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Welfare Reform – The Challenges Tuesday 22 nd May 2012 Angela Forshaw

Welfare Reform – The Challenges Tuesday 22 nd May 2012 Angela Forshaw Director of Housing & Customer Services. A little bit about LMH. • Liverpool Mutual Homes is a LSVT • We are ‘tenant led’ • We manage 15,500 homes • We are the City’s largest HA • We were the City’s ‘final transfer’

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Welfare Reform – The Challenges Tuesday 22 nd May 2012 Angela Forshaw

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  1. Welfare Reform – The Challenges Tuesday 22nd May 2012 Angela Forshaw Director of Housing & Customer Services

  2. A little bit about LMH..... • Liverpool Mutual Homes is a LSVT • We are ‘tenant led’ • We manage 15,500 homes • We are the City’s largest HA • We were the City’s ‘final transfer’ • We set up in April 2008 • We have a CEO, 3 Directors and 300 staff • We will have invested £380m in our stock & neighbourhoods by March 2013

  3. Tenants at the heart of what we do.... • Started work programmes on day one • Tenant priorities - c/heating and double glazing • Good progress made - out performed the business plan - focus on quality and efficiency • Award winning schemes e.g. Daneville - standard setting structural programme • On-going tenant input, consultation & choice

  4. More than just ‘housing’...... • Local service delivery focus • Resources based on area need and characteristics • Good fit with partners across the wards and neighbourhoods • Wider regeneration role – physical environment, ASB, education and employment, health and older people • Whole community approach - work with all residents, partners and organisations

  5. Welfare Reform Act – March 2012 Recap • Improve work incentives – work always pays • Simplify benefits system - make it less costly to administer • Fairness – to those claiming benefits and the taxpayer • Fairness – protect the most vulnerable • Control expenditure and housing costs • Encourage mobility in social housing sector • Make better use of social housing stock

  6. Main Changes…. • Universal Credit / Direct Payments • Under-Occupation (Bedroom Tax) • Non-Dependent Deductions • Capping • Disability Living Allowance / Incapacity Benefit • Council Tax Benefit Liverpool Context • 43,000 social housing tenants claiming HB (full & part) in Liverpool • 11,636 LMH tenants claiming HB (full and part) • Approximately 75.5% of LMH rent received direct

  7. Welfare Reform Act Timelines • Royal Assent 8th March 2012 - Some changes now, some April 2013, some October 2013 • Move to Universal Credit to be completed 2017/18 • For a period - 2 systems running - UC administered by DWP – October 2013 (maybe April 2014) - HB administered by LA until 2018

  8. Welfare Reform Act UC & Direct Payments - main features • National Scheme administered by DWP • Replaces: IS, WTC, JSA, HB, Child Tax Credit, ESA etc. • Paid to working age claimants – monthly in arrears – direct • Ambition - 80% plus of claims to be made online • New work related requirements / commitments / tough sanctions • October 2013 new claims / change of circs will go onto UC NOTE For people of pensionable age – housing costs part of Pension Credit from October 2013. New claims both claimants need to be of pensionable age (61 years as at April 2013 and rising).

  9. Welfare Reform Act Direct Payments – Risks • Loss of Income – forecast 3 -10% nationwide • LMH 1% = £550,000 ! • Arrears increase – abandonment - homelessness • Increased collection costs / court costs • Relationship with DWP • 13-15% new tenants - no bank account / don’t use DD regularly • On-line claims - digital exclusion • Claimant commitments / requirements / sanctions

  10. Welfare Reform Act Under Occupation - main features • DWP criteria per bedroom: • Every adult couple • Any other adult aged 16 or over • Any two children same sex under 16 • Any two children regardless of sex under 10 • Any other child aged under 16 Note size criteria currently excludes - fostering, staying access, pregnant women • Working age households from April 2013 (new and existing claimants) Note size criteria not applied to people in receipt of Pension Credit • Social rent and affordable rent tenancies • Reduces housing costs entitlement by 14% (£12) for 1 bed under occupation and 25% (£22) for 2 or more

  11. Welfare Reform Act Under-occupation – Risks • Estimated12 - 60% under occupation rate amongst HAs • Financial impact £600-£1300 per year per household • Hardship & increase in arrears • Unable to meet demand for downsizing • Tenant transfers - increased void costs • Increased relet times - lack of demand for certain properties

  12. Welfare Reform Act Non Dependent Deductions • 10 year freeze on NDD reversed over 3 yrs - April 11 / 13 • Lowest rates from £7.40 to £13.40 • Highest Rate from £47 to £90 (average rent £70.70 !) • DLA replaced by Personal Independence Payment - NDD no longer exempt from April 2013

  13. Welfare Reform Act Capping- April 2013 - main features ‘’No household will receive more in benefits than the average earnings of working households after tax” • £350/week for singles £500/week for couples and lone parents (current figs) • Doesn’t apply to Pension Credit or WTC recipients • Who will the cap affect? - Large families entitled to a significant amount of CTC / families in high rental areas - Families with 4/5 children likely to see £12 / £40 per week shortfall applied to housing costs element of UC

  14. Welfare Reform Act Other Risks • Failure of tenants to engage with what’s happening • Data gaps • Changing job roles flexible teams / structures /different skills / competing priorities / resources • Increased demands for support services e.g. RAISE, CABs • Increase in Debt Relief Orders • Void rates increase

  15. Welfare Reform Act Preparing for the challenges • Lobbying • Information gathering / risk assessments • Staff training & resource planning • Policy & procedure reviews • Relationship building with DWP • New ways of working - including working with Banks / Credit Unions • Communication !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  16. Welfare Reform Act Preparing our tenants for the challenges • Employment & Training Initiatives - Shared apprenticeship scheme - VIP scheme - Work Clubs - Work Placements - Procurement

  17. Welfare Reform Act Preparing our tenants for the challenges • Digital Inclusion Initiatives - Internet cafes - Silver surfers - Training partnerships - Direct help

  18. Welfare Reform Act Preparing our tenants for the challenges • Financial inclusion Initiatives - ‘Money Matters’ in secondary schools - Tenant Newsletter articles - Work with Credit Unions / banks - Special mail-outs - Welfare Rights Advice – increased provision

  19. Welfare Reform Act ‘Good housing is a determinant of good health, education and life chances. The Government’s housing and welfare reforms however, present a huge challenge for social landlords & tenants. As tenants are increasingly forced to make harsh financial decisions – ‘ digital inclusion, financial inclusion, worklessness initiatives’ – these phrases are becoming as common place in the housing office as ‘rent accounting and lettings policies’.

  20. Welfare Reform Act Rising to the challenge… • What can we do that we are not doing now? • What works? • What doesn’t work? • How do we focus on those most affected? • How do we help them? • How do we prevent homelessness? • How do we create safe and stable communities

  21. Thank you for listening Let’s discuss?

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