Written evidence from the London Borough of Southwark (Southwark Council) CLP0047

Background

         The London Borough of Southwark is a densely populated, diverse and vibrant area situated on the south bank of the river Thames, comprised of a patchwork of communities: from leafy Dulwich to bustling Peckham and Camberwell, and the rapidly changing Rotherhithe peninsula. Providing safe and quality housing and supporting residents through the cost of living crisis, are among our highest priorities.

• The average household income in Southwark in 2021 was £33,848 broadly comparable to the national average. However, there is a wide range of income in Southwark with around 1 in 7 households in the borough having an income less than £15,000 per year, and a similar proportion earning over £75,000. The average income also varies significantly depending on where our residents live - from £61,271 in Dulwich to £24,632 on the Old Kent Road. 

• Southwark is also a very ethnically diverse borough, with almost half of those living here coming from an ethnic minority background. Over 40% of residents were born outside the UK, Channel Islands and Ireland, of which 11% were born in Africa and over 8% were born in the Americas or the Caribbean.

• According to the 2021 census, half of all households in Southwark are disadvantaged in any one or more of the following dimensions: employment, education, health and disability, and housing. Our residents in rented accommodation spend on average 52% of their median monthly income on housing costs, in stark comparison to the national average of 24%.

• About 1 in 4 adults over the age of 16 experienced food insecurity in 2019.  For our Black residents and anyone living in social rented housing in our community that number nearly doubles (46% of residents from a Black ethnic background and 44% of those living in social housing reported experiencing food insecurity). 

• Foodbank use is currently at a record high. Use of the Borough’s Trussell Trust Foodbanks has increased by a startling ten-fold since 2009. Over 15% of those referred are already in employment.

• Our younger residents are disproportionately affected too; 43%percent of those aged under 16 are living in poverty and unable to afford healthy meals - significantly higher than the average for England. Twenty-five per cent of children are estimated to be food insecure, a prevalence in Southwark that is much higher than in London, for both adults and children.

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?

1.1.   The Council welcomed cost of living support payments. These payments provided a vital lifeline to the incomes of more than 45,000 residents in Southwark’s lowest-income and most vulnerable households last year worth tens of millions of pounds. 

1.2.   As a result of the cost of living crisis, the Council saw a huge increase in applications both to its local welfare assistance scheme (funded by the Council) and its new Southwark Cost of Living Fund.

1.3.   The extra income has and continues to protect many of those households from hardship by ensuring they had money to pay for food, energy, and other essentials as the cost of these items soared.

1.4.   As a Council we established a new Southwark Cost of Living Fund (mostly funded by the Household Support Fund), providing support for households not claiming benefits or who had missed out on Cost-of-living support payments after missing qualifying dates or due to other technicalities. 

1.5.   In the New Year, the Council found itself forced to use the fund to expand eligibility to include those who were already claiming means-tested benefits many of which had received Cost-of-living payments before Christmas and were still experiencing stark levels of poverty.

1.6.   Increasingly our residents do not have enough money to meet their essential living costs, even with Government’s cost-of-living payments. For example, in June 2022, 42% of Citizen Advice Bureau Southwark debt clients had a negative budget (up from 38% in February 2020, and 32% in 2016). A negative budget is where a debt adviser assesses that a client cannot meet their living costs.

1.7.   While the cost-of-living payments played a vital role in providing additional support to those on means-tested benefits, the Government’s support for working-aged households who are not eligible for means-tested benefits but otherwise on low incomes, has been lacking and eligibility should be expanded.

1.8.   This should be treated with the urgency it deserves. Nationally, the Joseph Rowntree Foundation reports that almost 4 in 10 (37%) of working-age, low-income households not on means-tested benefits are currently in arrears, and we see a similar picture in Southwark.

1.9.   They also report that Black, Asian and mixed-ethnicity households are still seeing incredibly high levels of hardship with more than 8 in 10 going without essentials. This is also visible in our Borough and alarming, given our ethnically diverse borough.

1.10.                     Research from Citizens Advice Bureau Southwark demonstrates that Southwark residents over the past year have shown that even people who are financially fairly stable and in full-time work are struggling with energy bills and are at risk of or are in fuel poverty, and research from Citizens Advice across London shows that over a quarter of those with a negative budget are in full-time work. These individuals and families would not be eligible for cost-of-living support payments.

1.11.                     Households also affected by No Recourse to Public Funds have been excluded from targeted support for “vulnerable” households, such as those living on low incomes, the elderly and people living with disabilities. This is the case even when an NRPF household falls into one of these vulnerable categories.

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

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

2.1.   Southwark Council has been working proactively to increase Pension Credit uptake for several years. This has been given a renewed priority given the context of the cost-of-living crisis, specifically since central Government’s approach was to target emergency financial support to people on means-tested benefits.

2.2.   In 2022 therefore, Southwark Council ran a local awareness campaign to boost Pension Credit uptake. This was a partnership-based, income maximisation communications project for which the council designed new information materials, which were distributed widely to locations across the borough such as GP surgeries and libraries.

2.3.   Materials included contact information for partner organisations that could help people fill in application forms. Messaging was also aimed at family members who might be able to persuade eligible relatives to apply.

2.4.   Messaging also linked Pension Credit to the cost-of-living crisis, emphasising the importance of ‘applying now’ to get Pension Credit and also qualify for the Government’s additional cost-of-living payments. The Council later wrote to residents encouraging them to apply for any benefits they may be eligible for before the relevant deadline in December. We did this in a targeted way, excluding people whom they knew from Department Work and Pensions caseload data who were already receiving Pension Credit.

2.5.   Southwark also already hold some information on residents eligible for but not receiving Pension Credit (for example, through Housing Benefit claim), however, there is potential to better share this data internally and use it to pre-populate Pension Credit applications. While there are legal barriers to this, overcoming these could help local authorities like Southwark better target residents and process applications more quickly.

2.6.   We plan to run a randomised control trial of different approaches to further target eligible non-recipients of means-tested benefits, including door-knocking. The trial will be independently evaluated by the organisation Impact on Urban Health. We are hoping that robust evaluation can demonstrate which particular strategies are impactful and worth investing in.

2.7.   Just under one in five (185) of the more than 900 pension-age residents targeted and first contacted last summer were on the Pension Credit roll by February.  A second mailout was sent in December and another targeted mail was sent to more than six hundred residents identified as having underlying eligibility for Pension Credit two weeks ago.

2.8.   This effort will continue throughout this year linked to the qualifying dates for all three instalments of this year’s cost-of-living payments.

2.9.   Our baseline for the campaign is the 7,200 pension-age households who were on Pension Credit before the start of the campaign. We aim to increase that number by ten per cent by the end of this year.

2.10.                     While we have seen success in take-up campaigns locally, the Central Government should do its part in better use of information campaigns for the cost of living payments, particularly for those eligible for working-aged benefits. Additional funding should also be allocated to local authorities to support take-up campaigns at a local level, as we have done in Southwark.

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

2.10 There are also concerns about the timing of Cost of Living Support payments, for example, all Cost-of-living support payments for last year were made by December, resulting in low-income households on means-tested benefits with a gap of at least four months between their final Cost of Living Support Payment in 2022-23, the arrival of further relief in the form of benefit uprating from April and the first new Cost of Living Payment for 2023-24. 

2.11 This gap also coincided with the coldest and darkest period of winter as energy and food prices continued to rise.

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?

3.1.   The Council has concerns about the way the support was administered through lump sums. We think this may have made it harder for vulnerable households to budget. 

3.2.   A better way of responding to the Cost of Living Crisis would have been to raise benefit levels for working-age claimants from April 2023 (or from a later date) as it had done with remarkable speed at the start of the COVID-19 pandemic.

3.3.   This would have enabled households claiming benefits to budget more effectively across the year and reduced the risk of cliff edges that may have been created by lump-sum payments. It may also have enabled the Council to concentrate locally provided support on low-income households not claiming benefits.

3.4.   Similarly, as a central London Borough, housing is an acute issue. London is in the midst of a severe housing affordability crisis at a time when the financial pressures on low-income Londoners have never been greater.

3.5.   Affordable housing in the levels of rent in the private rented sector is much higher than the national average; Citizen Advice Southwark found that enquiries about rent arrears comprised 27% of all debt issues.

3.6.   According to a briefing from London Councils on the Affordability of Private Sector accommodation for London Households in receipt of Housing Support, The effective freeze on Local Housing Allowance rates for the past two years has created serious difficulties for low-income Londoners in accessing housing.

3.7.   Across London, It has placed 124,4155 households at risk of homelessness as their benefit entitlements fall short of covering their rent, and restricted LHA rates make it impossible to find them secure and affordable private rented sector accommodation.

3.8.   Fundamentally, the affordability gap and increased homelessness pressures created by insufficient Local Housing Allowance rates can only be addressed by bringing Local Housing Allowance back into line with current market rents, and this combined with the cost of living payments would a cumulatively best way to support our residents during the cost of living crisis.

May 2023