Agenda item

The Director of Finance submits a report, which provides the Commission with an update on the effect of welfare reform in Leicester during 2015/16, and to highlight the expected impact of changes to be introduced by April 2017.

The Director of Finance submitted a report providing the Commission with an update on the effect of welfare reform in Leicester during 2015/16 and highlighting the expected impact of changes to be introduced by April 2017.

The Service Improvement Manager (Revenues and Customer Support) introduced the report, reminding Members of the welfare reforms introduced since 2013 and those still to come.

One change with continued impact was that relating to under occupancy of a property, (the “bedroom tax”).  This measure aimed to encourage people to move to smaller properties, but although the number of people on the housing register had now increased to 7,000, there was a shortage of Council-managed properties.  The Council had a legal duty to protect certain people, such as those with disabilities who, due to their needs, were unable to move, despite under-occupying a property, (for example, by supporting them through discretionary payments).

With effect from 7 November 2016, the benefit income cap would decrease to £20,000 per year for families.  Existing capped households would be re-capped and it was anticipated that approximately 700 additional families would be capped in early 2017.  In total, the amount of benefits received by these families would reduce by approximately £1 million, so the Council could not provide additional support for all of them.

Other changes included:

·           Universal credit was being introduced gradually.  Just over 4,000 people currently were affected by this in the city, but this number would increase;

·           Various smaller cuts had been made to benefits over the last few years.  For example, Housing Benefit and Council Tax Benefit now could only be backdated for one month, allowances for dependent children  had reduced and would continue to do so, people registering new claims for Tax Credit could only claim for up to two children, and the period of temporary absence from home for which benefits could be paid had been reduced from 13 weeks abroad to four;

·           It had been announced in 2015 that claimants under 22 years of age no longer would automatically receive Housing Benefit.  The draft legislation giving effect to this had not been seen yet, so it currently was not known what exceptions could be made;

·           Assistance that could be provided for new claimants with social sector housing rent would be capped; and

·           Continuing reassessment for disability benefit of people with chronic conditions would cease.

Councillor Waddington, (Assistant City Mayor for Jobs and Skills), reiterated that these changes were affecting residents that the Council would want to protect.  However, although the Council could provide some support, it did not have the resources to help all those affected.  In addition, it was recognised that people with children and those with disabilities could find it difficult to find work, despite government policy being to reduce benefits to encourage them in to work.

During discussion on this item, it was noted that:

o    Anyone receiving Employment and Support Allowance (ESA) with their benefits would not be affected by the benefits cap.  However, they would only receive ESA if they claimed it;

o    Anecdotal evidence suggested that rent arrears could accumulate when people moved on to Universal Credit.  If people moved from Jobseekers’ Allowance on to Universal Credit they could request a hardship advance of their benefit, which could then be repaid over a 6 – 12 month period.  Over 20 people had applied for an advance to date and more applications were anticipated as more people received Universal Credit;

o    A leaflet had been produced advising people on how to apply for assistance when facing financial hardship.  In addition, posters at the Jobcentre Plus provided information on assistance available from local authorities, as these were venues at which applications for benefits could be made;

o    Housing Benefit rates for new claimants in social sector accommodation would be limited to the Local Housing Allowance private sector rates for claimants who had lived in their properties for less than two years.  Existing claimants would retain their existing limit;

o    Entitlement to benefits was partly based on nationality and whether a claimant had a right to reside in this country;

o    Jobseekers were not automatically entitled to housing benefit, but needed to meet other criteria, such as whether they had dependents;

o    The Council now had no discretion to backdate benefits claims further than one month.  It therefore was very important that claimants were aware of this restriction;

o    The reduction in the period of temporary absence abroad for which benefits could be paid had been communicated proactively to community groups, schools, council hubs and the local media.  There was some concern that people would not report that they had been abroad, but the Council’s Audit and Risk Committee had provided useful advice on key community locations for posters around the city, (minute 22, “Housing Benefit Subsidy and Improvement Regime”, Audit and Risk Committee meeting of 3 August 2016 referred).  The effectiveness of these would be monitored;

o    Funding for hardship grants had been provided by the government for two years, but had now ended.  The Council therefore needed to consider what crisis support it could provide; and

o    Care should be taken to ensure that the opportunities available for the personal development of children in households with decreasing income were monitored, to ensure that they are not disproportionately disadvantaged because of these welfare reforms.

The Commission welcomed the report and the quality of the information contained in it, but asked that more information be included in future reports on what action was being taken to support people and respond to emerging issues.

Members were invited to contact officers about individual claimants’ cases outside of the meeting.

AGREED:

1)    That the Head of Revenues and Customer Support be asked to supply Members with copies of the leaflet produced advising people on how to apply for assistance when facing financial hardship;

2)    That the Head of Revenues and Customer Support be asked to include information in future reports on what action is being taken to support people and respond to emerging issues

3)    That the Assistant City Mayor for Children, Young People and Schools be asked to ensure that the opportunities available for the personal development of children in households with decreasing income are monitored, to ensure that these children are not disproportionately disadvantaged because of these welfare reforms; and

4)    That the Director of Finance be asked to submit a further report in 12 months’ time updating the Commission on the effect of welfare reform in Leicester, but that this report be made earlier if unexpected significant welfare reforms occur before then.