Policy in PracticeWebinar: Minimising the impact of the lower benefit cap

Tuesday 8 November 2016

Housekeeping

• Audio check

• Please ask questions

• Polls and a survey

• Finish by 11:30

Speakers

Giovanni Tonutti

Policy in Practice

Deven Ghelani

Policy in Practice

Agenda

• Introduction to Policy in Practice

• A brief history of the benefit cap

• Case study – London Borough of Croydon

• Six strategies to mitigate the impact of the lower benefit cap

• A comment from Croydon

• Recap – identifying and engaging residents

We make the welfare system simple to understand, so that people can make the decisions that are right for them

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SOFTWARE

individual impact

CONSULTANC

local impact

POLICY

national impact

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The impact of welfare reform policies

Governments may know how one policy affects many people. We can show

how all policies combined affect one person.

Poll 1: Who’s affected in your area?

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The lower benefit cap

The single biggest challenge posed by welfare reform to date

A brief history of the benefit cap

• Policy designed to limit the amount of most welfare benefits that a single household can receive

• Introduced between April and September 2013, set at £26,000 for all UK households

• Lower limit effective from Monday 7 November 2016, rolled out over 13 weeks

• Limits how much money a working age household can receive in benefits to £20,000 a year across the UK or £23,000 in London

• Will have significant impact on low income residents

• And on the local authorities supporting them

Who is affected?

Our findings show 5x as many households will be impacted

Towns and cities outside of London are particularly affected

The information available is fluid

• DWP listings of affected households in 2013 tended to overestimate the number of capped households, missing exemptions

• DWP methodology appears to have improved, based on WPLS, which joins admin data across DWP, Housing Benefit and HMRC

• DWP released their initial scan data in May / June, with a second scan in October that removed some exempted households

• Households affected at £26k have already had the cap lowered, with rollout to newly affected households over 13 weeks, with London and larger cities impacted later

• Letters to claimants say they may be affected and that their local authority will be in touch

• We find many households are unaware of what this means for them, what to do next and local authorities struggle to engage people

Without a coherent strategy, the impact will be severe for …

1. Families: they’ll be less able to sustain a tenancy >> risk of evictions and homelessness>> £8,000 per homelessness application

2. Local authorities: they’ll have longer homelessness lists >> increase in temporary accommodation and its associated costs>> £415 per week per capped household in TA

3. Housing associations: they’ll have a reduction in housing benefits >> risk of higher rent arrears, and evictions

Case study: London Borough of Croydon

Strategic priorities for the council:

• keeping people in their home

• improving household resilience and wellbeing

• reducing indebtedness

Achieved by a proactive approach and smart use of data

Contact Mark Fowler / Asha Vyas to learn more about their Benefit Cap Strategy Team

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“Working with Policy in Practice we’ve developed information that supports, informs and helps us monitor the effectiveness of our strategies.

“By better understanding the levels of risk and the concentrated areas where those residents live, we believe resources from inside and outside of the council will be better targeted and more effective.

“We’re deeply concerned about the amounts families will be losing and without a proactive, preventative approach we fear for the longer term impact on residents.”

Mark Fowler, London Borough of Croydon

Poll 2: What are the biggest challenges you face when working with capped households?

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Over to Giovanni

Turning data into actionable insightsC

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Council tax payments

Council tax arrears

DHP data

HB overpayments

DWP scans

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Benefit and Budgeting software

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T Detailed information about who is impacted by which reform, and how

6 target groups in Croydon

Potential exemptions

GROUP 1

168Already capped households

GROUP 2

226Quick wins

GROUP 3

227

Temporary accommodation

GROUP 4

81Lone parent households

GROUP 5

115 Households potentially on Universal Credit

GROUP 6

77

168 cases were identified as capped by the DWP who could potentially qualify for an exemption

These cases ranged from Carer’s Allowance, DLA or in the ESA Support Group, to households working enough hours to qualify for Working Tax Credit

Key take away:

Local authorities should verify these exemptions before making contact

Group 1: Potential exemptions

Households already capped are the first group to be affected.

So far they have managed to support their finances by budgeting, without seeking support from the council

A further reduction in HB, however, could become impossible to sustain without support from DHPs

Key take away:

Contacting these families to inform them about the imminent reduction in their entitlements should be a priority.

Group 2: Already capped

160 households affected by the cap are already in-work.

If they can increase the number of hours worked to the WTC threshold they may be exempt.

Other 67 households that are not currently working, but who show low barriers to work (i.e. no disability, no caring responsibilities, no young children).

Key take away:

This group of 227 households represents the ‘quick wins’: if employment support to these households is delivered in a timely manner, significant financial hardship could be avoided.

Group 3: Quick wins

In the borough, 81 temporary accommodation households will be affected by the cap. The costs implications are considerable.

In Croydon, we estimate that the costs to the authority for temporary accommodation for all households capped could rise to £1.1m

Key take away:

Local authorities could prioritise the use of DHPs to make up this shortfall by awarding payments to all households capped living in temporary accommodation

Group 4: Temporary accommodation

115 lone parents with children under 5.

The strategy should focus on removing those barriers to work, by ensuring access to child care.

Group 5: Lone parents

Key take away:

A geographical analysis can help local

authorities verify whether child care

facilities in the neighbourhood have

sufficient capacity to accommodate

these children.

77 households identified by the DWP scan not in the HB data.

These households may have moved to another authority, or no longer by impacted by the cap, but a proportion will be on Universal Credit.

Without sufficient data, planning and delivering targeted support to claimants in need on Universal Credit becomes a whole other challenge.

Croydon have agreed to securely share the UC award notices with PIP to see how this information can build on the analysis.

Key take away:

Local authority and housing associations should request the data on UC claimants affected by the cap from DWP, and visit affected households to learn more about their circumstances, and deliver a holistic system of Support.

Group 6: Universal Credit

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Over to Asha Vyas

Head of Enablement of Croydon

Poll 3: What are the biggest challenges your residents in capped households face?

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Recap:

Act now to help your residents - use data to target support

Turning data into actionable insights

Your data sets*

Our software

Full impact

assessment on

your residents

1. Use local data and insights to inform better decision making

2. See the impact of specific and cumulative reforms at an aggregate and household level

3. Inform targeted and tailored local welfare support

Prioritise capped households

Identify who they are

Pinpoint support

212 households meet criteria (↓15)

Engage them with a personalised benefit cap calculation

Evaluate Effectiveness

Return on Investment

Out of all current and newly capped cases:

• 81 are in temporary accommodation

• 212 of these households are at ‘High’ or ‘Severe’ risk of eviction.

The average cost of temporary accommodation across London is £3,530 / year. This is conservative, the cost is significantly more for capped households and the average cost of homelessness is £8,000.

• 212 x £3,530 = £750,000 is at risk

• 168 potential exemptions identified, and 227 ‘quick wins’ is a start!

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Questions?

Next steps

Complete the automated survey immediately after this webinar to:

1. Book a call to discuss how we can do this analysis for you

2. Request our Benefit Cap white paper

3. Join our newsletter mailing list to keep updated on our work

www.policyinpractice.co.uk

Thank you

Giovanni Tonuttigiovanni@policyinpractice.co.uk

Deven Ghelanideven@policyinpractice.co.uk

0330 088 9242hello@policyinpractice.co.uk