Written evidence from the London Borough of Hackney (LCW0030)

 

Executive Summary

  1. Hackney is a densely populated inner London borough and is one of the capital's most vibrant cultural and creative places. It is a young borough home to people from many different backgrounds. It is also one of the most deprived boroughs in the country although no areas are particularly poor or wealthy.
  2. The Council recognises that localised welfare provision that uses local intelligence to direct help towards those most in need is an essential arm of the wider welfare support scheme. We also recognise that the key route out of poverty is employment and therefore any local welfare provision should also seek to assist households to improve their life chances. As part of this the Council is implementing a Financial Inclusion plan to help promote independence, and taking a preventative approach in for those most likely to experience hardship.
  3. However, the Council also believes that local welfare provision should only meet short term needs. The provision of medium/long term welfare support should remain the responsibility of government through a centrally administered social security scheme.
  4. The Council is extremely concerned with the withdrawal of central government funding for local welfare provision. The Council will be unable to make up the gap in funding and consequently parts of the “local welfare safety net” will be severely restricted if not curtailed completely.  The introduction of the 7-day wait for Universal Credit also represents a significant additional demand on safety net provision in future.
  5. The government has acknowledged that a local provision is key in ensuring that vulnerable households are able to access financial assistance in times of crisis, but this local provision needs to be adequately funded over time. Hackney Council calls on central Government to;
  1. Guarantee that additional funding for local welfare assistance will continue to be provided to local authorities over the period of the next spending review, to allow for a settled administrative process to be put in place,
  2. Reconsider the distribution formula for Discretionary Housing Payments to take account of the higher costs experienced by some local authorities in preventing homelessness, 
  3. Government should refrain from putting in place a rigid framework that inhibits the way local welfare funding is spent. Crisis situations can arise as a consequence of a number of unforeseen and unforeseeable circumstances, and local authorities require the flexibility to respond as necessary.


Introduction

  1. The London borough of Hackney is one of the most diverse communities in the UK, with a population in excess of 246,000, over half of whom are from BME communities speaking 118 community languages. It is also among the most deprived, with 19.3% of the population receiving key out of work benefits and with over 44,000 households receiving assistance with their housing costs. As the recent London Poverty Profile identified Hackney is “still frequently found at the wrong end of the rankings for indicators on benefit receipt and worklessness”. Hackney also has one of the highest levels of homelessness and currently has 2,200 household placed in temporary accommodation.

Background

  1. There has been an expanding role for local authorities over recent years in delivering welfare support to the local community, supplementing national welfare scheme provision. Following the demise of the Discretionary Social Fund, central government acknowledged the need for a local crisis support scheme to assist with a range of urgent financial needs not met by regular social security benefit or tax credit payments. In a similar vein, when expanding the role of Discretionary Housing Payments as a response to wider welfare reforms, the government has stressed the importance of local knowledge when deciding whether an award is appropriate.
  2. Hackney Council has reacted positively to this new burden by looking at the delivery of local welfare support in a holistic manner and that the welfare provision includes help to relieve the pressure on the household and/or to prevent a crisis reoccurring. At the same time the Council has implemented financial inclusion action plan and focused on the importance of prevention in relation to those most at risk of hardship or crisis.
  3. The Council has established a Discretionary Awards Team, sited within the Benefits and Housing Needs department, with responsibility for administering the Hackney Discretionary Crisis Support Scheme, the Discretionary Housing Payment fund and the Council Tax Reduction Discretionary Fund. The approach taken by the team is informed by the Council’s wider welfare reform action plan.

The Council’s delivery criteria

  1. The Hackney Discretionary Crisis Support scheme
  2. Following the ending of the Discretionary Social Fund, The Hackney Discretionary Crisis Support Scheme (HDCSS) was established in April 2013 to meet local crisis support needs. This scheme was set up as a partnership between the Council and the third sector. L groups, registered social landlords and specialised advice agencies act as the portal for the scheme and applications can only be made through these providers. Restricting access in this manner has three advantages:
  1. those who are unlikely to receive an award within the parameters of the scheme are redirected to other possible avenues of support;
  2. vulnerable households and those in crisis receive support with the application process, including help with obtaining and providing supporting evidence;
  3. These households also have access other appropriate assistance and longer term support to prevent a crisis reoccurring.
  1. Applications are then considered by the Discretionary Awards Team. This separation allows the third sector partners to retain their advocacy role.    
  2. The Hackney scheme itself is generally more accessible than most, in that it has no fixed residential requirement that prevents applications from newcomers to the borough. However, there are some restrictions: The scheme is not open to persons under 16. Also the scheme is not open to people who are subject to immigration control. These include asylum seekers, people who have been refused leave to remain in this country and those with no recourse to public funds. The scheme is also not open to those people who have their daily living needs provided for them, i.e. a person in hospital or a care home, a prisoner, or a member of a religious order, a person in relevant education , unless they are about to leave and return to the local community.
  3. Some applications will be prioritised within the assessment process, for example:

    Applications for households that include children under 5, disabled persons or persons over 70.

    Applicants who have lived the borough for at least 6 of the last 12 months (or 3 of the last five years)

    Those in low income employment in Hackney

    Applications that assist move into sustained employment

    Applications from households fleeing domestic violence

    Applications for people moving on from hospital back into Hackney.

  1. Applications are then considered assessed based on the urgency of need, the alternatives available (including alternate funding streams), the priority of the household and the state of the funding pot.
  2. If an award is agreed, the default option is to directly procure the items required and arrange for them to be delivered to the applicant and installed where appropriate. Alternatively, where direct procurement is not appropriate, the team provide store vouchers.
  3. Currently, applications are processed within 2 days for crisis applications (although the most urgent cases are turned around within 24 hours) and 7 days for resettlement cases. Requests for household items are passed to our suppliers and delivery is normally made within 2 to 3 days depending on the availability of the client.
  4. While there is no formal appeal process, applicants unhappy with the decision of the Council can ask the team to reconsider, at which stage the merits of the application will be considered by an officer not associated with the initial decision.
  5. The scheme is ever evolving and the design and administration has changed to meet the specific needs of the Borough; for example with one of the highest mental health issues in the country the scheme has adapted how it responds to applications from those with mental health issues in partnership with City and Hackney Mind.
  6. Since its inception, the HDCSS has made over 9,700 awards and paid out the cash equivalent in excess of £1.4m. As well as directly alleviating hardship, the scheme supports the Council in tackling it’s wider social objectives:
  1. The Discretionary Housing Payment Fund (DHP)
  2. Following the substantial increase in the Discretionary Housing Payment (DHP) pot to help assuage the impact of welfare reform on vulnerable households getting housing support, the Council published a comprehensive DHP policy setting out its objectives and priorities in deciding awards. These objectives are:

    to support those taking active steps to improve their situation,

    to support those least able to help themselves,

    to support applicants during temporary hardship,

    to encourage applicants into secure employment,

    to prevent homelessness,

    to keep families together.  

  1. Awards from the DHP fund are made under the following circumstances (where the funding permit);
  1. Allied to the assessment of potential DHP awards, the team also provide an active hand off to other support services as appropriate, including Ways into Work, our employment support programme, Moneysmart, a project which provides advice on financial management, employment and digital skills and the local Foodbank.
  2. For 2014-2015, the government allocated Hackney £2.11m in DHP funding and the Council actually ended up slightly exceeding this allocation in order to meet demand; over 2,000 DHP awards were made totally £2.12m.
  3. For 2015-2016, the government have allocated Hackney £1.507m, a cut of over 28%.  As of the end of September, the Council had made over 1,000 awards totalling in excess of £762k (just over 50% of budget).
  4. Council Tax Discretionary Fund
  5. The Council Tax Reduction Discretionary Fund is intended to be an emergency fund to support those having short-term difficulty in paying their Council Tax.  Any award made from it is a discretionary payment and not a benefit. The fund itself is cash limited and the monies within it are finite. Once the money in the pot has been spent, it will not be replenished. 
  6. The fund is there to provide assistance to former Council Tax Benefit recipients and those new applicants who would have been eligible for Council Tax Benefit had the scheme continued post 31st March 2013 (with the caveat that it will assist residents who will suffer demonstrable and genuine financial hardship as a result of the Council Tax Reduction Scheme). The Discretionary Awards Team view every case on its own merits – considering the income, expenditure and circumstances of the applicant and their household makeup.
  7. Hackney received 143 applications for the Council Tax Discretionary fund in 2014/15. Although the volume of applications is low, the discretionary fund provides important support for those who struggle to make even very small contributions towards their Council tax (15% - equating to £3.76 for a band D property).

Advertising and accessing the “Local Welfare Safety Net”  

  1. The principle means by which the Council publicises the available discretionary support is through the London Borough of Hackney Website. Additionally, the Council regularly promotes the schemes through the myriad number of local networks and partnerships with which the Council interacts.
  2. Applying for assistance is slightly different depending on the assistance being sought:
    1. DHP – The DHP guidance, application form plus information as to the additional factors taken into account can be directly downloaded from the website. The completed application form is then submitted to the Council and passed directly to the Discretionary Awards Team for consideration.
    2. HDCSS – as previously mentioned, the scheme is run with the assistance of third party organisations. There are currently 21 third party organisations that participate in the scheme and applicants have to make applications to the scheme through one of these organisations. By using this method the scheme benefits and utilises the knowledge of specialist organisations such as the East End Citizens Advice Bureau and City and Hackney Mind (MIND helps people take control of their mental health).
    3. Council Tax Discretionary Fund – An application can be made in writing to the Council Tax department who will refer the case details to the Discretionary Awards Team
  3. The Council also looks to promote the various schemes at events such as the Hackney ‘Give and take’ event that encourages claimants to exchange items they do not want for items they need. The scheme also plays a major role in referring claimants to the ‘Hackney Cook and eat’ kitchens which encourages claimants to learn healthy cooking skills.  The scheme also works very well with the Hackney Benefits Cap team which advises claimants of their options once they have been capped.

Homelessness Prevention

  1. Much of the work undertaken by the Discretionary Awards Team is in response to a threat of homelessness or to facilitate a move from temporary accommodation into settled housing. There is a constant dialogue between the Discretionary Awards Team and the Housing Needs Team through both formal and informal channels. The purpose of this dialogue is not only to discuss individual interventions but also to examine the strategic impact the discretionary schemes are having on homelessness.  

Case Studies

  1. The case studies below are intended to illustrate the interaction between homelessness, DHP, and crisis support, as well as the non-financial support required to support the successful operation of the schemes:
    1. Following a referral from our Housing Needs team and assistance through the DHP scheme, a couple with two young children were able remain in their home. The husband is working and his partner has cancer and is hospital in a critical condition due to both kidneys failing. They had accumulated rent arrears of around £3k as they struggled with the overwhelming circumstances. An award was made to help cover these arrears, and budgeting support was made available.
    2. A self-employed transgender claimant undergoing transition was subject to unwelcome intrusion from the landlord and neighbours that made claimant feel uncomfortable and unsafe in the house/immediate area. With the support of a LGBT Housing Organisation, the Council assisted to claimant by paying £378 deposit, £378 rent in advance and £60 removal costs; totalling £816 DHP so the claimant could move to another borough in a Housing Cooperative on a 12 month tenancy.
    3. This couple with a young family were granted leave to remain in July 2015 and were previously supported by NASS until August 2015.  The family had been placed in temporary accommodation in Haringey. Having applied for child benefit, Income Support and Child Tax Credit delays in the assessment left them with no money to eat or survive. The HDCSS scheme provided £150 supermarket vouchers for food.
    4. This applicant had been stuck in temporary accommodation for 10 years and has a number of medical issues. Finally suitable accommodation as made available but without the HDCSS scheme providing a microwave and basic kitchen items ( kettle, cutlery and kitchen utensils) he would not have been able to take on the tenancy.

Developing a broad framework

  1. Within Hackney, the various schemes already operate within what could be termed a broad framework; evidential requirements are broadly similar and intelligence is shared across the schemes.  
  2. Similarly, the effectiveness and adequacy of support are part of a much wider assessment and monitoring of the impact of welfare reform within the borough.
  3. Hackney like most authorities has its own characteristics and unique landscape. Any prescriptive set of rules will prevent the authority from focusing on the specific needs of Hackney residents, and from proactively responding to need as it presents in the borough. This also contradicts the current move towards localism and devolution
  4. Hackney already carries out extensive monitoring of its schemes, however additional requirements for extensive monitoring would be an additional burden and not be comparable between local authorities. In the case of HDCSS which can be costly to administer and subject to continued reductions in allocated funds, the burden of additional performance monitoring and returns or other administrative burdens could impact on the viability of the scheme.

 

 

The Local Welfare Safety Net going forward

  1. The Council is extremely concerned with the withdrawal of central government funding for local provision. As already highlighted, Discretionary Housing Payments funding in Hackney was cut by 28% for this financial year, and while the local government finance settlement did include an extra £74m for upper-tier authorities “to recognise that councils have asked for additional support, including to help them respond to local welfare needs and to improve social care provision”, no funding has been guaranteed beyond March 2016.
  2. This shortfall in funding support cannot be made up from local authority coffers.  Central government grant to the London borough for Hackney for the delivery of its core functions has already been cut by £60 million, with a further round of cuts being expected in the upcoming comprehensive spending review. Consequently, parts of the “local welfare safety net” will be almost certainly be severely restricted if not curtailed completely.
  3. This at a time when demand for local crisis support is sure to increase. Changes to Working Tax Credit outlined within the Welfare Reform and Work Bill are likely to reduce the resilience of low income households reducing their ability to cope with crisis or short term interruptions in income.
  4. Added to this is the impact of the rollout of Universal Credit and the impact of the 7 day waiting period during which a household is not entitled to benefit. This will increase demand for crisis support from households moving from self-employment, employment in temporary or agency work, or previously contracted on a zero hour’s contract and who do not have the financial flexibility to stretch what are often earnings well below the national average over an extended period. When wage inflation does not match the increase in the cost of living the ability to set aside income for “a rainy day” is even more impaired.

 

October 2015