London Councils' Welfare Reform Impact Assessment presentation

Deven Ghelani
Policy in Practice
WELFARE REFORM IMPACT
ASSESSMENT
LONDON BENEFIT MANAGERS
BRIEFING
21 JANUARY 2016

www.policyinpractice.co.uk
Agenda
1. Introduction
2. The challenge facing local authorities
3. Our approach: Local data + our software
4. Preliminary findings for Hounslow
5. Recommendations
6. Outcomes for residents
7. Next Steps

We make the welfare system
simple to understand, so that
people can make the decisions
that are right for them
Policy in Practice

POLICY
National impact
CONSULTANC
Local impact
SOFTWARE
Individual impact

“I can’t see whether the people being clobbered
by reductions in council tax support, or under-
occupation are the same people that have been
clobbered by other reforms.”
Steve Carey, Leeds City Council
Challenge: Leeds City Council

The combined impact on
households is typically complex,
confusing
and changing

The Challenge Facing Hounslow
• Universal Credit live since April 2015
• New tranche of reforms coming in April 2016
The challenge applies to all London Councils.

Do you know the impact that
welfare reform is having on each
of your residents?

“We wanted to ensure a proactive approach to this next
round of welfare reforms. This meant having a strong
analysis of the impact and scale of impact of these reforms
on our residents, in order to target activity effectively. The
Policy in Practice analysis has provided us with this and given
us a strong basis on which to plan our partnership and Council
activity.”
Ian Duke, LB Hounslow
Challenge: Hounslow

Our approach

A person centred
Welfare Reform Impact
Assessment
data + software =
actionable insights

analysis of the impact and scale of impact of these
reforms on our residents, in order to target activity
effectively. The Policy in Practice analysis has provided
us with this and given us a strong basis on which to plan
our partnership and Council activity.”
Policy in Practice’s approach
Your Housing Benefit
data
Our Universal Benefit
Calculator
A detailed impact
assessment - who is
impacted and how?
1. Use local data and
insights to inform better
decision making
2. See the impact of specific
and cumulative reforms at an
aggregate and household
level
3. Inform targeted and
tailored local welfare support

Rich data for each household
Household details Under-Occupation Local Housing
Allowance
Council Tax Support
• Reference number
• Household Type
• Tenure
• Economic status
• Earnings
• Savings
• Under occupied (y/n)
• Under occupied (£)
• LHA cap (y/n)
• LHA cap (amount £)
• Not protected (y/n)
• Not protected (amount £)
Benefit Cap at £26k Benefit Cap at £23k Pay to Stay
LHA cap on RSLs
Income
• Could get WTC (y/n)
• Receiving DLA (y/n)
• Benefit cap 26k (y/n)
• Amount (£)
• Could get WTC (y/n)
• Receiving DLA (y/n)
• Benefit cap 20k (y/n)
• Amount (£)
• Reduced (y/n)
• Reduced amount (£)
• Earnings below NMW(y/n)
• Better off in work (£)
• Free school meal eligibility
Universal Credit Support Cumulative Impact Barriers to work
• Needs protection (y/n)
• Needs protection (£)
• In work conditionality (y/n)
• Min income floor (y/n)
• DHP (£/no)
• CTRS (£/no)
• Income Reduction 2015 (£)
• Impact 2015 (no/l/m/h)
• Income Reduction 2016 (£)
• Impact 2016 (no/l/m/h)
• Disability (0/1/2)
• Caring responsibilities (0/2)
• Parenting
responsibilities(0/1/2)
• Barriers to work
(low/medium/high)

Rich data for each household

The impact of the benefit cap

The Benefit Cap at £26,000:
UK, nationwide level
Number of households affected nationwide:
< 1,000
1,000 - 3,000
3,000 - 6,000
6,000-12,000
> 12,000
Wales, East, E Mids, Yorkshire
SW, W Mids, NE, Scotland
SE, NW
none
London

Number of households affected nationwide:
none
none
Wales
SW, E Mids, NE, Scotland
London, SE, East, W Mids, NW, Yorkshire
< 1,000
1,000 - 3,000
3,000 - 6,000
6,000-12,000
> 12,000
The Benefit Cap at £20,000 UK,
£23,000 London

Hounslow, borough level
Number of households affected within
the borough:
One ward
Two wards
Four wards
Seven wards
Four wards
0 - 15
16 - 35
36 - 45
46 - 55
56+

Hounslow, local authority level
Number of households affected within each
neighbourhood (LSOA) within a ward:
One LSOA
One LSOA
Three LSOA
Two LSOA
0
1 - 5
6 - 9
9 - 12

Hounslow, street level
Individual households can be identified
within a ward, at street level

Preliminary findings paint a stark
picture

34% of low income working age
households in Hounslow are in work
34%
3%30%
8%
25%
In work
Not in work, carer
Not in work,
disabled
Not in work, lone
parent
Not in work, other

£13.27
£17.05
At £26,000 At £23,000
The Summer Budget will increase the impact
of welfare reform on residents
A lower benefit cap will see a
greater reduction in
household income

Specific reforms have different impacts

Housing reforms in Hounslow
1. Pay to Stay: 12 households in the social rented sector earn more than
£40,000 pa. From 2017 they must pay rent at market rates. (NB, SHBE
unlikely to show households on higher incomes)
2. Removal of Housing Benefit for those 18-21 not in work under UC: 223
households at risk of losing housing support
3. LHA cap for social tenants: 586 in social rented sector paying rent above
LHA, average shortfall of £192 p/mth. Most are under 35 and “under-
occupying”
4. 1% cut in social rents
= Risk of higher rent arrears, and revenue streams for Housing Associations
and Council HRA’s under pressure

Universal Credit
23%
30%
47%
UC entitlment is
higher
No change in
entitlment

Universal Credit reforms in Hounslow
1. Reduced work allowance: 80% of households in Hounslow that will
be entitled to Universal Credit will face a lower work allowance
2. Conditionality: 5,582 households are in work and will be subject to
conditionality because their earnings are below the required
threshold
3. The minimum income floor affects most self-employed people
• 79% of self-employed households report earnings below the
Minimum Income Floor in Hounslow
4. Transitional protection: in 2016 8,554 households in Hounslow in
need of TP, for a total of £30.1 million

UC in 2020 in Hounslow:
National Living Wage and Tax Allowance
• Higher living wage ( £9 p/h) and higher personal tax allowance only partially mitigate the
impact of the transition to Universal Credit
• Transitional protection ensures people are not worse off at the point of transition, but
changes in relationship status or large changes in earnings may mean this is lost

Recommendations
1. Identify exemptions
2. Target support
3. Co-ordinate with partners
4. Identify cashable sSavings

231
1,161
At £26,000 At £23,000
Identify Exemptions
A lower Benefit Cap will affect 5x as many households
Check exemptions on specific
households, eg:
• Households in receipt of
ESA may be in the support
group
• Children in receipt of DLA
• Households in receipt of
carers allowance
• They or their partner may
be in work, and eligible for
tax credits
Help them to avoid the cap
before it hits.

Target support: Barrier to work
Target employment support
based on distance from the
labour market
Target intensive outreach
support to those households
most heavily impacted
In order to make best use of
support resources, and ensure
financial support is available
to the most vulnerable

Target Support: Benefit Cap
51 51
34 35
16
28
13
3
326
166 168
98 98
177
76
52
£0-20 £21-40 £41-60 £61-80 £81-100 £101-150 £151-200 £201 +
£26,000 (current) £23,000 (from April 2016)
Take proactive steps
Support those most severely
impacted by a lower benefit cap with
focused intensive outreach

Co-ordinate with partners:
Better off / Worse off and economic status
0
1,000
2,000
3,000
4,000
5,000
6,000
In work Not in work,
carer
Not in work,
disabled
Not in work, lone
parent
Not in work,
other
Numberofhouseholds
UC higher No change TP needed
Loss of tax
credits
Lower severe disability premium
Some people are
better off

Cashable savings:
£1.1m in additional income for schools in Hounslow
Pupil Premium and Universal Free School Meals in Hounslow
• 3,400 households have children eligible for free school meals.
• 1,623 households have children of the ages of 5 - 7, who would qualify for
Universal Infant Free School Meals.
• 850 of these households have an older sibling, and are therefore likely to
be claiming for means-tested free school meals.
• This leaves 770 households that could be targeted to increase take-up.
£1.1m was estimated to be lost to schools in the borough through the Pupil
Premium, as a result of fewer families applying for means tested FSM due to
the Universal Entitlement offer.
Recommendation:
Hounslow can use this analysis to investigate and increase the FSM take-up
rates of these households

How are others using this
information?

• they’re making better strategic and
operational decisions
• they’re getting the right support,
to the right people, at the right
time
• policyinpractice.co.uk/london

Proactive steps now can mitigate
the impact of reforms

Engage
people and
change
behaviour

Questions?

3 Core Deliverables
1. Household level data set with flags of each welfare
reform, and the amount impacted
2. Core report assessing the impact of current and
future welfare reforms in your council
3. Presentation of findings in person to your council

Next steps
Visit www.policyinpractice.co.uk/london to:
1. Download this slide deck
2. Request a sample impact assessment report for our Welfare
Reform Impact Analysis
3. Find out more about our software engine
Join our next webinar:
Universal Credit and the Impact on Work Incentives
Thursday 28 January at 10:30am
Register at www.policyinpractice.co.uk

Thank you
Deven Ghelani
deven@policyinpractice.co.uk
07863 560677
@deven_ghelani
Janet Harkin
janet@policyinpractice.co.uk
0203 239 5579
@jharkin

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