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Agenda Item No 8

 

The Vale of Glamorgan Council

 

Scrutiny Committee (Corporate Resources): 20th January 2015

 

Report of the Managing Director

 

Welfare Reform - Progress Report

 

Purpose of the Report

1.         To update Members on the work undertaken by the Council in implementation of the UK Government’s Welfare Reform agenda.

Recommendation

1.         That the report is noted and that a further update report is produced in six months.

Reason for the Recommendation

1.         To ensure that Members are kept updated.

Background

2.         The final report of the Scrutiny Task and Finish Group was presented to Committee on 23rd April 2013. The report was referred to Cabinet and the report and recommendations were endorsed by Cabinet on 8th May 2013.

3.         The recommendations of the Task and Finish Group included that the Scrutiny Committee (Corporate Resources) receives a report on the impact of Welfare Reform within the Vale of Glamorgan initially on a six monthly basis.

4.         The Task and Finish report reflected the position at the cut-off date of 31st March 2013. Since that time subsequent reports have been presented to Members in November 2013 and June 2014.  This report provides an update on the position as at December 2014.

Relevant Issues and Options

5.         The Officer Working Group last met in May 2014 to review work associated with Welfare Reform across the Council. There have not been any significant new welfare reform changes since that report. The Welfare Reform External Stakeholder Group continues to meet bi-monthly where local organisations can meet Council Officers to discuss the implications of Welfare Reform and to consider opportunities for joint working. There have been 5 meetings in, January 2014; March 2014; June 2014; September 2014 and November 2014 the minutes of which are reported on the Council’s website.

6.         In December 2014 the Local Service Board agreed that the group would change to become the Financial Inclusion Group and its Terms of Reference are currently being formed in light of the wider issues discussed by the Group. It was agreed that as the Group’s role has broadened since the initial welfare reforms there should be a wider focus on financial inclusion. The Council’s external website continues to be updated with the latest Welfare Reforms. The Council Tax and Benefits specific web pages have also been updated to reflect the latest information available on the individual services.

7.         At present, however, there are no new Welfare Reform changes taking place and neither has there been any publicised for the near future so an update of the ongoing impact of the previous changes is as follows:

Council Tax Reduction Scheme (CTRS)

8.         The Welsh Government introduced a Council Tax Reduction Scheme (CTRS) in Wales for 2013/14 which was replicated for 2014/15 and subsequent years based on the 2013/14 regulations. A Cabinet Report was presented on the 28th November 2014 which recommended to Council the re-adoption of the Council Tax Reduction National Scheme for 2015/2016 based on the prescribed regulations and reconfirmation of the Council’s discretions.

9.         Cabinet recommended that the Council confirm each year its adoption of the scheme and discretions, in accordance with the regulations governing the scheme before the 31st January.  Council’s decision was to resolve on the 17th December 2014 that the Council Tax Reduction Schemes and Prescribed Requirements (Wales) Regulations SI 2013/3029 (the Prescribed Requirements Regulations) and the Council Tax Reduction Schemes (Prescribed Requirements and Default Scheme) (Wales) (Amendment) Regulations 2014 SI 2014/66 be adopted.

10.      It was further resolved that any amendments to Regulations made by the Welsh Government should be reflected in the Scheme. The resolution reconfirmed that the national scheme be adopted with the following discretions –

  • That the Council should continue to allow Extended Payments up to a maximum of 4 weeks.
  • That the Council should continue to disregard War Widow and War Disablement pensions in assessing income for Council Tax Reduction.
  • That the Council should continue to allow Backdated Reductions for a period up to 26 weeks.

The reason for the decision was to enable the CTRS to be approved by Council by 31st January 2015 and be in place for implementation from 1st April 2015.

 

11.      Funding from Welsh Government (WG) has been allocated to contribute towards the 10% shortfall in Council Tax Reduction for 2014/15. Also Welsh Government has announced that this support will continue for 2015/16. The full amount allocated to the Council by WG for 2014/15 is £8.722m with any shortfall in terms of actual spending being made up by the Council. £8.957m has been allocated by WG for 2015/16.

12.      CTRS expenditure and budget are as follows:

  • 2013/14 CTRS Budget £9,437,000 Expenditure £9,117,454
  • 2014/15 CTRS Budget £9,742,000 Expenditure £9,042,142

13.      Subsequently the Welsh Government has laid further regulations - The Council Tax Reduction Schemes (Prescribed Requirements and Default Scheme) (Wales) (Amendment) Regulations 2015 which is subject to approval by the Assembly and will come into force on the 21st January 2015 which give the figures used to calculate applicants’ entitlement to Council Tax reduction uprated in line with Housing Benefit. These Regulations also incorporate additional amendments to reflect consequential changes related to social security benefits or other minor technical changes including:

  • Removing the requirement for Local Authorities to publish a draft scheme and consult interested persons where a Billing Authority revises a scheme in consequence of amendments made to the Prescribed Requirement Regulations. The effect of this amendment is to remove the requirement for Local Authorities to consult in relation to changes made by Welsh Ministers (as opposed to the discretionary areas of the scheme), which the Council has no discretion over.
  • Minor amendments to reflect the introduction of Shared Parental Leave and statutory shared parental pay which replaces additional paternity leave and additional statutory paternity pay from 5th April 2015. Transitional provisions are also provided for those in receipt of paternity pay on 1st April 2015.
  • An amendment is included which mirrors changes made to Housing Benefit Regulations to remove automatic entitlement to a Council Tax Reduction for European Economic Area (EEA) jobseekers, who are currently eligible by virtue of being in receipt of income based Jobseeker’s Allowance (JSA (IB)). Amendments in the Uprating Regulations remove access to CTRS for EEA jobseekers, however this only applies to those who make a new application for CTRS on or after 1st April 2015 or who cease to be entitled to income based JSA for a period after this date, for example if they enter into temporary employment.
  • Minor consequential amendments are also made in relation to definitions around Employment and Support Allowance and references to Universal Credit. Income related Employment and Support Allowance no longer consists of separate contributory and income related allowances, but only of a contributory allowance known as the 'employment and support allowance’.  Amendments are also made to insert references to Universal Credit into the 2013 Regulations where there are already references to other income-related benefits.

14.      Council Tax collection in-year has been maintained

  • 2011/12            97.3%
  • 2012/13            97.6%
  • 2013/14            97.5%

Social Size Criteria (Bedroom Tax)

15.      The social size criteria affects working age claimants where they are under-occupying their home and only affects Housing Association and Council tenants.  There will be a reduction in Housing Benefit of 14% for under-occupation of one spare bedroom and 25% for under-occupation of two or more spare bedrooms.

Number of people who have had Housing Benefit reduced:

April 2013

June 2014

December 2014

1102

944

907

 

Since its introduction in April 2013 there has been a reduction of 195 in the number of people affected.

 

Housing Benefit Reduction

 

 

June 2014

December 2014

14% reduction

795

770

25% reduction

149

137

Total affected

944

907

 

Bedroom Tax broken down into landlord types

 

LANDLORD

14%

25%

TOTAL

Council

425

98

523

Newydd

206

21

227

Hafod

65

10

75

United Welsh

31

6

37

Wales & West

32

2

34

Cando

8

0

8

Gwalia

3

0

3

TOTAL

770

137

907

 

Benefit Cap

16.      If a household’s benefit entitlement is larger than the Benefit Cap the level of Housing Benefit payments will be reduced by the amount that is larger than the capped level. This will only affect working age claimants where the amount of benefit will be capped at £500 per week for a couple or lone parent with children.

Since July 2013 (the introduction of the benefit cap), 54 people were initially affected by the cap. In June 2014 the number of cases affected reduced to 41; however this has now increased to 44 in December 2014. The size of a claimant’s household will affect the number claims subject to the cap.

 

July 2013

June 2014

December 2014

54

41

44

 

Discretionary Housing Payment (DHP)

17.      The DHP allocation from the Department for Work and Pensions (DWP) for 2014/15 is £244,982 and the Authority itself has allocated a further £219,000.

As at December 2014 a total of £164,208 in DHPs have been awarded with a further £52,660 committed leaving £28,024 to be allocated.

  

DHP applications for 2014/15 as at December 2014

 

Received

Granted

Refused

Waiting Further Information

Waiting To Be Processed

720

479

224

7

10

 

DHP Allocation

Paid

Committed

Remaining

£244,892

£164,208

£52,660

£28,024

 

The 479 successful DHP awards were granted for the following reasons

 

Reason

Number of awards

Amount Paid

Social Size Criteria (Bedroom Tax)

256

£78,153

Local Housing Allowance restriction

91

£39,046

Combination of reforms

1

£390

Other

131

£46,619

TOTAL

479

£164,208

 

These have been broken down into the reasons why payments have been made:

 

Purpose of DHP

Number of awards

 

December 2014

To help secure and move to alternative accommodation i.e. rent deposit

79

To help with short-term rent costs to secure moves

59

To help with short-term rent costs while the claimants seeks employment

53

To help with on-going rental costs for disabled people

31

To help with on-going rent costs

257

Total

479

 

Universal Credit

18.      DWP had previously stated that Universal Credit would be fully rolled out by the end of 2017 for working age customers.  However the position on this has recently changed by Central Government who have stated that most benefit claimants will have transferred onto the government's Universal Credit scheme by the end of 2018.

19.      The latest announced Government position is that Universal Credit will be rolled out throughout the country for those claimants as listed below:

  • From February 2015 to spring 2016 all new claims for Universal Credit will be taken from single, JSA claimants over 18 in a simple household without any children.  Also there must not be any other benefit entitlements so; they cannot be a home owner; cannot already be in receipt of HB; but can have housing costs although only rent.  They must already have a national insurance number, a bank account, but cannot have capital over £6,000.

It has been announced that there will be 73 Local Authorities who will roll out Universal Credit in the first tranche. The roll out will be done on a phased approach and Local Authorities will be notified in advance where they are within that timetable. To date the Vale of Glamorgan has not been notified of a go live date and the DWP will not commit to announcing the further tranches until the first tranche has been completed.

The Welsh Authorities included in the first Tranche are:

Flintshire live from April 2014

Neath and Port Talbot

Torfaen

Wrexham.

  • Spring 2016 to the end of 2017 – this is being referred to as the 'transition period' by the end of which all new claims will be made to Universal Credit, including couples and families, again this will be done via a phased approach yet to be determined. During this period 'natural migration' will also take place where anyone reporting a change of circumstances under one of the existing benefits will be moved onto Universal Credit.
  • End of 2017 onwards – The Universal Credit caseload will continue to build naturally, and DWP will also support, where needed, the managed migration of those claimants who have not already.

20.      Local Authorities will still need to continue to make provision for payment of housing costs into 2017 and supported accommodation cases will remain until at least 2018. Also payment of housing costs for pension age claimants will remain with the Local Authority for the foreseeable future.

Council Housing

21.      As at the 18th December 2014 there were 523 Council tenants affected by the extra bedroom subsidy compared to 588 in June 2014, the time of the last report. The reduction is attributed to tenants downsizing, change of circumstances, tenants vacating properties and the impact of the changes to the Council’s allocation policy.

22.      The Council’s dedicated Money Advisors continue to ensure information is provided to all tenants and as a result of the Authority’s Prevention First approach, rent arrears for this group are well controlled and managed. The Money Advisors not only assist in direct issues relating to payment of rent but have been able to maximise tenant income through a range of measures which include charitable donations, food bank vouchers and Dwr Cymru Water assist scheme to name a few.

23.      Arrears of rent have decreased to £33,551 as of the 15th December 2014 compared to the last report in June 2014 when the figure was £40,753 and from £43,487 (pre introduction of the bedroom subsidy).  Of the 523 affected, 55% continue to have clear rent accounts, 14% of cases arrears are reducing with 31% under intensive management where arrears are still unstable and in some cases worsening.

24.      The Department has not evicted any tenant where arrears are attributable to the Housing Benefit changes.  Future mitigation measures include an increase in the supply of smaller units of accommodation with 20 one and two bedroom units on the site of the former Marine Hotel on Barry Island which is on track to hand over for nominations in January 2015.  The site of the former Barry Magistrates court will provide an additional 46,  1 and 2 bedroom units and properties have started to be handed over on a phased basis using the Homes4U allocation scheme.  The development, in partnership with Newydd Housing Association, has been funded following a successful Council bid to the Welsh Government.

Social Services

25.      Personal Independence Payments (PIPs) have been implemented for new cases of Disability Living Allowance or where a review is requested by clients in the working age group.  Staff have received the appropriate training on the new arrangements. The impact of this in terms of outcomes for the clients is being measured.

26.      Applications for support are being made through the Discretionary Assistance Fund. No problems in accessing this funding have been reported

27.      The Council also continues to monitor any increase in debt outstanding as people have less to money to pay their bills but with no noticeable change as yet.

Resource Implications (Financial and Employment)

28.      The anticipated financial implications of Welfare Reforms were reflected in the 2014/15 budgets.

29.      Staff have been kept informed via team briefings, but as the transfer to Universal Credit has slowed, there have not been any significant implications as a result.

Sustainability and Climate Change Implications

30.      There are no direct climate change implications, however, the Council need to ensure that measures put in place to support welfare reform are financially sustainable.

Legal Implications (to Include Human Rights Implications)

31.      The Council is required to administer Council Tax, Council Tax Reduction and Housing Benefit in line with Government regulations.

Crime and Disorder Implications

32.       Future changes to Benefits may have implications for crime and disorder.

Equal Opportunities Implications (to include Welsh Language issues)

33.      Central Government and the Welsh Government have assessed the equality implications of the welfare reforms and the Council Tax support scheme. The Council has assessed the implications of the discretions applied to the Council Tax Reduction Scheme in line with the regulations.

Corporate/Service Objectives

34.      The service objective is to administer and pay Housing Benefits and Council Tax Reduction to eligible claimants.

Policy Framework and Budget

35.      The responsibility for decisions relating to discretions in respect of the Council Tax support is set out within the regulations and requires approval by Council.

Consultation (including Ward Member Consultation)

36.      Ward members have not been consulted as the issue affects all areas of the Council.

Background Papers

None

 

Contact Officer

Alan Jenkins - Head of Finance

 

Officers Consulted

Officer Working Group

 

Responsible Officer:

Sian Davies – Managing Director