Written evidence submitted by Pobl Group (BSW0035)
Pobl Group is the largest social landlord in Wales, operating predominantly in south and west Wales. We provide homes catering for a variety of needs, including general needs, supported housing and hostels, extra care schemes, student accommodation, intermediate rent, and shared ownership. We work with our customers and partners to promote tenancy sustainability and strong communities.
What are the key challenges for the benefits system in Wales and how do they differ from the other nations and regions of the UK?
(1) A continued emphasis on income maximisation for welfare benefits. The inherent complexities of the system make it very difficult to navigate. Within Pobl’s housing operations we have identified £1.2 million in unclaimed entitlements across our regions. There is a paucity of effective advice regarding welfare benefits in many areas of Wales. The housing sector in particular has a significant role to play in ensuring we have flourishing, resilient and sustainable communities. Welsh Government could do more in terms of exploring/co-production/working with social housing providers in respect of advice provision and welfare benefit income maximisation.
(2) Levels of means tested entitlements present the most significant challenge to the wellbeing of claimants heightened by the steady erosion of benefit income stemming from the respective Welfare Reform Acts. The most significant casualty has been the base-line means tested entitlements; the ‘two child rule’, the loss of the enhanced disability premium and the severe disability premium to new universal credit claimants and the erosion of the latter commensurate with other entitlement increases. An increase in rent and sequentially housing costs within universal credit will dis-proportionately impact disabled claimants as their transitional element reduces in line with their (annually increased) additional housing costs. Through devolution Wales has the ability and opportunity to mitigate the more egregious cuts.
(3) The University of Sheffield Institute for Sustainable Food has published a map modelled on data from the Food Foundation https://shefuni.maps.arcgis.com/apps/instant/interactivelegend/index.html?appid=8be0cd9e18904c258afd3c959d6fc4d7
Regionally, it shows Wales is struggling significantly with food poverty, arguably more so than other parts of the UK. We consider this is in turn linked to low levels of welfare benefit payment, low wages and in work poverty.
(4) Post the 2016 to 2020 benefit freeze, the link has been severed between cost of living and benefit entitlements. Wales, like Scotland and Northern Ireland, has the ability through devolution to create top up entitlements aside from the substantive means tested entitlements reserved to Westminster. With the impending loss of the universal credit £80 per month COVID uplift, the ending of the minimum income floor protection for the self-employed and the ending of the furlough scheme, the challenge for Welsh Government is how we can align equity and socio-economic reality to means tested entitlements for the sake of our communities?
Pre-pandemic, how effectively did the UK benefits system tackle poverty and socio-economic inequalities in Wales as compared to England and Scotland?
The UK benefit system is predominantly reserved to Westminster although Scotland presently has oversight in the area of disability entitlements. Pre-pandemic the UK (reserved) benefit system did little to tackle poverty and socio –economic inequalities in any area of the United Kingdom. The extent of the problem in Wales is highlighted by the food poverty map above and the Bevan Foundation estimating there are 700,000 people living in poverty across our Welsh local authorities.
Examples of reasoning below:
How has the COVID-19 pandemic changed the type and amount of support needed by people in Wales?
The COVID 19 pandemic has highlighted the need for welfare benefit provision to be reflective of the true cost of living.
Our customers experiencing the benefit system for the first time are shocked at how little they receive and the delays in receiving payment. Additionally, there is a great deal of uncertainty about ‘what is out there’ by way of financial support.
Our experience is that greater agility is required within the system for rapid payment; be that universal credit or the DAF.
(1) We are seeing increasing rent arrears within social housing driven in part by lack of financial resilience linked to welfare reform, although there are multiple factors involved; from legal action moratoriums to children being at home and people being forced to use housing costs paid direct to them for other purposes.
(2) Fundamentally, what is required is a level of benefit income that is sustainable for those who require it and reflective of societal economic pressures. The link needs to be restored to the retail price index or at very least the consumer price index.
(3) The pandemic uplift of £80 monthly for universal credit claimants has gone some way to re-dress the downward pressure that saw a drop from RPI to CPI and then to a four year freeze for most non-disability entitlements. Legacy claimants did not have the uplift although we await a judicial review outcome in that respect.
With the uplift to be removed from 30th September, the end of the furlough scheme and the return of the minimum income floor for the self-employed, there are will significant challenges for our communities already under financial pressure evidenced by increasing rent arrears and the food poverty data herein.
Recent findings of centre for cities found that cities in the North of England and Wales (Cardiff, Swansea and Newport named) experience highest levels of indebtedness. For example, £1 in every £5 services debt compared to an average of £0.35-50p in every £5 in other parts of the UK. The result being that these household are more likely to resort to subprime lending and thus worsen their situation.
The uplift has identified a sustained need for payment set at that level. The increase should apply to both legacy entitlements and universal credit. This partially restorative uplift should remain in place and using its pre-existing devolved powers to create a top up entitlement, we call upon Welsh Government to be bold in this respect.
There is the ability, as per the Scotland model, to create a top up payment that is disregarded when calculating Westminster reserved entitlements such as universal credit or means tested legacy benefits.
We consider this to be an ‘invest to save’ approach by way of facilitating more economically resilient communities, preventing homelessness and enhancing the ability to militate against health inequalities. It is our experience financial insecurity in all its forms has a negative impact on the mental wellbeing and physical health of our customers.
As part of our own response to supporting our customers through the current economic challenges we have recently adopted a Living Rent methodology within our rent setting policy. This approach aims to ensure that our rents reflect the differences in economic circumstances of families at a local level so that rents are genuinely affordable for families on low incomes. Our policy is aligned to the Joseph Rowntree Foundation Living Rents Model which states that for rents to be affordable, they should not be more than 28% of a household’s net income.
How effectively do the Welsh Government’s allowances and grants meet the particular needs of people in Wales?
The ability to access free school meals, DAF grants and assistance with council tax reduction in Wales remain essential. Our experience informs us there is a challenge for Welsh Government in terms of visibility and awareness of entitlements. For those new to the benefits system the aforementioned schemes were frequently missed.
How effectively has the UK benefits system responded to these needs, and what else should the UK Government do to deliver the right support in Wales?
Despite some initial challenges the UK benefit system via the Job Centre Plus dealt well with the huge upswing of universal credit claims in Wales.
However, for new claimants the pandemic uplift has become a fixture of entitlement. The DWP has failed in its messaging to make it clear the uplift is temporary and has only just begun to formulate its communication strategy to notify claimants of the impending change. This is disappointing and from a housing (Pobl) perspective we will endeavour to take steps ourselves to work positively with our customers in terms of messaging and support.
Thematically, the right support in Wales as well as other UK regions is inextricably tethered to levels of entitlement. It is our experience that a responsive, person centred, cost of living indexed benefit system that treats customers with dignity and respect is what we should collectively aspire to.
What reforms are needed to the benefits system and should there be further devolution of powers?
Binary reforms are undoubtedly required within the benefit system in terms of delivery and entitlement levels.
Devolution of powers if meaningful could be advantageous but the welfare benefit system is exceptionally complex and difficult administer. A selective and measured approach should be considered.
If devolution were able to create a person centred, respect based culture within welfare benefits, it would mark a real cultural step change in approach, efficacy, equity and perception.
To tackle the changes advocated above and within this submission Welsh Government can use existing powers to create top up entitlements to mitigate the more punitive aspects of welfare reform. This would differ from examples such as discretionary housing payments in that there is the potential to make a top up entitlement payable direct to claimant. It will be the job of Welsh Government to consult as widely as possible on such a scheme in terms of context, eligibility and it’s fit into a pre-existing UK wide welfare benefit framework or whether such an approach could be tethered to a UBI.
What are the implications of the UBI pilot in Wales?
Our observations regarding the above are as follows:
August 2021