All County Council Members have been invited to attend for this item.
Minutes:
All Members of the County Council had been invited to attend for this item, and Mr N J D Chard, Mr A D Crowther, Mrs E Green, Mr M J Harrison, Mr P M Hill, OBE, Mr R J Lees, Mr R A Marsh, Mr K H Pugh and Mr M V Snelling were present.
Ms C Grosskopf, Policy Officer, was in attendance for this item.
A copy of the slides used in the presentation was circulated to Members present and copied to all Members of the Council after the meeting.
1. Ms Grosskopf presented a series of slides which set out the background to, main proposals and potential implications of the Government’s Welfare Reform Bill. She highlighted the main changes, as follows:-
a) the largest and most radical change is the introduction of Universal Credit from October 2013, which brings together various benefits and tax credits into a single monthly payment. This Credit is intended to encourage and make it easier for individuals to get back to work, and the monthly payment is intended to help them get used to building a budget around a monthly payment of wages. However concern has been expressed about the ability of the more vulnerable claimants to cope with this system. Although the Government intends the majority of people to eventually claim Universal Credit online, they are currently looking into ways to deliver a face-to-face service for the more vulnerable customers. KCC (including the Gateway team) and some of Kent’s District Councils are involved in ongoing discussions about this;
b) Council Tax Benefit changes, from April 2013, will pass funds currently held centrally, minus 10%, to local authorities, which will be required to design their own local system of Council Tax benefit;
c) funding for the Discretionary Social Fund will be devolved to local authorities (the upper tier in county council areas) from April 2013. KCC is currently planning how to provide this service, including whether or not to commission a third party to provide it;
d) a cap on the level of benefits claimed by any one out of work household will be introduced from April 2013 (planned to be set at £26,000);
e) Disability Living Allowance (DLA) for people of working age is to be replaced by the Personal Independence Payment (PIP) from April 2013. This will have stricter rules of entitlement. Contrary to earlier indications, the mobility component of DLA and, later, PIP, will notnow be withdrawn for people in publicly-funded residential care;
f) Employment Support Allowance (ESA) restrictions from April 2012:- individuals claiming the national insurance-based ESA will only be entitled to it for one year. However, they will be able to go on claiming the means-tested ESA provided they (and their partner, if applicable) pass the means test;
g) easier data sharing between the Department of Work and Pensions and local councils from April 2012 (without the need for individual client authorisation);
h) up-rating of Housing Benefit for private sector tenancies by the Consumer Price Index from April 2013;
i) restrictions to Housing Benefit in the social housing sector from April 2013, based on size criteria;
2. Ms Grosskopf then went through the potential implications of the reforms, including:-
a) whether the reforms would reduce worklessness and benefit dependency or increase poverty and hardship. There are mixed views on this and various factors need to be taken into account, which were set out in the presentation slides;
b) risk to the Gateway model if local authorities are not given a role in the face-to-face delivery of Universal Credit;
c) risk to housing providers if the housing element of Universal Credit is not paid direct to them;
d) Council Tax Benefit reform brings risk to local government finances if billing authorities are unable to collect the required level of Council Tax;
e) localisation of the Social Fund brings reputational risk from local government making the decision to award or refuse benefits or support. On the other hand may be opportunities from increased localism;
f) benefit caps will particularly affect people in London and this may lead to migration to surrounding counties, including Kent; and
g) potential savings from enhanced data sharing.
3. Ms Grosskopf and Mr Ireland responded to comments and questions from Members, and the following points were highlighted:-
a) service users and staff will need to receive training and support to understand and administer the new system. Training in some aspects has already begun. Members expressed a concern about the administrative burden that the new rules will bring;
b) a concern was expressed that benefits paid direct to claimants may not be used for their intended purpose (eg to cover rent and Council Tax payments) and existing problems of arrears and debt will worsen. There may be some scope for payments to be made direct to landlords but this is limited and the majority of benefit recipients will be expected to learn to budget themselves. Concern was expressed about how this would impact on vulnerable groups and on housing providers;
c) the unemployed now includes many professional people who have aspirations and expectations about their scope to re-train and find new employment, but it is those who have never or rarely worked who will need the most help and encouragement to find employment and those at whom the reforms are targeted most;
d) from their experience of working with the National Assistance Board and in the private rental market, Members expressed concerns about how well some of the proposals would work and how well the changes had been thought through;
i) claimants whose benefits are paid direct to their landlords will not acquire the skill or habit of budgeting for themselves;
ii) changes such as those proposed will be difficult to introduce at a time of mass unemployment. When jobs are plentiful, it is easier to identify work refusers. Ms Grosskopf said that the Government would say that no-one will be forced off Universal Credit if there is no job for them to go to; and
iii) concern was expressed that providers of social housing are not geared up to manage rent arrears, and Ms Grosskopf added that this would also affect their ability to borrow from commercial lenders (ie if their income from benefit recipients is not secure);
e) the point was made that the proposed changes might drive rents down. If this does not happen, people would be forced to move to cheaper rental areas – this will particularly affect London Boroughs and migration to Kent is a possibility;
f) Members are sure to be approached by local people seeking help to understand the system and possibly to support them in an appeal, so they will need training to help them understand the new rules; and
g) when starting a new job, people have to wait for up to a month to receive their first salary payment, so there will need to be some flexibility to cover this waiting period to help people avoid falling into rent or Council Tax arrears. Ms Grosskopf thought that such flexibility may be available to support people back into work.
4. Mr Ireland outlined the risks associated with the changes; to some vulnerable users, for whom it may be difficult to assess their true ability to understand and cope with the changes and who therefore may not get the help and support they need; to KCC staff who might have to cover excessive demands for their involvement and support, and be tasked with taking difficult decisions about local cases; to Members, who might be asked to help and support local people with claims and appeals, and to the Kent economy and service providers as they may be pressured to accommodate tenants priced out of London by changes to rents and benefits.
5. Mr Lake added that, as the Chairman of the Supervisory Committee of Kent Savers, he is involved in assessing the potential risks to housing providers and tenants which will arise from the changes. Kent Savers have launched a pilot scheme across Maidstone, Medway, Swale and Tunbridge Wells, to help both sides to understand the changes and the new rules. Benefit payments for rent can be held by Kent Savers and then paid direct to landlords, for a small fee.
6. RESOLVED that the information set out in the presentation and given in response to comments and questions be noted, with thanks.