Homeless Action Scotland The 14th National Homelessness Conference Edinburgh, 21st November 2013

1. GermanyHow Services forHomeless People SurvivedWelfareReformsDr. Volker Busch-GeertsemaGISS – Associationfor innovative Social Research andSocialPlanningBremen, Germany. Coordinatorofthe European Observatory on Homelessness Homeless Action ScotlandThe 14th National Homelessness ConferenceEdinburgh, 21st November 2013

2. Outline of Presentation • Services for Homeless People in Germany: How They Are Organized and How They Are Financed • Welfare Reforms in Germany: Two Waves • The Fears • Results of the Reforms in Practice (for Homeless People and for the Services Supporting them) • Conclusions: Surviving Welfare Reforms

3. Services for Homeless People in Germany: How They Are Organized and How They Are Financed • No right to housing, but a strict duty of municipalities to provide temporary accommodation to persons who would otherwise be roofless • Homeless paragraph: Sections 67ff of the Social Code (SGB XII) provides an individually enforceable right to every citizen “in special social difficulties” to receive support in order to overcome such difficulties. Basis for financing NGO services. • Services for homeless people are to almost 95 % financed by municipal or regional funds. Income from donations and voluntary work much less relevant than in the UK • National legislation sets the duties, but municipalities and regional authorities pay for the services.

4. Welfare Reforms in Germany: Two Waves • Most well known: Hartz Reforms, introducing workfare elements in Germany and abolishing “unemployment assistance” related to former wages (became law in 2005) • Less well known, but particularly relevant for NGO services: Change of financing system from annual project funding covering the actual costs of a complete service to funding of individual services per person (reform in the late 1990s). • Only registered services can provide services. Contracts on content, scope, quality and price of services are precondition • Only services delivered individually in practice are paid for, but room for some profits exist if capacities are fully used • Introduction of market elements • Increase of competition

5. The Fears • Fears concerning the first reform • Increase of competition could lead to a serious threat for some existing services • Greater economic risks when existing capacities are not fully used, but personnel has to be paid for • Fears concerning the Hartz reforms • Subsistence benefit now covers much larger share of German population. Rents are fully covered but only as far as they are “reasonable”. Guidelines for what is “reasonable” are decided by municipalities. Where ceilings would be very rigid many households would be forced to move to homes with lower rents (segregation effect) or would risk to accumulate rent arrears and eventually eviction

6. The Fears • Fears concerning the Hartz reforms • New sanctions: in repeat cases they can also cut the housing allowance; young people under 25 may have all benefits cut by 100 per cent when they face a second sanction. Fear: increase of homelessness because of sanctions • Change of responsibility for employment and training for those on subsistence benefit. Jobcentres are responsible and this part of their task is organised and financed by a central government organisation (Federal Employment Office). Fear: change of responsibility would lead to closure of adequate projects for homeless persons • Split of responsibilities for prevention measures (assumption of rent arrears). Jobcentre is responsible for those who are “employable”; local social services for the rest. Fear: households imminently threatened with eviction would not get quick support as needed

7. The Fears • Note that most fears related to increase of risks and problems for poor and unemployed households, less to the existing services for homeless people (except special employment services for this target group) • Cynical comments foresaw good prospects for homelessness services in the future because the potential clientele would grow • Basis for financing homelessness services remained basically the same

8. Results of the Reforms in Practice • Hartz reforms were basically an important move in Germany from the “conservative” welfare regime (aiming at securing the standard of living for those who have worked in times of unemployment, illness and old age) towards the “liberal” regime (aiming at providing a basic safety net for the poor). • Those who suffered most losses were those who had been slightly better off thanks to “unemployment assistance” before: Those who had held a job and had paid social security contributions before becoming unemployed. Many new hardships for this group (subsistence benefit generally lower than before, have to accept every job offer after some time) • Poverty has increased despite decrease of unemployment in recent years; recent economic boom had little impact on large share of long-term unemployment

9. Results of the Reforms in Practice • Homelessness has NOT increased in the first years after implementing the reforms • Municipalities more reluctant than expected in setting low ceilings for “reasonable rent”, but large local variation and dependent on local struggles; courts set clear guidelines for defining adequate ceilings; quite a number of households pay part of their housing costs from their benefits meant to cover their minimum subsistence • New regulations for direct payment of housing allowance to landlords (important impact on risk of rent arrears) • Sanctions still matter of heated debates; often decrease the subsistence level, but impact on acute homelessness limited • Housing market development important factor, not directly related to welfare reforms (demographic developments, shrinking populations in many cities etc.)

10. Homeless persons who are temporarily accommodated under the police law (Ordnungsbehördengesetz) in North Rhine-Westphalia, 30.6. each year (1986 - 2011) clientsofNGO servicesforhomelesspeople +6,3 Source: Landesamt für Datenverarbeitung und Statistik Nordrhein-Westfalen

11. Results of the Reforms in Practice • Prevention efforts in many cities strengthened despite more complicated regulations of responsibilities • Increase of floating support for re-housed homeless people but also for securing sustainability of preventative risk interventions. New action fields for NGO services for homeless people (prevention) • Cooperation with job centers has become increasingly important and is not free from conflicts and frictions (struggle who has the lead, barriers to access case workers…..) • Increased competition and emphasis on quality of services also had some positive effects, though burocratic procedures (absorbing a lot of time and effort) are often deplored

12. Results of the Reforms in Practice • Probably less adequate employment and training opportuni-ties for homeless people than before the reform, but again large local variation • Particular problem: Young people under 25: normally not entitled to housing assistance outside parental household; severe sanctions for those not cooperating with job centers; «Bermuda triangle» between youth welfare services, job centres and services for homeless people. For the first time citizens with no right to subsistence benefit (after sanctions) • Long-term trend towards increased segregation because of ceilings for reasonable rent costs. Steady pressure on muni-cipal budgets for housing assistance (main part of municipal share of social assistance; rest is paid by Central Government)

13. Conclusions: Surviving Welfare Reforms • Serious consequences of welfare reforms in Germany • A harsh increase in inequality in German society • Sanctions for more than 500,000 unemployed persons per year • Very frequent deductions from a low minimum benefit (be-cause much support is only given in form of a credit to be de-ducted from the subsistence benefit in the following months) • A record of successful court cases against jobcentre decisions • Operational problems: Severe problems to reach case workers at job-centres, administrative barriers for realising claims, complicated application procedures, a completely overstrained software system, poor people left with no support at all because they forgot to renew their application for unemployment assistance……

14. Conclusions: Surviving Welfare Reforms • Serious consequences of welfare reforms in Germany (continued) • Sharp increase of insecure and precarious jobs with low pay (Germany still has no minimum wage) • Little chances for long-term unemployed people for (re-)inser-tion into regular employment • An increase of young homeless people (often sofa surfing and not provided with adequate support) • ….. • Despite the serious consequences of welfare reforms in Germany services for homeless people survived these reforms pretty well

15. Conclusions: Surviving Welfare Reforms • Welfare reforms in Germany brought market elements and increased competition to services for homeless people, with disadvantanges (more bureaucracy, more financial insecurity) but also some advantages (increased definition and control of quality of services) • The Hartz reform indicated a gradual move from the conservative to the liberal welfare regime, from wage related transfer payments to a basic safety net for poor people with workfare elements • They have hit mostly those who before the reforms were slightly better off than recipients of subsistence benefits, resulting in higher poverty rates and an increase of long-term unemployment

16. Conclusions: Surviving Welfare Reforms • As most homeless people were reliant on subsistence benefits before the reforms the changes were not as serious for them, though they have been suffering under the stricter sanctions and the lack of adequate measures to provide employment and training for this particularly marginalised group. • The increase of poverty and sanctions, the increase of the overall amount of people who will get their housing costs only paid as far as they are deemed “reasonable” have not led to an increase of homelessness, other factors have rather led to a decrease until recently (slackening of local housing markets; varying, but sometimes careful setting of rent ceilings and careful use of sanctions; improvement of prevention measures)

17. Conclusions: Surviving Welfare Reforms • Local struggles over ceilings for “reasonable” housing costs and for improving prevention measures had an important impact on lowering the risk of increased homelessness • While the welfare reforms have brought hardship to a large number of people, homeless services have not really suffered much from their consequences, with the exception of some employment services • Despite all the serious consequences services for poor people NGO services for homeless people survived welfare reforms pretty well

18. Conclusions: Surviving Welfare Reforms • I cannot really compare welfare reforms in Germany and the UK. My impression is that while the German welfare system moved a step towards the UK regime, the UK welfare regime is moving a step towards the US, both not being very positive moves in my view. • But you can be sure: There will be a life after welfare reforms and it makes sense to work and fight against the greatest risks at the national level as well as at the regional and local level. • My best wishes for success in this daily struggle!

19. Thank you for your attention!

20. Contact Dr. Volker Busch-Geertsema Gesellschaft für innovative Sozialforschung und Sozialplanung e.V. (GISS, Association for Innovative Social Research and Social Planning) Kohlhökerstraße 2228203 Bremen, GermanyFon: +49-421 – 33 47 08-2Fax: +49-421 – 339 88 35 Mail: vbg@giss-ev.de Internet: www.giss-ev.de