Welfare Reform and Work Bill Committee

Written evidence submitted by Gipton Supported Independent Living (Leeds, West Yorkshire) (GIPSIL) (WRW 47)

1. Gipton Supported Independent Living Limited, known as GIPSIL, is registered as a Cooperative & Community Benefit Society with Charitable Status (formerly an Industrial & Provident Society with Charitable Status). We are an organisation based in Gipton, Leeds, providing support and housing to young people and young parents aged 16 to 25 years across east & north east Leeds and providing specialist support to care leavers citywide. GIPSIL undertakes and hosts a range of other ancillary support services, including enhanced work clubs known as Opportunity Shops, and our Advice Service provides free & independent advice and casework, principally in relation to welfare benefits and housing, to our target client groups.

2. In light of our remit and client group, we have strong views in relation to the proposals contained within the Welfare Reform and Work Bill and a great deal of experience in respect of the impacts of welfare reform since the programme of austerity was initiated by the coalition government in 2010.

3. Restriction of Housing Benefit & Housing Costs in Universal Credit for those under 21- This budget proposal has huge potential ramifications for both social housing providers and organisations such as our own reliant upon Housing Benefit entitlement to partly fund our provision of supported housing. We are keen to see the detail of this proposal, in particular, the definition of ‘vulnerable’ within the exempted categories of claimant. Discussions within our own local authority indicate any financial saving to be negligible and may well be negated by the resource implications of investigation of individual circumstances and appeals.

4. Our experience with service users informs our belief that few young people leave the family home as a positive choice or on a whim. There are almost always underlying issues of abuse, unhealthy relationships and/or duress. The challenges involved in independent living for young people, including a benefit personal allowance of £57.90 some £15.20 below that of someone over 25, mean that leaving even a dysfunctional family home is often the option of last resort. These vulnerable young people will not necessarily have come to the attention of Social Care. In fact, this is increasingly unlikely in light of cuts in local authority budgets and the consequent impact upon service provision and raising of thresholds for intervention, including through Social Care. If the definition of ‘vulnerable’ is drawn tightly to necessitate some other professional involvement or corroboration, many young people will be placed at risk.

5. The programme of austerity implemented by the previous coalition government disproportionately impacted upon low income families with the least resilience to manage change or cope with crisis. Families have experienced increasing pressure and this has contributed to family breakdown resulting in more young people being required to leave home. This is evidenced in the increasing applications from young people for supported housing through Flagship in Leeds culminating in an increased threshold of need to secure eligibility for support. Our client cohort have increasingly complex needs around their health and social wellbeing.

6. Any potential restriction on Housing Benefit eligibility for young people is likely to impact upon allocations by social housing providers who will be understandably risk averse in the maintenance of the financial health of their organisations. Any reduction in tenancy offers from social housing providers, may well result in desperate young people seeking housing assistance with less orthodox or disreputable ‘housing providers’ placing them at real risk of exploitation.

7. There is potential for the restriction on Housing Benefit for young people to impact upon the discharge of other statutory duties owed to them by the local authority, such as through housing and social care. The Regulations will need careful drafting to coordinate with the Housing; Children and Care Acts.

8. The incremental implementation of the new National Minimum Wage will not address young people’s reliance upon Housing Benefit to assist with their housing costs it being applicable to only those over 25 years old.

9. Anecdotally, but also noting the Report from the Social Security Advisory Committee November 14, we consider The Housing Benefit (Habitual Residence) Amendment Regulations 2014 largely removing eligibility to Housing Benefit to those EEA migrants with solely ‘jobseeker status’ to be a precedent for the disproportionate social impact involved in the restriction of Housing Benefit to particular groups as against financial saving.

10. Restrict Housing Benefit backdating to 4 weeks. We believe that the Budget proposal to restrict backdating of Housing Benefit to a maximum of four weeks from the current six months will negatively impact upon rent collection rates for housing providers and will impact upon the most vulnerable tenants. The backdating rules do not give automatic entitlement upon claim and an applicant must demonstrate good cause for late claim, not including lack of knowledge of eligibility. As such, our experience in utilising backdating has been in the assistance of those most vulnerable clients who would have the least resilience to manage a large priority debt of rent arrears and placing them at risk of eviction.

11. Reduction in Benefit Cap to £20k from £26k for households outside of London. The reduction in the benefit cap will increase the Housing Benefit shortfall affecting those people and families on the lowest incomes. Discretionary Housing Payments have in no way been able to mitigate the full impact of the benefit cap and under-occupancy changes. The consequences for housing providers have included a fall in rental income and an increased pressure on resources to manage rent accounts in debt and support tenants. Whilst larger families have been predominantly affected by the cap outside of London, the reduction will mean the benefit cap becoming a routine problem. For example: a couple with two children would lose £211 pa as a result of the benefit cap if they were resident in a two bedroom property at the current Leeds Local Housing Allowance rate; they would lose £1726 pa if they had a 3 bedroom property and were eligible for the three bedroom LHA rate.

12. The narrative around the Benefit Cap is highly suggestive that the per annum figures comprise disposable income for claimants. In fact, the lack of rent control exacerbated by the housing shortage has given rise to the increase in Housing Benefit expenditure, issues wholly outside of the control of individual claimants. A couple with 2 children living in Leeds and in receipt of income based Jobseeker’s Allowance, Child Tax Credit and Child Benefit would have a household income excluding housing costs of £13 806. The residual £6194 up to the benefit cap would not meet the current two bedroom rate of Local Housing Allowance rates which in turn only cover the bottom 30% of market rents in the city. If this couple rented a two bedroom property at the Local Housing Allowance of £122.36, the annual rent £6362.72 would comprise almost 32% of their £20k benefit capped income.

13. Cuts to Tax Credits and introduction of the National Living Wage. The proposed cuts to Tax Credits will impact significantly on low income families and will perversely serve to increase reliance upon Housing Benefit where personal allowances are due to be frozen. (We note there is a proposal to remove the Family Premium of £17.45 from the Housing Benefit calculation for new claims and following changes in circumstance from 1st May 16 which will effectively further penalise low income, working families.) Cuts are scheduled to be implemented (April 16&17) before the introduction of the proposed national living wage due to increase incrementally to £9 per hour by 2020 and it is accepted that the increase in wages will in no way mitigate the full impact of the proposed Tax Credit cuts. IFS Briefing Notes BN175 9/9/15: ‘Among the 8.4 million working age households who are currently eligible for benefits or tax credits who do contain someone in paid work the average loss from the cuts to benefits and tax credits is £750 per year. Among this same group the average gain from the new NLW, is estimated at £200 per year (in a "better case" scenario). This suggests that those in paid work and eligible for benefits or tax credits are, on average, being compensated for 26% of their losses from changes to taxes, tax credits and benefits through the new NLW.’

14. The proposed increases to the general rate of the minimum wage are only applicable to those over 25 (currently, the general rate applies to employees over the age of 21.) This will again serve to increase younger people’s reliance upon Housing Benefit to support their housing costs and fails to reflect their living expenses which equate to those over 25.

15. Abolition of the Work Related Activity Component of ESA & Limited Capability for Work element of UC. The proposals to remove these additional components for new claims will likely place those suffering ill health and disability in significant financial hardship. These claimants have been subject to the stringent Work Capability Assessment confirming they are in ill health and unfit for work in the DWP’s own terms. These components were introduced to mitigate against the additional expenditure that disability and sickness necessarily incur. The cut represents a reduction in income of over £29 per week and will likely serve to discourage work readiness for claimants whose basic subsistence needs will no longer be met: there are clear cost implications to be being employable from transport, to clothing, to diet.

16. Proposal to increase conditionality requirements for parents in receipt of Universal Credit. This provision seeks to impose full work related requirements to those parents with a child from the age of 3. As a supported housing organisation working with disadvantaged young families, this provision fails to acknowledge the social value of caring. It takes away parenting choices from the poorest parents and fails to take into consideration the individual needs of very young children which are many and wide ranging.

17. Conclusions. We have identified a few changes proposed by the Welfare Reform and Work Bill and responded to these specifically as detailed above. We could have continued in this vein noting how the cuts reduce the incomes of the poorest people and families irrespective of whether they are in or out of work. However, there are a number of more general but significant points we believe are pertinent to the Bill.

18. The incomes of the poorest people and families will be reduced as a result of the Bill’s provisions as evidenced by the IFS analysis noted above. As such, the legislation cannot be seen to fulfil the stated aim of incentivising work.

19. It is difficult to get a comprehensive overview of the impact of the changes due to the interlinking nature of the provisions. As such, the Bill fails in the government’s aim to simplify the welfare system.

20. The cuts to Child Tax Credit and Universal Credit limiting eligibility to two children born after 6 April 17 together with the Benefit Cap which disproportionately impacts upon larger families, gives the message that the UK considers it’s children a drain upon resources rather than a national asset.

21. The points made reflect a snapshot of GIPSIL Advice Service’s experience and opinion. If it would be helpful to the Committee to expand or provide any clarification on the points raised, we would be happy to do so.

September 15

Prepared 14th October 2015