowing cap, the troubled families agenda and the health impact of the reforms.

• There are emerging issues regarding the use of Discretionary Housing Payments which should be monitored at a regional level.

• Consideration could be given to pooling budgets to balance areas of high need and high demand on funds with those of low need that run the risk of clawback in future years.

1.7 The information collected to date indicates that council tax and housing benefit caseload across local authorities in the East Midlands is static or increasing. This is contrary to the DWP view that claimant rates will fall as unemployment decreases. The conclusion drawn from these results is that many of the claimants will be those in low paid work or those on irregular hours or zero hours contracts.

1.8 Sections 2 to 8 of the report summarise the emerging impact in the East Midlands of individual elements of the Government Welfare Reform package, based on available data and feedback from the November 2013 Member Development event. A number of specific case studies are also highlighted.

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2.7 Rushcliffe Borough Council has been working to move claimants to online services, developing closer working relationships with key partners to integrate or co-locate services and seeking to identify the support required for the most vulnerable members of the community.

2.8 The West Lindsey pilot is focused on how the introduction of UC will impact claimants. This falls mainly into the two categories of Digital Inclusion, with claims to be made and maintained online; and Financial Inclusion, with benefit payments to be made monthly as one household payment and all payments direct to the claimant. West Lindsey is also evaluating the impact of the introduction of these reforms in a very rural area.

2.9 All of the East Midlands pilot authorities have hosted engagement events. One hundred and twenty delegates have attended these events. Further details on each pilot follow:

2: Universal Credit

2.1 Universal Credit (UC) affects those claiming out-of-work benefits and those claiming Tax Credits and Child Tax Credits. It replaces Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Housing Benefit, Child Tax Credit, and Working Tax Credit.

2.2 Payments are received monthly in arrears as a single payment per household. To receive UC claimants are required to sign a new Claimant Commitment. Most claimants will be expected to budget for housing and living costs from their UC payment.

2.3 The inclusion of Child Tax Credits and Working Tax Credits means that UC will inevitably affect many low-income working families. UC will also change the way benefits are claimed in the early stages of self-employment.

2.4 The roll out of UC has been delayed. Four pathfinder areas in the North West are administering UC to new claimants and, in October, Hammersmith and Fulham was added. DWP has stated that the project is still on course to be rolled out to all claimants by 2017.

2.5 In the East Midlands there are three local authorities included in the universal credit pilots; Melton Borough Council, Rushcliffe Borough Council and West Lindsey District Council.

2.6 Melton Borough Council is supporting the most vulnerable and complex customers to become ‘work ready’ through employment and skills projects. They are also supporting their customers in the move to accessing benefits online and away from previous traditional methods.



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From there we designed our first test of channel shift – we asked all Council Tax Support claimants (1,370) to confirm, online, whether their claim data was correct or not. We were successful in getting 65% to do this – with 40% of Cohort 3 who completed it needing assistance to do so. We produced simple inserts around how to access the service, obtain an email and guide as to where to find all free internet within the Borough which were distributed to the entire cohort. Throughout the campaign we monitored customer behaviour over the 6 month test period. Information was gathered and analysed using a variety of mediums including customer surveys, management information from our Customer Relationship Management system (CRM) and Google analytics.

The top 3 barriers were identifi ed as no access to internet (cost prohibitive), skills, and connectivity; the top reasons for not completing the process are detailed in the graph below:

The key aims we sought to achieve during the pilot were:

• To get 50% of our existing working age benefit case load using an online service.

• To understand and document the barriers faced by any benefi t customers who feel they are not able to self serve or need support to self serve using online services.

• To support a number of customers that are currently dependant on benefits and are the furthest away from the job market to improve their readiness for work – we aim to have 20 people take up some form of paid employment.

• To understand the barriers faced by this cohort and document the learning from the point above.

• To test integrating partner services by trialing two alternative methods to deliver lone parent new joiners’ interviews.

Digital Inclusion

Universal Credit (UC) requires that customers will have to make and manage their claims online. Prior to the pilot Melton Borough Council (MBC) did not off er any benefi t related online services other than for information. In trying to prepare our customers for UC being off ered as a digital service and our own drive to introduce and embed online services, we needed and wanted to test and understand our customer’s ability/desire to access online services.

In order to do this we carried out some early insight on our main cohort – working age benefit caseload – around their likelihood to self serve. The results below showed us that our cohort was split into nearly equal thirds in respect of their ability to access and use digital services, and the most vulnerable groups were not surprisingly the least likely to self serve:

Name Description Mosaic Groups2 Number

Cohort 1 Likely to self serve C, D, E, F, H 334

Cohort 2 Neutral to self serve A, B, G, I, J 526

Cohort 3 Unlikely to self serve K, L, M, O 510

Case Study: Melton Borough Council

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The top 3 devices used to access the service were: Apple ipad, iphone and Samsung smart phone amongst the more vulnerable groups, with laptops top amongst the least vulnerable groups.

We have recently introduced an assisted digital new claims process and although it is early days we are already seeing a 50% reduction in the time taken to process a new claim. We are also using emails and texting in an increased capacity as this is starting to show as customers’ preferred method of contact.

Vulnerable

MBC has a dedicated Employment and Skills Officer (ESO) currently funded through the flexible support fund from Jobcentre Plus. The service is intense and targeted at families with multiple complex needs by looking at and supporting their holistic needs to move them into employment. Consequently the number of live caseloads at any one time is around 8 – 10. Referrals are made and received from a variety of partners; once it has been received by the ESO it is initially assessed as to whether the customer meets the strict eligibility criteria or not. Interviews take place with the customer who then sets their key priorities and goals and related actions to help them achieve these with support from the ESO. During the pilot 96 referrals were received, of which 56 were worked with resulting in 21 getting into full time employment. 75% of the customers were aged 25 and under. The average time spent working with a family was 5 months, however evidence shows the longer we worked with them the better the sustainable outcomes became. Working in partnership was a critical element to this work as can be seen by the ESO being the lead on a very successful job fair seeing 786 customers through the door with 14 local employers and 12 learning providers as well as a recruitment drive for a company moving in to the locality – with over 40 local unemployed customers securing jobs.

We are currently waiting to see if we have been successful in our bid to the DWP for European Social Fund monies to help support our next ambition to test the concept of a ‘Me and My Learning/Skills Centre’ to allow us to target

the majority of our working age caseload in partnership with several key agencies including Jobcentre Plus, learning agencies, Work Programme, Money Advice and Credit Union.

Triage

The triage element had 3 control groups, these being the normal Jobcentre Plus location and service, the service to be delivered out of one of our children’s centres with an effective signposting/referral system to MBC staff where appropriate and the third also being delivered from another larger children’s centre but with an immediate follow up by MBC staff, where required, for quick resolution of queries and making of any other potential appointments etc. Numbers were expected to be and were small and unfortunately due to unforeseen resource issues within Jobcentre Plus the numbers of interviews held in the children’s centre were significantly compromised therefore learning and outcomes have been limited.

Learning was to be centred on improving poor attendance rates, improved customer experience and effective resolution of queries and signposting linked to better outcomes re. training and employment, as well as improving the customer’s general well-being. Of those interviews that did take place the findings show that attendance rates did not really improve and customers did not show any preference for different locations. Softer feedback from staff and customers however did suggest that they felt happier with the overall joined up service that was provided.

Jobcentre Plus has now become our 11th partner in co locating within our Council Offices – one of the first in the Country – so our next steps are looking at trialing a more joined up holistic triage service targeted at customers that have low to medium support needs.

Contact: Jackie Aimson

Email: [email protected]



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When Rushcliffe Borough Council found out it was a pilot authority they established a cross sectional project team with representatives from Revenues and Benefits, Customer Services, IT and our colleagues at Jobcentre Plus.

The three key aims were:

• Moving claimants online

• Integrating better with partners

• Tackling vulnerability

Universal Credit will require customers to not only apply online but it will pay them just one payment from which they will have to budget all their monthly outgoings. This might be a new concept for some so Rushcliff e wanted to work with relevant partners to make sure they were able to help customers gain all the skills they needed to do this.

Rushcliff e recognised that they couldn’t possibly expect customer service advisors to know everything, and there are some services that are not within the gift of the local authority to provide, for example, signing for Job Seekers Allowance is a Secretary of State devolved power to DWP.

Rushcliffe identified a range of partners to work with who could provide a well rounded package of help and support to customers. Often the customers were the same people so it made sense to work together.

The partnerships began with one to one meetings to set joint visions and shared aims and determine what the service delivery will be.

Where possible partners have co-located; Jobcentre Plus staff come in for two days a week, CAB advisors attend for two afternoons a week and the local college once a week. Advisors have been upskilled to offer a basic level of partner service when our partners are not in, providing a level of integrated service delivery. Co-location encourages open discussion, which doesn’t overcome data protection restrictions, but does make it easier. It also makes communication between partners much smoother for the customer.

Rushcliffe wanted to bring partners together to encourage cross fertilisation. They arranged a partnership event in June 2013 and a second event in October 2013. The group is just beginning to look at developing a common approach to ensure consistency.

This chart shows the key partners with the customer at the centre of service delivery.

No matter where the customer presents, they will get a consistent message and an effective ‘warm handshake’ to other organisations.

The mix of partners provides a good all round mix of support that customers are likely to need to engage in Universal Credit, such as help with IT, help with budgeting skills, getting bank accounts, and also training courses and getting back into work.

It is envisaged that if these relationships can be maintained then there is the possible start of a local partnership delivery group for the future, in line with the support services framework.

A range of publicity materials has been produced including leafl ets, press releases and articles in our residents’ magazine, issued 3 times a year. Rushcliff e has identifi ed that marketing does work as they have seen peaks in footfall following leafl et drops or newsletter articles.

Case Study: Rushcliffe Borough Council



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Partnerships work well if there is an agreement in place and there is buy-in at Senior Management level. Partnership agreements do not have to be complex or in-depth but need to set out joint visions and aims of the partnership.

Lessons learned in respect of partnerships include:

• Forming partnerships takes time and commitment

• The right mix of partners is required

• Effective IT facilities to enable partners to access

their software is needed

• Raising awareness is key – peaks in footfall after

communication campaigns

• Common and effective signposting is needed

Examples from Rushcliffe include:

A customer affected by the benefit cap and who wanted to work was helped by Jobcentre Plus, Central College Nottingham and Rushcliffe Borough Council colleagues in one interview. As a result the customer has secured work as a mid-day supervisor and the school has offered to support him through teaching assistant training so the college are helping him find the right course.

A gentleman came to see the Jobcentre Plus advisor. He hasn’t worked for 20 years due to ill health and was aff ected by the spare room subsidy. A holistic approach across partners meant that the customer received help in the same place from Citizens Advice regarding his benefi t entitlement, the Employment Support and Jobcentre Plus Advisors with his job search and Council advisors were able to answer his query about Council Tax Support.

Contact: Shirley Woltman




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The main objectives of the pilot are to look at how the introduction of Universal Credit will impact claimants. This falls mainly into the two categories of: Digital Inclusion, with claims to be made and maintained online; and Financial Inclusion, with benefit payments to be made monthly as one household payment and all payments direct to the claimant. In West Lindsey we are also looking at how this may impact differently in a very rural area.

1 Digital Inclusion

Public Access IT

The main focus of the pilot has been digital inclusion, and moving customers to being able to make benefit claims and conduct job seeking online. The first step was to introduce new public access PCs in the Guildhall, with icons giving direct links to claim forms and useful websites for job search, volunteering, training and money management. These are supported by seconded staff from Jobcentre Plus who support customers in using the IT.

The table below records the number of people who have used the Guildhall public access computers, what they have used them for, and the amount of support they required to use the IT.

Libraries

West Lindsey District Council (WLDC) are now beginning to extend public access provision and mediated support beyond the Guildhall. Staff covering all 8 West Lindsey libraries have been trained in the use of Jobseekers’ Allowance and Housing Benefit online claims. Jobcentre Plus has covered Universal Jobmatch with them.

Training Providers

Local training providers are making their IT suites available for public access and have staff that can support customers to make online claims or access Universal Jobmatch. They are also able to engage customers in free training courses linked to their needs. This can be building IT skills, writing a CV or possibly confi dence building.

Community Venues

WLDC is starting to introduce community IT, with 4 laptops being given to Southrey Village Hall. This will enable residents in the community to access the internet and learn IT skills. A local volunteer digital champion will provide support with this and ensure that the IT is accessible. Volunteers are being recruited through the VCS, with formal policies and agreements in place to support them. Wifi is being put into the venues through an existing WLDC project and computer hardware is being provided from redundant IT no longer used by WLDC staff .

Case Study: West Lindsey District Council

Assistance & Service Used

JSAHousing

BenUJM Careers Courses Volunteering Budgeting Other Total

None 78 14 366 3 7 0 1 56 525

Some 128 71 405 6 1 1 1 88 701

1 to 1 85 30 137 2 0 0 0 38 292

Total 291 115 908 11 8 1 2 182 1518

Assistance & Service Used %

JSAHousing

BenUJM Careers Courses Volunteering Budgeting Other

None 27% 12% 40% 27% 87.5% 0 50% 31% 35%

Some 44% 62% 45% 55% 12.5% 100% 50% 48% 46%

1 to 1 29% 26% 15% 18% 0 0 0 21% 19%



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Housing Benefit Online

An online Housing Benefit form was made available on the council website from 3rd May 2013. Additional staff were recruited to support with these claims and to assist the JCP adviser in the Guildhall. From October 2013 all new claimants are being expected to make their claim online. We have also ceased provision of paper forms to our major Housing Association, and have trained their staff to support online claiming.

2 Financial Inclusion

Credit Union

As a result of the Pilot, the Lincolnshire Credit Union is now operating from the Guildhall every Tuesday. The official launch was on 11th June 2013 and many new members have opened accounts. These include customers referred by NACRO and West Lindsey Domestic Abuse Service. This is the first Credit Union service in the West Lindsey area and it is hoped to follow it up by a second venue in the north of the district.

Citizens Advice Bureau

Financial support has been provided to CAB to support employment of a part-time debt adviser. CAB is recognised as the organisation which is most trusted to provide financial advice. The debt adviser also attends the Moneybox sessions (see below).

Moneybox

Working in partnership with their largest Registered Social Landlord, Acis, WLDC organised financial capability support sessions. These commenced on Friday 5th July 2013 and ran on the 1st and 3rd Friday of every month until December. The sessions were for individual confidential consultations, with representatives in attendance from the Credit Union, CAB, Housing Options team, a personal budgeting support adviser, solicitors, tenancy support and UC team to support online claims. Those identified as being in danger of falling into arrears were referred directly by their landlords to obtain early support.

3 Partnership Working

The WLDC partnership model is being described in the forthcoming DWP Local Support Services Framework as a model of good practice, involving a wide range of organisations and with a two-tier structure with an externally chaired Steering Group to provide strategic direction, and a Working Group formed of practitioners who provide the support for claimants. It shows how a multi-agency partnership can work to deliver the best service for local residents.

Governance

Steering Group The Steering Group consists of senior level staff from CAB,

the Credit Union, two major housing associations, local diocese, DWP (local and national), HMRC, WLDC and the local training provider.

Working Group The Working Group has an open membership allowing

participation from those organisations that support customers who may be impacted by the Universal Credit. These include housing associations, CAB, VCS, Credit Union, Domestic Abuse Service and those providing support for offenders and ex-offenders.

Delivery

Digital Access /Financial Inclusion As detailed above, WLDC are working with a wide range of

organisations to support customers to access the internet, develop their IT skills, and make claims and job applications online. A number of briefi ng sessions have been held to inform people about both Universal Credit and the Pilot.

Contact: Nicoya Palastanga


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Council Tax Support : Summary of Impacts in the East Midlands

Impact on Citizens Impact on Councils

• Local schemes have reduced support to certain groups to meet budget constraints, including low income working families, those in part time work or zero hours contracts.

• Some groups may now be paying Council Tax for the first time.

• The council tax benefit claimant counts in the East Midlands have remained static or have increased, despite falling unemployment, contrary to the DWP expectations (further detail in Figure 10.1). This may be due to an increased number of claimants in part time work or on zero hours contracts.

• 23 out of 28 councils that responded reported a fall in council tax collection rates and there is evidence that the cost of collection is increasing.

• Initial rates of council tax collection are declining through the year as more people are finding it harder to pay.

• The cost of council tax recovery is increasing with councils having to work harder to collect receipts.

3.1 From April 2013, the administration of council tax benefits has been administered at a local rather than national level. Each local authority has now set up a localised benefit support scheme. This change in the way Council Tax Benefit is administered has been accompanied by a 10% reduction in council tax support from Central Government.

3: Council Tax Support

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Household Benefit Cap: Summary of Impacts in the East Midlands


• Figures from DWP3 indicate that the cumulative count (April 2013 – November 2013) of households affected by the cap in the east Midlands was 1,278 (3.9% of the total for England).

• The highest levels are in Leicester (the most populous local authority area), followed by Nottingham and Derby.

• Councils will have to work closely with households identified as likely to be capped, aiming at getting as many as possible back to work, in partnership with Jobcentre Plus.

• As yet there is no clear evidence of councils in London sourcing affordable accommodation in the East Midlands to meet the needs of tenants affected by the cap – although the situation will continue to be monitored closely.

4.1 The benefits cap restricts the income from non-work related benefits. It is intended to ensure that workless households do not receive more in benefits than the average working household earns; restricting single people to £350 per week and £500 per week for couples and families. National roll out was managed over a 10 week period, split into two tranches completed by 30th September 2013.

4.2 Just under 33,000 households have been affected by the benefit cap in England so far, compared to the 56,000 originally estimated by DWP. Of those, 46% have been in London and only 3.9% in the East Midlands. A breakdown by council can be found in Figure 10.2.

4: Household Benefit Cap

3 Published 9th Janaury 2014.

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Under Occupation in the Social Housing Sector: Summary of Impacts in the East Midlands


• Figures suggest there are 17,872 cases affected by the under-occupancy criteria in the East Midlands in council owned stock (over half from the major urban areas): 14,599 with one spare bedroom and 3,273 with two or more spare rooms. Further detail in Figure 10.3.

• At present there is little evidence to suggest that people are moving as a result of under-occupancy.

• Council figures from across the East Midlands (Figures 10.4 & 10.5) suggest a rise in the level of rent arrears during 2013. However this data is incomplete and there no evidence of a direct link with under-occupancy.

• Some councils have reported a sharp increase in applications for Discretionary Housing Payments (DHPs) since April 2013 (see Section 7).

• Some councils have considered re-classifying smaller bedrooms as other accommodation to reduce the impact on tenants.

• There is increased pressure on a limited amount of smaller sized social housing stock.

• There will be an increased need for councils to address the under-supply of affordable housing.

5.1 From April 2013, Housing Benefit recipients within the social sector will receive their Housing Benefit based on household size. For those deemed to be under-occupying their homes they will receive a reduction in their benefits dependent on how many spare rooms they have. If a recipient is under-occupying by one bedroom then they will receive a 14% reduction. If they are under occupying by two or more rooms then they will receive a 25% reduction in their housing benefit.

5.2 Each person or couple that makes up part of the household will be eligible for one bedroom with the following exceptions:

• Children under 16 of the same gender are expected to share.

• Children under 10 are expected to share regardless of gender.

• A disabled tenant or partner who needs a non-resident overnight carer will be allowed an extra room.

5: Housing Benefit:

Under Occupation in the Social Housing Sector

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Housing Benefit: Local Housing AllowanceSummary of Impacts in the East Midlands


• Research by Sheffield Hallam University4 suggests that there may be up to 89,000 households affected by changes to LHA in the East Midlands (7.4% of the total for England).

• The impact is likely to be highest in some coastal towns and urban areas where there is a strong reliance on private sector accommodation and where rent levels are generally higher.

• Some councils have reported an increase in Local Housing Allowance Case Loads (Further detail in Figure 10.6).

• Some councils have reported a sharp increase in applications for Discretionary Housing Payments since April 2013 (see Section 7).

• There will be an increased need for councils to address the under-supply of affordable housing.

• Councils will need to develop localised initiatives to address the needs of the working poor.

6.1 Local Housing Allowance (LHA) is the method by which Housing Benefit is calculated for private sector tenants. In April 2011 a number of changes were made, as set out below:

a) The maximum payable rate was lowered from the 50th percentile to the 30th percentile of the market rate.

b) Maximum weekly payable rate were introduced:

• For a one bedroom property it is £250 per week.

• For a two bedroom property it is £290 per week.

• For a three bedroom property it is £340 per week.

• For a four bedroom property it is £400 per week.

• Four bedroom rate is now the maximum payable.

6.2 The reforms to the LHA element of Housing Benefit impact most on the areas where the private rented sector accounts for a high proportion of households and where rent levels are highest. So far, London has been most affected by these changes at national level.

6: Housing Benefit: Local Housing Allowance

4 The Local and Regional Impact of Welfare Reform, Sheffield Hallam University, CRESR, April 2013.

18



Discretionary Housing Payments: Summary of Impacts in the East Midlands


• Increased levels of DHPs will provide additional support to those that have seen a decrease in Housing Benefit payments since April 2013.

• Some councils have reported a sharp increase in applications for DHPs since April 2013.

• Some councils have sought to ration DHPs to ensure that future needs can be met. However, there is concern that any resulting under-spend will be ‘clawed back’.

• There may be a need for councils to work as a consortium, providing DHP support to manage costs, particularly for smaller authorities.

7.1 Councils are allocated funding each year from Government to support people who qualify for housing benefit (or similar under Universal Credit) but are experiencing difficulties in either paying their rent or with the start-up costs of a tenancy.

7.2 The Discretionary Housing Payment (DHP) pot is limited and when the funding for the year runs out, no more payments can be made. The local authority decides who should be given the payments, how much and how often they are paid. DHPs may be paid weekly or can be a lump sum. It can also be backdated.

7.3 The Government has increased the amount of money available to councils to help people to adjust to the reduction in housing benefits.

7: Discretionary Housing Payments

19



Welfare Assistance Schemes: Summary of Impacts in the East Midlands


• Schemes in the East Midlands have largely moved away from cash to targeted benefits in kind which relate to specific needs.

• There is evidence that local delivery has been more efficient and that funds are reaching those most in need of support.

• Lack of ring-fencing means that councils have greater flexibility to address local needs.

• Most schemes have been reviewed. One authority has proposed to withdraw its scheme in 2014/15 - to be replaced by other support.

• DWP funding for Welfare Assistance Schemes will end in 2015/16, placing greater pressure on council finances.

8.1 Welfare Assistance Schemes are to replace Community Care Grants and crisis loans for general living expenses previously administered by DWP. Prior to April 2013, Community Care Grants were available to support people to live independently in the community. Crisis loans were available to help with emergency short term needs.

8.2 These two forms of support for general living

expenses were abolished from 1 April 2013. New local provision of these will be administered by local authorities in England and the devolved administrations in Scotland and Wales.

8.3 The funding provided for establishing Local Welfare Assistance schemes has been provided on a non-ring fenced basis by DWP, which has resulted in local authorities across the East Midlands establishing different schemes of provision. DWP have recently confirmed that funding will cease from 2015/16.

8: Welfare Assistance Schemes



20

Derby City describe their vision of how they wanted to use the Local Assistance funding as “it should be a fairground ride with lots of different elements to support residents”. Initially, because of the timescales of getting a scheme in place by 1/4/13, their fairground ride was limited - “a tyre on a rope”. Learning began within the first few weeks of delivering the scheme as insight about the applicants and their circumstances became clearer. Derby has kept their scheme under continuous review and introduced new ways of supporting residents using the funding in innovative ways.

• Derby City Council has not used the welfare assistance fund as a catch all but has worked in partnership to make best use of City resources to best assist vulnerable residents.

• The Local Assistance Scheme uses a targeted/smart approach to providing crisis support with an effective referral system to tackle the root causes of crisis, leading to longer term help and sustainability.

• The customer insight from the limited information provided by the DWP gave an inaccurate picture of those residents needing support; this may have been because the DWP scheme was cash based which attracted a particular demographic of residents.

• The scheme is cashless and breaks down into two key components – immediate support to address a pressing or impending crisis and appropriate additional support that the Council or the local Third Sector can offer.

• In developing the scheme, Derby’s aim was to utilise existing resources in the City in a more strategic and collaborative way, both across the Council and the Third Sector.

• Derby identified the support already available from the various Council departments and the Third Sector. These were defined “help available” categories and were then transcribed onto signposting sheets used by staff and residents in publicly available electronic and printed formats.

• Food bank partners and Third Sector organisations are actively involved in delivering the scheme; they are also assisting in the dynamic review of the scheme.

• A key feature of the scheme is to offer early intervention to help people manage their money as effectively as possible; in some cases this is about educating people on money management.

• The review process has identified opportunities to enhance the scheme including those innovations that are outside the local assistance criteria but which bolster the main scheme and provide targeted support to vulnerable residents:

- Derby reviewed published charity reports to balance the scheme with the known factors facing UK families, which ensured the scheme reflects local and national poverty concerns.

- Derby is utilising this non-ringfenced budget in more innovative and brave ways going forward; for example, money has been set aside to help those with ‘No Recourse to Public Funds’. Work is continuing with Children’s Services to access bed and breakfast accommodation or assist with the costs of returning home.

- A rent in advance scheme has been bolstered (this scheme can pay up to a months rent in advance).

- Derby has an Income & Expenditure assessment approach, also available to partners, which is integrated in all welfare reform applications. This ensures that early intervention is made available to prevent lifestyle choices becoming longer term problems. This insight is used to ensure appropriate referrals are made, for example to the ‘Money Advice’ and Health and Wellbeing officers. The benefits of this will assist other parts of Derby City Council as it is envisaged that dealing with problems at an early stage will help to reduce the costs associated with more ingrained behaviours and choices.

Case Study: Derby City Council Local Assistance Scheme



21

- Working with family social workers to support those who fall short of the criteria for local assistance but still have financial pressures, particularly over the winter months and Christmas where family costs increase. As an example, to help with Christmas costs, vouchers for a local toy store were issued to families with children.

- Support has been given to local churches to provide a night shelter for the homeless which includes a hot meal, a sleeping bag, and breakfast.

- Funding has been set aside to fund a work opportunity scheme for a small cohort of jobseekers over 25 within a variety of labour market sectors. This scheme, ‘Derby’s Working’, is being delivered in partnership with DWP and employers. Its aim is to close the gap between the experience of being out of work and on benefits, and that of being in work and receiving a wage. The scheme includes training and mentoring and wages are paid at the living wage rate.

• As the scheme has been reviewed it has been enhanced to make it more accessible and provide a wider range of benefits. As a result Derby City Council is actively encouraging applications for Local Assistance from a wider demographic than that experienced by the DWP.

• Other policies, including hardship and council tax, have been reviewed at the same time.

Contact: Kath Gruber


22



9.1 The available evidence suggests that Welfare Reform is so far having a mixed impact in the region. Some reforms, such the implementation of the ‘Benefits Cap’, whilst receiving widespread media coverage, do not yet appear to have had a significant impact in the East Midlands.

9.2 The information collected to date indicates that council tax and housing benefit caseloads across councils in the East Midlands is static or increasing, although unemployment has been falling in recent months. There is some evidence of rising levels of rent arrears and a decline in council tax collection rates, both indicators of economic stress. Those in low paid employment appear to have been most affected by the reforms, partly due to associated changes to the tax credit system.

9.3 Different types of authority and place face different types of challenges. Some urban areas and coastal towns have been particularly affected by the Local Housing Allowance reforms due to a strong reliance on private sector housing stock to meet social housing needs and relatively high rents. Applications for Discretionary Housing Payments (DHP) and Council Tax Support Schemes have increased more in urban areas – particularly Derby, Leicester and Nottingham. Councils have concerns about the long term funding for DHP by Government.

9.4 The lack of ring-fencing by Government of funding for Local Assistance Schemes has been welcomed by councils, and there is evidence of emerging innovative practice to meet local needs more effectively as a result. However DWP has recently confirmed that funding will end in April 2015. Local authorities will therefore need to give further consideration to how they will deliver provision for 2015/16 and beyond.

9.5 Other emergent issues include:

• There is a need for greater local freedom and flexibility for councils to address the under-supply of affordable housing;

• There are specific concerns about the availability of suitable housing stock, particularly smaller properties and one bedroom accommodation;

• There is a need for greater freedom and flexibility for councils to support people into employment and deliver strong local economies; and

• There is a need for a greater acknowledgement of the impact on local authorities of new burdens and of absorbing the cost of administration of welfare reforms, including the impact this has on the ability of local authorities to plan strategically.

9.6 Further research will be required to fully understand the ongoing impacts on Welfare Reform on both communities and councils in the East Midlands. The Welfare Reform Steering Group is continuing to gather and analyse data based on the welfare reforms and all EMC member authorities have been asked to contribute to this data collection exercise. Priorities for the coming year include:

• Further learning from Universal Credit Pilots and Pathfinders;

• Further data on Social Housing Rent arrears;

• Homelessness presentations;

• Discretionary Housing Payments;

• Empty residential properties; and

• Advice and guidance services requests.

9: Conclusions and Next Steps

23


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24



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26

East Midlands CouncilsT: 01664 502 620F: 01664 502 659E: [email protected]: www.emcouncils.gov.uk

East Midlands Councils, Phoenix House,Nottingham Road, Melton Mowbray, Leicestershire LE13 0UL

This document is available in Braille, large print format andtape format on request. East Midlands Councils publicationsare also available in a range of languages if required.For more information please call 01664 502 620 ore-mail: [email protected]

This document has been printed on recycled paper.

Published February 2014.



Documents

Welfare Reform in the East Midlands The Story So Far · fi nancial impact of Welfare Reform in the East Midlands will be around £1.3 billion by 2014/151. So far, the available evidence