Welfare Reform and Work Bill Committee

Written evidence submitted by Wigan Council & Wigan and Leigh Homes (WRW 62)

Submission to the Welfare Reform and Work Bill Public Bill Committee

About Wigan

Wigan b orough is the 9th largest metropolitan district in the country, with a total population of 321,000.

68,000 residents are aged 17 and under, and 19.8% of ch ildren in Wigan live in poverty ranking us 114 on the Income Depravation Affecting Children Index. 18% of children q ua lify for free school meals, rising to 39% in the three most deprived areas.

14.5% of working age residents claim out-of-work or income related benefits.

Wigan Council was a pathfinder authority for the introduction of Universal Credit in 2013.

Wigan & Leigh Homes was set up in 2002 to manage and maintain Wigan Council’s 22,000 homes and additional functions such as homelessness, council house sales, adaptations for tenants with disabilities and new builds.

In recent years, organisations in Wigan have tested innovative ways to support people back into work. These include the Universal Support Delivered Locally (USDL) pilot – a Greater Manchester partnership with DWP to support long-term unemployed people back to work.

The programme is currently working with 47 individuals, 2 have found work, with 5 volunteering or training with a view to commencing work shortly.

Wigan & Leigh Homes (WALH) employ two Tenant Participation Officers who have offered advice on work, training and education to nearly 350 people since January 2015. With their support, WALH tenants have gained work experience with the company, had help to set up their own businesses and increased their skills through attending course and training sessions, with nearly 50 securing paid employment since the start of the year.

The Council runs a Local Welfare Support scheme, which continues to support and advise people in times of crisis. On average, the desk handles 341 requests for support a month.

At the time of the last round of welfare reform in 2013, Wigan Council identified that 38,000 (12%) residents would be affected, with the highest concentration in the Borough’s urban core.

Clause 1 and Clause 2: Full employment and apprenticeships: reporting obligations

Wigan Council welcomes the commitment to report on the number of new jobs every year and the progress towards the target for apprenticeships.

However, without measure of the quality and sustainability of jobs and apprenticeships created, we are concerned that some opportunities may not provide secure employment to those Wigan residents seeking work or apprenticeships.

Wigan Council would also like to see consideration given to increasing funding to successful initiatives like the Universal Services Delivered Locally pilot with the DWP, which has supported local residents into work. The success of the pilot has demonstrated the benefits of personalised, carefully targeted interventions and information sharing between the DWP and the Council to understand the full picture of clients needs and circumstances.

Wigan and Leigh Homes are currently supporting their tenants to gain more skills by undertaking a range of courses, including English, maths and basic IT skills. Wigan suffers from a legacy of low skills with fewer residents holding NVQ Level 4+ qualifications than the Greater Manchester and UK averages, particularly in the 25–29 year old age group. This skills gap serves as a significant barrier to creating higher paid and higher value employment within Wigan and for residents to take advantage of such employment opportunities in other areas.

We believe that in Wigan there is an un-met need for this kind of provision that would allow those claiming worklessness benefits to undertake vocational courses, and improve their chances of employment. In turn, this would support the Government’s ambition to achieve full employment, if more funding were made available to provide those kinds of courses.

Recommendation: that a measure of the quality and sustainability of the jobs and apprenticeships is created and reported alongside the number of jobs and apprenticeships created. We would suggest that a good measure would be ‘jobs created that are longer then 6 months in duration’.

Recommendation: that successful pilot projects supporting people into work are funded in the longer term.

Recommendation: that Government funding is made available to provide vocational courses for those who are currently on benefits.

Clause 3: support for troubled families: reporting obligation

Wigan Council welcomes the continued focus on the Troubled Families programme, and the recognition that there are some families whose complex issues mean that they need additional support in order to lead healthy and productive lives. 

In Phase 1, we worked with 755 families to help address issues around crime, antisocial behaviour, persistent absence from school and unemployment.  The widening of the criteria for Phase 2 reflects Wigan’s understanding that the issues faced by families were wider and broader than those in Phase 1, and that addressing the root causes of complex issues is key to delivering sustained behaviour change.

However, from our experience, we are keen to ensure that the burden of reporting does not outweigh the value of supporting the families in this cohort to help themselves to better lives.

Recommendation: that the reporting requirements and mechanisms required do not adversely impact the time staff are spending with families

Clause 4: workless households and educational attainment reporting obligations

Clause 5 and Clause 6: Social Mobility Commission and other amendments to the Child Poverty Act

We are concerned about the diminished focus on children living in poverty outlined in the Bill.

We do not believe that worklessness and educational attainment are as effective measures of child poverty as the measures in the Child Poverty Act (2010).

In particular, the high levels of attainment by children and young people in Wigan, with results in the top 20% in the country, belies the high levels of child poverty in certain areas of the borough. We are concerned that using educational attainment as a proxy measure for child poverty would mask the situation locally, where up to 39% of children living in poverty.

Wigan Borough was a pilot and pathfinder authority for the introduction of Universal Credit, and has more UC claimants than other similar areas in the region. As Universal Credit is not classed as a worklessness benefit in government calculations, our current worklessness levels are artificially low, and well below the north-west average. Prior to introducing universal credit, Wigan had higher than regional levels of worklessness. Again, we are concerned that using worklessness as a proxy measure for child poverty would mask the situation locally.

Taken together, we believe that using worklessness and educational attainment as measures will mask the true incidence of child poverty. Furthermore, Wigan Council believes that changing the reporting obligations will be detrimental to our ability to target the support given to children and families, and would like to see the Child Poverty Act retained.

We would also like to see the duties placed on local authorities in the Act retained as an important component of designing provision and support. This includes targets to reduce the number of children living in poverty.

In Wigan we have an average of 150 young people at any one time who are classed as Care Leavers these are young people who have been "Looked After" and are aged 18 - 21years of age or up to 25 if they are still in education.

 

In the past couple of years Government have recognised that young people are not always ready to live independently at 18 and have introduced "Stay Put" arrangements which enables young people in foster care to stay living with their carers beyond 18 years of age.

A further development is in the annual reporting to the DfE, previously each council reported 903 returns in respect of Care Leavers on 3 different issues

· That workers were still "In Touch" with Care Leavers

· That the Care Leaver is in E.E.T

· and in suitable accommodation

The reporting was originally during a 4 month period around the 19th Birthday, however this has now increased to 17, 18, 19, 20, and 21st birthdays.

If the same rule around benefits were applied to this vulnerable group there would be major issues to the council financially as the team are financially responsible for young people up to 18 however post 18  claims are made via DWP. (JSA and HB)

There is currently no indication that Care Leavers would be in the exempt group in respect of the proposed Welfare Reform and Work bill.

 

Recommendation: that the Child Poverty Act, and the duties and targets placed on local authorities as result, are retained.

Clause 7: Benefits cap

In 2014, 61 families in Wigan were affected by the Benefit Cap. On average each family has lost £60 per week. Families with 4 or more dependent children were more likely to be affected by the cap and made up 96% of the all households affected.

The further lowering of the benefits cap for couples and single parents as a result of the Bill is anticipated to make housing less affordable for more low-income families, both in private rented and social housing, typically those with 3 dependent children. The situation is likely to be exacerbated where families are also subject to the Under Occupation Charge (‘the bedroom tax’).

As part of a raft of support available to those affected, Wigan Ring-fenced a discretionary housing payment (DHP) budget for all those affected who apply which provided 13 weeks’ financial support. We would suggest that increased levels of DHP budgets are available for local authorities and partners to provide short-term assistance to families affected by this clause in the Bill.

Recommendation: that an increased level of DHP funding is available to Councils

Clause 9 and 10: Freeze of certain social security benefits and tax credit amounts for four tax years

In Wigan, it is anticipated that the freeze of certain social security benefits and tax credits will lead to more residents on a low-income struggling to pay essential bills and rent.

In the last 12 months there have been nearly 5000 requests for help at the Council’s welfare support desks, by residents struggling to cope with financial pressures. 78% of the requests came because the claimants did not have sufficient food to feed themselves or their families. The Council provides support in a number of ways, by providing referrals to local food banks and local budget furniture suppliers.

Although many of these organisations operate as charities, the Council has provided pump-priming funding for local food banks and furniture recyclers, to help them meet the rising levels of demand by becoming more sustainable in the longer term. It is unlikely however that we will be able to allocate additional funding beyond 2016, without more funding from Government to do so, and as a result, we may be unable to absorb the predicted rise in demand from local residents in crisis.

Recommendation: that increased levels of Government funding is made available for providing emergency support for people in crisis

Clause 11 and 12: Changes to child tax credits and the child element of universal credit

We are concerned that limiting tax credits to the first two children will lead to a decline in the standard of living for larger families, living on a low-income. Taken together with Clauses 5 to 7, this would deepen poverty for some children, at exactly the same time as removing the focus on the reduction of children in poverty (see recommendation for clauses 4, 5 and 6).

We are particularly concerned about the impact of the further reduction of the benefits cap on families with 3 or more children, who will be £58 per week worse off after the implementation of the Bill (see recommendation for clause 7).

Clause 13: Employment and Support allowance

Consideration should be given to removing the 16 hour rule for those claimants that do not have level two, and or level three qualifications, so they can access meaningful full time, or part time vocational or academic courses, that offer meaningful nationally recognised qualifications from accredited organisations.  This would assist individuals to retrain and give them increased and sustainable opportunities of employment, thereby reducing the cycle of poorly paid, part time, zero hour contracts and the associated volatile career prospects, which would help, in the long term, to reduce the welfare bill locally and nationally.

Recommendation: Removal of the 16 hour rule for those claimants with no or low level qualifications, enabling them to access meaningful training and accreditation opportunities.

Clause 19: reduction to social housing rents

Wigan and Leigh Homes have observed over the last two years a fall in demand for local social housing provision due to welfare benefit reform and an increased competition from the private rented sector. This has resulted in an increase in terminations, reduction in waiting list and increased void costs.

Changes proposed in clause 19 of the Bill would reduce Wigan’s Housing Reserve Account (HRA) by £34 million.

Currently, the HRA is in a relatively strong position with turnover of over £90m, relatively healthy reserves (£14m) and a strong capital investment programme (£37m). This is despite the government compelling the Council to increase the HRA debt by £100m in 2012 in return for a number of local freedoms, many of which have now been reneged upon. This good position is largely the result of good past investment decisions, reducing management costs and increasing cross-efficiency between WALH and Wigan Council.

However the reduction of income from 2016 would potentially limit WALH’s ability to commit increasing capital works. Furthermore, additional government requirements to for example levy rent reductions beyond four years or requiring further levels of reductions before 2020 would place significant pressures on maintain the current stock to current standards, or to build significant numbers of new low-cost homes.

Recommendations: that rent reductions to social housing rents are limited to 2020.

Wigan Case Study: USDL

Background to the claimant

Mr A, Male, age 57

Mr A had been unemployed for more than two years and presented to his DWP work coach with mental health and alcohol concerns. Following a discussion he agreed to take part in the USDL trial where additional support was available to help him deal with his problems. The work coach obtained consent to share his information and sent a referral across to the Council’s Live Well Family Advocate who was based less that five minute walk away.

Mr A was triaged by the Family Advocate Worker from the Live Well team and on arrival he was:

· depressed and anxious

· recently bereaved

· effected by substance misuse issues

· out of work

During the triage interview, it became clear that Mr A was greatly affected by the recent death of his mother, and a separation from his wife, and this in turn had impacted on the amount he was drinking.

Action taken

Mr A was supported to seek help for his substance misuse issues, and to seek bereavement counselling.

· a referral was made to an integrated GP practice for an appointment with the GP to address issues for bereavement counselling.

· an appointment was made with Addaction to address alcohol issues

Mr A and his key worker remained in frequent contact to ensure that he was attending his GP and alcohol support appointments and he confirmed that he now had an alcohol support worker. He informed his key worker that the alcohol support group sessions were not working for him as he felt uncomfortable and so his intention was to stop attending. To prevent this key worker contacted Addaction who arranged for one to one session instead and the support continues.

In April 2015 Mr As work coach organised a job interview for him and he felt positive that this would be successful however he was not successful in securing this post and he reported to his work coach that this had knocked his confidence. To overcome this key worker and work coach looked for volunteering opportunities which would help to boost his confidence and improve his CV. An application was made to a charitable organisation in Wigan and Mr A was successful in securing this position.

Outcomes

The client has started volunteering with the Warehouse Project in Wigan, who recycle and reuse items heading for landfill.

Mr A is still receiving support for his alcohol dependency which he would otherwise not have sought.

Mr A has said he feels in good spirits and feels people are listening to him. He has made substantial progress in alcohol awareness and a move towards employment. He is also expecting to shortly start counselling sessions which will help to address the bereavement issues.

Why is this different from business as usual?

Improved partnership working and information sharing between the work coach and the key worker has improved the service offer available to Mr A and has helped him to address his problems and access support. By working together and addressing the holistic needs of Mr A he is much happier and more likely to secure employment.

October 2015

Prepared 14th October 2015