Agenda Item No

The Vale of Glamorgan Council


Scrutiny Committee (Corporate Resources) 8th December 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 the implementation of the UK Government's Welfare Reform agenda.


  1. That the report is noted and that a further update report be produced in June 2016.

Reason for the Recommendation

  1. To ensure that Members are kept updated.


  1. The final report of the Scrutiny Task and Finish Group concerning Welfare Reform was presented to Committee on 23rd April 2013. The report was endorsed by Cabinet on 8th May 2013 and subsequent reports have been presented in November 2013, June 2014 and January 2015 to update this Committee on the progress being made.
  2. Since the January 2015 report there have been two significant Welfare Reform changes together with local issues to inform this. The report has two parts: Chancellor's July Budget; Local Issues and the implementation of Universal Credit.

Relevant Issues and Options

  1. The impact of the Welfare Reform changes are continuing to be monitored and the service data previously supplied has been updated at Appendix A for information.
  2. In December 2014 the Local Service Board agreed that the "Welfare Reform External Stakeholder Group" would change to become the "Financial Inclusion Group" and its Terms of Reference reformed in light of the wider issues to be discussed by that group with a focus on financial inclusion. The Council's external website continues to be updated with the latest Welfare Reforms together with the Council Tax and Benefits specific Web pages to reflect the latest information available for residents.

Chancellor's Budget - Welfare Reform - July 2015

  1. The Chancellor has continued the Government's Welfare Reform with the introduction of the Welfare Reform and Work Bill. The effects of this Bill on Vale of Glamorgan residents are as follows:

Main changes affecting Benefits

  1. There were a number of measures in the Budget affecting overall benefits rules as well as the rules applying to specific benefits:
  • The annual uprating of working-age benefits will be frozen for 4 years, which includes: Jobseeker's Allowance (JSA); Income Support; Child Benefit; Employment and Support Allowance (ESA), and Applicable amounts together with the local housing allowance (LHA) with minor exceptions;
  • The exclusions to this include: Maternity Allowance; Statutory Sick / Maternity / Paternity / Adoption Pay; Carers and Disability Benefits. These benefits along with Pensioner Benefits will continue to be uprated in relation to prices or earnings; and
  • Those in receipt of the work-related activity group (WRAG) of ESA will have their entitlement reduced to the same level as those in receipt of JSA. This will only apply to new ESA claims received after April 2016.

Changes Affecting Housing Benefit, Tax Credits and Universal Credit

  1. The key changes here are :
  • From April 2016, backdating of Housing Benefit claims will be limited to a maximum of four weeks;
  • From April 2017, 18-21 year olds will not be entitled to claim Housing Benefit or the Housing Element of Universal Credit automatically. Instead there will be a new "youth obligation" to "earn to learn". This youth obligation will require young people to participate in an intensive regime of support from day one of their benefit claim, and after six months they will be expected to apply for an apprenticeship or traineeship, gain work‑based skills, or go on a mandatory work placement;
  • The overall household benefit cap applying to Tax Credits, Universal Credit and Housing Benefit will be reduced from £26,000 to £20,000 in Wales;
  • The main changes affect Child Tax Credit, but these also impact on Universal Credit and Housing Benefit calculation rules;
  • From April 2016, the earnings disregard amount will be reduced significantly for both Tax Credits (£6,420 per year to £3,850 per year) and Universal Credit (£192 per month for those with housing costs and £397 per month for those without housing costs);
  • The taper at which Tax Credits are reduced as earnings rise will also be increased from 41% to 48%.
  • The Disregard for Changes in Circumstances before in-year increases in earnings are taken into account in Tax Credit calculations will be reduced from £5,000 to £2,500 per year.
  • Child allowances will no longer be applied for the third and subsequent children born after 6 April 2017 in claims for Child Tax Credit, Housing Benefit and Universal Credit, although there will be provision for "exceptional circumstances", such as multiple births. This will also apply to families claiming Universal Credit for the first time after April 2017.
  • Children with disabilities will continue to receive the Disabled Child Element or Severely Disabled Child Element in Tax Credits, Universal Credit and Housing Benefit.
  • The family element will be removed from Housing Benefit for children born or claims made after April 2016. From April 2017, this will also apply to the equivalent family element in Tax Credits and the Universal Credit higher amount for a first child.
  1. To help mitigate the impact of these changes, the government will provide funding to Local Authorities for Discretionary Housing Payments (DHPs) over the next five years.

Impact on local Council Tax Reduction (CTR) scheme

  1. Whenever there are changes made to the welfare schemes generally and Housing Benefit specifically, Local Authorities need to consider the impact of those changes on their own local CTR scheme discretions. The changes announced in the Budget will therefore need to be considered in terms of what allied changes Authorities may need to make to their CTR Scheme and what the potential additional costs of those schemes may be as a result.

Implementation of Universal Credit (UC)

  1. The DWP have announced that the Vale of Glamorgan Council will be included in the 4th Tranche of Councils to implement Universal Credit from February 2016 and anticipate that UC claims will be administered by the local Job Centre Plus from that date. They have indicated that the initial claims will be from new single claimants who would otherwise be eligible for Jobseekers Allowance (JSA) including those with existing Housing Benefit and Tax Credit claims.
  2. Representatives from the DWP have engaged with officers of the Council on the implementation and liaison for delivery of UC in the Vale based on a proven track record of close liaison for the benefit of the local community. The DWP roll-out of UC is to be supplemented by the locally delivered "Universal Support" to provide advice and support to UC claimants.
  3. For national expansion in 2015/16, the DWP is putting in place funded arrangements between Jobcentre Plus and Local Authorities to make available support for those needing extra help. The slow pace of Universal Credit has meant that the Council needs to support those on Jobseekers Allowance (JSA) until they are eventually transferred to UC. After that time the Council will still be responsible for Housing Benefits administration for those persons who are clients of the Pension Service and customers in supported accommodation who are presently outside the scope of Universal Credit.
  4. The DWP anticipate that vulnerable and complex customers will require Universal Support - "Delivered Locally Framework" (USDL) to assist them, which will be a partnership approach between the Council and the Job Centre Plus.
  5. The USDL Framework is being developed to deliver support services related to universal credit. The development of the framework and particularly the management of funding locally along with that share of the service delivery likely to be delivered by Councils require a statement of principles. These principles will prove helpful in creating a local relationship which is of the benefit to the residents of the Vale.

Personal Budgeting Support (UC)

  1. The DWP has given an overview of how support will operate for Universal Credit. On the provision of personal budgeting support, the DWP identifies two main elements to such support :
  • money advice to help claimants cope with managing their money on a monthly basis and paying their bills on time; and
  • alternative payment arrangements (APA) for some claimants who genuinely cannot manage the standard monthly payment and where there is a risk of financial harm to the claimant or their family. This might include rent paid directly to the landlord, a more frequent than monthly payment or a split payment between partners.
  1. The DWP has set out detailed guidance for decision makers on how to assess a need for money advice and / or alternative payment methods, including the 'Tier One factors' leading to a 'highly likely / probable need for alternative payment arrangements' -
  • drug / alcohol and / or other addiction problems e.g. gambling;
  • learning difficulties including problems with literacy and / or numeracy;
  • severe / multiple debt problems;
  • in temporary and / or supported accommodation;
  • homeless;
  • domestic violence / abuse;
  • mental health condition;
  • currently in rent arrears / threat of eviction / repossession;
  • claimant is young either a 16/17 year old and / or a care leaver; and
  • families with multiple and complex needs.

Universal Credit Digital Service (UC)

  1. DWP confirmed in October 2015 that the role out of the digital application system for Universal Credit will begin in May 2016, however as a Welsh version is required this will mean that the Digital system role out will be delayed until the Welsh version is completed. This is anticipated to be the end of 2016 at the earliest, but more likely early 2017. Until the digital system is ready it will mean that a further roll-out of cases across Wales will be limited to the claims from single persons only.

Local Authority Staffing Preparations (UC)

  1. As the implementation of Universal Credit approaches, the engagement of staff will become vital in maintaining a viable service. During this period the Council is committed to :
  • Preparing staff, systems and claimants;
  • Identifying vulnerable claimants;
  • Working in partnership;
  • Successes and challenges in preparation for UC;
  • Training courses aimed at improving general awareness; and
  • Specific training in implementing UC.

Data sharing with the DWP

  1. The DWP have introduced regulations to allow sharing of UC data with Local Authorities and other local providers for the purposes of the new 'Universal Support' service. The regulations came into force on 13 February 2015 and have been implemented from March. The DWP has also provided an update on its plans to move to an automated process for the sharing of data on universal credit claimants with Local Authorities for Council Tax Reduction purposes.

Alternative Payment Arrangements (UC)

  1. Alternative payment arrangements (APAs) have been introduced by the DWP to allow the housing costs element to be paid directly to the landlord where tenants claiming universal credit (UC) are unable to manage their finances.

HB overpayments

  1. The DWP has published a 'good practice guide' on recovering Housing Benefit Overpayments effectively. The new guide advises that:
  • Debt recovery should at all times be proportionate and always take account of the debtors' personal circumstances.
  • LAs should always treat each case individually and ensure they adhere to related council policies, e.g. anti-poverty strategies, supporting vulnerable customers, expected behaviours of 3rd party debt collection agents etc.
  • LAs should always consider any informal reasonable offer for repayment before taking any formal action.

Changes Resulting from the Comprehensive Spending Review

  1. On the 25th November 2015 the Chancellor of the Exchequer made his Spending Review and Autumn Statement. In the statement he reiterated his intention to achieve £12b savings in the Welfare Budget over the course of this Parliament. The Chancellor accepts that the overall Welfare Cap will be exceeded in 2016 - 2019, but will be brought back into line by 2019/20.
  1. The main headlines within the Statement as far as they affect welfare are that:
  • Tax Credit changes announced in the Summer Budget will not now go ahead as far as they affect the taper and the thresholds
  • Housing Benefit for Social Rented Sector tenants will be subject to the same local housing allowance rates as currently apply to housing benefit claims in the private rented sector. Although this may not be an immediate major concern in most authorities, as average social sector rents are currently below LHA rates which are based on private sector rents, it may become an issue in future years as social sector rents increase in comparison with the LHA rates, which will be frozen for the next four years. The measure will only apply to housing benefit claims from April 2018 for new tenancies signed after 1 April 2016.
  • Significant changes to housing benefit eligibility for the homeless and overall homeless funding, with the replacement of the weekly management allowance in housing benefit (£60 outside London) with an annual direct grant of £10m. This proposal involves, from 2017/18, removing the temporary accommodation management fee paid in the current housing benefit subsidy arrangements to local authorities with a new annual grant paid directly to local authorities. Local authority homeless budgets could therefore be impacted by this change as the current arrangements are closely linked to the number of actual homeless persons placed in temporary accommodation whereas the new direct grant arrangements will not be so closely linked.
  • From April 2016, Housing Benefit and Pension Credit eligibility will be removed for those claimants leaving the UK for longer than one month or who are outside the UK will be limited to four weeks, reduced from the current 13 weeks limit.
  • Jobcentre Plus offices will be co-located in Local Authority buildings alongside local authority customer services where possible, rather than in all cases.
  • DWP will see a reduction in its day-to-day budget, including administration and IT costs by an overall 14%
  • Additional stamp duty for buy-to-let and second home purchasers
  • Universal Credit roll out is not now scheduled to be complete until 2021.

Council Housing

  1. The Housing Service has continued to monitor income levels and to support individuals who may be experiencing difficulties in paying their rent. The data below highlights the statistics relating to recover action for the period March 2014 to March 2015

Affected by under-Occupation charge

Not Affected by Under-Occupation charge

Introductory Tenancies - Notices of Possession Proceedings Served



Secure tenancies - Notices of Seeking Possession Served



Rent Possession Proceedings




3 (Arrears accrued were not solely as a result of U/O charge


  1. The annual arrear figure in relation to all stock as at 30th March 2015 was £149,349.00 which had decreased from the previous year which was £152,386.00.
  2. The Money Advice Team was established in June 2013 to assist with the Welfare Reform changes and now included 3 full time staff. The remit of the team has now been expanded to include helping all our tenants across the Vale of Glamorgan with money advice.
  • Maximising the income of our clients
  • Providing budgeting advice
  • Warm Home Discount Scheme applications
  • Supporting people referrals
  • Providing debt advice
  • Applications to Utility Trusts and Vicars Relief Fun
  • Discretionary Assistance Fund applications
  • Assist with Homes4U applications
  • PIP & DLA applications
  • Young Carers referrals
  • ESA applications
  • Attending Tribunals with the customers.
  1. A number of training sessions have been attended by all the Money Advisors and Housing Income Officers to ensure that knowledge is kept up to date. A positive working relationship has been developed with other agencies and Housing Associations to help share good working practises.
  2. The Aberaeron Hub will offer to customers a Money Advice service where any resident can drop into get advice and support. In addition the service will operate at the Civic Centre or at the person's home if needed.

Social Services

  1. 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.
  2. Applications for support are being made through the Discretionary Assistance Fund. No problems in accessing this funding have been reported.
  3. 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)

  1. The anticipated financial implications of Welfare Reforms were originally reflected in the 2015/16 budgets. However due to the Chancellor's Welfare Reform changes outlined in July 2015 there is a need to consider if the allocation to the DHP budget requires an increase if the new backdate rule of 4 weeks is implemented.
  2. Staff have been kept informed via team briefings, however as the transfer to Universal Credit has slowed, there have not been any significant implications. This will become an issue in March 2016 onwards with the implementation of Universal Credit.

Sustainability and Climate Change Implications

  1. 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)

  1. The Council is required to administer Council Tax, the Council Tax Reduction Scheme and Housing Benefit in line with government regulations.

Crime and Disorder Implications

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

Equal Opportunities Implications (to include Welsh Language issues)

  1. 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

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

Policy Framework and Budget

  1. The matter is for Executive Decision by Cabinet. The responsibility for decisions relating to discretions in respect of the Council Tax support is set out within the regulations.

Consultation (including Ward Member Consultation)

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

Background Papers


Contact Officer

Nigel Smith, Operational Manger Exchequer

Officers Consulted

Head of Finance

Exchequer Manager

Senior benefits Officer

OM Public Housing Services

HOS Business Management and Innovation Social Services

Responsible Officer:

Rob Thomas, Managing Director