Communities and Local Government CommitteeWritten evidence from Thanet District Council

How effectively are the Department for Work and Pensions and the Department for Communities and Local Government working together to implement welfare reform?

Our experience would suggest a lack of joined up working between the two departments and a lack of focus on the overall impact of a raft of different reforms on the customer. Housing Benefit, Social Sector Size Criteria, and the introduction of local Council Tax Benefit all come at the same time in April 2013. Couple this to the launch in some areas of Universal Credit arrangements and we would have welcomed much closer working between the different agencies and a recognition that there will be impacts such as increased debt/hardship, homelessness etc resulting from the changes.

We would very much welcome a multi-disciplinary team who could review the overall impact on the customer.

Is the guidance available to Local Authorities from Central Government on implementing welfare reform adequate? Are there areas where more or better guidance is required?

We would appreciate a better information flow. For example, recently the Minister for Welfare Reform announced to the select committee that temporary accommodation claims for management costs would be rolled into Discretionary Housing Payments (DHP), which seemed to be news to his own department, as well as a shock to local authorities.

Is the Government’s timetable for Welfare Reform Achievable?

Based on current evidence the answer would be no. It appears that very little of what the Government plan to do is even close to ready, this includes IT infrastructure, lack of clarity over how certain claims are to be dealt with, scepticism towards the online claim expectations, data sharing and cross-working between DWP/HMRC/LAs etc.

The implementation plans for Universal Credit are already being diluted on a regular basis. From a starting point of “all claims from unemployed people will go onto Universal Credit from October 2013” we are now in a position where we are being told that very little will change for Local Councils in 2013–14. Furthermore, the milestone for including low wage earners with HMRC RTI interface seems incredibly optimistic, considering the logistical problems this raises.

This provides real uncertainty. DWP will be managing Universal Credit but not TUPE-ing Local Authority staff. Due to the need to manage potentially substantial redundancy costs, this leaves Councils with real management issues (such as the use of short-term contracts whilst the timetable slips) and the potential for significant redundancy payments at times which are not yet clear.

Are Local Authorities being allocated sufficient resources to deliver services such as Localised Council Tax Support and advice to claimants on Universal Credit?

Given the Government reduced funding for this new Localised Council Tax Support scheme alone by approximately £2.2 million, it is not felt that Local Authorities have been allocated nearly sufficient resources to deliver these services, leave alone offer advice to claimants on Universal Credit. In order to mitigate the effects of these changes we have had to reduce benefits for working age people by between 5% and 6%, remove the 10% “second home” discount, remove the exemption for empty and unfurnished properties and discontinue Second Adult Rebate for working age claimants.

Although these measures have been put in place to minimize the risk to the most vulnerable and those on the lowest incomes as far as is possible, it must be recognised that people will face additional financial burden and hardship which in turn will cost local authorities in a number of ways, including debt recovery, debt write-offs and the associated court costs, homelessness and the need to re-house, temporary accommodation provision and payment thereof. The additional financial burden on a wide range of council services will cost.

Are there financial risks to Local Authorities from Welfare Reform changes? Are such risks being adequately addressed?

This follows on from the point above. There are huge financial risks to Local Authorities. The loss of/reduction of subsidy claims for the administration of Housing Benefits, shortfall as a result of the Localised Council Tax Support Scheme, an increase in demand on a wide range of Local Authority Departments (Housing, Housing Options, Council Tax, Community Safety, Community Development etc). There is a real concern that the “national” savings from Welfare Reform will never materialise as the costs will simply be shunted elsewhere through increased pressure on Local Authority departments as outlined above—for example through bad debts and redundancy payments to long-standing Local Authority staff (payments made from the public purse).

What impact have Welfare to Work schemes had, or are likely to have, on the numbers of benefit claimants?

This is not an easy question to answer, however, a recent BBC article shows the Welfare to Work scheme has achieved a 3.53% increase as opposed to the Government’s 5.5% target. This is significantly under target and does not bode well for the future.

What evidence is there that Local Authorities are able to use effectively existing services or contracts for the delivery of new local Social Fund Schemes?

Kent County Council are delivering this in Kent and District Councils are resisting the transfer of powers to them.

How will the separation of the administration of Council Tax Benefit and Housing Benefit affect claimant?

This duplication of work is only going to confuse customers. By confusing the customer this generates additional, avoidable contact which increases the cost/burden on the local authority. It also duplicates the work. At the moment there is one form for one process which is dealt with in one transaction. In the future (when Housing Benefit moves into Universal Credit) there will need to be two separate assessments made by two different organisations, it is a struggle to see where the financial saving is to be made here. Furthermore, Universal Credit and Localised Council Tax Support will have two distinct appeal systems with different processes and potentially different decisions, further confusing and negatively affecting the claimant.

How significant an issue is Housing Benefit fraud under the proposed new system and what measures are being taken to address it?

Fraud is a major issue in the proposed new system. With no way of cross-referencing properties against the local property database the system is left wide open for multiple, fraudulent claims at the same address, especially in Houses of Multiple Occupation (HMOs). The lack of a property database within the Universal Credit system is a major failing, one that Local Authorities having been raising with the Department for Work and Pensions for at least three years. With the verification of certain documentation no longer being required this also leaves the proposed new system open to fraud.

With a centralised hub dealing with claims nationwide, you begin to lose all the acquired local knowledge that Local Authorities have, which has been proven, time and time again, to be a crucial tool in fighting benefit fraud.

Are there sufficient safeguards to protect social landlords from financial harm resulting from the payment of housing benefit direct to claimants?

Based upon the information we have been given, sufficient safeguards are not in place. The direct payment of benefits directly to claimants is likely to result in arrears/non-payment of rent, as has been proven historically, which will cause significant financial harm to social landlords in the obvious, direct sense. Moreover, they will then have to endure further financial burden trying to reclaim that money (legal costs, staffing costs etc). In the long term, it may also affect social landlords’ ability to borrow money to build new property as that “guaranteed” income they currently receive from Housing Benefit departments will simply no longer exist.

January 2013

Prepared 28th March 2013