Written evidence from the Community Housing Cymru CLP0031

Cost of Living support payments - CHC Sector response

About Us

Community Housing Cymru (CHC) is the voice of housing associations in Wales. We represent and support 36 housing associations and community mutuals. Our members provide almost 165,000 homes to 10% of the Welsh population.

Our Response

In March 2023, the Work and Pensions Select Committee launched a call for written evidence to support their inquiry into Cost of living support payments in the UK. This inquiry will explore whether the design and delivery of support upheld the government’s commitments to ‘protect the most vulnerable’ and ‘provide vital support for those on the lowest incomes’.

Our submission responds to the questions that are most relevant to housing associations in Wales and provides recommendations in response to the central question of the inquiry based on this evidence.

This submission builds on our response to the Work and Pensions Select Committee’s  inquiry into benefit levels in the UK.

To what extent have the cost of living support payments been sufficient at helping eligible households meet the cost of essentials such as food and electricity?

Housing associations across Wales recognise that the cost of living support payments have improved the financial circumstances of tenants during the months these payments were paid. However it is evident that short-term financial support will not solve the scale of the substantial economic challenge facing Wales which could cause potentially devastating consequences for individuals and communities.

23% of the welsh population live in relative poverty and social housing tenants in Wales are among those who have been hit hardest by the cost of living crisis[1].

It is clear that even before the cost of living crisis social housing tenants in Wales were struggling to afford basics, including food, on Universal Credit. According to the Joseph Rowntree Foundation 90% of UK households on Universal Credit are now going without essentials. Research from the Resolution Foundation also highlights that social housing tenants are the most likely to have fallen behind with their housing costs with 15% of social tenants in rent arrears as of March 2023[2].

Social housing tenants have been forced to access foodbooks or other emergency support for the first time. Alternatively, some tenants have not accessed emergency support due to stigma and instead gone hungry, or not purchased medication in order to pay essential bills.

Evidence provided by housing associations following our call for feedback to this inquiry response indicates that the cost of living support payments have assisted many to address ever increasing prices across food, utilities, mortgages/rent, in the short term. Some housing associations suggest that this has been reflected in the lower number of requests for food and fuel banks than anticipated by housing associations in the months where the payments were made.

The payments have provided short term relief for tenants who are efficient at managing their income. For those who have difficulty managing income/expenditure it has led to some getting into greater difficulties than they already were. Our members have provided us with examples of social housing tenants using their cost of living payment to reduce or pay off ‘debt’, rather than to pay for essentials such as food and electricity. Those struggling financially are using their ‘rent’[3] money to pay for essentials, leaving them to fall into arrears. The cost of living payment is then being used to pay a lump sum towards the arrears. This suggests that the combination of the cost of living payments and current benefit levels are not sufficient to allow social housing tenants to pay for basic essentials.

“I know the energy top ups have been a real help for some to manage their heating costs, not so much the cost-of-living payments. I’ve found the rent money is more likely to go on the utility bills/food, then the cost-of-living payment used to make a token payment to catch up with rent.” Housing Association staff response to our call for evidence

Many social housing tenants are still struggling despite the cost of living payments being made. Housing associations are witnessing an overall increase in arrears, referrals to money advice services, and requests for food and fuel bank donations (from both those eligible for cost of living payments and those who aren’t). Tenants are still struggling with the increasing cost of food and electricity and tenant survey results indicate that these elements were of the most concern to customers. This is particularly the case for those without access to benefits for housing costs, and who are not entitled to cost-of-living support payments.

It is clear that the short-term solution provided by the cost of living payments will not assist long-term without fundamental change to the social security system. The UK government must ensure there is a sufficient safety net to support these people through the ongoing crisis, and review eligibility criteria to ensure that these people are not excluded from receiving the help they desperately need.

We also suggest that improvements should be made to the benefit system to ensure that social security is sufficient to cover basic essentials. We fully support the Trussell Trust and JRF’s ‘Essentials Guarantee’ campaign and provided our thoughts on this in our recent benefits committee inquiry response. 

What role have the following factors played in access to the cost-of-living support payments: passporting, cliff-edges, qualifying period anomalies, nil rewards, etc.?

The cost of living support payments should be targeted to the most financially vulnerable members of society. The UK Government must therefore review all mechanisms that currently exclude vulnerable members of the community from receiving cost of living support. Passporting, cliff edges, qualifying period anomalies and receiving a nil award on Universal credit due to sanctioning all exclude potentially vulnerable claimants from accessing support at pivotal points. We have provided further information on these specific issues below:

Passporting and cliff edges: Low income households not in receipt of means tested benefits still require the financial support provided by the cost of living payments. Some social housing tenants on contribution benefits miss out on the payments, despite being on incomes as low as those that were eligible. Earning a few pounds too much can cost some tenants hundreds in cost of living payments. The eligibility criteria should be reviewed, working in partnership with housing associations, to ensure that this group of vulnerable households receive financial support.

Housing associations are also concerned that not all eligible households are accessing the benefits that they are entitled to. For some, there is a stigma associated with claiming benefits. Passporting serves a purpose in ensuring large cohorts of eligible people may access assistance more smoothly which is positive. However, this also creates a distinct divide from those who are ‘not known’ who in turn can become more disadvantaged and marginalised as a result.

Proactive campaigning and resourcing engagement for this group should be prioritised and prominent. The recent expansion of the assessed earnings threshold (AET) and government messaging around enhanced conditionality and sanctions arguably disincentives potential claimants, causally exacerbating the cliff edge scenario even for those within entitlement parameters. The DWP, Welsh government and other stakeholders must work in partnership on a proactive communication campaign to raise awareness of support that is available and work towards breaking down the stigma attached with claiming benefits.

Qualifying period anomalies: In order to receive the May cost of living payment a person would need to have had a qualifying benefit in the period Jan-Feb. This isn’t realistic for many people who may have experienced a recent change of circumstances. For example, someone may have recently found work and no longer require the payment, or may have recently lost their job and are now on a benefit only income. It would therefore be ideal if the payment qualification was assessed in ‘real time’.

In addition, people receiving wages 4 weekly could receive a zero payment of UC at the wrong time and miss out.

Receiving a nil reward: Consideration needs to be given to someone sanctioned, as they are still impacted by the cost of living crisis. Housing associations are aware of  tenants receiving a ‘nil award’ because DWP have not looked at claims in detail, requiring tenants to have to challenge decisions. We have been made aware of the mental health issues and stress that this causes for tenants, with some associations noting that they have witnessed an increase in people harming themselves due to the stress involved.

Targeted support should therefore remain in place if Universal Credit remains active, even if there is a nil payment assessment within a qualifying period.

How has the Department’s ad-hoc payment system and its design and use benefitted or limited the delivery of cost of living support?

Housing associations have expressed concerns that for tenants who were already experiencing difficulty managing their money, receiving infrequent lump sum payments has worsened their financial situation. The unknown date of when the cost of living payment will reach the tenant’s bank account also provides further difficulty with managing finances. Consideration should therefore be given to alternative payment schedules.

Housing associations bridging the gap

Housing associations are doing all they can to address the shortfall in cost of living support. Many housing associations deliver financial resiliency services as part of their core business. All tenants are able to access these services at any time during their tenancy but worryingly they are currently in very high demand as tenants seek more advice than usual.

Within the housing associations that participated in our research, one housing association has seen a 10% increase in average number of referrals per month. This trend is replicated across the sector with numerous associations reporting a rise[4].

Frontline housing staff are witnessing daily the impossible challenge and choices tenants have to make to try to make ends meet as the cost of living crisis hits home. Housing association staff provide high levels of support to individuals to enhance their earnings by completing paperwork side by side with tenants to access benefits and grants. Some housing associations have specialised staff who support tenants through more complex benefit application processes like Personal Independence Payments (PIP).

The shortfall in current government support is further highlighted by tenants’ increased reliance on housing association ‘hardship funds’ which are designated funds within associations that provide money directly and quickly to tenants facing extreme hardship who are either not eligible for government assistance or can not wait for applications to be processed. As of September 2022, 81% of housing associations in Wales have a hardship fund and the average fund per housing association is £40,337.

Housing associations also deliver a multitude of extra projects and schemes to protect the communities they serve from the effects of the cost of living. Appendix 1 and 2 demonstrates the extra steps associations are taking to ensure tenants and the wider community have sufficient access to food. In order to improve community resilience, associations also deliver projects aimed at improving employability skills amongst tenants and community members. Appendix 3 and 4 highlight this invaluable support. For full details of the breadth of work housing associations in Wales are doing to support tenants through the cost of living crisis please visit our cost of living hub.

Housing associations have expressed concerns about the aftershocks of a crisis of this magnitude as indebted households are likely to experience hardship even if they escape the immediate crisis. Many housing associations now report that they are reaching the limits of what they can do to help. Every option for tenants has been explored and no further savings can be identified or support offered.

Our recommendations

Without government intervention imminently to increase the welfare protections in place for social housing tenants, there is a risk of poverty increasing and homelessness. We therefore fully support the Essentials Guarantee campaign recently launched by JRF and the Trussell Trust which calls for the UK Government to introduce an Essentials Guarantee, determined through an regular independent process to help us understand the cost of essentials and ensure Universal Credit allowance enables people to afford at least the food, utilities and vital household goods. The campaign also outlines that any deductions should not be taken at the detriment of people being able to access these essentials.

Community Housing Cymru recommends that:

●        The UK Government must review how they target and administer Cost of Living payments to ensure they reach those that are most in need, when they need it. This could be achieved through working with community based partner organisations, like housing associations, to identify improvements to the eligibility criteria and payment administration.

●        The UK Government takes action to ensure that the welfare system provides a sufficient safety net so that Welsh social housing tenants can afford to pay for food and other basic essentials. We fully support the ‘Essentials guarantee’ campaign recently launched by the Trussell Trust and Joseph Rowntree Foundation, calling for Universal Credit to be increased to allow claimants to afford essentials.

●        When designing UK benefit policies, sufficient regard must be given to how these interact with devolved policies. Welsh and English benefit policies must compliment each other and be appropriately communicated to tenants and community members to ensure people claim what they are entitled to.

Appendix 1

Fit and Fed Merthyr Tydfil was established in 2018 through ICF funding via the local health board. Working in partnership with the local youth service, third sector youth organisations and Street Games Wales, skills were pooled to develop a school holidays programme that would provide free access to enriching activities, and a healthy nutritional meal at the end of each session.

With Merthyr Tydfil Housing Association (MTHA) leading project management, and others providing facilities and workers, eight Fit and Fed sites were initially established across the borough. In the first financial year of the project, 159 sessions were provided; 748 different children and young people engaged; and 2,230 meals provided. This rose to 848 children and young people, 182 sessions and 2,358 meals in the second financial year that the project ran.

Following this high interest in the scheme and the relief it brought to families, MTHA applied for National Lottery Community Fund funding to extend the project to up to 15 sites across the borough. When writing the application, the team says that they never in a hundred years thought that they would be facing the current cost of living crisis.

Fit and Fed is now a sanctuary for many families in the area. Since April 2022, the scheme has expanded to 14 sites, with most children and young people being within walking distance to a site.

Appendix 2

RHA Wales’s Grub Hub project has three aims: to support tenants and community members in hardship; to prevent good quality food going to landfill; to offer volunteering opportunities for those who want to give something back to their community.

The project began in July 2017 when Greggs in Tonypandy asked if the housing association could use their surplus food. RHA Wales’s partners have increased since then to include Lidl and Farmfoods in Porth, and they also receive donations from Cooperative and Tesco stores.

Every week tenant volunteers collect the food and prepare the parcels, working alongside housing officers and income advisors to get help to those most in need.

Since launch, 2,150 parcels have been given to 1,100 people; and eight people have been given volunteering and training opportunities.

Appendix 3

Tai Tarian has just taken on its tenth group of recruits to its Copper Foundation, which aims to give people who are struggling to find work a route back into employment. The foundation launched in 2017 but now, in 2022, its role in supporting tenants into jobs is more important than ever.

People enrolling on the scheme are given 12-month paid contracts to work on Tai Tarian’s external improvement programme. During this time, they receive training, skills and experience which will help them go on to find further employment.

In its first four years, the foundation provided opportunities to 75 people. They worked on around 600 Tai Tarian properties, enhancing their appearance and security.

One of the new recruits recently said: “I’ll mainly be working in the area where I live and helping to enhance its appearance, so it is something I’m really looking forward to.”

Nick Cope, Tai Tarian’s Head of Capital Investment said: “The project is all about giving people a great experience of the world of work and over the next 12 months they will undergo numerous training courses and play a huge part in improving the external areas of our properties.

“During their 12 months with us they will gain a whole host of practical experience, working alongside our experienced team of tradespeople. But, just as importantly, we’ll also be providing them with additional support such as interview technique training and advice on how to write CVs and fill in job application forms, to prepare them for the next stage of their careers.”

Appendix 4

Cynon Taf Community Housing Group was awarded over £275,000 from the WCVA active inclusion fund for two tenant employability projects.

The 'potential project' launched on 1st July 2022, while a community project launched later on 1st September.

Both schemes aim to help tenants and those within the local communities aged 25 and over who are looking to improve their skills, with the goal of moving into employment. Project officers work closely with participants to identify skills or activities that would be useful to them, such as confidence building, money management, digital skills, volunteering and more.

One participant - Miss X - was supported by the project team to update her CV and learn interview techniques to help in her search for employment opportunities. Miss X also took part in digital confidence sessions and was accessed online Welsh taster courses.

Since being involved in the project Miss X feels more confident, motivated and less isolated than she had following the COVID-19 pandemic. She said: "I feel I have more confidence than before I came onto the project, I've made friendships through some of the sessions and course work which has benefitted me not feeling so isolated."

May 2023