Work and Pensions Committee - Universal Credit implementation: meeting the needs of vulnerable claimantsWritten evidence submitted by Neath Port Talbot County Borough Council

1. There are significant changes impacting on claimants, the Department for Work and Pensions (DWP) and local authorities (LA) as a result of implementing Welfare Reforms. Whilst it is appreciated that reforms are appropriate to encourage people back to work and not penalise them via the benefits system, care must be taken to ensure that those entitled to benefits receive their entitlement and understand what they have to do to claim and retain such benefits.

2. Online application will cause enormous difficulty to a significant proportion of benefit claimants. Online support and advice will not help people who are not IT literate. There must be some form of personal face to face help and advice for claimants. Local authorities may be best placed to provide this support but there will need to be links between the LA and Universal credit staff/systems in order for LA’s to be able to provide efficient support and must be properly funded.

3. Monthly payment will cause difficulty at the start/transfer of a claim to Universal Credit. There will inevitably be a large number of people unable to budget effectively with a monthly payment. Consideration must be given to an initial payment to alleviate these problems (eg a bridging loan).

4. People will need money management help and support. One aim of the Universal Credit is to enable benefit recipients to manage their budget however this won’t happen without help/support/training. Indeed even with such support many will fail. There needs to be provision for this. Historically such support has come from Citizens Advice Bureaux etc but funding and the increased workload will mean that these institutions will struggle to cope, as indeed they are currently. This may be an area which the local authority again may be involved in. There would however be funding issues in providing such a service.

5. Up to date online earnings data will be of great significance to the efficiency of dealing with Universal Credit administration. Presumably there must however be robust back up arrangements for system failure or those employers who don’t provide the relevant information. Any failure by the employer to provide the relevant information will be harmful to the claimant’s Universal Credit claim.

6. With regard to the reduction of fraud and error there seems to be a lack of verification in certain areas. There needs to be an identification of where the lack of verification will lead to possible fraud and error issues eg rental liabilities amounts and existence of bona fide tenancies, capital held etc. It will be difficult for Universal Credit staff to identify multiple tenancy claim fraud eg people claiming rent assistance for the same tenancy. Without a property data base the likelihood of landlord/tenant benefit fraud is increased. This was an issue which was prevalent prior to local authorities becoming responsible for housing benefit payment.

7. The claimant commitment proposals may seem reasonable, but whilst it may be self inflicted this will lead to possibly significant short term hardship issues. Presumably there will be appeal issues which if benefit is still suspended in the mean time will result in short term hardship even though subsequently the appeal may be upheld. Turnaround times for appeals are currently excessive with the likelihood of deteriorating further with the introduction of the new system. The issue of appeal turnaround times and the effect on the claimant’s finances in the mean time is a matter requiring urgent attention.

8. The effect on the work at local authority benefits offices is significant. It must be noted that the introduction of the new Council Tax Support Scheme from April 2013 will not lead to a reduction in workload. Caseloads will remain almost unchanged whilst the means testing and data collection will remain almost at current levels. Future variances in workloads are largely dependant on the work local authorities will be expected to do during the transition to Universal Credit and after its full introduction. Inevitably during the transition period claimants will contact the local authority for guidance regardless of where the statutory duty lies. This is also likely after full implementation. In view of local authorities role in local support to its constituents it would seem appropriate that authorities are provided with the information needed to help claimants in any Universal Credit enquiries. It may be that the overall workload will be greater with the retention of a Council Tax Support scheme and a face to face Universal Credit role.

9. The introduction of the benefit cap in this area will only impact on a small number of claimants, however those affected will generally not be in overly expensive properties and therefore moving will not be an issue to address any reduction in their income. Whilst it may be argued that their income levels are higher than may be considered necessary the qualification criteria to that income is the same as for all other benefit claimants. They will also lose what may be a significant amount of benefit overnight.

10. Changes to the entitlement of those in Registered Social Landlords (RSL) properties considered over accommodated will have a significant effect on claimants. Moving to more appropriately sized property is only an option if suitable alternatives exist. Many properties may be over occupied due to lack of appropriately sized families to occupy and therefore over occupation being a better alternative than having vacant properties. Whilst the introduction of this change is understandable there should be consideration of protection for existing claimants/tenants and those who have changes in circumstances which lead to the property becoming over accommodated.

11. The 10% cut in funding for the localisation of Council Tax Support will have a substantial effect on those on low income and result in local authorities often having to recover additional small balances from those with the lowest income. Regardless of the new scheme adopted, as a result of the reduction in funding, the outcome is a simple cut in benefit entitlement to those whose circumstances haven’t changed and are unable to vary their financial situation.

12. Impact monitoring needs to concentrate initially on new claimants and those being transferred to Universal Credit. There will also be a negative impact on local Council Tax collection rates. The monthly in arrears payments will inevitably be an issue. Rent payments will be an issue for many where payment has historically been direct to landlord individual claimants will now have to pay the sums direct. This could have a negative impact on landlords cash flow and cost of service delivery.

13. It should be noted that the levels of ongoing administration grants will be vital to local authorities’ ability to provide the required services. Any award of grant in respect of the transferred responsibility for Council Tax Support must reflect the substantial workload that remains despite the withdrawal of Housing Benefit. Likewise any reductions relating to the reduction in Housing Benefit work must take into account the residual workloads and new Universal Credit implications. Work and therefore funding relating to the LA’s contribution to the administration of Universal Credit must be sufficient to provide a quality service which will be essential to the success of the implementation of the Universal Credit and to the wellbeing of the poorest and most needy in our communities.

14. It appears that a revised social fund for local authorities to administer is to be introduced to deal with problems arising during/as a result of the introduction of Universal Credit. It is a concern that this fund is seen as a sticking plaster for the local authorities to deal with problems caused by the introduction of Universal Credit or those which Universal Credit has not been designed to deal with. This would seem to devolve all problematic cases to local authorities with limited funds being made available.

16 August 2012

Prepared 21st November 2012