Reductions to benefit entitlements have left people on the lowest incomes more vulnerable to short-term financial crises. The local welfare safety net is the last line of defence to prevent these people falling into severe hardship and destitution. Expansion of local discretion in the system at a time of budgetary pressures has given rise to concerns about the coverage and adequacy of the safety net, particularly in England, where variation in available help is widest.
The potential benefits of localising the safety net are clear, however, and being realised in some areas. A number of local authorities are successfully helping their residents to address the underlying causes of their needs and become more self-sufficient, as was the intention of the policy. The Department for Communities and Local Government (DCLG) and the Local Government Association (LGA), should take steps to spread good practice elsewhere.
Much better coordination of the local and national benefits systems is required to mitigate the risk of blurred demarcation of responsibilities, which can leave vulnerable people confused about where to turn in a crisis. Co-location of council benefit teams, and other local services, with Jobcentre Plus staff will go some way towards achieving this. The Government should also find a way to overcome any barriers to local and central government sharing relevant benefits data and IT systems.
The Department for Work and Pensions (DWP) must address local Discretionary Housing Payment (DHP) criteria which have unintentionally and unfairly excluded disabled people from support. It should strengthen the relevant guidance and give it statutory force.
Time-limited DHPs are clearly inadequate protection for people the Government did not intend welfare reforms to affect but who cannot reasonably be expected to take steps to mitigate the effects. This applies to parents or guardians who care full-time for their severely disabled grown up children and therefore cannot work, and for whom there is no suitable cheaper accommodation, and yet are currently subject to the Benefit Cap. Such groups should be exempted.
The DWP should review its methodology for calculating and distributing individual local authority DHP funding allocations, and devise a system which better matches funding to need. It should also consider rewarding councils for preventative work which ultimately returns more money to the Exchequer than the welfare reforms themselves would otherwise have done.
The recently announced changes to local government finance in England are likely to be broadly positive for local government as a whole, particularly in times of economic growth. The Government’s innovation of offering four-year settlements to councils that wish to plan their budgets over the medium term, as new, potentially transformative, financing arrangements are phased in, is very welcome. Local authorities and the Government, however, must agree a system which can cope with future economic downturns. The new system must also be sufficiently robust to protect services, including crisis welfare, in deprived areas, in the transition to the new financing arrangements and in the longer term.
The current lack of a robust evaluation strategy for the welfare safety net as a whole should be addressed. Localisation combined with an expansion of discretion (as opposed to entitlement) represents a radical departure from the previous system. The Government must ensure the changes are working as intended. Regardless of responsibility for delivery, central government maintains an ongoing obligation to ensure provision of a safety net which prevents vulnerable people from falling into severe hardship and destitution.
Prepared 11 January 2016