Written evidence from Gingerbread (BNC0047)

About Gingerbread

1. Gingerbread is the leading charity working with single parent families. We campaign against poverty, disadvantage and stigma to promote fair and equal treatment and opportunity for single parents and their families.
2. Gingerbread hears directly from single parents about their experience of the benefit cap through our helpline and membership. This submission includes both the numerical impact of the benefit cap on single parents and examples of the experiences of single parents affected by the policy.

Summary

3. The benefit cap of £26,000 was introduced in 2012 and has had a disproportionate impact on single parents with young children who have found it difficult to move to cheaper housing or into employment. From November 2016 the benefit cap level was lowered to £23,000 in London and £20,000 outside London. It is having an impact on an even greater number of single parents and their young children across a wider geographical area. The government’s own figures show that the lowered benefit cap (including the existing households) will impact around 88,000 households across Britain in 2016/17[1]. The government estimates that 61% of households affected will be headed by a single parent (53,700 households)[2]. Over half (52%) of those impacted by the benefit cap are single parents households with a child aged between 0-4.
4. There are three key factors that make it harder for single parents to escape the benefit cap: the high cost of family housing particularly in the private rented sector, a lack of part-time jobs and a lack of suitable and affordable childcare. Without addressing these key barriers, the benefit cap threatens to push this vulnerable group into deeper poverty.
5. There should be a rethink of the exemptions of those impacted by the benefit cap that have the youngest children (particularly for those who have a baby or toddler) when the problems of juggling work and care and childcare costs are the most acute. There should also be a softening of the expectations on parents of pre-school aged children impacted by the benefit cap.  This could for instance include an exemption for parents who are working towards financial self reliance through undertaking a mini-job under 16 hours a week or undertaking recognised training or skills improvement to better their job prospects.  Overall there should be better protections built into the back to work expectations of parents impacted by the benefit cap to recognise their need to care as well as work.

The cap is intended to incentivise behavioural change amongst claimants and secure savings for the Exchequer. To what extent is it achieving that?

6. One of the aims of the lowered benefit cap is “to improve work incentives for those on benefits.” 66.5% of single parents are already in work[3], however, there are practical difficulties for single parents of younger children to move into and sustain work including the sole responsibility of taking and picking up their child from childcare and dealing with domestic emergencies on their own (such as when their child is ill). Single parents want to work but the cost of childcare is a significant barrier alongside the lack of flexible work. This is considered in more detail in our response to the next inquiry question.
7. Analysis of the previous benefit cap shows the benefit cap particularly impacts single parent households who have a young child. Based on figures under the previous benefit cap over half of those impacted will be single parent families with a child aged 0-4. It will also have a significant impact on single parent households with very young children a total of 31,700 households with a child that is aged 0-2 (so a baby of toddler) are expected to be affected by the new cap. The government’s own figures show that single parents with children aged 0-4 are 16 percentage points less likely to move off the benefit cap that coupled parents with children of the same age[4].
8. Whether the benefit cap incentivises behavioural change or not will in part rely on the consistency with broader welfare changes.  Although parents of three and four year olds will be expected to become job seekers (which starts to be rolled out from 2017 but will not be fully implemented until 2021) this policy also recognises that this group of parents should also have the chance to improve their skills rather than ‘work first’. This is because the DWP acknowledges that this group of parents are more likely to be less skilled and further from the job market than parents of older children. This opportunity to improve their skills is viewed as a way of improving their work prospects and securing longer term sustainable employment. The ‘work first’ approach under the benefit cap signals a confused approach as to what behavioural change the government wants to see, and how it will achieve its broader welfare reform aim for claimants to progress in work and off benefits. So the behavioural change of moving into work as quickly as possible under the benefit cap goes against the broader ethos of welfare rules and expectations. For many single parents affected by the benefit cap they will not be able to move into cheaper accommodation and will struggle to move into or sustain work and will just become poorer. This will add costs to the Exchequer both in short term support, through Discretionary Housing Payments and through parents in crisis with an inability to pay their rent and become homeless.
9. For example a single parent from outside London[5] contacted Gingerbread very worried about the impact of the benefit cap on her family. She has three children, including a two year old. She is set to lose £126 a week from the benefit cap. She is keen to move into work and is already training to be a childminder. Under wider welfare rules she would be allowed to complete this training which finishes in four months. The benefit cap is putting pressure on her to move into any work as quickly as possible and not complete her training.

To what extent has claimant behaviour responded to the cap, through moving into work, moving house etc? What effect does the cap have on incentives, what are the barriers to the behavioural change and how can they be overcome?

10. A government evaluation has shown that few households have been able to move into cheaper accommodation as a result of the previous benefit cap level “the benefit cap has not led to significant increases in the proportion of capped households moving[6]. As the Institute for Fiscal Studies points out, the data also showed only a modest number of people moving into work as a result of the benefit cap[7]. The DWP’s analysis also showed that people’s capacity to move into work was also more difficult where they had young children “single parents who had found work were more likely than the still capped group to have children aged four or over at school or nursery.”[8]
11. There are three main barriers that make it difficult for single parents with young children to escape the benefit cap; a lack of cheaper accommodation, a lack of suitable jobs and an insufficiency of childcare to match the work requirements.

High cost of housing

12. The high cost of housing has been a barrier to households affected by the benefit cap from moving into cheaper accommodation. This is more acute with the lowered benefit cap level. Shelter’s analysis[9] predicts that because of the high cost of housing single parent families with one child will be hit by the lowered benefit cap across London and not just in the traditionally more expensive boroughs so for instance they will be impacted by the benefit cap with just one child if they lived in Tottenham or Poplar. Single parents will also be affected by the lower benefit cap in smaller towns and cities across Britain.  For instance where a single parent has two children and needs different bedrooms they will be impacted by the benefit cap in over a third of areas (39%) in Britain in areas not considered particularly expensive such as Portsmouth, Southend and Luton[10].
13. Single parents have told us about the impact of the benefit cap and the high cost of housing even where they are living in crowded conditions:
14. A single parent in London who has two children aged 3 and 5. She is already working part-time is finding it hard to work more due to the ages of her children. As she works under 16 hours she does not earn enough to claim working tax credit to escape the benefit cap. She lives in private rented accommodation. Since November she has lost £25 a week under the benefit cap. She can no longer afford to heat her home as a result of the cap.
15. A single parent who lives outside London and has three children under two (including twins). She is in temporary housing living in a single room with her three children and has a loss of housing benefit of nearly £60 a week under the benefit cap. Despite her circumstances she does not pass the financial assessment to move into a one bedroom flat in her area. She does not know how she would be able to find and sustain work due to the age of her children.
16. A single parent who has one child aged four and lives in London. She has experienced domestic violence and lived in a hostel for two years. In the autumn her council found her a flat in the private rented sector. However, under the lowered benefit cap she has a shortfall of rent of nearly £13 a week.
17. A single parent who has two children, the youngest is three years old. She lives in emergency accommodation outside London. She has been in her accommodation for two years and has a housing benefit loss of £64 a week under the benefit cap.

18.  Lack of suitable part-time jobs

19. For most single parents impacted by the benefit cap the main route to escaping it will be to move into work of at least 16 hours a week. However, there are significant shortages in the availability of part-time vacancies.
20. Research has found that only 8.7 per cent of jobs advertised are ‘quality’ jobs (that pay at least £20,000 FTE) with flexible working options.[11] The proportion of flexible jobs remains low across the UK in comparison to the very high demand. The research also found a strong link between low pay and part-time jobs.
21. Jobseekers are encouraged to register on the government job brokering website, Universal Jobmatch and the site is a significant source of job vacancies. Use of the site can be seen as evidence from jobcentre work coaches of claimants actively seeking work. Analysis of vacancies advertised in 8 cities on Universal Jobmatch, illustrated in the chart below, found that just 8 per cent of jobs in these areas were being advertised part-time.[12] Furthermore this small pool of part-time vacancies may also not be suitable for parents with young children as these can include evening and overnight working and some jobs which do not provide sufficient hours for someone to start a Working Tax Credit claim.    
22. Single parents have told us about the lack of suitable part-time vacancies, the difficulties of finding work to escape the benefit cap or maintaining a flexible job:
23. For instance a single parent who lives outside London and has four children, the youngest is aged three. She is losing £300 a month under the benefit cap. “I would love to go out and work but in the small town where I live there is currently no jobs available that are not demanding you to be ‘flexible’ that is on call at any time. I’ve have had to make the choice some weeks of buying enough food to see us through or making sure there is money on the gas and electric meters.”
24. A single parent who has two children and lives outside London. She has always worked but in September 2016 she had to give up her job as she found it impossible to juggle her work with the care of her children. She found that her manager was not sympathetic. She has not been able to find another job. From June if she has not been able to find work she will be affected by the benefit cap.
25. A single parent who lives outside London who has three children, the youngest is two years old. Under the lowering of the benefit cap she loses £50 a week. She is worried that she will lose her family home. She has been trying to find a job but it has been hard to find work that also fits with her caring responsibilities.
26. A single parent who lives outside London and has three children and the youngest has just turned four. She works 90 minutes commute away. Her parents have been dropping and picking up her son from nursery but due to a change to their circumstances they are unable to carry on with this support. The single parent has a new manager who will not let her leave early from work and so she is worried she will need to leave her job. She lives in a private rented three bedroom property and if she were to lose her job would face a shortfall of £70 a week under the benefit cap.

27.  Insufficiency of suitable childcare

28. The Government has introduced this policy with no consideration of the wider support needed to make it work, for instance it has no assessment of the availability or cost of childcare for single parents affected by the lowering of the benefit cap[13] nor how the policy would match with their ‘free childcare’ offer. As already stated the benefit cap has a disproportionate impact on parents with very young children where there is less childcare support and availability. There is no free childcare entitlement for children under two years of age. The provision of childcare for disadvantaged two year olds is for 15 hours in term time and would not therefore match the requirements of a year round 16 hours per week job which required a commute. The majority of local authorities in England report that there is not enough care available in their area for two year olds entitled to free childcare[14]. The average price of 25 hours of childcare for a child under two is £116 and there are significant regional variations with London and the South East being the most expensive (where the benefit cap has a particular impact)[15]. The extended entitlement for three and four year olds (for an extra 15 hours) are dependent on a parent already being in work and not seeking work (and will not rolled out until September 2017) and so it is unclear how parents impacted by the benefit cap could access the extra provision in order to work sufficient hours to escape the benefit cap. Without sufficient affordable and appropriate childcare it will be very difficult for single parents of young children to move into work and sustain employment.
29. Single parents tell us the difficulty of balancing work and childcare:
30. A single parent who was working has to give up work because of a lack of childcare for her two year old son. She is recently separated from her partner and is living with grandparents as a temporary measure. She lives in London and wants to move into her own accommodation. The Local Housing Allowance in her borough for a 2 bedroom property would see a shortfall of nearly £20 a week under the benefit cap.

Are their unintended consequences (either positive or negative) of the cap?

Lack of protection for well-being of children

31. There are established legal protections and guidance for work coaches that mean that the work search for single parents can be different from other job seekers including for instance their journey times to work and when they are expected to work – such as not being expected to work overnight or into the evenings when they have a child under 13. There are no such protections under the benefit cap with just a blanket rule of securing a job with a specified minimum number of hours. The protections exist to recognise the needs of children but also to make it more likely that parents will move into work that they can sustain whilst bringing up younger children. Without similar protections under the benefit cap parents are less likely to sustain a job and this also threatens the well-being of their young children (52% of the affected households are single parents with a child aged between 0-4).

More generous working hours rules for couple families to escape the benefit cap under Universal Credit

32. Under the current welfare rules there are differential hour’s requirements for coupled and single parent households to escape the benefit cap. So currently a couple would be required to work a combined amount of 24 hours. Single parents are required to work 16 hours. Under Universal Credit rules the couple’s exemption has been lowered. So now both single parents and coupled parents are required to work the equivalent of 16 hours a week at the National Living Wage. This therefore makes it easier for coupled parents to escape the benefit cap through more limited hours of work[16]. There have been no concessions built in for single parents who have found it far harder to escape the benefit cap than coupled parents.

33.  Recommendations

34. Single parents with a child aged 0-2 should be exempt from the benefit cap. At the very least single parents with a child aged 0-1 should be exempt. If parents with babies and toddler are not exempt then at least the conditions expected of this group should be modified. For instance parents in this group should be encouraged and supported to improve their skills and job prospects or to move into mini jobs (of less than 16 hours).
35. Single parents with a child aged 3-4 should be exempt from the benefit cap where they are job seeking or improving their skills in order to secure better paid more secure work in the future. There should be reconsideration of the hours rule for parents who are doing some work but do not satisfy the current or revised Universal Credit requirements.
36. Single parents who want to move into work but there is insufficient childcare for them to do so should be exempt from the benefit cap. Single parents with a child aged 3-4 should have access to the extended 15 hour offer where they are seeking work.
37. The benefit cap levels should take better account of the private rent levels in an area including reflecting the high costs of temporary accommodation.
38. The DWP should collect more nuanced information about the impact of the benefit cap on those moving off the cap. This is to reflect the differing impact of the benefit cap on different households including the lower rate of moving off the cap by age of youngest child. They should also record households who moved on and off the cap to see the effectiveness of the policy in people sustaining work.
39. The DWP should urgently review the Universal Jobmatch website to increase the number of part-time jobs and consider incentives to employers to double the number of part-time vacancies including through the establishment of a job share register.

April 2017