www.coventry.gov.uk
Welfare Reform
(impact on councils and their
communities)
Tim Savill
Head of Benefits
Coventry City Council
www.coventry.gov.uk
Welfare Reform Bill
• “an historic step in the biggest welfare
revolution in over 60 years.”
David Cameron
• COMPLETE, UTTER, MASSIVE
DWP Speaker March 2012
www.coventry.gov.uk
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
www.coventry.gov.uk
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%...
www.coventry.gov.uk
Changes that have
happened
www.coventry.gov.uk
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
www.coventry.gov.uk
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
www.coventry.gov.uk
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
www.coventry.gov.uk
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
www.coventry.gov.uk
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
www.coventry.gov.uk
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
www.coventry.gov.uk
Changes that will happen
in next 12 months
www.coventry.gov.uk
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
www.coventry.gov.uk
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
www.coventry.gov.uk
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
www.coventry.gov.uk
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
www.coventry.gov.uk
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
www.coventry.gov.uk
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
www.coventry.gov.uk
Future Changes
www.coventry.gov.uk
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…
www.coventry.gov.uk
Universal Credit
www.coventry.gov.uk
What happens next?
• Secondary legislation for Welfare Reform
Act and Local Government Finance Bill
• Consultation
• LA involvement in delivery of UC?
www.coventry.gov.uk
QUESTIONS
Tim Savill
Head of Benefits
Coventry City Council
Email: [email protected]
Tel: 024 7683 2607
Mobile: 07507 889129
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