The impact of Welfare Reform in Leicester

Karen Wenlock

Revenues & Benefits Manager

July 2014

1

Content

• Council Tax Reduction Scheme • Under –Occupancy • Benefit Income Cap • Homelessness • Financial pressure • Discretionary Housing Payments • Impact On Children • Personal Independent Payments • Impact On Adults • Migration And Emerging

Communities • Legal challenges • Universal Credit

What Help Is Out There? • Community Support Grant • Sanctions • Emergency Food • Working together • Summary • Any questions?

2

Council Tax Reduction Scheme

• Council tax reduction scheme replaced council tax benefit from April 2013.

• All working age benefit households have to pay 20% or more towards their council tax bill.

• The average bill to pay is £198. • Pensioners are protected from the change • This is a discount offered by the council not a state benefit • Financial support was limited to awards above £3.60 per week • The charge payer must have capital below £6,000. • Average benefit loss £3.80pw • Main three wards affected : New parks, Spinney Hills and Beaumont

Leys.

3

Council Tax Reduction Scheme- where the loss in council tax was felt across the city.

4

What are we doing to help?

• We launched a targeted ‘talk to us’‘ publicity campaign • Additional ‘prompt to pay’ letters were sent to a target client group • The council sort to reduce the burden of debt for all households in

the city where the debt is not paid through negotiating lower court costs

• Expected number of charge payers issued with liability orders to allow recovery of debt through attachment to welfare benefit payments

• Of the 15,000 who had a bill to pay this year 7,000 payers have paid in full with the remainder paying regular instalments or have attachments to benefits/earnings (2,542) and expected to pay in full by October 2013.

• Take up of the scheme has been less than expected. • Council tax collection against the target is strong.

5

Under-occupancy Impact Analysis

• In the 2011 Census in Leicester 129,603 households in the council tax property base.

• Of these 31,270 residents declared they lived in a social housing property.

• In total 3,844 households affected from April 2013 however by 31st March 2014 this number had reduced to 2,976.

• Average loss per household is

• £10.91 for one spare room

• or £19.96pw for two or more spare rooms

Main three wards affected:

• Council Housing: New Parks, Braunstone park/Rowley fields and Eyre's Monsell.

• Housing Association: Spinney Hill, Coleman, Stoneygate.

6

Under-occupancy

7

Map showing the property distribution of homes affected by under –occupancy rule. Data as at 31.12.13.

8

What can the council and social housing providers do to help?

• Where known, all households were contacted prior to the rule being applied to them offering advice and support.

• Leaflets are available offering advice on taking on a lodger • All households have been offered housing advice and support should they wish to find cheaper,

smaller alternative accommodation. • Promotion of the HomeChoice, EasyMove, HomeSwapper schemes to help households find new

homes. • Supported by Discretionary Housing Payments (DHP)to minimise rent arrears while waiting to find a

suitable place. • The housing allocations policy has been reviewed and updated to reflect the changes. • High take up for discretionary applications. Support of this nature is on-going were the householder

is seen to be helping themselves to manage their financial commitment. • Controversy extended into the definition of “what size is a bedroom?” , room reclassification and

whether the council should adopt a no eviction policy for tenants facing loss of income due to welfare reforms.

• Since April 2013 868 households no longer have the rule applied. • The collection of rent owed to the council is less than last year, however this was anticipated. • Come and talk to us campaign - about how to pay regular, affordable amounts • Clockwise Rent Account • Tackling tenancy fraud, freeing up properties • Their options to move may be limited if they have rent arrears DHP.

10

What size is a bedroom?

• Section 365 in the Housing Act, 1985, is used to calculate the maximum number of people who can live in a property, without causing ‘statutory’ overcrowding.

• The Government’s Housing Benefit guidance does not take any account at all of the size of a bedroom. A room is either a bedroom or it is not.

• Any room with adequate ventilation and a minimum of 50 sq feet (4.65 sq metres) of floor space can be considered as ‘available for use as sleeping accommodation’.

Re-classification of a bedroom

• Re-classification of bedrooms could occur when:

Where significant adaptations to the property have occurred. Such as a through floor lift has been installed.

Where the accommodation has seen a change to the floor plan.

If the bedroom size is less than 50 square feet (reference Housing Act 1985) the room will no longer be deemed to be a bedroom.

Any reclassification will be undertaken on a case by cases basis and not as a wholesale reclassification exercise.

Changes to the legislation.

• Some homes should not have had the rule applied to them. • This is where the claimant had been resident at the address and deemed

to have been in continuous receipt of Housing Benefit since January 1996, these tenants should have been excluded from the under-occupancy charge from 1st April 2013 until the legislation was amended from 3rd March 2014.

• Additional Housing Benefit for this period has now been awarded. A letter was sent to those affected in late March 2014, once the legislation was changed.

• These cases are now subject to the under occupancy restriction from April 2014

• Council cases – 262 • RSL cases – 84 • In total 346 households affected in the city. • Some claimed DHP to support their residency. • This has not been recovered.

13

Benefit Income Capping from August 2013

• 72% are female claimants. Of these 59% are lone parents.

• 28% are male claimants. All singles (6%) claimants are male

• 47% white, 36% Black, minority, ethnic, 17% unknown

14

How many households are affected: Initial DWP scans showed there 725 households in Leicester that could face the Benefit Income Cap when applied. Actuality there are, at any one time, between 170 and 220 households affected by the rule.

Benefit

Income

Cap

Working

age

All

domestic

dwellings

202

£22.61

-

£116.36

Spinney Hills

Stoneygate

Braunstone/Rowley

Fields

Benefit Income Capping

The average loss of housing benefit per week:

Average weekly welfare benefit income 13/14 for a couple with children.

Not including housing benefit

COUPLES WITH CHILDREN

No. Children

PASSPORTED BENEFIT

CHILD BENEFIT MAX CTC

TOTAL income per week

1 112.55 20.30 £62.79 195.64

2 112.55 33.70 £115.10 261.35

3 112.55 47.10 £167.40 327.05

4 112.55 60.50 £219.71 392.76

5 112.55 73.90 £272.02 458.47

6 112.55 87.30 £324.33 524.18

7 112.55 100.70 £376.63 589.88

8 112.55 114.10 £428.94 655.59

9 112.55 127.50 £481.25 721.30

10 112.55 140.90 £533.56 787.01

Benefit cap households Average housing benefit loss per week Based on live caseload as at 30.11.013 Number of children in household

Social housing

Private rented sector

2 £64.12 £49.12

3 £22.61 £28.62

4 £28.92 £39.06

5 £59.47 £71.19

6 £48.44 NA

6+ £66.32 £116.36

Benefit Income Cap

This map shows the

distribution of

households across the

city affected by the cap,

by tenure and ward.

What is the council doing to help?

• Following the national trend only half the households expected to be affected by the rule have actually had the rule applied and their Housing benefit reduced.

• Collaborative working with the job centre plus supports households back into the jobs market

• Improving skills through training • All households have been contacted to offer housing advice and support given

should they wish to find cheaper alternative accommodation. • All households with children have been contacted to ensure support and advice is

offered and where to find additional assistance if struggling to feed the family. • Housing options are monitoring the housing market and reports of notice of

seeking processions/evictions to establish if this rule is resulting in families losing their home.

• Contacted every household offering Discretionary Housing payments and housing advice should they wish to move.

• Signposted to budgeting advice, if they wish to remain in the property and need assistance to manage their budgets.

• If they are actively trying to help themselves they may apply for a Discretionary Housing payment (DHP) to help pay their housing costs while a solution is found.

17

Homelessness

One possible way of measuring the direct impact of welfare reform on homelessness in the city is by reviewing the number of households the council has a duty to re house.

Comparable year on year data where Leicester City council had a duty to re house.

12/13 13/14

Quarter 1 33 28

How many of these households had dependent

children resident?

31 28

Quarter 2 20 27

How many of these households had dependent

children resident?

19 22

Quarter 3 10 22

How many of these households had dependent

children resident?

10 17

Neighbourhood impacts

The areas of the city where households are most likely to be experiencing cumulative impacts of welfare reforms and, consequently, presenting an increased risk of issues including debt management, hardship, safeguarding, and vulnerability to homelessness:

• North West (Beaumont leys, New parks)

• West (Braunstone park & Rowley Fields)

• South (Eyres Monsell)

• East( Spinney Hills, Stoneygate, Coleman)

19

Discretionary Housing Payment (DHP)

fund allocation

The total number of DHP applications received in 2013-14 was 3443 against 426 for the entirety of 12/13.

DHP fund has been spend in totality as at March 2014

Funding for £2014-15 is £828,533

In addition - Council tax Discretionary relief fund spend to March 2014 was £262,236

Local Authority 2012/13 2013/14

Leicester City 209,549 813,252

Nottingham City

211,880 696,031

Derby City 234,767 560,754

Coventry City 329,445 798,643

21

Discretionary fund– Local Discretion Working with our colleagues in Housing, Adult social care and Children's services the Discretionary Housing payment fund will consider supporting: Helping households moving to smaller accommodation. We will contribute up to £200 towards

moving costs and disconnection/reconnection charges

Foster carers with a second spare room. There are 2 households in the city meeting this criteria.

Foster carers for adults ( shared lives). There are 40 households in the city meeting this criteria.

Care leavers up to 22 years old or 25 if at university

Carers – we will support you while you seek alternative accommodation. There are 1249 registered carers in the city, 101 of them claim HB

Disabled claimants where a room is used to store medical equipment such as a dialysis machine.

Absent parent or shared care – we will consider helping cover the costs of this room in order to support family relationships

Considering becoming a foster carer/adoptive parent? Then we could consider covering the bedroom tax for these households for up to 6 months while the assessment is undertaken.

Supported households on the think family programme.

Family households where the children are under 10 years of age, currently required to share a room, different genders, one of the children is nearly nine.

Children with disabilities who are unable, due to their condition, to share a bedroom with a sibling

How have we awarded the support?

DHP funds have supported:

• 801 under-occupancy cases

• 96 benefit cap households

• 441 other households affected by a multiple impacts

Council Tax Discretionary Relief funds have supported:

• 1945 households

23

Impact on households with children

• For most of the welfare reform changes over half of the households affected have children

• There is a disproportionate affect on lone parent households

• The impacts are being felt in the most financially deprived areas in the city

• Adverse affect of the delay in the introduction of Universal Credit, as would potentially qualify for more income under that scheme.

24

Impact on Children's services

• Protected increases in domestic violence and statutory child protection activity may increase because of increase in family tension following financial crisis

• Greater impact maybe felt by care leavers who have no home to return to if they are homeless as a result of the reforms.

• For care leavers the council funds a setting up home grant of £1,500. There maybe a greater call on this support

• There will be a greater call on all discretionary funds for additional help for vulnerable families particularly with disabled residents

• A mobile population with families separating and moving to Leicester will increase the pressure on stretched services. Tracking safeguarding households will be more difficult.

• Planning for school places is problematic. Children may join school population from outside the housing options route therefore our ability to monitor and therefore apply a rational strategy for planned increases is difficult.

• As more families seek work to improve their financial position is the child care provision out there affordable, accessible and of a sufficient standard to support these aspirations?

Impact on vulnerable adults

• The reforms are anticipated to affect 75% of service users

• Disabled households are protected from some of the changes

• More people will pay a reduced contribution or no contribution following a fairer charging assessment

• Budget management is difficult

• Increased referrals likely

27

Migration and emerging communities

• The greatest impact of Welfare Reform is being felt in the boroughs of London

• The expected migration, if it is occurring it is below our radar

• New communities in the city commonly reside in private rented sector. Therefore as many of the changes impact greatest in private rented sector they will be disproportionately affected by the changes

28

Universal Credit roll out

National roll timetable says by the end of 2014 UC will start to expand to cover more of the North West. LCC benefit fraud investigators transfer to DWP in March 2016. During 2016 all new benefit claimants across the country will claim UC instead of the benefits it replaces. However, it has now been acknowledged that at least 700,000 claimants will not be on UC by the end of 2017. Housing costs moving into Pension Credit has been delayed until 2017/18

WHAT OTHER HELP IS OUT THERE?

Community Support Grant

Formerly known as Crisis loans and Community Care grants Leicester developed its own local scheme known as the Community Support Grant.

Funding for Leicester is £1,606,825m

Community Support Grant

Council adopted our scheme from April 2013. The key headlines being to: • alleviate poverty; • support vulnerable young people in the transition to adult life; • safeguard residents in their own home • help those who are trying to help themselves; • keep families together; • support the vulnerable in the local community; • help people through personal and difficult events. The policy intention supports other council strategies and recommendations: • Leicester City’s Child Poverty Commission recommendations • Leicester City’s food plan 13/16 • Children’s society recommendations

32

Community Support Grant

Take up /use of the scheme are: • LCC received 2613 requests for support • 1463 approved, 1055 declined ( a number of these were duplicate and incomplete) • £367,211.53 in award payments made • 700 referrals to other sources of support for those whom we are unable to support through the

scheme- they usually receive a referral to the LCC partner food banks • 1700 food bank referrals. • In 2013/14 LCC policy awarded 873 crisis grants (non-cash based awards and funds which are not

recovered from the client) of £57,078.38 • An average award is £64.94. They received co-op vouchers which exclude the purchase of alcohol

and cigarettes, for food, fuel to ups direct onto fuel cards, clothing and most would also receive a 3 day food parcel.

• In 2013/14 LCC policy awarded 590 community support grants (non-cash based awards and funds which are not recovered from the client) of £310,211

• An average award is £515.17. Including white goods, beds, bedding, carpeting of homes mainly

social housing stock, curtains, sofas, tables etc. 33

Community Support Grant

• LCC has piloted alongside providing new goods, a scheme to ensure a sustainable resource for furniture in future years. “Pass it on “ project.

• The Local Welfare Assistance (LWA) funding has been utilized to develop this pilot this scheme in

conjunction with waste management. Our initial findings are encouraging. • This pilot has shown the council is able to minimise purchasing new goods for the first seven

months of the pilot the savings were £58,334. • Donated items include bed frames, sofas, chairs, dining room tables, bedside tables, computer

desks, wardrobes, dressing tables etc. (beds supplied with a new mattress) • 174 households in the city received 746 furniture items. All were assessed as safe, clean and re-

useable. • All electrical items had been PAT tested. • This venture is currently operating at a very low level in order to test the viability, it is hoped the

scheme will expand in the coming months and this offer will roll out to a wider audience. • The council expenditure on landfill charges reduced by £1,398, 19 tons of waste did not end up in

landfill.

34

Sanctions

In September 2013

• 11,400 people claimed Job seekers allowance (JSA)

• 15,900 people claimed Employment Support Allowance (ESA) including Incapacity Benefit claimants

Of the 29,000 Adverse decisions (sanctions) applied in Leicester, Leicestershire and Northamptonshire between Oct 12 and June 2013

• 4,570 applied to JSA claimants

• 250 applied to ESA claimants

DWP Sanctions • A major issue in the city has been the increased activity at the DWP regarding the use of

sanctions with increasing number of applicants presenting both to us and other advice services who have no means of support.

• Initially these applications were not supported under the CSG policy, as the DWP has retained the administration of a hardship fund and the crisis loan for alignment payments. From April 2013 known as short term benefit advances (STBA) a loan against future benefit , in order to support the DWP sanctions policy.

• However the scheme and the local impacts was continually reviewed and monitored by the council and advice agencies a recent upward trend in sanctioned claims has identified hardship and showing STBA payments are awarded in very small numbers, leaving significant number of household’s struggling to cope.

• LCC CSG policy has been amended, in recognition of this need, and in future some applicants who have no other means of support will receive assistance.

• The numbers of crisis grant applicants have increased by 43.10%, the number of awards has increased by 61.76%, the average award has increased to £70.30 in April 2014 and the monthly spend for crisis grants has increased by 48.9% since the policy change was introduced.

36

Emergency food outlets for the city . Research findings.

We have identified there are broadly three main types of provision:-

• Emergency food (i.e. providing several days of non-perishable food to those in crisis).

• Hot meals (services aimed primarily at homeless or disadvantaged groups)

• Surplus food distribution (fresh, chilled and close-to-expiry food provided to eliminate food waste from wholesale/retail outlets)

37

Emergency food provision in the city

Hot meals only including lunch clubs

Food parcels Meals and food parcels

Total

North 2 3 3 8

West 1 5 0 6

East 6 3 1 10

Central 4 5 2 11

South 0 7 0 7

Total 13 23 6 42

Distribution of emergency food provision in the City where known.

38

Food banks

Why has demand increased?

40

What does the future look like?

41

The viability of current food banks to continue operations in the next 12 months.

Risks and issues identified The information gathered during this mapping exercise has helped to get a better understanding of the provision in Leicester. The main issues and risks are: • Whilst virtually all sites reported demand is not being met through their current capacity, it is possible the food

poverty needs of a number of deprived inner-city areas are not being met potentially because of a lack of provision in their locality. However another perspective is what these communities’ are doing differently that has not required the local response to be to set up a food bank.

• Improved communication and internal referrals between food banks would increase efficiency and further reduce

food waste. • It is clear that the provision would benefit from the setting up of a clear structure of standards in key areas to

ensure that the current provision adhere to all the necessary standards in relation to Health and Safety, such as food handling, food storage etc. This would improve the current provision but would also assist with the setting up of any new provision giving a clear framework on which to operate.

• Funding of scheme memberships, running costs and other associated costs is increasingly difficult. • Sustainability of the outlets is under threat. As 86% of the providers rely on one single resource to provide the

bulk of their produce this means should this provider change their delivery model a significant number of sites would need to source an alternative supply or in some instances may be forced to close.

• Assuming the food poverty needs identified earlier in this report will persist into 2014 at comparable levels, urgent

action will be required to source alternative suppliers of emergency food. No other UK suppliers are known to operate on the ‘warehouse model’ employed by FareShare.

42

Solutions? Described below are some of the possibilities the council is currently exploring based on the meetings and site visits we have undertaken:

• A co-ordinator to support this community activity facilitating volunteer activity, supporting fund raising and alternative resources (food drives, other food sources).

• Cooking skills training offer: such as the Let’s get cooking, which a Children’s Food Trust is cooking course run a 3 – 4 hour taster session for food bank volunteers and/or workers. The session will include some basic fundamental cooking skills and examples of what and how to cook on a budget. The participants will also be invited to use the session to further develop a course that will particularly meet the needs of food bank volunteers and workers.

• The Children’s Food Trust can deliver their full 2 day Let’s get cooking training to groups in Leicester. It is an excellent, comprehensive and practical course that has been very highly evaluated by the children centres where the trained staff now run Let’s get cooking courses for local families. See their website including a section on food poverty http://www.letsgetcooking.org.uk/ .

• Food hygiene and food safety standards training. The council is exploring what the Regulatory Services Business Training Unit can offer. A sample of the courses offered are:

– Award in Food Safety in Catering Level 2 – 1 day course

– Award in Managing Food Safety in Catering Level 4 – a 6 day course for managers of food establishments

– Award in Supervising Food Safety in Catering – 3 day course

– Health and Safety in the Workplace Level 2 – 1 day course

– Emergency First Aid at Work Level 2 – 1 day course.

– Setting up a Food Bank –They can offer a bespoke course for the food bank staff including some of the above courses and encompassing a workshop on risk assessment and Food Standards (labelling, allergens, traceability of food stuff).

• Expansion of the luncheon club model across communities in part to meet the changing profile of the FareShare delivery model from April 15

• Volunteer training in Money Advice.

• Volunteer Expenses (such as training, travelling and subsistence)

43

Local research and development

It is critical to understand how these changes will impact on advice and support provision in the city. This will be achieved by working with key partners/groups through a number of activities over an 18 month period: • Welfare Reform impact research project • Local Support Service Framework and partnership working with the DWP • Corporate Welfare Advice and Customer Service Review • Transition to Universal Credit programme board • Support Welfare Advice partnership (SWAP) group

An informed view

To support evaluation of what is working and what might need to change, in respect of advice and support provision, the city council has commissioned research into the size and characteristics of the low-income household population in Leicester, and the experiences of local people, places and services affected by welfare reforms.

Plus a team at Loughborough University are bringing together available data to estimate the numbers and characteristics of households in Leicester that do not have enough income for a minimum acceptable standard of living. These findings will be complemented by a range of locally co-ordinated research activities which aims to develop a ‘joined up’ analysis of how welfare reforms are being experienced by Leicester’s people, places and services and the actual and potential consequences for standards of living and service delivery. The core focus of the local research is to generate evidence to inform development of the council’s discretionary funds policies and a review of welfare advice and customer support. However, it is expected that the findings will be of wider interest and there is scope, over the next 12 months, for the focus of the local inquiry to be widened to inform other welfare-related developments (e.g. homelessness review).

45

In summary

• The impacts from benefit cap are not as great as first envisaged • Number of households facing under-occupancy are decreasing • Social housing transfers are up Key areas of concern continue to be: • The financial and health impact on disabled, their carers’ and other

vulnerable groups • The financial and health impact upon children in the city • Access to advice and support for the most in need in a sector seeing

significant reductions • Access to affordable accommodation • Growing need for emergency food aid in the city

46

Thank you for listening

• Any questions?

• My contact details are:

Karen Wenlock

Revenues & Benefits Manager

Karen.wenlock@leicester.gov.uk