Steve Cullen

CEO Warrington District CAB

Welfare ReformsThe reality in England

Overview

• Introduced the most fundamental reforms to the social security system for 60 years

• Government aims:

- to ensure individuals always benefit from moving off welfare benefits into work

- to make the benefits system fair for both recipients and the taxpayer

- to simplify an overly complex system

Backdrop

• Stagnant economy• Cuts in public funding• Increasing cost of ‘essentials’

Welfare Reform - Timeline

2011 – 2014 – Conversion of recipients of Incapacity Benefit, Severe Disablement Allowance and Income

Support to Employment and Support Allowance, to include work capability assessment.

April 2012 – Contribution based ESA limited to 365 days for recipients in the work related activity

group

Tax credit for working families

May 2012 – Lone parent Income Support entitlement changes

Welfare Reform – Timeline (cont...)

Oct 2012 – New JSA / ESA sanctions

Jan 2013 – Child Benefit reduced / withdrawn for higher rate taxpayers

April 2013 – Housing Benefit under-occupancy

Benefit cap

Personal Independence Payment (pathfinder)

Social Fund Reform

Council tax localisation

Universal Credit (pathfinder)

Intended Consequences

• Less face-to-face claimant interviews – more online interactions

• More personal responsibility for household finance• Increased use of bank accounts and direct debits• Less benefit fraud and inaccurate records• System more responsive to up-to-date and accurate

personal data

Unintended Consequences

• May exclude some social groups• More severe consequences for errors in the system• Decreased levels of household spending• Increased levels of household debt• Increased homelessness• Family breakup• Domestic abuse• Impact on mental health• Potential impact on crime, health and wellbeing, and

community cohesion.

Our response to the reforms

• All partners working together on the pathfinder• Advice agencies collaborating more than ever

before but losing funding

Warrington Borough Council;• Support for under 35 year olds

Golden Gates Housing Trust;• £600,000 into extra support• Pre-tenancy service to explain the changes

Welfare Reform Action Partnership

Identifying our most ‘at risk’

residentsRaising awareness

of the changes

Ensuring our information and

advice services are ready to respond

Universal Credit Pathfinder

Financial literacy / public internet access

WRAP PathwaysThe Warrington Partnership decided to identify as early as

possible residents likely to suffer;• Single impact• Double impact –low level support needs• Double impact – high level support needs• Multiple impact – very high level support needs

This would dictate the level of single or multi agency response and support.

Universal credit statistics to September 2014

• April 2013 – September 2014 – 30370 claims made• April 2013 – September 2014 – 16590 started UC claims• 70% males• 60% under 25• Current caseload 14170 claimants• 80% from North West England

LGA & The Centre for Economic & Social Inclusion

Reported August 2013 on Local Impact of Welfare Reform• Estimated income of benefit claiming households will on average lower

by £1615 pa• Exception is London £1965 – high benefit receipts and high housing

costs• Impact is disproportionate by region• Higher in the North• Coastal towns also suffer bigger impact• 59% of welfare reforms fell on working households

Concluded that there was a high degree of uncertainty about what the positive impact on employment will be from Universal Credit.

Commons Public Accounts Committee 2013/2014

Reported on early progress of Universal Credit• Chair, Margaret Hodge said

“Pressure to deliver a programme of this magnitude within such an ambitious timescale created a fortress culture where only good news was reported and failures denied.”

One of the conclusions;

The pilot programme is inadequate as it does not deal with the key issues that Universal Credit must address, the volume of claims, their complexity, changes in Claimant’s circumstances, the need for claimants to meet conditions for continuing entitlement to benefit, and the security of information to prevent fraud.

National Audit Office report September 2013

Key Findings

The Govt “reset” UC in early 2013 because of the Major Project Authority’s serious concerns about programme implementation

• No detailed blue print or transition plan• Department lacked a detailed view of how UC is meant

to work• May go on to achieve considerable benefits to society

but must learn from early mistakes

Joseph Rowntree Foundation June 2014 – Impact of Welfare Reform on Social Landlords & Tenants

• Tenants faced difficult decisions such as cutting back on essentials (heat or eat)

• Highlighted changing relationships between RSL’s and tenants• Necessity to put more support in place = less investment in new housing

Conclusions;• The reforms may well end up making tenants more, not less, dependant• People on low incomes, both in work and out of work are more vulnerable to

debt and risk of eviction• Focus on existing property’s and tenants limits RSL’s ability to build more• RSL’s are increasingly excluding the poorest applicants• Risk of rising homelessness• Possible that reform will cost Govt more as reliance on privately rented

properties grows leading to higher housing benefit costs.

Warrington

• Huge amount of partnership work to prepare for reforms• We have 1600 UC claimants – most under 25, living with parents• Poor decision making still one of our biggest problems• Mandatory reconsideration of ESA and UC causing great hardship. Average 8 weeks

with no money• Difficulties with communications – including DWP using text and voicemail to clients

with no money – problem with clients having no credit on their phones• Poor written communication• UC is not familiar with shared rents, rent free weeks, collection of water charges

(where a condition of a tenancy)• Payment delays affect rent arrears• Five weeks minimum for first payments to claimants, if everything goes well • Payment dates will eventually fall on weekends, client report received nothing –

requires a manual intervention by DWP staff (human error)

Warrington (cont 2...)

• Problems activating reported changes of circumstances• Complex cases go wrong and have to be dealt with on a case by case basis – claims

being rebuilt manually• Clients sometimes ‘encouraged’ to wrongly end their claims• Clients find difficulty budgeting• Increasing sanctions – impose first – ask questions later – often 100% of standard

allowance• Clients have no option but to use housing costs to live on• We saw a significant rise in rent arrears for UC claimants• Huge use of Discretionary Housing Payments to combat bedroom tax• Rise in eviction – Warrington CAB prevented homelessness in 93 cases in the last

quarter alone, mostly through duty advice in the County Court• Great hardship – huge rise in referrals to foodbanks • Claimant commitment – poor consideration of health issues, rural access, ignoring

the effect of sanctions

Warrington (cont 3...)• Cases take much longer to sort out• Refusing to provide recorded telephone conversations between clients and UC staff• Putting unreasonable demands on CAB e.g. Five page forms to obtain data disclosure• RSL rent arrears and council tax arrears are now in my top 5 debt statistics

Any Questions?