Decision Maker: Cabinet
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: Yes
To inform Cabinet of the implications of the
roll out of Universal Credit on residents, the council’s
benefit service and budget, and the HRA.
The Deputy Leader (Finance and Investment) introduced the report noting the national campaign to push back on the Government’s proposals, the significant detrimental effects expected on claimants, and that direct payments could further affect the Council’s budgets and ability to collect arrears. Residents deserved an efficient service, but Universal Credit (UC) would increase the processing time from 25 calendar days to 42 days, which would then be paid monthly in arrears. Overall, these changes represented a changing dynamic of the state-welfare relationship and would be devastating for many persons. Since February, single Jobseekers Allowance (JSA) claimants had to claim UC, which would also replace Income Support, Tax Credits, Employment Support Allowance (ESA), and Housing Benefit from February 2017. The Benefits service was paid in part by a grant from the Department for Work and Pensions (DWP) currently at £3.4m, which had been reduced every year for the past five years, irrespective of claimant rates. Moreover, given the Council currently spent £4.9m per annum on the service offset by the £3.4m grant, a projected £1m budget deficit was expected by 2019/20. Likewise, the Housing Revenue Account could see its rent arrears increase from £5.8m to £21.8m by 2020 and represented a serious risk. The Council would continue to use its remaining safety net to mitigate these impacts as far as possible, and was also lobbying Government for an improved system and for ring-fenced funding, whilst redoubling its debt collection efforts.
In response to questions from the Cabinet Member for Adult Social Care, officers responded:
· They were conscious of the risks to finances and residents, and would look to mitigate through the Financial Resilience Strategy and through further lobbying of the DWP, with any changes to strategies to be brought back before Cabinet.
· The DWP, through the Citizen’s Advice Bureau (CAB), would provide specific support for residents that needed help with personal budgeting and accessing digital services.
· There was no clear indication of who would hold the risk for the outstanding debt collection, and there were concerns over the potential for financial abuse since the service was fully digitised and paid to a single household member.
· The attendance allowance was not yet included in proposals as the Government was still considering this element.
· On complex cases, the DWP were already having difficulty processing couples and the special tenancy element was not included in the proposals as trials had experienced difficulties in processing these. However, single, simple claims were processed successfully, although housing benefit had proven difficult.
· On alternative payment arrangements, a number of Lambeth tenants fell into this category, generally around vulnerability, with it expected that tier 1 persons (most vulnerable) were likely to receive direct support, whilst tier 2 persons (lesser risk) may receive a housing benefit element. This split would be decided by Work Coaches through the DWP. The aim of the DWP was to move away from alternative payments to pay the claimants directly, so these currently comprised short-term plans.
1. To monitor the impact of the introduction of Universal Credit on Lambeth residents and on council budgets, paying regard to the risks outlined in Section 6 of the report.
2. To monitor the provision of personal budgeting and digital support to residents and identify the extent to which their needs are met. This is to be reviewed each quarter with DWP, with a view to increasing support if necessary.
3. To identify mechanisms to maintain a good Council Tax Support service and Housing Benefit service for remaining customers within the reduced benefit administration grant over the coming years. This is a vital service supporting vulnerable residents, and proposed changes will be reported back to Cabinet, with details of future structure, funding and performance targets.
4. To provide targeted support for those tenants at risk of falling into arrears, to help them manage their finances, and where appropriate increase their income through entry into and progression to better employment.
5. To revise recovery procedures as appropriate and develop ways of working in order to provide more intensive support for tenants in rent arrears.
6. To provide briefings for councillors on the details, potential impacts, and mitigations being taken by the Council.
7. To incorporate any further requirements for support to residents into future commissioning exercises under the Financial Resilience Strategy, and review budget implications as appropriate.
8. To recommend to Cabinet any revisions to the Financial Resilience Strategy and the Income and Debt Strategy, where changes to the administration of benefits and implications of the Government’s role in delivering Universal Credit require the Council to respond with a change in policy.
9. To continue making the case to Government to improve the process for introducing Universal Credit and associated welfare reform changes so that local authorities can:
a. Monitor the implementation and impact of these changes, especially with Universal Credit claimants at risk of falling into problematic debt as a result of monthly payments in arrears;
b. Recover Housing Benefit overpayment debt effectively and agree specific arrangements with DWP for tenants in Temporary Accommodation in particular;
c. Receive ring-fenced funding to continue providing vital emergency and crisis support through the local welfare safety net.
Publication date: 15/04/2016
Date of decision: 11/04/2016
Decided at meeting: 11/04/2016 - Cabinet
Effective from: 30/04/2016