SLAED Employability Group

Welfare Reform: Challenges for Employability Partnerships

Andrew Noble and Andrew McGuireImprovement Service Thursday 6th June 2013

Introduction

• Welfare Reform- main changes• Welfare Reform- Financial impact• Welfare Reform Employability and economic

development – the evidence base

Welfare Reform- the main changes- timescale

• 2011– Benefits uprated in line with CPI rather than RPI– Local Housing Allowance changes

• 2012– Child Benefit rates frozen for 3 years– Reduction to 70% childcare costs claimed through tax credits– Contributory ESA limited to 1 year– Lone Parents moved from IS to JSA earlier.

• 2013– Universal Credit introduced – Successor arrangements to CTB and Social Fund introduced – Council Tax Reduction

Scheme and Scottish Welfare Fund– New under-occupancy rules in socially rented sector– Benefit Cap introduced– Personal Independence Payment introduced (replacing DLA)– 1% annual uprating of all benefits for 3 years

Welfare Reform- Financial Impact of Welfare Reforms to 2014/15

Benefit Area No. h’holds/indivduals affected

Estimated loss £m p.a.

Incapacity Benefits (1) (3) 144,000 500

Tax Credits 372,000 300

1% uprating (3) n.a. 290

Child Benefit 621,000 225

DLA (1) (2) 55,000 165

Local Housing Allowance 80,000 80

Under occupancy 80,000 50

Non-dependent reductions 28,000 30

Benefit Cap 2600 15

Total 1,660

Welfare Reform- Financial Impact of Welfare Reforms to 2014/15

Benefit Type Average loss per affected household/ individual (£ p.a)

No. Of Households/ Individuals affected per 10,000

Loss per working age adult (£p.a.)

Incapacity Benefit 3,480 410 145

Tax Credits 810 1,600 85

1% Uprating n.a n.a 85

Child Benefit 360 2,660 65

DLA 3,000 160 50

Local Housing Allowance

1,010 340 25

Under occupancy 620 340 15

Non-Dependant reductions

1,130 120 10

Benefit Cap 4,810 10 <5

Total 480

Overall impact of welfare reform on Scotland by 2014/15 by local authority area

Glasgo

w

Invercl

yde

Dundee

West

Dunbartonsh

ire

North Ayrs

hire

North La

narksh

ire

Clackm

annan

shire

East

Ayrshire

Renfre

wshire

South La

narksh

ire

South Ayrs

hire

West

Lothian

Dumfries

and Gall

oway Fife

MidlothianFa

lkirk

Argyll a

nd Bute

East

Lothian

Angus

Highlan

d

Edinburgh

Scottish

Borders

Eilea

n Siar

Perth an

d Kinross

Stirlin

g

Moray

East

Renfre

wshire

Orkney

islan

ds

East

Dunbartonsh

ire

Aberdee

n

Aberdee

nshire

Shetl

and isl

ands

0

50

100

150

200

250

300

Estimated loss £m p.a.

Estimated loss £m p.a.

Overall financial impact of welfare reform on Scotland by 2014/15 by local authority area

Glasgo

w

Invercl

yde

Dundee

West

Dunbartonsh

ire

North Ayrs

hire

North La

narksh

ire

Clackm

annan

shire

East

Ayrshire

Renfre

wshire

South La

narksh

ire

South Ayrs

hire

West

Lothian

Dumfries

and Gall

oway Fife

MidlothianFa

lkirk

Argyll a

nd Bute

East

Lothian

Angus

Highlan

d

Edinburgh

Scottish

Borders

Eilea

n Siar

Perth an

d Kinross

Stirlin

g

Moray

East

Renfre

wshire

Orkney

islan

ds

East

Dunbartonsh

ire

Aberdee

n

Aberdee

nshire

Shetl

and isl

ands

0

100

200

300

400

500

600

700

Loss per working age adult £ p.a

Loss per working age adult £ p.a

The Evidence base• The most up to date baseline data available for work

and health related benefits by age, gender and duration of claim by local authority area

• Labour market activity and inactivity by local authority area

• Levels of under-employment by local authority area• Work Programme performance by local authority area• Some assessment of the impact of DWP’s

conditionality and sanctions policy• Potential approaches to mitigation

Total Number of Job Seeker Allowance Claimants (JSA)by local authority April 2013

Aberdeen City

Angus

Clackmannansh

ire

Dundee City

East Dunbarto

nshire

East Renfre

wshire

Eilean Si

arFif

e

Highland

Midlothian

North Ayrs

hire

Orkney I

slands

Renfrewsh

ire

Shetla

nd Islands

South La

narkshire

West

Dunbartonsh

ire

Scotla

nd0

5,000

10,000

15,000

20,000

25,000

Total JSA Count

Total JSA Count

Total Number of Income Support Claimants by local authority November 2012

Aberdee

n City

Aberdee

nshire

Angus

Argyll a

nd Bute

Clackm

annan

shire

Dumfries

and Gall

oway

Dundee City

East

Ayrshire

East

Dunbartonsh

ire

East

Lothian

East

Renfre

wshire

Edinburgh

, City

of

Eilea

n Siar

Falki

rk Fife

Glasgo

w City

Highlan

d

Invercl

yde

MidlothianMoray

North Ayrs

hire

North La

narksh

ire

Orkney

Islan

ds

Perth an

d Kinross

Renfre

wshire

Scottish

Borders

Shetl

and Isl

ands

South Ayrs

hire

South La

narksh

ire

Stirlin

g

West

Dunbartonsh

ire

West

Lothian

0

5000

10000

15000

20000

25000

Total Income Support benefit payments (Nov 2012)

Total Income Support benefit payments (Nov 2012) Scotland

Total number Employment Support Allowance (ESA) claimants by local authority November 2012

Aberdee

n City

Aberdee

nshire

Angus

Argyll a

nd Bute

Clackm

annan

shire

Dumfries

and Gall

oway

Dundee City

East

Ayrshire

East

Dunbartonsh

ire

East

Lothian

East

Renfre

wshire

Edinburgh

, City

of

Eilea

n Siar

Falki

rk Fife

Glasgo

w City

Highlan

d

Invercl

yde

MidlothianMoray

North Ayrs

hire

North La

narksh

ire

Orkney

Islan

ds

Perth an

d Kinross

Renfre

wshire

Scottish

Borders

Shetl

and Isl

ands

South Ayrs

hire

South La

narksh

ire

Stirlin

g

West

Dunbartonsh

ire

West

Lothian

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

Total ESA Claimants

Total ESA Claimants Scotland

Total number of families in receipt of Tax Credits by local authority 2010/11

Aberdee

n City

Aberdee

nshire

Angus

Argyll a

nd Bute

Clackm

annan

shire

Dumfries

and Gall

oway

Dundee City

East

Ayrshire

East

Dunbartonsh

ire

East

Lothian

East

Renfre

wshire

Edinburgh

, City

of

Eilea

n Siar

Falki

rk Fife

Glasgo

w City

Highlan

d

Invercl

yde

MidlothianMoray

North Ayrs

hire

North La

narksh

ire

Orkney

Islan

ds

Perth an

d Kinross

Renfre

wshire

Scottish

Borders

Shetl

and Isl

ands

South Ayrs

hire

South La

narksh

ire

Stirlin

g

West

Dunbartonsh

ire

West

Lothian

0

10000

20000

30000

40000

50000

60000

70000

Total families in receipt of tax credits (in work and out of work, finalised annual awards 2010/11)

Total families in receipt of tax credits (in work and out of work, fi-nalised annual awards 2010/11)

Number of Housing Benefit claims in Local Authority and the socially rented sector, by local authority, November 2012

Aberdee

n City

Aberdee

nshire

Angus

Argyll a

nd Bute

Clackm

annan

shire

Dumfries

and Gall

oway

Dundee City

East

Ayrshire

East

Dunbartonsh

ire

East

Lothian

East

Renfre

wshire

Edinburgh

, City

of

Eilea

n Siar

Falki

rk Fife

Glasgo

w City

Highlan

d

Invercl

yde

MidlothianMoray

North Ayrs

hire

North La

narksh

ire

Orkney

Islan

ds

Perth an

d Kinross

Renfre

wshire

Scottish

Borders

Shetl

and Isl

ands

South Ayrs

hire

South La

narksh

ire

Stirlin

g

West

Dunbartonsh

ire

West

Lothian

0

10000

20000

30000

40000

50000

60000

70000

80000

No. of HB recip-ients in Social Rented Sector

No. of total HB claimants in LA Housing

Total number of Incapacity Benefit (IB) claimants by Local Authority November 2012

Aberdee

n City

Aberdee

nshire

Angus

Argyll a

nd Bute

Clackm

annan

shire

Dumfries

and Gall

oway

Dundee City

East

Ayrshire

East

Dunbartonsh

ire

East

Lothian

East

Renfre

wshire

Edinburgh

, City

of

Eilea

n Siar

Falki

rk Fife

Glasgo

w City

Highlan

d

Invercl

yde

MidlothianMoray

North Ayrs

hire

North La

narksh

ire

Orkney

Islan

ds

Perth an

d Kinross

Renfre

wshire

Scottish

Borders

Shetl

and Isl

ands

South Ayrs

hire

South La

narksh

ire

Stirlin

g

West

Dunbartonsh

ire

West

Lothian

0

1000

2000

3000

4000

5000

6000

7000

Total IB Benefit Claimants

Total IB Benefit Claimants Scotland

Total Number Incapacity Benefit (IB) and Severe Disablement Allowance claimants by local authority November 2012

Aberdee

n City

Aberdee

nshire

Angus

Argyll a

nd Bute

Clackm

annan

shire

Dumfries

and Gall

oway

Dundee City

East

Ayrshire

East

Dunbartonsh

ire

East

Lothian

East

Renfre

wshire

Edinburgh

, City

of

Eilea

n Siar

Falki

rk Fife

Glasgo

w City

Highlan

d

Invercl

yde

MidlothianMoray

North Ayrs

hire

North La

narksh

ire

Orkney

Islan

ds

Perth an

d Kinross

Renfre

wshire

Scottish

Borders

Shetl

and Isl

ands

South Ayrs

hire

South La

narksh

ire

Stirlin

g

West

Dunbartonsh

ire

West

Lothian

0

500

1000

1500

2000

2500

3000

3500

4000

Total number of IB/SDA benefit claimants

Total number of IB/SDA benefit claimants Scotland

Total number of Working Age Disability Living Allowance Claimants by local authority November 2012

Aberdee

n City

Aberdee

nshire

Angus

Argyll a

nd Bute

Clackm

annan

shire

Dumfries

and Gall

oway

Dundee City

East

Ayrshire

East

Dunbartonsh

ire

East

Lothian

East

Renfre

wshire

Edinburgh

, City

of

Eilea

n Siar

Falki

rk Fife

Glasgo

w City

Highlan

d

Invercl

yde

MidlothianMoray

North Ayrs

hire

North La

narksh

ire

Orkney

Islan

ds

Perth an

d Kinross

Renfre

wshire

Scottish

Borders

Shetl

and Isl

ands

South Ayrs

hire

South La

narksh

ire

Stirlin

g

West

Dunbartonsh

ire

West

Lothian

0

10000

20000

30000

40000

50000

60000

70000

Total no. of Working Age DLA claimants

Total no. of Working Age DLA claimants Scotland

Work Programme Referral, Attachments and Job Outcomes (1st June 2011-31st July 2012)

Aberdeen

CityAngu

s

Clackm

annan

shire

Dundee City

East

Dunbartonsh

ire

East

Renfre

wshire

Eilea

n Siar Fife

Highlan

d

Midloth

ian

North Ayrs

hire

Orkney

Islan

ds

Renfre

wshire

Shetl

and Is

lands

South

Lanark

shire

Wes

t Dunbart

onshire

0

5000

10000

15000

20000

25000

30000

35000

Total Work Programme Job Outcomes

Total Work Programme Attachments

Total Work Programme Referrals

Employment rates for Scottish local authority areas 2012 (Scottish Labour Market Survey 2012)

Aberdee

n City

Aberdee

nshireAngu

s

Argyll a

nd Bute

Clackm

annan

shire

Dumfries

and Gall

oway

Dundee City

East

Ayrshire

East

Dunbartonsh

ire

East

Lothian

East

Renfre

wshire

Edinburgh

, City

of

Eilea

n Siar

Falki

rk Fife

Glasgo

w City

Highlan

d

Invercl

yde

MidlothianMoray

North Ayrs

hire

North La

narksh

ire

Orkney

Islan

ds

Perth an

d Kinross

Renfre

wshire

Scottish

Borders

Shetl

and Isl

ands

South Ayrs

hire

South La

narksh

ire

Stirlin

g

West

Dunbartonsh

ire

West

Lothian

0

10

20

30

40

50

60

70

80

90

Employment Rate % 2012; Scottish Labour Market Survey 2012

Employment Rate % 2012

Economic Inactivity rate by Scottish local authority area 2012(Scottish Labour Market Survey 2012)

Aberdee

n CityAngu

s

Clackm

annan

shire

Dundee City

East

Dunbartonsh

ire

East

Renfre

wshire

Eilea

n Siar Fif

e

Highlan

d

Midlothian

North Ayrs

hire

Orkney

Islan

ds

Renfre

wshire

Shetl

and Isl

ands

South La

narksh

ire

West

Dunbartonsh

ire0

5

10

15

20

25

30

35

Economic Inactivity Rate % 2012

Economic Inactivity Rate % 2012

Underemployment across Scotland 2012proportion of workers who are underemployed

source- Annual Population survey October 11-Sept. 12

Dund

ee C

ity

Shet

land

Isla

nds

Clac

kman

nans

hire

Sout

h Ay

rshi

re

Dum

frie

s and

Gal

low

ay

Renf

rew

shire

Wes

t Dun

bart

onsh

ire

Argy

ll &

But

e

Angu

s

Glas

gow

City

East

Ayr

shire

Scot

Bor

ders

, The

Inve

rcly

de

Pert

h an

d Ki

nros

s

Mid

loth

ian

High

land

Nort

h Ay

rshi

re

East

Loth

ian

Stirli

ng

SCO

TLAN

D

East

Ren

frew

shire

Falk

irk

Edin

burg

h, C

ity o

f

Fife

Aber

deen

shire

Nort

h La

nark

shire

Mor

ay

East

Dun

bart

onsh

ire

Sout

h La

nark

shire

Wes

t Lot

hian

Ork

ney

Islan

ds

Eile

an S

iar (

Wes

tern

Isle

s)

Aber

deen

City

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

13.6%

9.9%

5.1%

Underemployment- summary

• Underemployment increasing across all regions of the UK. • Between 2008 - 2012 the number of underemployed workers

in Scotland increased by 76,000• In 2011 the UK underemployment was high compared to EU• Wide variation in underemployment rates across LA areas. • Almost half of all underemployed people in Scotland are

working part-time in the private sector.• Women are more likely to be underemployed than men

(women more likely to work part-time). • 65% of young males not in full-time education working part-

time report themselves as underemployed.

Conditionality for Universal Credit• Applicants for Universal Credit are required to sign a Claimant

Commitment- a record of the responsibilities the claimant has made in return for receiving Universal Credit

• Claimant Commitment applies to those in work and receiving UC, who are identified as “could work more”, i.e. Those in part time Low paid employment; the under-employed

• Expectation that preparing for and getting a job is the “full time focus” of the UC claimant.

• Claimants not being able to demonstrate this will face a sanction, i.e. cut to their UC.

• This means that people in employment will seek support to develop their skills, access training/ further education and progress in the labour market as result of their Claimant Commitment- further increasing demand for a broad range of employability services

WR: Challenges for Employability Partnerships (1)

• Range of challenges for Employability Partnerships arising from WR (e.g. Potential major increase in demand for Employability services; different mix of clients / needs; etc)

• Resource implications (scale / doing more things / doing different things)?

• Ensuring appropriate linkages to other relevant services (Money Advice, Welfare Rights, etc – incl emerging LSS) whilst avoiding ‘revolving doors’

• WR ‘incentivising work’ is premised on jobs being available. Linkages to demand side / Strengthening integration with wider Economic Development

WR: Challenges for Employability Partnerships (2)

• Reduced incomes within local economies

• Scope to influence focus of next round of EU funding

• Local Govt has major role to play in employability – and also lead role re SOA priorities.

• Where does potential ‘crisis management’ around WR leave prevention / early intervention agenda?

• Do Councils / CPPs have genuinely joined-up approach to Econ Outcomes?

• What more can public sector do re maximising economic impact?

Economic Outcomes Programme

• Working with Councils / partnerships to implementing key messages of ‘Econ Dev Improvement Guide’ in order to maximise economic impact

• Access to Guide and further info on EOP via:- www.improvementservice.org.uk/economicoutcomes

• Wide range of tailored supports available to:-– Individual Councils / Partnerships– Groups of Councils / partnerships– National initiatives

• Linkages to all key Econ Dev Agencies via EOP Prog Board

• But limited resources

Group Discussion

• Update re where Councils are in context of WR Employability challenges

• Emerging issues / themes?

• Are there common areas that would benefit from EOP / WRISP support?