1. National Delivery Group Welfare Reform: Challenges for Employability Partnerships Andrew Noble Improvement Service Tuesday 18 th June 2013 Atlantic Quay Glasgow

2. Introduction- Summary Welfare Reform- main changes Purpose of Welfare Reform Welfare Reform- financial impact Welfare Reform and Employability Focus on Universal Credit Conditionality for Universal Credit Welfare Reform challenges for Employability Partnerships

3. Welfare Reform- the main changes- timescale 2011 – Benefits up-rated in line with CPI rather than RPI – Local Housing Allowance changes 2012 – Child Benefit rates frozen for 3 years – Reduction to 70% childcare costs claimed through tax credits – Contributory ESA limited to 1 year – Lone Parents moved from IS to JSA earlier. 2013 – Universal Credit introduced – Successor arrangements to CTB and Social Fund introduced – Council Tax Reduction Scheme and Scottish Welfare Fund – New under-occupancy rules in socially rented sector – Benefit Cap introduced – Personal Independence Payment introduced (replacing DLA) – 1% annual uprating of all benefits for 3 years

4. Purpose of Welfare Reform UK Government’s case for Welfare Reform hinges on employment: “you will always be better off in work” “making work pay” Introduction of Universal Credit central to this objective

5. Welfare Reform- Financial Impact of Welfare Reforms to 2014/15 Benefit AreaNo. h’holds/indivduals affected Estimated loss £m p.a. Incapacity Benefits 144,000500 Tax Credits 372,000300 1% uprating n.a.290 Child Benefit 621,000225 DLA 55,000165 Local Housing Allowance 80,00080 Under occupancy 80,00050 Non-dependent reductions 28,00030 Benefit Cap 260015 Total1,660

6. Welfare Reform- Financial Impact of Welfare Reforms to 2014/15 Benefit TypeAverage loss per affected household/ individual (£ p.a) No. Of Households/ Individuals affected per 10,000 Loss per working age adult (£p.a.) Incapacity Benefit3,480410145 Tax Credits8101,60085 1% Upratingn.a 85 Child Benefit3602,66065 DLA3,00016050 Local Housing Allowance 1,01034025 Under occupancy62034015 Non-Dependant reductions 1,13012010 Benefit Cap4,81010<5 Total480

7. Overall impact of welfare reform on Scotland by 2014/15 by local authority area

8. Overall financial impact of welfare reform on Scotland by 2014/15 by local authority area

9. Welfare Reform and Employability Age- Older age group 30-50s Gender- marginally more men than women claiming UC related benefits Duration of Claim- majority of non JSA claims, 2 years plus, many 5 years plus Barriers to employment- childcare and transport as well as multiple and/or complex needs What happens to those who return from the Work Programme?

10. Focus on Universal Credit Universal Credit (UC) brings together 6 existing benefits into a single monthly payment: JSA IS ESA Housing Benefit Child Tax Credit Working Tax Credit Unemployed and working claimants UC is a household rather than individual benefit

11. Conditionality for Universal Credit Applicants for Universal Credit are required to sign a Claimant Commitment- a record of the responsibilities the claimant has made in return for receiving Universal Credit Claimant Commitment applies to those in work and receiving UC, who are identified as “could work more”, i.e. Those in part time low paid employment; the “under-employed” amongst them. Expectation that preparing for and getting a job is the “full time focus” of the UC claimant. Claimants not being able to demonstrate this will face a sanction, i.e. cut to their UC. This means that people in employment will seek support to develop their skills, access training/ further education and progress in the labour market as result of their Claimant Commitment- further increasing demand for a range of employability services

12. WR: Challenges for Employability Partnerships (1) Range of challenges for Employability Partnerships arising from WR (e.g. Potential major increase in demand for Employability services; different mix of clients / needs; demands of conditionality etc.) Resource implications (scale / doing more things / doing different things)? Ensuring appropriate linkages to other relevant services (Money Advice, Welfare Rights, etc – including emerging Local Support Services framework) whilst avoiding ‘revolving doors’ WR ‘incentivising work’ is premised on jobs being available. Linkages to demand side / Strengthening integration with wider Economic Development

13. WR: Challenges for Employability Partnerships (2) Reduced incomes within local economies Scope to influence focus of next round of EU funding Local Govt. has major role to play in employability – and shared statutory partner role re SOA priorities. Where does potential ‘crisis management’ around WR leave prevention / early intervention agenda? Do Councils / CPPs have genuinely joined-up approach to Economic Outcomes? What more can public sector do re. maximising economic impact?

14. Group Discussion 1.Where Partnerships are in context of Welfare Reform employability challenges 2.Emerging issues / themes? 3.Consideration of the scale of potential additional demand- availability of suitable provision? 4.New demand versus current priorities and focus? 5.What kind of support do Partnerships require?

15. Andrew Noble Welfare Reform Implementation Support Programme andrew.noble@improvementservice.org.uk knowledgehub.local.gov.uk/group/welfarereformscotland