irrv welfare reform and benefits seminar: the reality of the social impact of welfare reform
TRANSCRIPT
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Deven GhelaniPolicy in Practice
IRRV WELFARE REFORM AND BENEFITS SEMINAR:The Reality of the Social Impact of Welfare Reform
2 February 2016
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Agenda
1. Introduction2. Universal Credit – Past, Present and Future3. Welfare Reforms – Past, Present and Future4. Our approach: Local data + our software5. Preliminary findings 6. Recommendations What can local authorities do to
improve outcomes for residents7. Next Steps
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We make the welfare system simple to understand, so that people can make the decisions that are right for them
Policy in Practice
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POLICYNational impact
CONSULTANCYLocal impact
SOFTWAREIndividual
impact
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“I can’t see whether the people being clobbered by reductions in council tax support, or under-occupation are the
same people that have been clobbered by other reforms.”
Steve Carey, Leeds City Council
Challenge: Leeds City Council
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The combined impact on households is typically
complex, confusing and changing
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Focus on Universal Credit
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Universal Credit: the policy
55% Generous work allowances
2009
65% Generous work allowances
2013
65% Limited work allowances
2016
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How Universal Credit works
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What is the Social Impact of Welfare Reform?
Do you know the impact that welfare reform is having on
each of your residents?
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“We wanted to ensure a proactive approach to this next round of welfare reforms. This meant having a
strong analysis of the impact and scale of impact of these reforms on our residents, in order to target
activity effectively. The Policy in Practice analysis has provided us with this and given us a strong basis on which to plan our partnership and Council activity.”
Ian Duke, LB Hounslow
Challenge: Hounslow
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Our approach
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A person centred Welfare Reform Impact
Assessment
data + software = actionable insights
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“We wanted to ensure a proactive approach to this next round of welfare reforms. This meant
having a strong analysis of the impact and scale of impact of these reforms on our residents, in order to target activity effectively. The Policy in Practice analysis has provided us with this and given us a strong basis on which to plan our partnership and
Council activity.” Ian Duke, LB Hounslow
Policy in Practice’s approach
Your Housing Benefit data
Our Universal Benefit Calculator
A detailed impact assessment - who is impacted and how?
1. Use local data and insights to inform better decision making
2. See the impact of specific and cumulative reforms at an aggregate and household level
3. Inform targeted and tailored local welfare support
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“We wanted to ensure a proactive approach to this next round of welfare reforms. This meant
having a strong analysis of the impact and scale of impact of these reforms on our residents, in order to target activity effectively. The Policy in Practice analysis has provided us with this and given us a strong basis on which to plan our partnership and
Council activity.” Ian Duke, LB Hounslow
Rich data for each householdHousehold details Under-Occupation Local Housing
AllowanceCouncil Tax Support
• Reference number• Household Type• Tenure• Economic status• Earnings• Savings
• Under occupied (y/n)• Under occupied (£)
• LHA cap (y/n)• LHA cap (amount £)
• Not protected (y/n)• Not protected (amount £)
Benefit Cap at £26k
Benefit Cap at £23k
Pay to StayLHA cap on RSLs
Income
• Could get WTC (y/n)• Receiving DLA (y/n)• Benefit cap 26k (y/n)• Amount (£)
• Could get WTC (y/n)• Receiving DLA (y/n)• Benefit cap 20k (y/n)• Amount (£)
• Reduced (y/n)• Reduced amount (£)
• Earnings below NMW(y/n)• Better off in work (£)• Free school meal eligibility
Universal Credit Support Cumulative Impact
Barriers to work
• Needs protection (y/n)• Needs protection (£)• In work conditionality (y/n)• Min income floor (y/n)
• DHP (£/no)• CTRS (£/no)
• Income Reduction 2015 (£)
• Impact 2015 (no/l/m/h)• Income Reduction 2016
(£)• Impact 2016 (no/l/m/h)
• Disability (0/1/2)• Caring responsibilities
(0/2)• Parenting
responsibilities(0/1/2)• Barriers to work
(low/medium/high)
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“We wanted to ensure a proactive approach to this next round of welfare reforms. This meant
having a strong analysis of the impact and scale of impact of these reforms on our residents, in order to target activity effectively. The Policy in Practice analysis has provided us with this and given us a strong basis on which to plan our partnership and
Council activity.” Ian Duke, LB Hounslow
Rich data for each household
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The impact of the benefit cap
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The Benefit Cap at £26,000:
UK, nationwide levelNumber of households affected nationwide:
< 1,000 1,000 - 3,000 3,000 - 6,000 6,000-12,000 > 12,000
Wales, East, E Mids, YorkshireSW, W Mids, NE, Scotland SE, NWnoneLondon
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Number of households affected nationwide:
nonenoneWalesSW, E Mids, NE, ScotlandLondon, SE, East, W Mids, NW, Yorkshire
< 1,000 1,000 - 3,000 3,000 - 6,000 6,000-12,000 > 12,000
The Benefit Cap at £20,000 UK,
£23,000 London
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The Benefit Cap at £23,000:
Hounslow, borough levelNumber of households affected within the borough:
One wardTwo wardsFour wards Seven wardsFour wards
0 - 15 16 - 35 36 - 45 46 - 55 56+
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The Benefit Cap at £23,000:
Hounslow, local authority level
Number of households affected within each neighbourhood (LSOA) within a ward:
One LSOAOne LSOAThree LSOATwo LSOA
0 1 - 56 - 9 9 - 12
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The Benefit Cap at £23,000:
Hounslow, street levelIndividual households can be identified within a ward, at street level
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From national to household level
UK (Ben Cap) UK (Cumulative) Ward
Neighbourhood Street
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The impact of Welfare Reforms
Preliminary findings paint a stark picture
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34% of low income working age households in Hounslow are in work
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34%
3%30%
8%
26%In work
Not in work, carer
Not in work, disabled
Not in work, lone parent
Not in work, other
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£13.27
£17.05
At £26,000 At £23,000
The Summer Budget will increase the impact
of welfare reform on residentsA lower benefit cap will see a greater reduction in household income
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Specific reforms have different impacts
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Housing reforms in Hounslow
1. Pay to Stay: 12 households in the social rented sector earn more than £40,000 pa. From 2017 they must pay rent at market rates. (NB, SHBE unlikely to show households on higher incomes)
2. Removal of Housing Benefit for those 18-21 not in work under UC: 223 households at risk of losing housing support
3. LHA cap for social tenants: 586 in social rented sector paying rent above LHA, average shortfall of £192 p/mth. Most are under 35 and “under-occupying”
4. 1% cut in social rents
= Risk of higher rent arrears, and revenue streams for Housing Associations and Council HRA’s under pressure
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Universal Credit
23%
30%
47%
UC entitlment is higher
No change in enti-tlment
Transitional Pro-tection needed to avoid lowe enti-tlment under UC
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Universal Credit reforms in Hounslow
1. Reduced work allowance: 80% of households in Hounslow that will be entitled to Universal Credit will face a lower work allowance
2. Conditionality: 5,582 households are in work and will be subject to conditionality because their earnings are below the required threshold
3. The minimum income floor affects most self-employed people• 79% of self-employed households report earnings
below the Minimum Income Floor in Hounslow
4. Transitional protection: in 2016 8,554 households in Hounslow in need of TP, for a total of £30.1 million
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UC in 2020 in Hounslow:
National Living Wage and Tax Allowance
• Higher living wage (£9 p/h) and higher personal tax allowance only partially mitigate the impact of the transition to Universal Credit
• Transitional protection ensures people are not worse off at the point of transition, but changes in relationship status or large changes in earnings may mean this is lost
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How to improve the social impact of welfare reforms
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1. Identify exemptions2. Target support3. Co-ordinate with partners4. Identify cashable savings
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231
1,161
At £26,000 At £23,000
Identify ExemptionsA lower Benefit Cap will affect 5x as many householdsCheck exemptions on specific households, eg:
• Households in receipt of ESA may be in the support group
• Children in receipt of DLA
• Households in receipt of carers allowance
• They or their partner may be in work, and eligible for tax credits
Help them to avoid the cap before it hits.
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Target support: Barriers to work
Target employment support based on distance from the labour market
Target intensive outreach support to those households most heavily impacted
In order to make best use of support resources, and ensure financial support is available to the most vulnerable
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Target Support: Benefit Cap
£0-20 £21-40 £41-60 £61-80 £81-100 £101-150 £151-200 £201 +
51 5134 35
16 2813 3
326
166 168
98 98
177
7652
£26,000 (current) £23,000 (from April 2016)
Take proactive stepsSupport those most severely impacted by a lower benefit cap with focused intensive outreach
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Co-ordinate with partners:
Better off / Worse off and economic status
In work Not in work, carer
Not in work, disabled
Not in work, lone parent
Not in work, other
0
1,000
2,000
3,000
4,000
5,000
6,000
UC higher No change TP needed
Num
ber o
f hou
seho
lds
Loss of tax credits
Lower severe disability premium
Some people are better off
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Cashable savings:
£1.1m in additional income for schools in Hounslow
Pupil Premium and Universal Free School Meals in Hounslow
• 3,400 households have children eligible for free school meals.• 1,623 households have children of the ages of 5 - 7, who would
qualify for Universal Infant Free School Meals. • 850 of these households have an older sibling, and are therefore
likely to be claiming for means-tested free school meals. • This leaves 770 households that could be targeted to increase
take-up.
£1.1m was estimated to be lost to schools in the borough through the Pupil Premium, as a result of fewer families applying for means tested FSM due to the Universal Entitlement offer.
Recommendation: Hounslow can use this analysis to investigate and increase the FSM take-up rates of these households
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How are others using this information?
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Client testimonials
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• They’re making better strategic and operational decisions
• They’re getting the right support, to the right people, at the right time
• policyinpractice.co.uk/london
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Proactive steps now can mitigate the impact of
reforms
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Questions?
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3 Core Deliverables
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1. Household level data set with flags of each welfare reform, and the amount impacted
2. Core report assessing the impact of current and future welfare reforms in your council
3. Presentation of findings in person to your council
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Next steps
Visit www.policyinpractice.co.uk/london to:
1. Download this slide deck2. Request a sample impact assessment report for our
Welfare Reform Impact Analysis 3. Find out more about our software engine