Implications of Welfare Reform Wednesday 21 November 2012

Conference Chair Cllr Martin Hill, Lincolnshire County Council

Universal Credit and Other Welfare Reforms – a Local Authority Perspective John Wright 21 November

Universal Credit Aims to make benefits system simpler by merging out of work benefits and tax credits into one award, including Housing Benefit and make work pay. Implementation Oct 2013 to 2017; pathfinder roll out in Greater Manchester region from Apr 2013 Digital by default - 80% of transactions on line Direct payment monthly in arrears to a household rather than an individual. Jun 12 – Jun 13 direct payment demonstration projects involving six councils/HAs

Universal Credit UC replaces the following benefits/tax credits: Working Tax Credit, Child Tax Credit, Housing Benefit, Income Support, Income-based Jobseeker’s Allowance Income-related Employment and Support Allowance. Will support working age adults and children up to an upper age limit linked to the qualifying age for pension credit.

Pension Credit UC not payable to people in receipt of pension credit, except where one of a couple under pension credit age, in which case treated as household eligible for UC. Housing Benefit for these households replaced by Housing Credit To be introduced to same timescale and payment terms as UC, though not starting until

Benefit Cap Aims to restrict amount of benefit working age claimants can receive to average earned income of a working household after tax and national insurance. Applies to working age households To be set at £500 per week for couples and lone parent households and £350 per week for single person households Until UC to be delivered by councils through Housing Benefit

Benefit Cap Bereavement Allowance Carer's Allowance Child Benefit Child Tax Credit Employment and Support Allowance (except where it is paid with the support component) Guardian’s Allowance Housing Benefit Incapacity Benefit Income Support Jobseeker's Allowance Maternity Allowance Severe Disablement Allowance Widowed Parent's Allowance Widowed Mothers Allowance Widows Pension Widows Pension Age- Related When added together the benefit cap will limit the total income that can be received from the following benefits:

Benefit Cap Does not include council tax benefit Will not apply for those qualified for Working Tax Credit or in receipt of the following benefits: –Disability Living Allowance –Personal Independence Payment (from April 2013) –Attendance Allowance –Industrial Injuries Benefits –Employment and Support Allowance, if paid with the support component –War Widow's or War Widower's Pension 9 month grace period for those in continuous employment for previous 12 months

Local Welfare Assistance Replaces community care grants and crisis loans Funded from un-ringfenced grant to be paid to upper tier and unitary authorities Provides local support to vulnerable groups Can be in cash or in kind Indications that councils choosing mixture of the two, but with a greater emphasis on in kind rather than cash.

Housing related reforms Oct LHA reduced from 50 th percentile to 30 th percentile of market rates and frozen from Apr 2012 From Apr 2013 to be adjusted by CPI From Apr bed rate of LHA removed – max rate is for 4 bed property From Jan 2012 single under-35s only eligible for shared rate of LHA Apr 2013 – introduction of size criteria in social housing.

Serious Fraud Investigation Service DWP, HMRC and council fraud investigation services to become partnership to ensure single investigation in respect of Welfare Benefit and Tax Credit fraud Council staff remain as council employees Councils still responsible for non welfare related fraud

Comment While we welcome: Simplification of benefits and tax credit system with the introduction of UC Recognition that councils are best placed to design systems to support the needs of their own communities. Views differ on how people’s behaviour will change as a result of the reforms, but clear councils will be crucial in influencing the dynamic/behavioural changes the government is seeking, particularly in strategic housing role But implementation raises a number of issues for councils

Impacts and Issues (potential & real) General Data exchange IT readiness New burdens Demographic migration? Loan sharks, Credit Unions and Stop Loan Sharks Team ( ) Introduction of UC Face to Face delivery Managing run down of HB delivery Future of staff (TUPE issues) Monthly direct payments Passported benefits

Impacts and Issues (potential & real) Introduction of Benefit Cap Provision of information Sufficiency of DHPs Rent arrears/increased cost of collection? Increases in B&B and Temp Accommodation? Overcrowding? Increase in rough sleepers? Reputational impact? Local Welfare Assistance New role for councils Various options being considered SFIS Future investigation of tenancy and council tax fraud

Questions?

The Implications of Welfare Reform -Local Council Tax Support -the story so far Andrew Burton IRRV - Head of Revenues, Benefits & Customer Services Bassetlaw DC November 2012

What the briefing will cover  What is happening to (scrapping of) Council Tax Benefit and -what have we done/still to do at Bassetlaw DC ?  x Bedroom Tax  X Universal Credit  X Social Fund  Practical analysis…20 mins

CTB, what is happening – key messages  1) From 1st April 2013, there is no more Council Tax Benefit. Councils instead must put in place a locally determined scheme that awards discounts to residents by reference to financial need.  2) The local scheme will be funded by the Government at a level of 90 per of existing “demand led“ CTB. ……… (continued)

 3) Pensioners cannot be worse off than they are now under CTB. They are protected and the Govt said this is the only intervention in schemes.  4) The new local scheme must somehow encourage the journey from welfare to work, the idea being that if councils did more about job creation and unemployment, the 10% saving in CTB would heal itself.  5) Under the equality duty, must not, disadvantage vulnerable groups. So, some working age groups should not face reductions such as the severely disabled. CTB, what is happening – key messages

 CTB caseload ,500 claimants  CTB spend £9.130m 2012/13  10 per cent is >£910,000-£1m with new cases  Pensioner caseload  Working age earning  Working age IS/JSA 3565  Existing spend on pensioners £4.3m  Existing spend on working age £4.8m  Expected spend for working age under new scheme £3.9m Some Bassetlaw DC stats

 MPA and districts in Notts worked together on standard menu of options and framework  But, there is no countywide scheme as Billing Authority must reflect different challenges.  Not all Notts agree to types of change e.g. a weekly liability restriction, Ashfield,Broxtowe and Gedling said no ….  Council Leaders -involved, informed re menu options and timetable, Difficult choices for members What are we doing in Notts ?

 LGA Chairman Sir Merrick Cockell said “Councils are being put in a very difficult position. Under the proposed scheme most councils will have to ask people on lower incomes, including the working poor, to pay more council tax than they currently do The million pound drop

 Use the Council Tax Benefit scheme as basis- but restrict support for Council Tax for working age people yet protect the vulnerable (severe disability and war pensions)  – Everyone pays something including JSA /IS by presenting (in Bassetlaw) 80% of liability for rebating  – Indicative modelling: Potentially nets £0.7m (cap support at 80%) - £1.003m. (cap support at 75%) Bridging the £1m Drop -Attempt 1

 Band A,Harworth charge now £  Gets Income support /JSA so rebate pa £ ie £ pw  If only 80 % rebate-able so £21.39 x80% so gets £17.11pw which is £ pa in new support  £ minus £ = £ or <£19 pm - specifically £4.28 pw to pay.  This element would account for 7/10 of shortfall ( c 700k ) Example……….

 Capital limit from £16,000- nets <£0.030m  Scrap Second Adult Rebate for working age (£0.012m)  No backdating awards (£0.020m)  Increase non dep deduction (£0.050m)  Stop ignoring Child benefit (£0.220m)  Stop ignoring income disregards (£0.090m)  Consider vulnerable class  Consider hardship fund  Consulted …………. The million pound drop -other adjustments to CTB scheme- common in Notts

 residents with the least money will receive the most help  Support will be distributed as widely as possible among people eligible to claim the discount  The scheme will support people moving into, and on, low paid work.  The scheme will ensure that everyone apart from the most vulnerable will pay something towards Council Tax BDC Consultation messages

 Leaflets /booklets- 22,000 mailshot  On line survey  Bassetlaw CAB/A1Houisng / other RSL/2 shires CU/Vol sector, Fin Incl group  Parishes/local councils  Road shows TRA  8+ weeks 29/8 to 28/10/2012 Consultation formats

 Mr Pickles made an announcement first reported in the Times 13/10/12 Wait a minute

 Share of £100m is £217, 275  Conditions apply, mainly IS related cases  Transition, no Income Support /JSA case to be worse off by more than 8.5%  Substantially underfunds the gap  Other changes in attempt 1, can’t apply  Grant can’t be claimed until after scheme deadline 31 st Jan 2013  May need to re do our scheme and consult again  Initial angry reaction………… £100m deal (or no deal?)

 FURY  Meddling  Descending into chaos. Bad thing made worse  During 3 rd reading, amendment to review in 3 years and include Council Tax Support in UC  Threw out changes to home alone discounts  Doomed to failure, takes money off poor, lasted 3 years, late central interfering,labelled poll tax ii  Bad week, that was the last week in October A 4 letter word beginning with F

 Approx 390  On the 80 per cent- survey is split, disagree said do it lower than 80 per cent  250 to 90 re Hardship  Count income? – do it excl war widows  Other tweaks - do it said 260/75  Agree vulnerable do it said 260/50  96 per cent from Bassetlaw  61 per cent not on CTB and mostly under 60 Consultation responses

 “MY CONCERN IS THAT YOU WILL NOT BE ABLE TO MAKE THE SAVINGS AND YOU WILL INCREASE COUNCIL TAX BILLS. MIDDLE CLASS WORKERS WILL SUFFER AS USUAL!”  “I recognise that BDC are required to bring in changes to the system but I hope you are continuing to protest strongly against the rationale behind it ie that poor and vulnerable people should be hit disproportionately hard by the need to make savings” Comments

 Royal Assent to LGFA 2012  Council may decide to revise draft scheme and take the Transitional Grant and accept its conditions  Fund the gap from tax base growth c 500k  New discount powers  We are unlikely to re consult year 1  Will be consulting for year 2 scheme Be positive, it’s November

 Collection – est 50 per cent won't pay  Collection costs >£50k more. Need DIRECT Debit  Vulnerable and unknown information  Discount changes- consider the impact  Major publicity on scheme decision Jan/ Feb  Revs staff at full output anyway- year end  Customer impact rent increase and council tax. A huge telephone demand expected Key matters

 Tax base, MPA and local councils  Empty property council tax  Decide on accepting share of £100m  BDC Weekly scheme and collection approach  CTS scheme by 31/1/13 (20/12/12)  Others  Major member decisions  Unprecedented activity and customer and staff impact to plan for Next few weeks - Hold our nerve

Workshops Delegates attend one workshop, delegates to choose between; Workshop 1 – West Lindsey District Councils Universal Credit pilot Workshop 2 – Rushcliffe Borough Council and Melton Borough Councils Joint Universal Credit pilot

Universal Credit Pilot West Lindsey District Council Alan Robinson Nicoya Palastanga

What is Universal Credit? Universal Credit will simplify the benefits system by bringing together a range of working-age benefits into a single streamlined payment. It aims to: simplify the system, making it easier for people to understand, and easier and cheaper for staff to administer improve work incentives smooth the transitions into and out of work reduce in-work poverty cut back on fraud and error. The first applications to Universal Credit will be made in October We expect all working age claimants to have moved onto Universal Credit by October 2017.

Personal Independence Payment Universal Credit Child Benefit, Carer’s Allowance (will remain) Income related JSA Income related ESA Income Support (including SMI) Working Tax Credits Child Tax Credits Housing Benefit Disability Living Allowance Contributory JSA and ESA (conditionality rules changing) Council Tax Benefit (Localised Council Tax Schemes) Pension Credit … to include support for housing and children

2013 focus pilots - Twelve pilots will run from autumn 2012 to September 2013 to explore how local expertise can support residents to claim Universal Credit focus pilots will look at: - encouraging claimants to access online support independently; - improving financial independence and managing money; - delivering efficiencies and reducing fraud & error; and - reducing homelessness. Post 2015 focus pilots – on the longer term role for local authorities in supporting Universal Credit claimants. Local Authority-led Pilots Key: LA-led pilots Pathfinder preparation projects Direct Payment Demonstration Projects North Dorset Rushcliffe Melton Bath & NES Oxford Caerphilly Newport Birmingham West Dunbarton North Lanarkshire Oldham Wigan Dumfries & Galloway Edinburgh Wakefield Shropshire Southwark Torfaen West Lindsey Lewisham

Migration - key dates APRIL 2013 Pathfinder begins National introduction of Universal Credit – groups of new unemployed able to claim, gradual phasing out of claims for existing benefits Expansion - new claims from people in work and moving current claimants to Universal Credit in phased approach Universal Credit roll-out complete OCTOBER 2013 SPRING

WLDC Pilot October 2012 to September 2013 Face to Face Delivery Local delivery Holistic approach Digital engagement/journey Reduce fraud and error

Online Claims Digital by default Housing Benefit/Job Seekers Allowance Access to IT Public Access in council offices Working with partner organisations Public Access across the district

Support for Customers Financial Literacy - budgeting skills - suitable bank accounts Introduction to IT Literacy and Numeracy

What will be different? Co-location of services ≈WLDC, JCP, LCC, VCS ≈Additional support from CAB, Credit Union, training providers, NCS

The Role of Local Authorities Localism Community Champions Reducing Fraud Partnership Working Experience – housing, skills agenda, council tax support

Now over to you for any questions

Welfare Reform - The Impact on Housing

Introducing Kettering

 93,800 people live here (+14% in ten years)  We own and manage 3,800 homes  More than 950 new homes were built by housing associations between 2006/07 and 2010/11  Private rentals have increased from 6.4% of the housing stock in 2001 to 24.3% today  2991 households are now registered on Keyways

Welfare Reform: The Emerging Picture

 Shared accommodation rates for under 35’s – Affected 60 claimants – many are now struggling  Benefit cap – Could affect 50 households – take-up of one-to-one meetings is very, very low  Size criteria – Could affect 35% of working-age council tenants – 455 households  Non-dependent deductions – Higher levels of fraud?  Localisation of Council Tax Benefit – Potentially, a huge impact but little awareness among tenants

Welfare Reform: The Emerging Picture Short term  Raising awareness of welfare reform among tenants  Staff training  Logistical issues - IT, direct debits  Need for more tenancy support  Impact on rent arrears and homelessness  Dealing with under-occupation - spending on voids Longer term  Impact on the private rented sector  Increase in HMOs - quantity and quality

London – Only 55 minutes away!

London – only 55 minutes away!  We are monitoring closely  Impact on private sector rents  Impact on local support services

Our Response to Welfare Reform

Action Plan  Focus on underoccupying council tenants  Identifying resources for more tenancy support  Working with HB to Identify vulnerable private tenants  Housing options interviews at first point of contact

Communication Strategy  Training and information for staff  Consulting stakeholders  Information for tenants and applicants  Target individual tenants  Promote life skills training

Dealing with Underoccupation  HomeMove Advice and practical support for tenants who want to downsize  Mutual Exchanges Advice and information Promotion of House Exchange Incentives for tenants  Lodgers

Life Skills Training  Move On, Move In Life skills training for young people  Life Plan Helping tenants with employment, education and training  Tenancy training houses For young people and rough sleepers

Any questions? John Conway Head of Housing  

Welfare Reform: The impact on local communities Samuel Scharf

Contents Joining the dots of Welfare Reform Impact of reforms on local areas and communities Responsibilities of, and pressures on, local authorities Solutions

Local provision: welfare assistance Welfare Reform Act abolishes, from April 2013: - Community care grants (CCGs) - Crisis loans (CLs) for living expenses Previously centrally held Council Tax rebate budget will be added un-ring fenced to LA grant (-10%) with additional policy pressures LAs expected to make local arrangements to meet need Housing benefit changes

Managing effects of benefit changes Total benefit cap Families look to move to cheaper accommodation (or not as the case appears to be) Risks of overcrowding, HMOs (Houses of Multiple Occupation) and homelessness, increases pressure on housing and homelessness depts, children’s and adult services. Movement between areas risks employment problems, less social integration and child protection issues. Increases pressure on schools, health services.

Implications for local authorities Various levels of pressures and responsibilities: 1. Local provision of formerly national schemes 2. Managing effects of benefit changes on local communities 3. Involvement in local delivery of national Universal Credit? 4. Others – PIP (Personal Independence Payments) /DLA (Disability Living Allowance), Re-setting local entitlement criteria to discounted services

Pressures that will impact communities New administration of these support functions – money to existing services with high entitlement thresholds Support in kind versus support in cash No rights to review – pressure on your complaints process Not ring fenced - potential movement of money to statutory services Timing Impact if there is a local residence test

Simpified? Personal Independence Payment Universal Credit Pension Credit, Child Benefit, Carer’s Allowance (will remain) Income related JSA Income related ESA Income Support (including SMI) Working Tax Credits Child Tax Credits Housing Benefit Disability Living Allowance Contributory JSA and ESA (will remain) Council Tax Benefit

Tapering

Role in delivery of Universal Credit Delivery of UC is “digital by default” but face to face and telephone access for those who need it Potential role of LA s, RSLs (Responsible Social Landlords) and third sector organisations in delivery: help access online account face to face / telephone contact budgeting support and financial capability

Top 5 challenges 1)Social Services assessments (new proxies), costs and passported services 2)Empowerment or dependency, what is the balance? 3)Individual and family capability and capacity to cope 4)Digital by default – what does this look like? Impact? 5)Coping with increase in demand both on advice services as well as high cost lenders and unscrupulous traders.

Communication ActivityDatesPurpose of scan Benefit Cap direct mail/ Communication (NB further scans post Oct 12 are currently being considered) May To all ‘stock’ claimants (at that point in time) July To ‘new’ claimants not captured on p April 12 scan October To all ‘stock’ claimants (at that o point in time) To inform claimants of the cap and the support available to them. DWP District scan (NB further scans post Oct 12 are currently being considered)  April 2012 – an initial ‘stock’ scan  July A new claim scan (only cases not o on April scan)  October 2012 – A new claim scan (only cases n not on July scan Districts will use the scan from April 2012 to make contact with claimants and offer of employment support. Local Authority Scan  April/May 2012 – an initial ‘stock’ scan  July A new claim scan (only cases not o on April scan)  October 2012 – A new claim scan (only c c cases not on July scan LAs will require a scan output of potential cap claimants /households to enable them to offer housing support.

Solutions Accountability and transparency Clear information channels to citizens, need for real engagement and use of appropriate technology Working across teams in LAs, Job Centre Plus, with CABx and others to explain changes (Local Delivery Alliances) Common issues that joint thinking could provide some solutions New partnerships. E.g. Banks, employers.

Welfare Reform: The impact on local communities Samuel Scharf e:

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