Welfare Reform Update

John de la Rue

East Midlands IRRV

15th August 2013

LAs and Welfare Reform

And the rest ...

Increased DHP funding

Benefits Cap

Universal Credit

April 2013

• CTRS

• Social Sector rent restrictions

• LHA limited to CPI

• Social Fund

• Crisis loans (£133.3m)

• Community Care Grants (£141m)

£m 2013/14 2014/15

LP conditionality (£220) (£300)

Size restrictions (£470) (£470)

LHA uprating (£40) (£240)

DLA (£350) (£1040)

Benefit cap (£220) (£260)

ESA time-limiting (£1130) (£1430)

ESA Youth Provisions

(£10) (£10)

Other (£60) (£110)

TOTAL (£2510) (£3870)

LAs and Welfare Reform

And the rest ...

Increased DHP funding

Benefits Cap

Universal Credit

April 2013

• CTRS

• Social Sector rent restrictions

• LHA limited to CPI

• Social Fund

• Crisis loans (£133.3m)

• Community Care Grants (£141m)

£m 2013/14 2014/15

LP conditionality (£220) (£300)

Size restrictions (£470) (£470)

LHA uprating (£40) (£240)

DLA (£350) (£1040)

Benefit cap (£220) (£260)

ESA time-limiting (£1130) (£1430)

ESA Youth Provisions

(£10) (£10)

Other (£60) (£110)

TOTAL (£2510) (£3870)

CTRS Yr1

CTS scheme options1 2 3

Leave as is and make up the difference

Arbitrary cap[protecting vulnerable groups]

Vary multiple parameters within existing CTB structure

Example 1

338k properties 77.5k CTB claims

30% reduction Protection for disabled, households with

children <5 and War Pensioners Abolition of 2AR

Band D: £1,312 30% = £7.60 pw

Example 2

32k properties 4k CTB claims

15% in-work taper on 100% of liability Abolish non-dep deductions £6k capital limit Band E restricted to Band D Nil entitlement for Bands F, G and H 80% of liability Protection for disabled and War Pensioners Child Benefit and Child Maintenance 13 week protection Nil entitlement for under 25sBand D: £1,467 20% = £5.64 pw

CTRS Yr1 and beyond

Approach to Yr1 82% (of 326 LAs) reduced entitlement

18% made no change

72% introduced a minimum payment 46% went for DCLG 8.5% 40% opted for 10 to 20% cut Remainder are at 20% +

34% introduced a discretionary fund

Questions for Yr2 Collection rates for CTRS debt

Option to change and align with CTax

Option to leave aligned to HB

Option to align with wider Welfare Reform agenda

The bedroom tax

“Trying to define ‘significantly adapted accommodation’ for exemption purposes ... would be difficult and expensive to deliver effectively, especially within Universal Credit. It would either be too broad brush or leave out many other, equally deserving cases. We therefore recommend increasing the DHP pot ... this approach would enable local authorities to make decisions at a local level about which cases should be prioritised for financial help to meet any shortfall caused by this measure. This approach may produce inconsistencies in the way individual cases are treated across different parts of the country.” DWP Sept 2011

Emerging issues

• Shortage of suitable social sector housing

• Increasing rent arrears

• Tenant behaviour • Non-engagers • Payers-and-stayers• Movers

• Increased and co-ordinated DHP activity

• Pressure on Social Housing providers

• Shifts in HB caseloads

April 2013

• 14% or 25% reduction in HB

• Only applies to working-age claims

• Exemptions for foster carers, and parents of disabled children and armed forces personnel

• Increased DHP funding available

The Benefits cap

The following incomes are included:

Bereavement Allowance Carer’s Allowance Child Benefit Child Tax Credit ESA (except support Comp) Guardians Allowance Housing Benefit Incapacity Benefit Income Support Jobseekers Allowance Maternity Allowance Severe Disablement Allowance Widowed Mother’s Allowance Widowed Parent’s Allowance Widows Pension

•

2 tranches: Working age Private and public sector tenancies Temporary homeless tenancies DWP’s decision implemented by LAs Limits amount of out of work benefits in

payment to £350/£500. HB reduced to apply the cap until Universal

Credit is introduced If applying the cap reduces HB to nil, leave

£0.50 in payment so that a DHP may be considered.

Certain exemptions including meeting the qualifying conditions for WTC

Grace period of 39 weeks

LGA ~ The Local Impacts of Welfare Reform (Aug 2013)

• 1.71 million households will be affected by HB cuts

• 1.18 million of these will be ones where no-one works

• Highest impact in London and coastal towns

• 31.5% of households in Blackpool

• Relatively few are looking for or finding work

• Estimated that 155,000 may find work

• Estimated that 115,000 may move home

• 270,000 may therefore mitigate the impact of cuts

• Heavily dependent on local jobs and housing market

•

• Households on benefit will be £31 pw worse off (£1 in £7 of household income)

• Reasonably even spread across LAs (except London)

• Likely to have the largest impact on areas with high levels of Benefits dependence

• NE, Lancashire, Central NW, Birmingham, the Black Country, parts of London and coastal towns

• 59% of cuts fall on working households

• Impact can be mitigated by moving or finding work (but this is dependent on jobs and houses)

LGA ~ impact of HB reforms

LHA changes

Restriction to 30th percentile April ’11

LHA cap April ’11

Shared Room Rate for <35s Jan ’12

Uprating limited to RPI (and thereafter to 1%)

Apr ’13

Saving £1.51 billion

Affecting 1.15 million

Average £25 pw

Benefits cap

Cap to £500/£250 By Sept ‘13

Affecting 50,000

Average £64 pw

Affects:• All couples with 4+ children and 4+ bedrooms • All single parents with 5+ children

Bedroom tax

14% or 25% for WA Apr ‘13

Saving £395 million

Affecting 540,000

Average £14 pw

Overall

Affecting 1.71 million

Average £23 pw

DWP Nov 2010

Local Support Services Framework (Feb 2013) Mental health issues Learning difficulties Drug or alcohol addiction Homelessness English language limitations Literacy difficulties Prisoners and detainees 16 and 17 year olds Non EEA including refugees Physical disabilities Working abroad Domestic violence victims Sensory disabilities Severely indebted Over 18 care leavers Gabling addiction MAPPA claimants Numeracy difficulties Troubled Families programme Rural isolation

Building on existing support Tailored and specialist support Home visits Verification Identifying cases for payment direct Tackling homelessness Urgent support

Support for new features of UC• Triage and reorientation • Online assistance• Money advice • Alternative payment arrangements • Work related support

The UC claimant journey and local support (Feb 2013)

Learn about UC Create a UC account Provide details for claim

See likely payment amount

Submit claim Prepare for interview

Attend initial interview

Prove ID and sign claimant commitment

Receive award notification

UC paid into bank account

Budget monthly and pay rent

Demonstrate actively seeking work

Start/increase work

Update details UC payment adjusts automatically

Universal Credit (Aug 2013)

October 2013 UC on track for 2017 6 additional JCPs to take new UC claims from single unemployed claimants 10 in-work conditionality pilots Improved access to digital services

Funding will be maintained to manage the full administration of HB in 2014 and 2015 Local Support Services Framework • “continue to develop certain items where production is underway” • Test aspects within the pathfinder and new UC areas • Develop new opportunities over the next 18 months • Another version in October 2013 and fully updated in October 2014

DWP Nov 2010

Welfare Reform & customers

Welfare

Reforms

• CTRS and bedroom tax from April ‘13 • Elements of Social Fund devolved to 1st tier authorities • Benefits cap from July onwards • CTRS YR 2 (without DCLG transitional grant)• Housing Credit element of UC paid direct to claimants monthly in arrears

Increased debt

• Increase in CTax arrears • Increase in rent arrears • Increase in DHPs, s13A applications and Social Fund claims

Customers need

• Social Housing of the appropriate size or a regulated private rented sector• Budgeting support and financial products (jam jar accounts) • A joined-up approach to recovery and discretionary awards • Supported self-service for digital-by-default services • New jobs or increased hours

Welfare Reform & LAs

Challenge

• No timetable• Increasing demand and discretionary activity• Local Support Services Framework • Shortage and uncertainty of funding• Inconsistent approaches and standards

Role

• Support for vulnerable customers• F2F, budgeting and finding work

• Increased discretion, managing demand and efficiencies• Locally tailored but consistent with a national framework• Customer segmentation for targeted provision

LAs need

• Varying states of readiness • 50% have caseloads <20,000

• Confirmation of UC timetable, delivery model, LA role and funding arrangements• Resilience to deal with diminishing caseloads and residual activity

Questions