Where next for Welfare Reform? Alistair Reid

What we will cover? Recap – 2010 – 2015 Where is our money spent? What next Conservative Government Smith Commission Universal Credit What else – a guessing game What can you do?

So – what has happened to date Changes to Housing Benefit Introduction of Personal Independence Payment Introduction of Universal Credit Smaller up rating of tax credits Changes to child benefit Benefit Cap Overall spending cap More rigorous sanctions regime

Housing Benefit Local Housing Allowance Set at 30th percentile/ capped rates for size/ shared room rate Non Dependent Deductions Under occupancy provision Reduce benefit by 14% for one room/ 25% for 2 or more SG mitigated through increased DHP

PIP To replace Disability Living Allowance Non means tested benefit Simpler to administer and easier to understand But – had reducing numbers and cost as aim 343k claimants in Scotland – could be reduced by 55k according to SG research

Universal Credit Replacing 6 existing benefits (income support/ JSA/ HB/ Child Tax Credits/ Working Tax credits/ ESA) Standard allowance which is topped up depending on circumstance Lower withdrawal rate than existing benefits Paid monthly and includes housing costs – administered by the DWP

Child benefit/ tax credits/ welfare cap Removed Child benefit from ‘high earners’ – over 60k Up rated tax credits at only 1% from 2013 – 2015 (less than inflation) Capped amount of benefits at £26000 Overall welfare cap for 2015 onwards of £119.5 bn for 5 year period Sanctions regime (between 4 and 156 weeks) (Council Tax benefit)

Where do we spend money now? In your groups discuss what percentage of welfare spending goes to the following: Pensioners Child benefits and tax credits Housing and Council Tax benefit Disability and Carers Employment and support allowance Income support Job seekers allowance

What next? Conservative Government Smith Commission Universal Credit What else?

What we know Conservative Manifesto ‘real fairness means where people really can not work, they must be supported’ ‘freeze working age benefits for 2 years’ ‘lower benefit cap to £23,000’ ‘Rolling out universal credit’ ‘£12 billion in welfare savings’

What we know (con’t) Queens Speech (builds on manifesto) Commitment to freeze working age benefits Reduction in benefit cap – cap is equivalent to take salary of £29k Exemption where entitled to working tax credit Protect pensioners and costs associated with disability Remove automatic entitlement to HB for 18 – 21 year olds

So- where will the cuts fall? Budget – 8th July £12 billion in 2017/ 18 figures (£11.8 billion today) Child benefit wont be cut Pensioner benefits wont be cut Benefits for disabled wont be cut All commitments given by DC

Smith Commission Following referendum Smith Commission formed Will involve administration of benefits worth £2.5 billion being delivered by Scottish Government (out of £17 billion) Universal Credit – will give SG administrative role to change frequency/ methods of payment and whether landlord paid directly Will allow SG to vary housing cost element (LHA/ UOP etc) Overall admin of UC remains at UK wide level

Smith Commission Benefits devolved: Attendance Allowance/ Carers Allowance/ DLA/ PIP/ Severe Disablement Allowance/ Social Fund Block grant will increase to cover costs SG allowed to create new benefits Powers over support for unemployed through mainly work programme SG – spirit of bill does not meet Smith

Universal Credit Rolled out across the country in phases Must sign ‘claimant commitment’ – to prepare and look for work Administered by the DWP – paid to household on a monthly basis as a single payment – including housing element In exceptional circumstances can arrange alternative payments (rent to landlord/ more frequent payments/ payment split between partners)

Universal Credit Issues and concerns Conservative win means will carry on Concerns over payments/ arrears/ processes Will require landlord support Arrangements for alternative payments/ culture change What does it mean for capital programmes?

What else – a guessing game

What the experts think? The above represents £125 billion – of which just under 10% will be cut The areas protected mean horrific cuts elsewhere (remember majority of welfare spent on pensioners Over half spent on housing benefit and tax credits Difficult to avoid hitting low income families Merge child benefit and child tax credit?

Where will we be in the future? Tax credits Conservative supporters have started ‘Subsidy for big business’ Child Benefit Limit to 2 children/ reduce 1st child supplement Housing benefit For under 25s?

Where would you make savings? Accept premise that cuts required What would you do?

What can you do? Work with your landlord Effective advice services Rent Arrears policies and procedures Tailored support Campaigning Raising awareness Providing support to affected individuals

? Welfare

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