Written evidence from South Tyneside Council BPI0033

About South Tyneside

South Tyneside is a relatively small borough covering the towns of South Shields, Jarrow and Hebburn and the villages of Boldon, Cleadon, and Whitburn, with a total population of just under 150,000. As a North East post-industrial, coastal area, we have a pervasive legacy of intergenerational deprivation as well as acute skills and health challenges within our communities.

According to a recent report by JRF, the North East has the highest proportion of individuals living in households under the Minimum Income Standard. In 2019, 53.2% of children in the region were living in households without the income required to be able to afford the goods and services the public think is needed to meet material needs and participate in society.[1]

We know that the situation in South Tyneside is particularly acute; 39.1% of children were living in poverty in 2020/21[2], 30.2% of school pupils are eligible for free school meals[3] and a quarter of our population live in the 10% most deprived areas in England.[4] Further, the latest data shows that 18,180 people in South Tyneside are claiming Universal Credit, of which 34.5% are in employment.[5]

Last year, South Tyneside Council undertook extensive consultation with residents, partners, staff, and elected members to develop our refreshed 20-year-vision for our borough – ‘a place where people live healthy, happy, and fulfilled lives’[6]. Underpinning this vision are our ‘ambitions’, these are things we want all people in South Tyneside to be - the things that are fundamental to our residents being able to live happy, healthy, and fulfilled lives. These are:

• Financially secure – residents will have what they need for a good standard of living.
• Healthy and well – residents will enjoy good mental wellbeing and physical health throughout their lives.
• Connected to jobs, skills, and learning – residents will have access to good quality jobs, skills, and learning.
• Part of strong communities – residents will live in clean, green, and connected communities where they feel safe.

In March 2022, South Tyneside Council established the ‘South Tyneside Poverty Group’ to bring together teams from across the Council, key partners, and practitioners with the aim of reducing and mitigating the impacts of poverty in the borough. The group held a Cost of Living Summit with partners in October 2022 and holds monthly meetings, coordinates anti-poverty related activity, and conducts regular ‘cost of living’ and ‘warm space’ surveys to inform decision making. This submission is informed by insight generated through the Group’s activities, from other Council teams and relevant local data and research.

What ‘essentials’ should working-age benefits in the UK cover? Are current working-age benefit levels sufficient to cover those needs? 

Current benefit levels are not sufficient for long-term benefit claimants. We know that far too many people in our borough, both those who are eligible for social security benefits and those who are not, are going without the things we know are essential to lead healthy, fulfilling lives. We know that residents are being forced to make impossible decisions between food and warmth – but the essentials are more than this. Local food banks have told us about ‘an increasing trend of people referring to essential items such as toilet roll, toothpaste and toiletries as luxury items, down to the bottom of the shopping list by a mile’.

At the start of this year, we heard about a mother collapsing with exhaustion and hunger after walking two miles with a pair of toddlers to reach a South Tyneside food bank.[7]

In a year long study that explored the experiences of Universal Credit for claimants, their families and support staff in South Tyneside, interviews with claimants made evident the far-reaching impacts of financial insecurity. Interviewees expressed how payments are typically too low to meet basic needs, leading to reliance on family, friends and organisations for loans, food, and other support, often causing feelings of shame.[8] In addition, claimants mentioned often becoming isolated due to being unable to afford travel costs or being unable take part in social activities such as having a cup of tea in a café with friends. Month after month, our warm space survey data highlights how important social networks are to peoples’ mental health, with ‘feeling lonely/socially isolated’ one of the most popular reasons for visiting warm spaces.

Government should consider the recommendations of the Child Poverty Action Group’s Cost of Child Poverty 2023 report.[9] This recommended scrapping the two-child limit (which it says has been a key driver in poverty levels increasing in areas like the North East), remove the benefit cap, increase child benefit by £20 a week (which would support low and middle income families squeezed by the cost of living) and introduce universal free school meals.

Are working-age benefit levels appropriately set to encourage people who are able to work into work? 

The evidence suggests that working age benefits are not appropriately set to encourage people who are able to work into work. South Tyneside’s out of work claimant rate is high and rising (highest in the LA7), with the latest data reflecting a 7.3 percentage point decrease in the employment rate since last period.[10]

Benefit levels are especially problematic for single people who live alone. In households where there are multiple claimants, the Government should consider a claim type that covers the household, rather than just a joint claim for couples. The value of multiple claims within a single household contributes to multi-generational employment.

What lessons can be learned in respect of benefits provision more generally from the £20 uplift to Universal Credit, introduced during the pandemic? 

During interviews conducted as part of the NIHR supported research outlined above, many claimants said that they felt financially better off during the payment increase. This reduced the impossible choices, eased anxiety and stress, improved feelings of wellbeing and gave opportunities for health enhancing behaviour such as exercise and dietary improvements. Meanwhile, those with payment deductions for debts continued to struggle, with many fearing the return of standard payments and the accompanying issues.

More generally, this reflects the extreme financial vulnerability experienced by many South Tyneside residents. South Shields and Jarrow -the two parliamentary constituencies in the Borough- have higher financial vulnerability index scores than the regional (54.5) and national averages (43.1), at 59.8 and 55.9, respectively.[11]

The absence of a strong social security safety net prior to the pandemic has left too many people without any financial resilience to cope with unexpected income shocks, leaving food banks and other crisis support organisations to pick up the pieces.

What principles should inform the design and delivery of the working-age benefits system (e.g. fairness, transparency, inclusivity)? 

All of the above, plus progression and independence. There should be close links between the Department for Work & Pensions and the Department for Education to ensure that skills provision is available to claimants that will enable them to move into secure jobs instead of a cycle of taking short term insecure jobs and making another benefit claim after a short period of employment.

What should be the purpose of working-age benefits? 

Encourage people into work and provide a safety net that ensures that under no circumstances, are individuals being forced to make health-comprising, impossible decisions between eating, staying warm, or staying safe. Government should consider backing the Essentials Guarantee, supported by more than 90 charities, to ensure this.[12]

What is the role of i) the benefit cap; ii) repayments; iii) sanctions on the adequacy of benefits?  

Universal Credit Intensive Work Activity should be a temporary support benefit for people whilst they are looking for work. It should be awarded on a fixed term basis and with more emphasis on finding work with more intensive support.

Benefits for long term health conditions should include support to improve their conditions – there are too many people who are inactive because of illness and awaiting treatment. 

There is a clear need to understand the impact of sanctions and whether alternative approaches could be used in the first instance. A recent report by IPPR highlighted that someone in the North East is over 30% more likely to be sanctioned than someone in the South East, with just some of this variation likely due to demographic differences between areas and local factors.[13]

Government should consider the recommendations made by IPPR, including the suspension of sanctions until inflation is brought under control and an exploration of whether a ‘yellow card’ system could be developed which removes a financial penalty for the first sanction, replacing this with an intervention meeting to review conditionality and clear up misunderstandings.

What is the impact of No Recourse to Public Funds conditionality on benefit provision for affected households?

This conditionality significantly hampers the settlement and integration of asylum seekers into local communities. If they were granted asylum, they would be able to find work and integrate more quickly. This has numerous quantifiable and non-quantifiable benefits beyond those to the individual or household, including boosting local economic growth and strengthening community cohesion.

What role could, or should, an independent body undertake in advising government on benefit policy?

An independent body could undertake a lead role in considering key issues and concerns with the current benefit system, including:

• The effectiveness of current benefits in incentivising people to move into work and to increase hours to move off Universal Credit;
• The role of intergenerational unemployment on the prevalence of child poverty and household poverty.

What impact do working-age benefits, such as Universal Credit, New Style Job Seeker’s Allowance and New Style Employment and Support Allowance, have on work incentives? 

The tapering of Universal Credit means that claimants are always financially better off in work. New style JSA and ESA reflect contributions that individuals may have made and provide a temporary safety net. However, because of waiting lists for health treatments, many people are not able to go back to work as quickly as they like, or within the duration of new style ESA.

What role should contributory-based benefits play in the welfare system? 

The rate of contributory benefits should be set a higher rate to reflect the contributions made by working adults. However, they should be time limited to ensure that there is an incentive to return to employment.

What aspects associated with the administration of benefits impact the adequacy of experience for claimants?  What changes should be made to the administration of working-age benefits? 

The initial wait for a payment is too long, currently at 5 weeks (4 weeks for the assessment period and 1 week for the payment period). The five-week wait is the single biggest driver of UC debt deduction in families, punishing those who do not have the financial buffer to survive the wait.[14] The North East has the highest percentage of children living in Universal Credit households with a deduction. In August 2022, (the latest period for which the data was available at the time of publication), 3,800 children in Jarrow and 4,500 children in South Shields were living in households with a Universal Credit deduction.[15] The payment period should be significantly reduced to prevent households from incurring debt through supporting themselves through advances.

Are there any particular groups who have been ‘left-behind’ in the design of working-age benefits policy? 

People with learning disabilities and care leavers. There is not enough specialist support for people with a learning disability and the level of financial support for care leavers who are living independently is not enough to support them and to allow them to undertake apprenticeships.

How effective is parliamentary scrutiny of benefits levels? 

There should be more scrutiny on how effective working age benefit policy is in reducing the overall number of benefit claims over a sustained period and how effective the policy is in reducing long term claims over a sustained period. The current interventions focus on supporting people into entry level jobs which are often insecure and short term and lead to a return to benefits.

There should also be joint scrutiny of DWP policy and DfE skills policy to ensure that they work together to support working age people.

What information should the Government publish to facilitate the effective scrutiny of benefit levels? How frequently should such information be published? 

Long term claim reductions - quarterly.

Return to benefit claim numbers - quarterly.

May 2023