Agenda item

Robbie Rainbird, Head of Processing, Financial Operation and Customer Services, was present for discussion of this item and made a presentation to the Committee thereon, copy interleaved.

 

During the presentation the following main points were made –

 

 

·         Since 2010 the Government has introduced significant reforms to the welfare state aimed at encouraging people into work, simplifying and restricting benefits and saving money. Key changes include –

Restriction/removal of universal (non means tested) support e.g.child benefit

Caps and freezes on welfare spend

Changes to Local Housing Allowance

Introduction of the Bedroom Tax

Benefit Cap – initially £26000 for London then reduced to £23000

Tougher requirements for those on Job Seekers allowance, and requirements on lone parents to seek work

Restricting access to benefits for EEA migrants

Changes to sickness benefits – replacing Incapacity Benefit with Employment and Support Allowance (ESA), requiring a work capability assessment

Changes Disability Benefits – replacing Disability Living Allowance (DLA) with Personal Independence Payment (PIP)

Changes to Tax Credits and other family support

Introduction of Universal Credit – simplifying the Benefits system

·         The latest changes to take place since 2017 have been –

Support with childcare – Tax free childcare has been introduced and the Government contributes up to 20% of the first £10000 of costs per child, per year, up to a maximum of £2000 per child per year, for people with income around £15000 and not receiving child support via tax credits

Free child care entitlement doubled from 15 hours to 30 hours per week for working parents of 3 and 4 year olds

Benefit support for children – 2 child limit support through tax credits and Universal Credit and Family Element removed – people starting a family no longer eligible for Family Element in tax credits or First Child element in Universal Credit

Changes to ESA – the work related activity component abolished – new claimants placed in WRAG now receive the same rate of payment as those claiming JSA or UC equivalent

ESA permitted work limit removed – claimants undertaking permitted work and earning between £20-£120 per week no longer have to stop work or stop claiming after 52 weeks

ESA sanctions reduced – claimants who are sanctioned now receive 80% of their benefits (previously 60%), does not apply to those in WRAG who will receive 60%

·         Latest changes are as follows –

Young People – Universal Credit Youth obligation – 18/21 year olds who have been claiming UC for 6 months now have to apply for training/apprenticeships through a work placement

Bereavement Support Payment – Introduced for all new claims from April 17 – replaces Bereavement Allowance, Bereavement Payment, Widowed Parents Allowance

Earning threshold for Benefit Cap exemption – Changed from fixed rate of £430 per month, to the amount a claimant would earn if they were working 16 hours a week at national minimum wage (so most people now have to earn more before they are exempted from the cap)

Support for mortgage interest (SMI) – no longer available for new or existing claimants – will need to apply for a loan

Universal Credit – Raft of changes announced in Autumn budget and implemented in 2018, following feedback from early pilots including – advance payments increased from 50% to 100% of estimated monthly award, 7 day waiting period removed, 2 week HB to run on, easier for claimants and social landlords to have rent paid directly to the landlord

·         There are still further changed to come as follows –

Childcare support – Autumn 2018 – Employer childcare vouchers no longer available to new claimants from October 2018. Existing claims will continue until the child is 15 (or 16 if disabled), or the claimant starts claiming under another scheme (as part of Working Tax credit, Universal Credit, or Tax Free childcare), whichever is the earliest

Self- Employed – From April 19 self -employed people will no longer pay Class 2 National Insurance contributions, which currently count towards contributory benefits e.g. New State Pension. Clarification is still awaited on how Class 4 contributions will count towards benefit entitlement

Roll out of Universal Credit – Families with three or more children should be able to claim UC from February 19 onwards. Also transferring UC ‘Live Service’ claimants to full service (initial batch), Islington claimants transferring from 5 September – November 2018 (around 1700). Migration of all existing benefit claimants for all legacy benefits from 2019-2022, as many as 20000 in Islington, depending on how many move over earlier

·         Latest DWP data for Islington indicates numbers affected by welfare reforms

Benefit/Reform                 Number of residents                 Latest data for

Bedroom Tax                                        2188                                      May 18

Benefit Cap                                           330                                       August 18

Housing Benefit                                    27909                                   July 18

Disability Living Allowance                    7480                                     April 18

-       Will be transferring to PIP

Personal Independence Payment        6669                                      April 18

Carers Allowance                                 3148                                      February18

Employment and Support Allowance   11507                                     Feb 18

Jobseekers Allowance                          3965                                      July 18

Universal Credit                                    1670                                      July 18

Bereavement Benefits                           94                                         Feb 18

 

·         Universal Credit full service was introduced in Islington from 20 June 2018

·         Most new claims, plus existing benefit claimants with a change of circumstances, will now claim Universal Credit, instead of the current ‘legacy’ benefits. Exceptions are – families with more than 2 children (temporary as DWP aiming to include these from next year date to be confirmed) – people in supported housing or temporary accommodation continue to claim HB, and people of pension age, currently 65 but increasing, continue to claim HB, and those on UC who reach 65 will be required to move back to HB

·         Existing UC claimants (first batch from November 16) moving to UC Full Service from 5 September – November 18

·         All remaining claimants not yet moved over will be migrated between 2019-2023, Islington has at least 20000 residents claiming HB and one or more out of work/in work benefits so UC will have a big impact on Islington residents

·         Universal Credit is the new means tested benefit for people of working age, which replaces six existing means tested benefits – Housing Benefit, Child Tax Credit, Income Support, Working Tax Credit, Income Based Job Seekers Allowance, Income related Employment and Support Allowance

·         It is a single monthly payment to a household (household counts as single person or couple plus any dependent children). Claimants receive a standard allowance plus extra money if they have children, a disability or health condition, care for somebody who does, qualify for assistance with rent or other housing costs

·         Triggers for a move to UC can include a change in employment status, a change in family circumstances or other changes. These include move to working more than 16 hours to less than 16 hours, move from out of work to sick, move from sick to out of work, move from sick to working more than 16 hours, and a move from in work to sick. In addition, changes to family circumstances include household becomes responsible for a child for the first time, change of address in the relevant post code area that requires a new claim for HB, out of work lone parent becomes couple parent, out of work couple parent with child under 5 becomes lone parent, partner leaving/joining household, claimant is within 11 weeks of birth of child and out of work lone parent’s child reaches the age of 5. Other changes include – new/underlying entitlement to benefit legacy, attending court/jury service, ceased full time education, remanded in custody, income and/or capital goes over threshold, take on full time caring responsibilities, claimant is no longer a full time carer

·         A claim for UC is made via the claimant making an online claim on the DWP website – the claim can be saved but it is only valid once the claimant presses submit. The claimant receives a text or e mail with telephone number to make appointment with allocated work coach in local jobcentre and failure to attend for interview could risk the claim being cancelled. The claimant has an initial meeting with the work coach to clarify information relevant to the claim, first payment will be received 5 weeks after this, subject to information being correct. Actions are agreed to move towards work and how often to meet. The landlord – in the case of council tenants the Housing Income Team, is notified of the UC claim via the Landlord Portal and asked to verify the rent. Where the claimant is claiming HB, the local authority HB team is advised that the claimant has made a claim for UC so HB will stop. The HB team pays a final two week ‘run on’, to cover rent for the next 2 weeks

·         Key Changes – Risks and challenges – Claims are made and managed online so claimants will need access to IT and have the digital and literacy skills to manage their claims. All contact is by text, e mail or UC journal, there are no letters and claimants will need to look regularly at their journal and To Do list and enter updates on activity. Claimants are expected to take more responsibility

·         Payments are made monthly in arrears, and this will be a change for people on out of work benefits who are paid weekly or fortnightly. They will need to budget monthly. Claims are not backdated but paid from the day the claim is submitted, so it is important that people are advised and supported to submit their claim as soon as possible. There is a minimum 5 week waiting period before the first payment is received. Housing costs are included in the payment and residents will be responsible for ensuring their rent is paid, unless alternative payment arrangements are in place

·         The positive changes are it will be easier for residents to move in and out of work as claimants no longer need to sign off and on, as they move in and out of work, Payments are based on earnings, not hours worked, and claimants no longer need to worry that their benefits will stop if they work over 16 hours, UC will continue but be adjusted up and down, depending on earnings. Claimants have a personal allowance, anything they earn above that limit is subject to a taper, (37p is kept for every £). The DWP system accesses real time information from HMRC, for the past month and adjusts payments accordingly. There is no fortnightly signing on so work coaches can help more people who want to work and they will have mixed caseloads, including those who previously would have been on ESA. There is also funding for training and Access to Work funding to help claimants who need extra support to move into work

·         The Alternative Payment Arrangements (APA) are as follows – For those claimants who will struggle with the new monthly payment model, there are 3 options. Rent paid directly to the landlord – claimants can request this, social landlords can request APA’s as trusted partners, through the landlord portal where there are risk factors, private landlords need the consent of the claimant. There can also be more frequent payments (half monthly), where a claimant will struggle to budget monthly and splitting the payment in the household – such as where there is a risk of DV or gambling etc.

·         Evidence from those areas where UC full service has already been rolled out is that rent arrears rose significantly. Islington has opted to take a proactive approach, to use APA’s, wherever there is a risk of tenants struggling to pay the rent

·         Alternative Payment Arrangements are as follows – Tier One factors highly likely/probable need for alternative payment arrangements include – drug/alcohol and other addiction problems, learning difficulties including problems with literacy and numeracy, severe/multiple debt problems, in temporary or supported housing, homeless, DV or abuse, Mental Health conditions, currently in rent arrears, threat of eviction, repossession, claimant is a young 16/17 year old and/or a care leaver or families with multiple and complex needs. Tier Two factors include – no bank account, third party deductions in place, claimant is a refugee/asylum seeker, history of rent arrears, previously homeless and/or in supported accommodation, other disability, claimant has just left Prison or hospital, recently bereaved, language skills where English is not spoken as the first language, ex service Personnel and NEET’s

·         Advance Payments – Claimants who will struggle to cope during the 5 week waiting period can ask for an advance payment. They can request this at their initial meeting with their work coach, or any time before they are paid. This can be any amount up to 100% of their monthly, and it is paid off over the next 12 months, deducted directly from the monthly payments. Evidence from other areas where UC has been rolled out was that the waiting period caused real financial hardship, and increased demand on Food Banks and Local Authority crisis schemes. Advance payments can be a real help but will mean that the household has less to live on for the next 12 months

·         In terms of Islington’s Universal Credit support offer the Council’s approach is that whilst UC is not the Council’s responsibility it wants to help residents to be able to make and manage a UC claim, and ensure that the rent is paid. Staff should refer residents to DWP for issues with their claim, Advice Partners can also help, and IMAX can help residents work out financial implications. The Council will work to proactively encourage, and apply for, APA’s but adopt a cautious approach. Council Tax support is not included in UC, this needs to be notified as part of the UC claim, Islington will take notification from DWP as a trigger to offer CT support. The Council’s support offer focuses on helping residents to adjust to the changes that UC brings

such as making and managing claims online, budgeting and ensuring rent is paid

·         Digital Support will be provided at a new Digital Zone in the Customer Centre at 222 Upper Street, and with PC’s and scanners to enable residents to self-serve. CAB volunteers will be on hand to support those who need more one to one support to make and manage their claim. New UC supervisor/caseworker to support volunteers on difficult case. There will also be digital access in Libraries, and Library Managers have all been UC trained and this will be cascaded to all staff. Computers will be available in all libraries for residents to make and manage UC claims. Staff will be on hand to give basic support on getting online and refer residents to more UC specific support at 222 Upper Street

·         Key messages for residents – Not everyone will be migrating to UC from 20 June – just new claimants and some change of circumstances. UC is a Government initiative, not a Council one. The main changes are – monthly payments, in arrears for rent, online claim, delay, paying rent, maybe less money. The resident is responsible for their claim, but there is a lot of support available to help with changes. UC claims are not backdated, so a claim must be submitted as soon as possible and it is important for residents to attend an interview with the work coach, as the claim may be cancelled if they do not. Council Tax support could be claimed if a resident is eligible, as UC does not include Council Tax support but includes a reminder

·         Communication with residents – there is no universal information campaign, by the Council, the bulk of claimants will not be switching to UC until planned migration so there is a risk of causing alarm or confusion. Instead effort has focused on getting frontline staff across the Council and partners trained on UC, so they are able to signpost to support and advice. Simple one page handouts have been produced for frontline staff to hand to residents who need to claim UC. Housing will be writing to tenants when they make a claim with information and advice on where to get help. Prompts have been added to Home Connections site, to advise that moving home could trigger a move to UC. Rent statements will be adjusted to clearly present rent/housing costs information for a UC claim. There is an article in UC Residents e-bulletin in July and Islington Life Autumn edition. There is also a UC webpage on the LBI website www.islington.gov.uk/universalcredit

·         Staff are being prepared with briefings and training with a comprehensive programme of training for frontline staff, with a basic overview, with option for detailed training on UC claim for teams, who need in depth knowledge. There is also a staff information pack which contains a UC factsheet, Summary of Islington’s support offer, a Directory of Support and Advice. There is a UC page on izzi, including an information pack, and there will be a Friday Feature and briefing for Members

·         In terms of monitoring impact Governance and oversight – there is an UC Member Board, which will meet again in October to look at impacts of the first 3 months and to address any emerging policy or support issues. The UC officer group will continue to meet on a regular basis, and will monitor the situation and escalate any issues to Members and also provide periodic updates to scrutiny, as required. There will also be day to day monitoring through support services at JCP, 222 Upper Street, and Libraries will monitor demand and issues. The local DWP leads have provided details of ‘escalation routes’, i.e. who to contact at the job centres, when there is an issue. The Council are also willing to raise any wider issues relating to UC claims process/system/policy at departmental level. Frontline teams are advised to raise any emerging issues, either problems with UC claims or with the wider support offer

·         Since 20 June there have been around 1700 new claims for UC to date, currently around 20 a day per job centre. DWP staff are aiming to offer assessment interviews the day after the claim is made, but as numbers grow this is likely to become more difficult. The aim is to focus on ensuring all new claimants are paid on time and receiving the right amount of money

·         Council/Advice Partner support is in place but to date take up has been very low. Emerging issues are – claimants completing on line application but not phoning to make an appointment – the UC claim will be cancelled if the claimant does not have an interview. Claiming requiring more intensive support at the job centres e.g .those with language needs, Mental Health or Learning Difficulties. Work coaches have been trained in this, but are finding that it is taking a long time to help more vulnerable clients, (manageable at present), but could become a problem when larger numbers transition over).

·         There are challenges for specific groups: feedback from services representing vulnerable residents is that their clients will really struggle with UC, and the local support offer may not be as intensive enough to cope. Key groups include – people with learning disabilities, or mental health problems, those with complex needs e.g. PAUSE clients or homeless moved into accommodation, people who are illiterate, or for whom English is not a first language and private sector tenants who will be worse off under UC and will have little money to live on

·         Members expressed the view that the SID should be amended in the overall aim – second bullet point to read -

To facilitate an effective challenge to the Government where appropriate, and communicate this to residents

·         Members were informed that the average rent arrears in Islington since the introduction of Universal Credit in July had risen

·         There will also be an additional administrative burden on Council staff, as a result of the introduction of Universal Credit, and that this needed to be ‘flagged up’ with the DWP

·         In response to a question it was stated that Members would be sent details of the standard amount of Universal Credit and the additional amounts that could be awarded

·         A Member referred to the fact that it was difficult to access information online in relation to Universal Credit

·         Discussion took place as to advance payments, and that whilst these could be made by the DWP the advance payment would be deducted over the next 12 months

·         Members were informed that the Council could also make discretionary payments in certain circumstances

·         In response to a question as to how UC had worked where it had been introduced in other London Boroughs, it was stated that discussions had taken place with L.B.’s Southwark and Croydon and there is an ongoing exchange of information. It was added that witness evidence from another Borough would be heard at the October meeting of the Committee

·         It was stated that the Council would continue to process Council Tax support

·         Reference was made to the new Job Centre ‘work coaches’, and that it is hoped that this would be an improvement on many residents previous experience of attendance at a Job Centre

·         A Member enquired whether the ‘work coaches’ were linking in to the employment programmes operated by the Council, as this may lead residents to find employment more speedily

·         Members expressed concern that the introduction of Universal Credit is a Government Policy over which the Council has little or no control, and that a communications strategy should be put in place to ensure residents were aware that the Committee were conducting a scrutiny into this area and the measures that the Council were putting in place to endeavour to mitigate its effects

·         Reference was made to the fact that Library staff were being trained in order to assist residents in completing on line application UC claims, and it was stated that it would be beneficial if Library staff offered workshops for residents and to contact the Executive Member Economic Development in this regard

·         Members were informed that the Job Centre ‘work coaches’ were front facing staff and the rationale is that by residents completing UC application forms online, this would free staff up to concentrate on assisting residents to find employment. In addition, there would be Council staff and other support at job centres to assist residents

·         In response to a question it was stated that uniform grants were available, however in terms of grants for books for children this will be investigated and Members informed thereon

·         A Member enquired how the Council/residents could be sure that the DWP were paying the right benefits to residents and that the Alternative Payments arrangements was in place to assist residents. It was stated that the Alternative Payment Arrangements were in place to assist claimants who struggle with the new monthly payment model, and that rent could be paid directly to the landlord, there could be more frequent half monthly payments, where a claimant will struggle to budget monthly, and the option of splitting the payment in the household, where there are DV, gambling issues. Evidence has shown that in areas where UC Full Service has been fully rolled out arrears have risen significantly. It was noted that Housing Associations, through the Landlord portal could access this arrangement, however private landlords could not access this portal

·         It was noted that housing staff were proactively in discussions with residents where it is felt Alternative Payment Arrangements were necessary

·         Members expressed the view that a senior official from DWP should also be invited to give evidence to the Committee in relation to the UC scrutiny review at a later meeting and an invitation should be extended in this regard

 

RESOLVED:

(a)  That the Scrutiny Initiation Document (SID) be approved with the following amendment –

Overall aim – bullet point 2 should be amended to read – To facilitate an effective challenge to the Government where appropriate, and communicate this to residents

(b)  That Members be circulated with details of the standard and additional benefits payments that are available to claim under Universal Credit

(c)   That as Universal Credit is a Government initiative, and not a Council one, a communications strategy be investigated to inform residents that a scrutiny review is being undertaken by the Committee and the measures that the Council are putting in place to mitigate the effects on residents

(d)  That the Executive Member Economic Development be requested to investigate the possibility of library staff running workshops for residents to assist them in understand Universal Credit and how to complete an online claim

(e)  That details of the grants available for school uniform and books, in cases of hardship, be circulated to Members

(f)    That a senior officer from DWP be invited to attend a future meeting of the Committee to give evidence

 

The Chair thanked Robbie Rainbird and Annette Hobart for attending and their presentation