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Welfare Reform (impact on councils and their communities) Tim Savill Head of Benefits Coventry City Council

Welfare Reform (impact on councils and their communities) Tim Savill Head of Benefits Coventry City Council. Welfare Reform Bill. “an historic step in the biggest welfare revolution in over 60 years.” David Cameron COMPLETE, UTTER, MASSIVE

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Welfare Reform (impact on councils and their communities) Tim Savill Head of Benefits Coventry City Council

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  1. Welfare Reform(impact on councils and their communities)Tim SavillHead of BenefitsCoventry City Council

  2. Welfare Reform Bill • “an historic step in the biggest welfare revolution in over 60 years.” David Cameron • COMPLETE, UTTER, MASSIVE DWP Speaker March 2012

  3. Agenda • Main changes for councils / timetable - • Local housing allowance (Housing Benefit) • Local support for council tax/timetable for changes and software issues • Impact on council finances and key decisions • People affected and why • illustrations of how individual/groups might be affected • Universal Credit - broad approach / benefits included / making work pay • What are councils doing to prepare

  4. Housing/Council Tax Benefit in Coventry • The Council administers HB/CTB on behalf of the DWP to 41,000 households in the city • 29,000 HB claims (11,000 in private sector getting Local Housing Allowance) • 12,000 people getting CTB with no HB • Coventry spends circa £120m on HB and £30m on CTB – funded by DWP subsidy • Caseload has increased by 25% in the past five years and expenditure by more than 27%...

  5. Changes that have happened

  6. Impact on people (in Coventry) • LHA changes will affect 10,000 people by an average of £11 per week • weekly reduction ranges from £1 to over £70 • £5.7 million less benefit per annum

  7. HB changes that have taken place (and examples of impact) • Prior to April 2011, if your HB rate was higher than your rent you could keep the difference – up to £15 per week – about 2,000 people in Coventry • Four bedroom rate • About 100 families affected – protection of 9 months • January 2012 the shared rate of LHA extended to anyone under 35 years of age • About 500 people losing up to £40 per week • Discretionary Housing Payments (DHPs) cases have increased (Dec – Feb) from 114 to 144 compared to 12 months ago

  8. Some examples based on DHP claims - Naomi • Released from prison under the prisoner release scheme and had a history of drug dependency and prior to her sentence was a sex worker • Due to past history could not move into shared accommodation • Due to the changes in HB and her age (under 35) she was only going to be entitled to a maximum of £63.00   • Both the probation service and her support worker believed that the only way that Naomi could be rehabilitated back into the community was to have self contained accommodation • DHP payments have supported this

  9. Tanya • Age 31, currently living in a self contained one bedroom apartment. Lived in this property for 4 years, she has several medical issues to deal with and she has some level of learning disability • Rent £110 per week. • Prior to 20/02/12 Housing Benefit £103 pw • LHA rate reduces to £63.00 per week. Shortfall £47.00 • Advised that should be looking to reduce housing costs by trying to find more affordable accommodation. • Explored the possibility of increasing income with a claim for DLA • Agreed DHP of £47.00 per week for 13 weeks to explore alternative options

  10. John and Kirsty • Currently live in a 2 bedroom accommodation with their 5 year old daughter. Rent £121.15 pw • HB reduced from £113.54 to £103.85 per week when protection ended on the 9 January 2012 • Deductions at source from ESA and trying to clear rent arrears and some non priority debt - but just about managing. Engaged with them on a regular basis in regards to budgeting and money management • Partner is extremely vulnerable several issues in regards to her mental health, some evidence of past addiction issues within the household. • Moving or eviction would not be the best option for this family. Applied for DHP to cover the shortfall - £17.30 pw

  11. Outcomes? • Too early to say • What will happen when protection runs out? • Close links between Benefits and Housing • More DHP funding on way for 2013 changes • Budget can only sustain around 200 cases if paid for a full year • But more likely 800 people for 13 weeks each

  12. Changes that will happen in next 12 months

  13. LHA rates frozen from April 2012 • At present LHA rates are based on the 30th percentile average of local market rents and are reviewed every month • From April 2012 LHA rates will be frozen and uprated from April 2013 by the Consumer Price Index rather than by reference to actual market rents

  14. Under occupation in social housing • Working age households that under-occupy social housing will have their HB reduced • 14% for one room and 25% for two rooms • Effective from April 2013 • 32% of working age households affected – 4,000 people in Coventry

  15. Total benefits ‘cap’ • From April 2013 cap on the total amount of benefit a household can receive • Based on net average household incomes • £500 per week for couples and families, £350 per week for single people • LAs will have to administer this in short term by capping HB • DWP to notify people affected shortly

  16. Council tax benefit localisation • Council tax benefit cut by 10% nationally (£3m for Coventry) and localised from April 2013 • CTB currently funded by DWP – financial burden of increasing caseloads will transfer to Councils • Councils need to design, consult on and approve local schemes by 31 January 2013 • Pensioners protected so 10% cut is actually a lot higher for working age people • Lots to do in not much time

  17. Social fund • Crisis loans and Community Care Grants to be devolved to Councils to administer • White goods, furniture, emergencies • DWP running a series of seminars for councils • ‘New burdens’ funding • From……April 2013

  18. Scale – Coventry 2009/10 data • 14,650 applications for Crisis Loans for Living Expenses • 10,840 received an award. • Around £590,000. • 3,780 applications for Community Care Grants • 1,840 were awarded • Around £875,000 • £178 million spent in GB

  19. Future Changes

  20. Universal Credit • Welfare Reform Bill is now Welfare Reform Act and introduces UC and other changes • Combines range of benefits, including HB, into one single working age credit administered by DWP • Paid monthly directly to the customer • No cash losers – transitional protection for those worse off (but many cuts already in place) • HB for pensioners to move to Pension Service (Housing Credit) • Uncertainty over specialist accommodation – homeless claims etc. • The timescales are ambitious…

  21. Universal Credit

  22. What happens next? • Secondary legislation for Welfare Reform Act and Local Government Finance Bill • Consultation • LA involvement in delivery of UC?

  23. QUESTIONS Tim Savill Head of Benefits Coventry City Council Email: tim.savill@coventry.gov.uk Tel: 024 7683 2607 Mobile: 07507 889129

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