Memorandum submitted by the Convention
of Scottish Local Authorities (COSLA)
COSLA welcomes the Scottish Affairs Committee
invitation to provide evidence at their inquiry into Poverty and
this paper aims to provide members with an overview of the evidence
COSLA proposes to put forward.
SUMMARY OF
THE MAIN
POINTS
1. The tax credit and benefits systems need
to become more flexible and responsive to allow individually-tailored
approaches. COSLA advocates more personalised, flexible, locally-agreed
and individualised support for everyone seeking and capable of
sustainable, accessible, appropriate work.
i. COSLA recommends that local government
is resourced to undertake targeted benefit take-up work.
ii. Any replacement for Housing Benefit must
take full account of local differences in rent and income levels
and must not lead to increased debt levels for tenants.
iii. Financial and social exclusion are increased
by closure of key services such as post offices; by limited access
to low-cost financial services; by a lack of affordable, flexible
childcare in some areas; and by regressive utilities tariffs for
low income households.
iv. Climate, rural scarcity and fuel costs
exacerbate poverty in rural areas of Scotland.
v. Geographical intensity and generational
factors exacerbate poverty in urban areas of Scotland.
vi. Asylum seekers and refugees can be particularly
susceptible to poverty and destitution.
BACKGROUND
2. Scottish Local Government is committed
to ensuring social justice and to tackling poverty across Scotland.
Across urban, rural and mixed urban-rural Scottish local authorities,
a range of strategies and approaches are being implemented within
the wider context of Community Planning, for example to:
— address health inequalities;
— address income poverty, financial
inclusion and debt;
— tackle unemployment; and
— improve literacy and numeracy skills.
3. It is impossible to define the total
cost of Scottish councils' contribution to the reduction of poverty,
but it is safe to say that local government contributes a significant
proportion of total annual public sector expenditure on services
to tackle poverty and disadvantage.
4. Despite concerted efforts by UK, Scottish,
local government and our partners, large numbers of people in
Scotland continue to experience poverty and social exclusion.
Using the UK and Scottish government measure of poverty—households
with less than 60% of equivalised median income—Child Poverty
Action Group (CPAG) identifies that 980,000 people in Scotland
(20% of the population) are living in poverty; and 250,000 children
(24% of all children) are living in poverty.
5. Although significant progress has been
made in tackling poverty over the past 10 years, in particular
amongst children and pensioners, there are still groups of people
at risk of poverty in Scotland, including young adults, lone parents,
people who are not working, people affected by disability, ethnic
minority groups and asylum seekers. An increasing challenge is
people with multiple and complex needs who require joint interventions
from a range of agencies. While poverty is most prevalent in urban
areas of Scotland, CPAG identifies that one in ten of the rural
population (100,000 people) are income deprived and large numbers
of people are living in poverty in areas with much lower concentrations
of poverty than the city of Glasgow which has a disproportionate
share of Scotland's poorest neighbourhoods.
6. At a time when Scotland's economy is
growing, poverty remains widespread and clearly economic responses
alone will not be adequate. Scottish Local Government believes
that eradicating poverty requires joined up strategies, policies
and approaches at both national and local levels across issues
of income; education, training and employment; childcare and caring;
health and community wellbeing.
7. This paper focuses in particular on reserved
issues and their interface with the work of local authorities
and community planning partners in Scotland.
TAX CREDITS
AND BENEFITS
8. The main levers of the tax and benefit
system across the UK are reserved to Westminster. While tax credits
have undoubtedly lifted a significant number of households out
of poverty, Scottish local authorities identify a number of issues
related in particular to the administration of tax credits which
can impede poverty reduction, including:
— Delays in decisions and awards, particularly
in the initial period, which can place parents in a financially
vulnerable position.
— Confusion regarding awards which
result in over-payments.
— Application forms not being available
on-line which leads to delay in completion.
— 16-hour rule which excludes many
parents who work fewer hours from accessing in-work benefits.
— A8 nationals' registration problems
which delay access to in-work benefits such as tax credits.
— Delays in assessment and payment
for asylum seekers who gain status under the "legacy"
programme.
9. We therefore suggest a review of the
administration of tax credits and scope for local discretion on
"rules" and fast-tracking. This would allow more flexible,
responsive and personally-tailored approaches and locally-agreed,
partnership-led packages of individualised in-work support which
include tax credits.
JOB SEEKERS
10. Job Seekers Allowance (JSA) rules can
make it difficult for jobseekers to attend vocational skills training
as part of their pathway to work. A limited period of training
and coursework can be a vital part of the process of preparing
the individual with multiple disadvantages for work, for example,
by improving employability, habits of work and increased confidence.
We therefore suggest consideration of the provision of local discretion
to relax these rules where there is clear evidence that the training
proposed (over 16 hours and/or two weeks) is part of a managed
pathway to work.
11. There are also issues for people currently
in receipt of Incapacity Benefit which can impede them from accessing
employment. For example, time spent on Incapacity Benefit (IB)
or Severe Disablement Allowance (SDA) does not count towards the
qualifying period for Council Tax and Housing Benefit "run-ons"
(continuing benefits) on entering employment. Therefore, individuals
leaving IB for Job Seekers Allowance to pursue their intention
to get work (since claiming is an eligibility requirement for
some New Deal and other programmes) have to claim JSA for 26 weeks
before being eligible for these continuing benefits. These same
people would retain eligibility for continuing benefits if they
opted to remain on IB/SDA.
12. In replacing Incapacity Benefit with
Employment and Support Allowance in 2008, we hope the Government
will ensure that flexibility will extend to administrative processes,
assessments and "rules" to enable local partnerships
to provide appropriately tailored packages of support timeously
and effectively and to ensure that interfaces with other benefits
do not act to deter people from taking up employment, training,
education or volunteering options. Again, we advocate more personalised,
flexible, locally-agreed and individualised support for everyone
seeking and capable of sustainable, accessible, appropriate work.
BENEFIT UPTAKE
13. Local government clearly has a role
to play in ensuring that people are kept informed about the benefits
that they are eligible to, not least because benefits such as
Housing Benefit and Council Tax Benefit are administered by local
authorities. Scottish local authorities are proactive in this
regard and provide a great deal of information to their residents,
whether that is in person at council offices, in print, or on
their websites. Similarly, some are also involved in resourcing,
co-ordinating and monitoring the work of other advice and rights
agencies—for example, Fife Rights Forum is funded by Fife
Council with a remit to help to improve the quality of advice
services, promote co-operation between agencies and increase community
involvement across the sector (http://www.fiferightsforum.org.uk).
14. However, welfare benefits do not always
reach their intended recipients. Indeed, a 2005 study by the Department
for Work and Pensions (DWP) estimated that around one in five
people over 60 did not claim their full entitlement. It is therefore
recommended that local government is resourced to undertake locally-appropriate,
targeted secondary benefit take-up work and that DWP work with
local government and other key stakeholders to improve primary
take-up rates, for example through increased automatic triggered
payment wherever possible.
LOCAL HOUSING
ALLOWANCE
15. The Welfare Reform Bill currently before
parliament introduces Local Housing Allowance (LHA) to replace
Housing Benefit for low income households renting in the private
sector. Local authorities currently administer Housing Benefit
and will take over provision of the Local Housing Allowance. This
new benefit will generally paid directly to clients rather than
their landlords. COSLA has a number of concerns in relation to
this forthcoming change.
— This change in benefit has the potential
to push more people into poverty and debt through a reduction
to their current benefit level.
— The DWP does not have a strong record
of resourcing programmes to help unbanked benefits claimants access
bank or post office accounts (which they will need to have to
receive LHA).
— Blanket rent levels introduced by
LHA will potentially lead to inequalities where the level of rent
set is not sensitive enough to local differences.
16. The rate of withdrawal of Housing Benefit
(known as the taper) as a claimant's income rises above basic
Income Support/JSA Levels is very high, a 65 pence reduction in
HB for each additional pound of income including that from earnings
and working tax credits. This creates a "poverty trap"
which acts as a barrier to work with many who take up employment
finding that they are little or no better off financially. Indeed
many are left worse off once work related overheads such as work
clothing and travelling costs are taken into account.
17. The existence of this "poverty
trap" was acknowledged yet again as recently as July 2007
in the House of Commons Work and Pensions Committee Report entitled
"Benefits Simplification" (paragraphs 156-176).
FINANCIAL INCLUSION
18. Financial Exclusion is a characteristic
of poverty and available statistics tell us that 9% of Scots (450,000
people) still do not have access to a bank account. Scottish Local
Government is committed to developing services that provide advice
and support services targeted at vulnerable members of the community
to help individuals maximise their income and benefits. This is
hampered by regressive policies by some utilities companies with
regard to tariffs for low income households; by closure of key
services such as post offices in fragile and disadvantaged communities;
and by limited access to low-cost financial services.
19. Scottish Local Government is also implementing
preventative measures in relation to financial inclusion where
Education is playing an important role by covering finance and
financial issues with young people within the school curriculum,
so they are more able to manage their finances, access bank accounts
etc.
CLOSURE OF
POST OFFICES
ACROSS SCOTLAND
20. People living in poverty are particularly
dependent on their local post office as a place to collect benefits,
access money and, as importantly, a place of informal social networking.
Accessibility to post office services is therefore a key issue
in Scotland where individuals rely on them for essential financial
services, given that more post offices in Scotland are located
in rural areas because of the way the Scottish population is distributed,
compared to other parts of the UK.
21. COSLA therefore has a number of concerns
related to the closure of Post Offices and places considerable
importance on government's commitment to funding support for the
network and the introduction of "outreach" branches.
FUEL POVERTY
22. The Scottish House Condition Survey
for 2004-05 found that 419,000 households (18.2%) in Scotland
live in fuel poverty. However, Communities Scotland also calculated
that for every 5% increase in fuel price, a further 30,000 households
will become fuel poor. Fuel prices increased by an average of
61% between 2003 and 2006, bringing the actual figure for the
number of Scottish households in fuel poverty in 2007 to around
650,000. Older people are particularly at risk of fuel poverty
as they have fixed incomes.
23. Statistics from Energy Watch Scotland
demonstrate Scotland's unique position in relation to Fuel Poverty:
— Due to the difference in climate,
Scotland has a much longer heating season and a household in the
north of Scotland can spend 68% more on fuel than in the south
of England.
— Scotland has a large number of properties
that are off the mains gas grid and which are likely to remain
so; some 33% of homes in Scotland have no gas.
— Research from the Scottish Government
has shown that the most effective measure for removing a household
from fuel poverty is to fit a gas central heating system. However
many households are in rural and remote areas where the cost of
providing a gas supply would be uneconomic. These areas are then
forced to use more expensive fuels to heat and provide power to
their homes.
24. Fuel Poverty has particular relevance
as an indicator of poverty in rural areas of Scotland due to remoteness,
transport difficulties and the cost of fuel. There are issues,
however, with how data is collected. For example, in Argyll and
Bute 21% of households are estimated to be in fuel poverty on
the basis of authority-wide data. However, at small output area
scale the figure can rise to 45.9%.
25. Orkney has the second highest level
of fuel poverty in Scotland, with 31% of households recorded as
living in fuel poverty. Orkney's climate is colder, wetter, and
windier so residents face higher fuel bills to achieve an acceptable
level of comfort. In addition, fuel poverty in Orkney is related
to the age of stock, with 45% of all dwellings being pre-war builds
so the energy efficiency of houses is very low. 89% of all properties
were identified as having an NHER rating in the 0-5 range (poor
to moderate) in comparison with 49% nationally. Of those, 84%
are in the private sector.
EMPLOYABILITY AND
SKILLS
26. Scottish Local Government recognises
that the level of poverty amongst working-age adults also needs
to be addressed and is currently involved in delivering a range
of locally-appropriate interventions across Scotland which aim
to tackle unemployment and to increase skills and employability.
It is anticipated that the imminent transfer of regeneration and
Business Gateway functions from Scottish Enterprise to local government
should support greater integration of services to help people
to move towards job-readiness and into training and work.
27. At present, current government strategy,
with its focus on work as the key route out of poverty, is only
partially effective. CPAG identifies that half of children and
working age adults living in poverty in Scotland are living in
households where an adult works. Low pay is prevalent in Dumfries
and Galloway, Clackmannanshire and Moray whereas worklessness
is prevalent in West Central Scotland (Glasgow, Inverclyde and
West Dunbartonshire).
28. Despite improvements in childcare provision,
a lack of affordable, flexible childcare remains a significant
barrier to parents trying to move back into education or work.
29. Local authorities across Scotland also
raise a number of issues regarding the operation of New Deal and
its impact in reducing worklessness. For example, some highlight
that the tendering and contracting for major JobCentre Plus (JCP)
delivery programmes, such as New Deal, do not offer sufficient
scope for responding to local strategies and involving local partners.
Assessments of tenders are undertaken nationally with recommendations
made to District Managers for their consideration with little
local input.
30. In addition, the national design of
New Deal sets up some rigid requirements of programme delivery
and participation which restrict the capacity of JobCentre Plus
staff to offer customers the most effective combination of measures
from the full menu of opportunities. Such restrictions make it
harder to maximise outcomes within given budget limits. Similarly,
other providers sometimes need access to customers' personal data
held by JCP but current rules exclude this possibility, even where
customers give their consent.
31. It is proposed, therefore, that JobCentre
Plus Districts should be able to operate New Deal programmes on
a flexible basis within agreed targets and funding, enabling them
to offer customers the full range of options in response to their
Action Plan rather than solely using age or eligibility criteria.
In addition JCP District Officers should be able to manage the
overall funding available for customers without specific allocations
of resources to each individual (ie using an average cost per
head according to category), allowing flexibility to meet targets.
It is also recommended that a proportion of JCP programme funds
should be designated as a "partner" or "co-decision"
fund for allocation by the local partnership, giving JCP the ability
to participate as an equal partner in local alignment of funding
and procurement to deliver shared employability, employment and
anti-poverty outcomes.
ASYLUM SEEKERS,
REFUGEES AND
MIGRANT WORKERS
32. There is a recognition that important
progress is being made in tackling poverty in Scotland through
Scottish local and national and UK Government commitments and
policy action. However, in some cases policy appears to be resulting
in increased poverty, for example, for asylum seekers.
33. COSLA Strategic Migration Partnership
(CSMP) works with many of the key voluntary, statutory and private
sector organisations involved in the provision of services to
asylum seekers, refugees and new migrants in Scotland.
34. According to Border and Immigration
Agency in Scotland, around 20% of new asylum applications currently
being processed in Scotland result in leave-to-remain being granted.
Failed applicants have a right to appeal and in 2006 22% of appeals
were successful.
35. Most Asylum seekers are destitute when
they arrive in Scotland, having had to abandon their cash and
assets when they fled persecution. Asylum seekers are not able
to access mainstream benefits provision, but can apply for accommodation
and/or subsistence payments through the Asylum Support system
while their case is decided. Asylum Support is administered by
Border and Immigration Agency and is set at around two-thirds
of the level of income support (currently around £40 for
an adult asylum seeker). This means that asylum seekers are living
in poverty while their claim is decided.
REFUGEES
36. People who receive refugee status in
Scotland also experience poverty. When a person receives a positive
decision they have to move from the accommodation provided by
Border and Immigration Agency (although sometimes accommodation
is novated). They then face the poverty trap of choosing between
expensive furnished accommodation or struggling to furnish a home
(bearing in mind that most Scottish people experiencing poverty
can rely on long-established family and social networks to support
them in this).
37. Refugees can struggle to find employment
commensurate with their previous skills and experience. Long periods
of economic inactivity while they waited to receive status, problems
translating or transferring qualifications and the impossibility
of carrying out police checks in their country of origin are significant
barriers to finding employment.
38. The quicker decision-making of the new
asylum model will make these issues less relevant for new asylum
applicants. However, Border and Immigration Agency are in the
process of dealing with a backlog of applications which were lodged
before the new system was introduced. This involves the review,
by March 2008, of 1079 families' cases across Scotland, and around
90% of those resolved to date have received leave-to-remain. As
a result of this, people who have been unable to work for three
years or longer now have the right to work and there is an urgent
need for services to support them to avoid them becoming part
of Scotland's worklessness problem.
39. Refugees are able to access mainstream
benefits whether they are working or not. COSLA has recently done
a lot of work with JobCentre Plus and Department for Work and
Pensions to ensure that new refugees receive a National Insurance
Number quickly so they can access benefits. Early reports suggest
that this work has been successful, however refugees are still
receiving significant delays in receiving Child Tax Credit administered
by Her Majesty's Revenues and Customs. In some cases refugees
have waited 16 weeks for these benefits to start. During this
period their children are effectively unsupported and the family
experiences destitution.
RURAL ISSUES
40. Remote rural populations across Scotland
experience higher than average costs of purchasing everyday items
such as food, fuel and transport. Food, fuel and transport costs
in the Outer Hebrides, for example, are 20% higher than average.
In Argyll and Bute, almost 40% of the population live in settlements
of less than 1,000 compared to the Scottish average of 12%. This
has significant impact on transport and the range of services
that are easily accessible and increases the cost of service delivery.
Benefit uptake also tends to be lower in more isolated, inaccessible
areas. Even though the unemployment rate in Argyll and Bute and
Highland is lower than the national average, these areas have
a relatively low average gross household income and wage level.
Employment by no means always equates to wealth.
41. The lack of employment opportunities
within rural areas dictates the dependence of individuals on seasonal
work such as low wage tourism and service sectors which only require
staff for peak periods. The lack of permanent positions can also
lead to an inability to attract people in to the area and to retain
an area's young people, which in turn leads to demographic decline
experienced in many rural areas.
URBAN ISSUES
42. While the key feature of rural poverty
and deprivation is often its dispersed, "hidden" nature,
in more urban areas, it can be the intensity of poverty across
whole neighbourhoods which is particularly distinctive in Scotland's
cities and towns. This intensity and the inherent generational
factors, present continuing challenges in addressing structural
issues such as benefits traps, employability, and health inequalities.
Numbers of people in receipt of incapacity benefits in urban areas
of Scotland, for example, remain high. Indeed, one-fifth of the
100 Westminster constituencies with the highest numbers of people
in receipt of incapacity benefits are Scottish seats.
CONCLUSION
43. There are very particular circumstances
in Scotland—for example, climate, rural scarcity, and fuel
costs—which impact on poverty. There are also unique and
innovative responses, many of them delivered through strong local
partnerships within the framework of Community Planning.
44. Local government will play an increasingly
important role in ensuring that communities and individuals are
lifted out of poverty and, in particular, in ensuring that there
is congruence between the UK-wide, Scotland-wide and local approaches
and policies. Local government in Scotland also has a key role
in ensuring that communities and individuals are at the heart
of anti-poverty policies which are appropriate, flexible and locally-
and individually-responsive. In responding to the deep-seated,
structural causes and effects of poverty in Scotland, however,
UK-wide, Scotland-wide and local government must take shared accountability
and work collaboratively if we are to bring about lasting, long-term
change for the better.
Fiona Bradley
COSLA, Policy Officer
November 2007
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