Welfare Reform – The Challenges

Tuesday 22nd May 2012

Angela Forshaw

Director of Housing & Customer Services

A little bit about LMH.....

• Liverpool Mutual Homes is a LSVT

• We are ‘tenant led’

• We manage 15,500 homes

• We are the City’s largest HA

• We were the City’s ‘final transfer’

• We set up in April 2008

• We have a CEO, 3 Directors and 300 staff

• We will have invested £380m in our stock & neighbourhoods by March 2013

Tenants at the heart of what we do....

• Started work programmes on day one

• Tenant priorities - c/heating and double glazing

• Good progress made - out performed the business plan- focus on quality and efficiency

• Award winning schemes e.g. Daneville - standard setting structural programme

• On-going tenant input, consultation & choice

More than just ‘housing’......

• Local service delivery focus

• Resources based on area need and characteristics

• Good fit with partners across the wards and neighbourhoods

• Wider regeneration role – physical environment, ASB, education and employment, health and older people

• Whole community approach - work with all residents, partners and organisations

Welfare Reform Act – March 2012

Recap

• Improve work incentives – work always pays

• Simplify benefits system - make it less costly to administer

• Fairness – to those claiming benefits and the taxpayer

• Fairness – protect the most vulnerable

• Control expenditure and housing costs

• Encourage mobility in social housing sector

• Make better use of social housing stock

• Universal Credit / Direct Payments

• Under-Occupation (Bedroom Tax)

• Non-Dependent Deductions

• Capping

• Disability Living Allowance / Incapacity Benefit

• Council Tax Benefit

Liverpool Context• 43,000 social housing tenants claiming HB (full & part) in Liverpool • 11,636 LMH tenants claiming HB (full and part)• Approximately 75.5% of LMH rent received direct

Main Changes….

Timelines

• Royal Assent 8th March 2012

- Some changes now, some April 2013, some October 2013

• Move to Universal Credit to be completed 2017/18

• For a period - 2 systems running

- UC administered by DWP – October 2013 (maybe April 2014)

- HB administered by LA until 2018

Welfare Reform Act

Welfare Reform Act

UC & Direct Payments - main features

• National Scheme administered by DWP

• Replaces: IS, WTC, JSA, HB, Child Tax Credit, ESA etc.

• Paid to working age claimants – monthly in arrears – direct

• Ambition - 80% plus of claims to be made online

• New work related requirements / commitments / tough sanctions

• October 2013 new claims / change of circs will go onto UC

NOTE

For people of pensionable age – housing costs part of Pension Credit from October 2013.

New claims both claimants need to be of pensionable age (61 years as at April 2013 and rising).

Direct Payments – Risks

• Loss of Income – forecast 3 -10% nationwide• LMH 1% = £550,000 !• Arrears increase – abandonment - homelessness• Increased collection costs / court costs • Relationship with DWP• 13-15% new tenants - no bank account / don’t use DD regularly • On-line claims - digital exclusion • Claimant commitments / requirements / sanctions

Welfare Reform Act

Under Occupation - main features

• DWP criteria per bedroom:• Every adult couple

• Any other adult aged 16 or over

• Any two children same sex under 16

• Any two children regardless of sex under 10

• Any other child aged under 16

Note size criteria currently excludes - fostering, staying access, pregnant women

• Working age households from April 2013 (new and existing claimants)Note size criteria not applied to people in receipt of Pension Credit

• Social rent and affordable rent tenancies

• Reduces housing costs entitlement by 14% (£12) for 1 bed under occupation and 25% (£22) for 2 or more

Welfare Reform Act

Under-occupation – Risks• Estimated12 - 60% under occupation rate amongst HAs • Financial impact £600-£1300 per year per household• Hardship & increase in arrears • Unable to meet demand for downsizing • Tenant transfers - increased void costs• Increased relet times - lack of demand for certain properties

Welfare Reform Act

Non Dependent Deductions

• 10 year freeze on NDD reversed over 3 yrs - April 11 / 13

• Lowest rates from £7.40 to £13.40

• Highest Rate from £47 to £90 (average rent £70.70 !)

• DLA replaced by Personal Independence Payment - NDD no longer exempt from April 2013

Welfare Reform Act

Welfare Reform Act

Capping- April 2013 - main features

‘’No household will receive more in benefits than the average earnings of working households after tax”

• £350/week for singles £500/week for couples and lone parents (current figs)

• Doesn’t apply to Pension Credit or WTC recipients

• Who will the cap affect?

- Large families entitled to a significant amount of CTC / families in high rental areas

- Families with 4/5 children likely to see £12 / £40 per week shortfall applied to housing costs element of UC

Welfare Reform Act

Other Risks• Failure of tenants to engage with what’s happening• Data gaps • Changing job roles flexible teams / structures /different skills / competing priorities / resources • Increased demands for support services e.g. RAISE, CABs • Increase in Debt Relief Orders • Void rates increase

Welfare Reform Act

Preparing for the challenges• Lobbying• Information gathering / risk assessments• Staff training & resource planning• Policy & procedure reviews• Relationship building with DWP• New ways of working - including working with Banks / Credit Unions• Communication !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Welfare Reform Act

Preparing our tenants for the challenges

• Employment & Training Initiatives

- Shared apprenticeship scheme

- VIP scheme

- Work Clubs

- Work Placements

- Procurement

Welfare Reform Act

Preparing our tenants for the challenges

• Digital Inclusion Initiatives

- Internet cafes

- Silver surfers

- Training partnerships

- Direct help

Welfare Reform Act

Preparing our tenants for the challenges

• Financial inclusion Initiatives

- ‘Money Matters’ in secondary schools

- Tenant Newsletter articles

- Work with Credit Unions / banks

- Special mail-outs

- Welfare Rights Advice – increased provision

Welfare Reform Act

‘Good housing is a determinant of good health, education and life chances.

The Government’s housing and welfare reforms however, present a huge challenge for social landlords & tenants.

As tenants are increasingly forced to make harsh financial decisions – ‘ digital inclusion, financial inclusion, worklessness initiatives’ – these phrases are becoming as common place in the housing office as ‘rent accounting and lettings policies’.

Welfare Reform Act

Rising to the challenge…

• What can we do that we are not doing now?

• What works?

• What doesn’t work?

• How do we focus on those most affected?

• How do we help them?

• How do we prevent homelessness?

• How do we create safe and stable communities

Thank you for listeningLet’s discuss?