Written evidence from the Brighton & Hove City Council CLP0035

 

Inquiry: Cost of living support payments

The following submission represents the views of members of the cost-of-living partnership working group across Brighton and Hove (B&H). This was discussed at the working group and includes input from internal departments, CVS and statutory partners and the DWP. Colleagues are well placed to respond to this inquiry to scrutinise the government’s cost of living support payments for 2022/23 and 2023/24 and offer views and recommendations.

Executive summary
 

1)      Regional disparities are evident, and B&H stands out for having elevated levels of rent disparities and pockets of deprivation, therefore it is our view that future payments should factor in geographic and demographic circumstances that can consider a variety of factors.

2)      More awareness needs to be raised and data gathered, especially for Pension Credit recipients. Even though the initial credited amount for recipients may be low, we believe that additional assistance received alongside this benefit is valuable in supporting them through the cost-of-living crisis.

3)      There should be special categories created for those who are not in receipt of means-tested benefits, or those only slightly above the threshold, but who would still benefit from cost-of-living support payments.

4)      To prevent people from missing out due to fluctuating income or missing out on payments by a few days’ eligibility, the qualifying period to receive the cost-of-living support payments should be extended to a period of 6 weeks.

5)      Change the timing and distribution of payments from 3 months, to monthly, which will help recipients manage finances, in line with other benefits.

6)      Develop a separate fund that supports specific cases/scenarios that receive a zero reward, so there is not an over-reliance on the Household Support Fund to cover these cases.

1. 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?

Those in receipt of benefits spend a higher proportion of their budgets on essentials like, food, rent and energy. In B&H, teams and colleagues including representatives from housing, mental health and debt, Public Health data analysis, Family Information Service, Welfare, Revenues & Business Support, Youth Advice Centre, Moneyworks and Advice Matters Partnership CVS representatives, have stated that the payments are falling short, and one element of this that is particularly prevalent in B&H concerns private rental prices which are increasing at an unsustainable rate.

The Office for National Statistics (ONS) found the median monthly rent in England between October 2021 and September 2022 was £895 for a three-bedroom flat, higher than at any other recorded point. In B&H the average median monthly rent calculated for a three-bedroom flat is £2,134, which is higher than the average median rate. [1] Local Housing Allowance (LHA) in B&H for the cost of a three bedroom property is £276.16 a week, totalling £1196.69 for one month. This already puts claimants at a disadvantage and deficit of £937.31 per month in paying their rent. If we include the cost-of-living payments themselves at an estimated £900, then even with this support, vulnerable people with children are already running at a deficit.

The below graph illustrates how B&H (which lies in the Southeast) has one of the highest levels of rent in the country, after London.

Table 1:

Private Rental Market Statistics

Table 1.5: Summary of 'Three Bedrooms' monthly rents recorded between 1 April 2021 to 31 March 2022 by region for England

 

Three Bedrooms

Region

Count of rents

Mean

Lower quartile

Median

Upper quartile

ENGLAND

118,400

996

675

850

1,200

NORTH EAST

6,770

607

495

565

675

NORTH WEST

16,930

750

595

695

850

YORKSHIRE AND THE HUMBER

13,090

692

550

650

795

EAST MIDLANDS

11,070

746

625

725

850

WEST MIDLANDS

11,250

810

695

775

895

EAST

15,180

1,066

825

1,000

1,250

LONDON

10,080

1,992

1,525

1,750

2,200

SOUTH EAST

19,480

1,226

995

1,200

1,400

SOUTH WEST

14,550

996

795

900

1,120

Source: VOA’s administrative database as at 31 March 2022

 

The below table highlights the affordability of renting in Brighton and Hove.

Table 2:

Meanwhile, the DWP’s key support fund for local authorities to alleviate rent shortfalls – Discretionary Housing Payments – has been frozen at 2021/22 levels for 2023/24 and 2024/25.

This already highlights a significant strain on household resources, focused solely on one area of cost-of-living that plays an important part in recipients household budget management. This is compounded by B&H recipients of the payments still being disproportionately reliant on debt/credit to cover the cost of essentials such as food and electricity. Within the Advice Partnership Strategy Day Report, MAP (Money Advice Partnership) reported that the number of clients with a negative or deficit budget is between 46-55%. This is compounded by the limited capacity and number of debt advisers available. Currently, there are 2.5 debt adviser’s available compared to over 7 advisers in 2019.[2] The response from advisers is that they are at their limit on how they can help customers manage their finances and debt, particularly when they are running at a constant deficit.

Nationally, electricity prices rose by 66.7% and gas prices by 129.4% in the 12 months to March 2023.[3] Food and non-alcoholic drinks rose at the fastest rate in more than 45 years in the 12 months to March 2023. The largest contributor to the rise in food inflation was bread and cereals, for which average prices rose by 19.4% in the year to March 2023.[4] Levels of food insecurity are high in B&H with at least 5411 people receiving food support weekly from 48 food providers running out of 54 locations. Moreover, the data also concludes that there has been a significant increase in people needing food help indefinitely, with 63% of people who access food help needing to do so on an ongoing basis. [5]

Food banks in B&H have also stated that they are seeing more people with health conditions and disabilities, often with no food at all in their cupboards. This suggests that the payments they have been accessing are not enough to cover all their daily expenses. This is evidenced by the fact that over 4000 different users accessed council web pages on how to make a referral to a food bank last year (2022). Users of the food partnership phonelines, who shared details about their circumstances, revealed many had complex needs including navigating physical and mental health needs, cost of living increases, applying for or experiencing delayed/cut/sanctioned benefits, disability support, refugee status, domestic abuse support, housing crises support and/or other emergency support.

Another reported element demonstrating widespread need is the increased demand for Local Discretionary Social Fund (LDSF) support. We can see below that the decisions made, and amounts spent on LDSF, supported by the Household Support Fund, has increased exponentially each year for the sample months given in the table below:

Table 3:

 

April 2021

April 2022

March 2023

Decisions made in one month (i.e. cases)

140

393

708

Amount spent in one month

£17,338

£88,366

£122,139

 

It is also worth noting that very few of the above awards are repeated decisions as most claimants are restricted to only one claim every 6 months. This is further proven by analysing the above metrics, and we can see that from 2021 to 2022 there was a percentage increase in cases awarded of 280% and from 2022 to 2023 we can see that there was a further percentage increase of 180%. This cumulative increase indicates the strain that B&H recipients are having to contend with regarding the cost of living.

Due to the ongoing deficit that the majority of B&H recipients are running at, due to rising housing, energy, and food bills, with which awarded benefits are not able to contend with, as illustrated by LDSF, the conclusion is that the cost-of-living support payments are insufficient to support low income households to meet rising costs.

2. What role have the following factors played in access to the cost-of-living support payments:

a) Passporting: Not already being in receipt of certain means-tested benefits, despite being eligible, and consequentially being prevented from accessing emergency support;

There are varied reasons why applicants may not be in receipt of certain means-tested benefits. One area that our partnership would like to highlight is the pressure facing applicants who must wait for GP (General Practitioners) appointments to request specific medical evidence to be means-tested. This has a knock-on effect in that it prevents applicants from accessing means-tested benefits and thereby also missing out on receiving support payments.

Another area of passporting highlighted by our partnership is on pension credits. This has been found to be one of benefits least likely to be taken up by eligible recipients locally. There are 236 Housing Benefit or Universal Credit (and Council Tax Reduction) claimants who could be eligible to claim Pension Credit but are not currently in receipt.  This cohort of households also owe the council £26,000 in rent or Council Tax arrears.  If they could claim extra income, they could not only better afford their rent and Council Tax but potentially their overall finances. Additionally, many recipients who choose not to apply for Pension Credit, because they view the amount not worth the perceived trouble for applying, often miss out on other help and support available because they are not recipients of Pension Credit. For example: council tax reduction discounts, help with NHS (National Health Service) dental treatment, help with heating costs, and more.

Nationally, Universal Credit makes up 41% of the UK’s £19 billion in unpaid benefits. This illustrates that the application or awareness for eligible recipients of Universal Credit is difficult and not as accessible as intended. Due to this, there are many people that are being prevented from accessing emergency support.

Table 4:

 

 

b) Cliff edges: Not being in receipt of a certain means-tested benefit, because households failed to meet certain qualifying thresholds;

We would also like to highlight specific recipients who often miss out. The B&H Family Information Service has had a high number of referrals via social workers in relation to people who have no recourse to public funds. Often, this can be women who have fled a DV (Domestic Violence) situation, but are not eligible to claim benefits themselves, and are therefore supported by social services. This group would be an essential target group who would benefit greatly from the cost of living payments.

Additionally, there was a particular case study highlighting a parent who was a recipient of Universal credit but earnt £2 pounds over the threshold for receiving the cost-of-living support payments. This had a debilitating effect on their mental health, and this ended up promoting the narrative that working extra hours was limiting them in receiving support. This is even more concerning as this type of narrative and example will spread to other recipients who will be worried about increasing hours in their jobs, or looking for alternative work, for fear of becoming worse-off overall.

c) Qualifying period anomalies: issues relating to the timing of benefit payments;

One anomaly noted was the cut-off point to receive the supported payments. To ensure eligibility there was a qualifying period but it was noted that some recipients may fall outside of that period by a few days, and as such would not be eligible for the payments.

A second anomaly is where there is a fluctuating income; a household could receive a slightly higher income in one month, meaning they would not receive a Universal Credit payment the following month.  If that month happened to be the month in which eligibility for the Cost of Living payment was assessed, then the household would miss out on those extra payments, even though their income across the year remained low.

Our recommendation would be that the qualifying period to receive the cost-of-living support payments should be extended to a period of 6 weeks to allow for fluctuations of income.

d) Receiving a nil reward on a Universal Credit payment, due to reasons such as sanctioning; or

For those who receive a zero reward on UC (Universal Credit) there is an unrealistic expectation on the Household Support Fund to cover these cases. There is a cumulative effect, in that there was no uplift to the Household Support Fund and is therefore also adding extra pressure on other areas such as food banks and LDSF.

e) Any other technicality you believe the Committee should investigate?

One of the biggest issues is the distribution of Cost of Living Support payments as three lump sums. B&H colleagues report that applicants who receive lump sum payments find that they are absorbed immediately into debt and crisis abatement. It’s harder then to manage their day-to-day spending. Furthermore, this is compounded by the date of distribution, which does not conform with the ongoing policy intent of modelling Universal Credit on monthly salary, rather than in 3-month instalments. It is our view that future consideration of other cost of living support payments should be made monthly, so that recipients can incorporate the money into their monthly cost of living expenses. This would equate to payments of at least £75 per month.

This is essential to highlight as the removal of the temporary Universal Credit uplift of £80 per month and the increase in food, energy and other costs due to inflation, has meant that everyone has less to budget with.

 

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

DWP representatives in Brighton and Hove have not received any feedback relating to the ad-hoc system and its design and use benefiting or limiting the delivery of cost of living. However, this has now been highlighted within the working group and consultation with specific users will be conducted to determine this question. This data will then be forwarded onto the committee at a later stage.

4. Are there any examples of international best practice in relation to the delivery of emergency cost of living support that the UK can learn from?

There are many countries that implemented a package of emergency economic measures to support the cost of living. Spain approved a package of emergency economic measure worth more than 9 billion euros. The measures included a cut in the tax on electricity, from 10% to 5%, a reduction in the cost of monthly transit passes, and a one-time payment of 200 euros, for people who earn less than 14, 000 euros a year and not are not already receiving benefits. Germany. Also passed various measures. On travel, they involved a 9 euro a month ticket scheme, the German government also cut taxation on fuel. Germany also offered a series of one-off payments: people in employment are to be paid an energy price lump sum of 300 euros through their employer’s payroll, which companies can reclaim from the government. People on social welfare will receive 200 euros, houses on housing benefits subsidised with 270 euros a month, rising to 350 euros for a two-person household. Families were also offered 100 euros per child in July.[6] France went one step further and aimed for nationalising EDF, for which we understand that 90% of shares now belong to the state.[7]

Best practice could be informed by looking at the demographic and geographic differences across England. Utilising census and IMD data, as well as ensuring that payments are made to support the most vulnerable, and ensuring distribution in a way that is both economically viable and supportive of recipients and how they manage their finances.

 

May 2023

 


[1] Private rental market summary statistics in England - Office for National Statistics (ons.gov.uk)

[2] Advise Partnership Strategy Day Report.

[3] Cost of living insights - Office for National Statistics (ons.gov.uk)

[4] Cost of living insights - Office for National Statistics (ons.gov.uk)

[5] (Public Pack) Agenda Document for Policy & Resources Committee, 16/03/2023 16:00 (brighton-hove.gov.uk) p.169

[6] Cost of living crisis: how does UK compare with rest of Europe? | Money | The Guardian

[7] France now owns 90% of EDF - Energy Live News