1. Where next for Welfare
Reform?
Alistair Reid

2. 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?

3. 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

4. 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

5. 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

6. 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

7. 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)

8. 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

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

12. 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’

13. 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

14. 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

15. 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

16. 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

17. 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)

18. 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?

19. What else – a guessing game

21. 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?

22. 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?

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

24. 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

25. ?
Welfare

26. Thank you
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