1) Executive Summary
Caerphilly County Borough Council consider the reform to welfare as a key priority and has developed a number of projects and activities providing support across a range of services.
A brief description of activities that directly impact on tenants in both council properties and the private rented sector is provided. Some of the activities are at an early stage so their impact is difficult to assess, however, analysis of the support being carried out with council tenants affected by the social sector size criteria is indicating some positive outcomes which may be beneficial to share with other local authorities.
The Authority has significant concerns about the on-going impacts of the reform and draw attention to the anticipated implications on the delivery of its services.
2) Introduction
Caerphilly County Borough Council (CCBC) is the 5th largest local authority in Wales with a growing population of around 178,800.
The latest figures (April 2012-March 2013) indicate that the proportion of economically active people in the county borough is slightly above the Wales average but significantly lower than the GB average (Caerphilly 74.3%, Wales 73.8%, GB 77.1%). The proportion of people in the county borough claiming JSA is significantly higher than average (Caerphilly 4.7%, Wales 3.7%, GB 3.3%). Levels of deprivation in the county borough are higher than the Wales average over a range of indicators.
The wide-ranging changes introduced by the U.K. government to the welfare system have been seen as a priority by CCBC from a very early stage. In response to the introduction of the Welfare Reform Act and Local Government Finance Bill, CCBC established a Welfare Reform Programme Board in July 2012. A core project delivery team is comprised of officers from all key service areas, including Housing Benefit and Council Tax Benefits Section, Housing, Community Regeneration, Social Services, Supporting People, Customer Services, Education/Children and Young People Partnership.
The overall aim of the Programme is to ensure that the Local Authority and its residents are adequately prepared for the impact of the Welfare Reform Act and the Council Tax Reduction Scheme.
2) Caerphilly County Borough Council response to the welfare reform
The Programme Board has overseen the development of a number of projects and initiatives to support residents with the changes, details of some of these activities are outlined below;
2.1 Social Sector Size Criteria
In February 2012, local tenants voted for CCBC to remain as landlord for the borough housing stock. The council currently manages 13,382 tenancies in 10,908 properties.
The latest data indicates that of the 2,741 social housing tenants in Caerphilly Borough affected by the social sector size criteria, 80% (2181) are council tenants. Of these 78% are under occupying by one bedroom and the remaining 22% by two or more bedrooms.
In response to the Social Sector Size Criteria the authority considered the most effective way of engaging with tenants who would be vulnerable to the changes. Based on knowledge of the tenants and experiences of staff it was considered that face-to-face contact was the most appropriate means of offering support. In September 2012 two Tenancy Support Officers (TSO) were appointed with an additional two being appointed in April 2013. The TSOs visit council tenants affected by the change and provide face-to-face assistance in the form of advice, signposting, referral and practical support.
The tenants receive a wide spectrum of advice and support to help reduce monthly outgoings and to lessen the impact of loss of income experienced by the introduction of the Social Sector Size Criteria. The support also includes signposting and referral relevant to each tenant’s circumstances and includes:
The activities of the TSO’s will also be evaluated as part of the Universal Credit Local Authority Led Pilot that CCBC is running in partnership with DWP. The key impacts of the TSO visits has been three-fold;
However, the TSO posts are only temporary and the need for additional follow- up visits has been identified. In the evolution of our activities it is emerging that achieving sustainable solutions may only be feasible in the long term with continuity of support via repeat visits, which generate a significant resource issue.
Support will also need to be extended to public and private sector tenants with the other welfare changes, which will in turn create additional pressure on existing budgets.
The local authority views budgeting and debt management as a major issue, especially with the introduction of Universal Credit. Providing independent financial advice and support will be essential to enable claimants to manage their monthly income.
The capacity to be able to manage budgets and debt has been seen by the local authority Rents Department as a key issue in supporting tenants to maintain their tenancy. Working in partnership with CAB, the Rents Department fund dedicated debt and budgeting clinics for tenants who are identified as being in debt and requiring support. The clinics are held in local council offices and generally have had a high attendance rate. Appointments are managed by the TSO’s with reminders being sent to the tenant, via text, the day before. However, demand has increased to such an extent that bookings are now being made 6-8 weeks in advance and this is having an impact on attendance rates and the capacity of CAB to continue providing the level of support required at the current funding level.
CCBC has recognised the need for a holistic approach to housing provision and supports the development of a vibrant private rented sector. A small-scale pilot has been developed in partnership with the Wales Co-operative Centre to target those private rented sector tenants who receive housing benefit payments by cheque (25) or whose payments are made direct to the landlord (500). The aim of the pilot is to develop and test a profiling/support assessment to identify the tenants support needs and signpost or refer them to the relevant service. The pilot will promote the use of Credit Union accounts to tenants who are financially excluded.
The results of this pilot are being collated but initial responses from a small number (<40) of the participants indicate that significant numbers of participants require: housing advice, help with UC and benefits, require budgeting skills and support with mental health, physical health and learning difficulties. It is also apparent that significant numbers require assistance with computer skills and IT access, had no broadband access and used prepayment meters for gas and electricity services. Many had also used overdrafts, borrowed from family, applied for social funding and/or used ‘cash converter’ services to borrow money.
2.3.1 Housing Pathways
CCBC has taken a proactive approach to early intervention in preventing homelessness and has developed a ‘Housing Pathways’ project to ease the pressure on the council housing stock. A series of surgeries are held on a weekly basis around the borough for residents who may be at risk of becoming homeless. Support is provided in identifying sources of funding (eg DHP) which will assist in helping those at risk of becoming homeless. During the first 6 weeks of the project, 93 residents sought support resulting in 25 being housed in the private rented sector before they presented as homeless. Monitoring of the service is on-going.
2.3.2 Social Letting
The local authority is also working with the owners of empty properties in the private sector to bring them back into use. There are approximately 900 properties across the borough which are empty or under-used. The local authority is currently developing a business case to deliver a service as a ‘social letting agency’ on behalf of the owners. Grants may be provided to bring the properties up to standard and the local authority could manage the properties on the owners behalf. Engagement with tenants through this process could provide the opportunity to access additional support if identified (eg debt/financial advice). The local authority also propose to develop an advice service for private landlords which would provide independent guidance on a range of issues.
2.4 Benefit Cap
In Caerphilly, the latest information indicates that less than 50 households are in receipt of housing benefit and affected by the Benefit Cap. It is proposed to contact those affected, generally via the landlords’ tenancy support officers or a member of our housing department with the aim of offering effective support and guidance.
An information sharing agreement between housing benefit and social service departments has enabled the identification of vulnerable households who may require additional support due to the Benefit Cap and the Social Sector Size Criteria. The monitoring of the outcome of this agreement is on-going.
3.1 General
Local Authorities are considered by its residents as the first point of contact for support across a range of service areas. The Welfare Reform is introducing changes that will have an impact and demand on services of a volume and nature that the Authority will not be resourced to support. The introduction of the reform is set against a general picture of cost saving and funding reduction which is increasing pressure on already stretched resources. The key impacts of the reforms are highlighted below;
3.2 Funding & Income Streams
The nature and extent of the impact of the welfare changes will probably result in sustainable solutions not being able to be achieved for all in the short/medium term. The uncertainty of the level of funding beyond 2014/15 is therefore a significant concern. Specific concerns are highlighted below;
3.2.1 Council Tax Reduction Scheme (CTRS) – the Welsh Government has introduced an all Wales scheme and has funded the shortfall for 2013/14. There is still uncertainty regarding the funding for future years coupled with a lack of information on the medium term proposals for the scheme. As a background to this there is also uncertainty as to whether future funding for administration of the scheme will match the actual costs of administration. Currently over 26% of households in CCBC are in receipt of CTRS.
3.2.2 Local Housing Allowance (LHA) - The freezing of the LHA rates for the period 1st April 2012 to 31st March 2013 and the rates being up-rated on an annual basis based upon CPI have resulted in a reduction of LHA in real terms. These changes mean that LHA rates no longer reflect local market rental and this may cause a widening of the gap between LHA rates and local private rental rates in the medium/long term. Approximately 24% of the CCBC caseload for housing benefits is LHA related.
3.2.3 The Discretionary Housing Payment (DHP) - is a key aspect of financial support provided to residents. The DHP is used as a short term emergency measure to engage with residents to enable identification of what additional (financial and non-financial) support is needed to allow the resident to live more independently. It is fundamental that when a DHP is awarded a sustainable longer term solution is found. It is imperative that claimants engage with appropriate support, that financial advice can be provided and if necessary, affordable accommodation is sourced.
Last year CCBC made 284 awards with a total grant of just under £75k. This year to the end of August 820 awards have been made using half of the £292k allocated for this financial year. It is anticipated that there may well be an increase in the number of applications/awards during the remainder of the year, coupled with an increased pressure to permit an extension of current awards. This will be closely monitored over the next few months to establish what budget pressures this may create.
3.2.4 Other funding sources - Funding for other programmes which provide wider support to residents (eg Supporting People, Communities First) is also uncertain in the short/medium term.
3.3 Council Housing Tenancies
Caerphilly Council acknowledges the extensive studies and implications of direct payments planned with the introduction of Universal Credit and shares concerns that rent arrears will increase as a result of direct payments to tenants.
The direct payment of housing costs will present a new financial management challenge for many tenants especially those who do not currently have a bank account or who have additional support needs. As well as financial inclusion issues, the introduction of Universal Credit will also highlight digital exclusion issues for many households who do not have access to the internet, or who do not have the digital or literacy skills required to utilise an on-line system.
Despite the work being done by the TSO’s (see 2.1 above) an increase in rent arrears has been experienced due to the implementation of the social sector size criteria and it is anticipated this will increase further under Universal Credit.
3.4 Housing Allocations Policy
The introduction of the Social Sector Size Criteria, coupled with the introduction of Universal Credit, has forced changes to the allocation of council properties to those who are homeless or at risk of becoming homeless.
There is already an existing shortage of one and two bedroom properties within the authority and the forced push to downsize has resulted in less suitable emergency accommodation for vulnerable tenants. As a result, tenants are being placed in properties that they are under-occupying which exacerbates their existing problems. The lack of suitable accommodation and the additional fees in the private rented sector (months rent in advance, bonds and agency fees) has already resulted in an increase of placements in B&Bs.
The removal of payment direct to landlords under Universal Credit is likely to diminish the availability of properties in the private rented sector for residents who are claiming benefits. This in turn will increase the cost and subsequent pressure to the local authority.
26 September 2013
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