Chartered Institute of Housing. Response to the Department for Work and Pensions consultation on 21 st Century Welfare.

Transcription

1 Chartered Institute of Housing Response to the Department for Work and Pensions consultation on 21 st Century Welfare. September 2010

2 Introduction CIH welcomes the Department for Work and Pensions consultation on 21 st Century Welfare. CIH is the professional body for people working in housing. We are a charitable membership organisation with extensive reach across all parts of the UK, covering rural and urban communities, and every local authority area. We have a membership base of 23,000 individuals and every year we provide professional training and services to more than 30,000 housing sector professionals. We are unique in housing in that we have a domain approach to our work reaching out not just to a particular sector, but to everyone who works in or is involved with housing, communities and regeneration. This includes housing associations, local authorities, ALMOs, private sector landlords, umbrella organisations, tenants organisations, academics, funders, developers and members of the wider third sector (for example refugee community organisations, housing advice centres, credit unions, BME community organisations etc). Our view s on the 21 st Century Welfare proposals are informed by the views of our members about the impact on their businesses and the people they work with and for. Our response in based on a body of research and work that CIH has had underway for some time. Indeed, we have long called for a closer examination of the way that housing support is provided across tenures, including reforms of housing benefit. We are therefore encouraged that the government has undertaken work to look at benefit reform, including the role, cost and operation of benefits to support individuals and families with housing. We are however disappointed that some of the fundamental welfare reforms proposed in this important work have been pre-empted, and arguably undermined, by the announcements made in the June emergency budget. The measures announced in June will have a considerable and detrimental impact on tenants and providers, yet the full implications appear to have been poorly assessed before the decision to reduce funding was announced. The motive appears to be reducing expenditure with little co-ordination or regard for the purpose of the benefit itself. In our response we are clear that government must ensure it takes the necessary steps to examine the important inter-relationships between housing benefit, rents and new housing supply. Housing providers and the lending community are both clear that changes to housing benefit, in particular in the social sector, will have important effects on business plans and the ability to service existing debt as well as new borrowing. The off-balance sheet borrowing undertaken by housing associations is of particular importance, given its pivotal role in providing for the building of new affordable housing. Changes to housing benefit will have ramifications across other areas of 2

3 public expenditure (for example the impact and effectiveness of capital investment in new homes) that need to be fully understood and quantified. CIH is clear in recognising the over-riding imperative and importance of cutting the deficit and controlling public expenditure. This is a key consideration across all areas of government programmes and it is right that housing finance, in its entirety, should also come under scrutiny. With over 80% of public money spent on housing going through housing benefit it is particularly appropriate that this area is closely examined. Moreover, significant concerns have existed for some time around a housing benefit bill that has continued to rise in recent years. Yet we must also acknowledge and consider why this has been the case. This should be a starting point in looking at changes around housing benefit, not an after-thought. Housing costs for all households, whether renting or owning, have increased as we have failed to supply enough housing to meet the changing needs of our population and economy. In this sense, the housing benefit bill, as well as other economic and social costs, is a price that we are paying for a wider inability to address provision of sufficient housing across markets. We must also acknowledge that housing benefit has a distinct role in the welfare pantheon, in that it is necessary to help people afford to live in an appropriate home, something that isn t an optional extra. Indeed, given that housing benefit s purpose is to support people with their housing costs, CIH questions the shift towards making elements of housing benefit conditional, for example around behaviour in seeking work. This is out of keeping with other measures proposed in this consultation. Question 1: What steps should the Government consider to reduce the cost of the welfare system and reduce welfare dependency and poverty? CIH agrees that the most effective way of reducing the cost of welfare is to reduce the number of people out of work and receiving benefits. In our sector, this view is supported by the data on the growth in housing benefit expenditure. This shows that 70% of the growth in recent years is attributable to growth in the out of work caseload. However, we are concerned that measures which erode the real or relative value of out of work benefits will be counter-productive in supporting people in to employment. Out of work benefit levels are already relatively low especially when compared with other European states that have insurance based systems in which benefit rates are based on previous earnings. As out of work benefits in the UK are income related they are already based on low basic levels of income. Since the commitment to eradicate child poverty was introduced, basic benefit levels have risen to more reasonable standards for families with children. 3

4 However, they remain low for single people and childless couples, particularly where the customer is aged under 25. Over the past thirty years successive governments have adopted a strategy of reducing out of work income replacement rates, introducing work conditionality and putting in place benefit sanctions for non-compliance. We have now reached a point where work conditionality sanctions are unlikely to produce significant returns. Indeed there is a danger that they may prove to be counter-productive. Despite best endeavours, we also need to recognise that it is unlikely that we will be able to design administrative rules that can fully take into account the efforts that a customer is taking to find work. Approximations look set to provide the main route forwards (e.g. time on benefit). There are unfortunately weaknesses in using approximations and proxy rules. They can be indiscriminate and risk catching those who are making genuine efforts to start back into work. For example, those who have been out of work for long time and live in an area of high unemployment but who are now working with an intermediary (such as a social landlord) on a programme to improve their job prospects. We believe an alternative strategy is required that adheres to the principle that work pays. CIH is therefore encouraged that this consultation has started to address the issue of work incentives. We are clear that in order to produce the best outcomes work incentives should however be viewed as just one element in a comprehensive strategy to support individuals. They must go hand in hand with steps to create genuine employment opportunities through high quality employment services. We were therefore disappointed that spending on employment programmes such as the Future Jobs Fund has been either cut back or discontinued. We would note that the coalition government is approaching this review with some important building blocks already in place. The previous administration had started to put in place some elements of a comprehensive strategy and we hope that the Government will build on these initiatives where they are in keeping with their plans. For example, we support the approach to work conditionality and employment services as set out in Gregg Report (i.e. conditionality and support should be proportional to the distance from the labour rather than type of benefit received). We would note that this consultation is much stronger on improving work incentives through structural reforms to in-work benefits and improvements in administration. We particularly welcome the proposal to combine in-work benefits so they operate on a unified system of taper and disregards. CIH was one of the first organisations to advocate a unified taper 1 as the most effective means by 1 Wilcox, S (1998) Unfinished Business: Housing costs and the reform of welfare benefits, CIH/CML/JRF/LGA/NHF, Coventry. 4

5 which tackle the deepest part of the poverty trap (i.e. where the overall marginal withdrawal rates are highest). Although this is the correct approach, we would note that top withdrawal rates in a reformed system are still likely to be in somewhat in excess of 70%. For many customers tackling administrative failure is at least as important in improving work incentives. Question 2: Which aspects of the current benefits and tax credits system in particular lead to the widely held view that work does not pay for benefit recipients? There are several aspects of the current system that created the widely held view that work does not pay. The most important of these could be considered to be: high taper and concurrent and overlapping withdrawals arising from entitlement to multiple in work benefits (as well as inconsistent systems in the way in which multiple benefits are assessed) loss of fringe benefits when taking up low paid work (for example, free school meals, free prescriptions, access to Social Fund grants and interest free loans) long-term erosion in the role and relative importance of social insurance in the overall structure of welfare provision (an over emphasis on meanstesting) low earnings disregards combined with a failure to ensure that their relative value is maintained through index linking high non-dependent deduction rates in benefits that provide help with housing costs (support for mortgage interest, housing benefit and council tax benefit) a poor understanding of the complex range of in work benefits and consequently low take-up rates amongst working households over-sensitivity to small changes in circumstance especially when combined with retrospective adjustment and administrative delays administrative failure around moves in and out of work and the failure of the system to provide a stable and predictable platform during the transition from worklessness into work High tapers and overall combined marginal withdrawal rate We support the view in the consultation paper that the very high rates of withdrawal (80%+) arise from overlapping tapers. It is also accurate that adjusting the taper rate for the final withdrawal (housing benefit and council tax benefit) will have very little effect on the overall marginal rate, unless these were drastic reductions that would appear to be ruled out on cost grounds. Some room for improvement is evident in tackling the inconsistent way in which income is assessed for different in work benefits. Tax credits are assessed on gross historic incomes whereas housing benefit and council tax benefit are assessed on net current incomes. This inconsistency can cause 5

6 difficulties for customers. It is confusing and obscures reasons for reassessment. A change in earnings may affect housing benefit and council tax benefit immediately but may be delayed for up to a year for tax credits. Further overpayments of tax credits are recovered by reducing ongoing payments, however these in-turn increase the housing benefit assessment. This makes planning a budget a key issue for those on low and modest incomes very difficult. CIH is therefore very supportive of the proposal for a single assessment of income and single withdrawal taper. We also support the proposal for the income assessment to be based on current net income. This will be much more transparent for customers. Loss of fringe benefits The value of fringe benefits (both real and perceived) can be a big disincentive for people taking up work. This applies in particular where their actual value is significant compared with the very low earnings disregards. Importantly, the value of these benefits can vary considerably depending on the customer. For example, the value of free prescriptions may be a big consideration for disabled customers, whereas large families may see free school meals as particularly important. Long term erosion of social insurance Social insurance provides a strong link between work and benefits. If basic insurance benefits are relatively generous they can also provide an incentive to save (including private insurance provision) and promote independence. However, the real value of insurance benefits has been eroded over the past 30 years and the incentive to save has been lost. For those on low to modest incomes the cost of basic payment protection insurance is prohibitively expensive especially when they are in insecure employment. Significantly, basic insurance benefits do not include any help with housing costs. This is an important factor in the general perception that you are better off not working. CIH therefore supports a mixed welfare model whereby help with housing costs is not simply confined to means testing. We support models such as the Sustainable Home Ownership Partnership (SHOP) approach developed by the Joseph Rowntree Foundation. Low earnings disregards The basic earnings disregards in housing benefit and council tax benefit are low and their real value has been eroded over time by the failure to index link. We would welcome any proposal to provide a significant uplift in their value. This would provide a key route by which an incentive gap can be created between being in and out of work. 6

7 However, we would note any uplift would need to be maintained and this would require their value to be index linked. Improvements in the marginal withdrawal rate also have the effect of reducing the value of the disregard to a claimant in work. We would support a two tier or graded system of disregards that encourage customers to move from part-time to full time work. The current structure of disregards tends to support part-time work and provides only a relatively small incentive to move into full time work. We would therefore support measures to widen the differential. Another anomaly is that there is no incentive to move part time to full time work for claimants aged under 25: this ought to be addressed. High non-dependant charges High rate non-dependant charges can also act as a disincentive to work, especially for young people. The charges can also act as an unintended incentive for new household formation which in times of economic downturn may increase the benefits bill. CIH was particularly disappointed that these aspects were not acknowledged in the 2010 Budget reforms. We would support a restructuring of non-dependant charges to encourage the move from part-time to full-time work. The current structure of charges is problematic. Charges are based on gross income for anyone who works at least 16 hours per week, but if the non-dependant works less than 16 hours including if they are out of work - the lowest rate charge applies. This creates a clear incentive to work part time but a big disincentive to work full time and increase earnings. Non dependant charges should be based on net income and earnings disregards should apply. Low take up of in work benefits Many customers are unaware that they are entitled to help through housing benefit and council tax benefit whilst they are in work. This is reflected in the low take up rate. Take up of in work housing benefit is only around 40-50%. The complex range of benefits currently available is likely to be a factor. We therefore believe that the proposal to create a single working age benefit should help. However, it will not eradicate this problem completely. Whilst housing costs remain an independent element in the calculation (and we would want this to remain so) take up will still be an issue. At the heart of many issues around take-up is access to, and use of, good quality advice. This applies both when the customer is making their initial claim and when they have a change of circumstances. The costs of providing good quality advice need to be factored into any assumptions made about administrative savings. 7

8 Administrative failures - moving in and out of work and over sensitivity to small changes in income The importance of consistent, high quality administration is a key aspect of any welfare reform and should not be under-estimated. It is particularly important because of the limits around what can be achieved by changes to the taper and disregards. For low income households stability and certainty can be as important as the overall level of income. One potential weakness of the proposed single working age benefit is that it will naturally change as income rises and falls. This could be a real problem for people who do not receive a regular salary and for those whose earnings are dependent on measures such as bonuses and commission. It is also a problem for those who receive occasional and irregular over-time - this isn t addressed by the disregards. The current system of administration means that there will always be a time lag between a change in earnings and a new assessment. Often this means that the customer can be left with an overpayment debt which disrupts their budget. This can exacerbate personal financial difficulties. For example, if the gain in income was temporary (e.g. irregular overtime) then by the time the new assessment comes through the customers earnings will have reduced and they can be left with debt that is difficult to service. Real-time assessment would help to address this problem. However, it will take time and effort to demonstrate that there is real value in taking on overtime. Regardless of whether real time assessment is introduced there is still a strong case for fixed period awards. These provide the stability and certainty that low income workers need to budget with confidence. They also provide a strong message that work pays. Changes in assessment when the customer moves in and out of work are also an issue. In many instances it is the transition into work that is the cause of customer anxiety. Important improvements have been made in administration over the past decade but even the promptest assessment will still cause a disruption. In housing this problem is compounded by the differential treatment that inwork customers receive from providers in terms of treatment of debts. Those who are out of work (but in arrears) tend to be pursued (if at all) for nominal amounts (often deducted direct from benefits) and this often compares unfavourably with those who are in work. Research by Business in the Community has shown that transition into work is itself a problem. Their research showed that customers tend to give perceived losses greater weighting than any perceived gains. We are therefore disappointed that the consultation makes no mention of Transition into Work Payments (extended benefit run ons) as part of the package of incentives to help customers back into work. 8

9 While the intention might be to ensure that customers are better off in work, some customers are likely to opt for stability for a guaranteed period rather than a higher income if that would mean they would have to juggle their budgets. Question 3: To what extent is the complexity of the system deterring some people from moving into work? Generally there is considerable confusion amongst customers as to how the different in-work benefits and tax credits interact. Many fail to take up the benefits they are entitled to. There may be many reasons for this. Some may simply believe that they are not entitled to support if they are in work, others may feel they are not eligible if they receive one of the other benefits. Others may simply choose not to claim because of the potential disruption caused if their income changes this may or may not be related to administrative failure in the past. The move to a single working age benefit could help significantly here. However, not all of these problems will necessarily be addressed by a single benefit. If the benefit has a number of components (eg. basic living expenses, work expenses and housing costs) then it is likely that whether the customer receives the correct entitlement will depend on whether any change of circumstances is correctly identified and whether there are time limit rules for notifying changes. For example, a customer may not realise that they are entitled to help with their housing costs if they move home for work because their previous rent was low and their new income is higher than previously. Question 4: To what extent is structural reform needed to deliver customer service improvements, drive down administration costs and cut the levels of error, overpayments and fraud? It is difficult to comment fully on this question without further details of the structural changes that are envisaged. We generally agree that there are structural changes that could deliver service improvements and drive down administration cost. It should be recognised that the relationship between administrative structures and service delivery is complex. Simplifying the structure of benefits may make it easier for customers to identify and understand what they are entitled to and it may also provide an opportunity for duplication and unnecessary administration to be removed. But there are a number of reasons why this does not necessarily mean that customers will receive a better service. 9

10 First, although the structure of benefits will be simplified by creating a single working age benefit, it is highly likely that the single benefit itself will need to be complex. This could cause administrative problems (unless the Government is prepared to abolish, for example, some of the administrative interventions and rules around, for example, conditionality). Second, rather ironically, the current complex structure of benefits can be helpful by allowing for specialisation. It could be argued that this provides some efficiencies by allowing benefits to be delivered speedily and with reduced risk of fraud and error. Third, removing whole tiers of administration could make some services less responsive and more remote from the customer. A complex benefit with many constituent components risks delays because the final decision on the award will be dictated by the slowest part of the process. Duplication of functions, whilst obviously inefficient does at least allow for parallel processing so that the component where there is the most spare capacity can at least be delivered on time. Specialisation of function also means that mistakes are less likely to be made, and where they are, that they are spotted at an early stage. While housing benefit is only one component of the proposed reforms, we would emphasise its importance. CIH would find it difficult to support reforms if the housing costs element was insufficiently sensitive to actual local housing costs. This is a complex area that needs careful consideration. Any proposal for the social rented sector would face real difficulties at least until such time rent restructuring was complete (with all households therefore being charged the target rent). Until that point is reached it remains possible for households in smaller properties to be charged a higher rent than a household in a larger property. We are also very concerned about the pace of changes that may arise as a result of this consultation. Overly hasty organisational changes especially where they are accompanied by staff shortages - could impact on administrative effectiveness. Whilst we commend some of the visionary thinking in the consultation we believe that in the end the stability and long term future of the new system will depend as much on effectively managing transition as there being a clear and coherent objective. Despite these concerns we agree that there are some areas where there is unnecessary duplication that benefits neither consumers nor administrators. The most obvious of these is that the current system involves multiple assessments of income. 10

11 More confusingly for the customer because of differences in the method of assessment each agency involved may arrive at different but a nevertheless correct result. There is no reason why this particular function could not be carried out by a single agency. Indeed a large part of the housing benefits system already operates on this basis through passport benefits and non-passport pension credit cases. It should not be difficult to extend this to the remainder of the caseload. Question 5: Has the Government identified the right set of principles to use to guide reform? 21 st Century Welfare - Principles for reform The Government propose to use a set of principles to guide reform. They could be to: ensure that people can see that the clear rewards from taking all types of work outweigh the risks; further incentivise and encourage households and families to move into work and to increase the amount of work they do, by improving the rewards from work at low earnings, and helping them keep more of their earnings as they work harder; increase fairness between different groups of benefit recipients and between recipients and the taxpayer; continue to support those most in need and reduce the numbers of workless households and children in poverty and ensure that interactions with other systems of support for basic needs are considered; promote responsibility and positive behaviour, doing more to reward saving, strengthening the family and, in tandem with improving incentives, reinforcing conditionality; automate processes and maximise self service, to reduce the scope for fraud, error and overpayments. This could include a responsive and immediate service that saves the taxpayer significant amounts of money and ensures compliance costs for employers, at worst, no worse than under the current system; and ensure that the benefits and Tax Credits system is affordable in the short and longer term. We agree that the Government should develop a set of principles to guide reform. This will help ensure that the long-term strategic direction is maintained. We largely agree with the principles proposed. The Government should also set out which of these are priorities so that where there is a potential conflict a clear direction can still be deduced. We would add a further principle: ensure that the transition between the old and new system is properly managed in way that causes the least disruption to consumers. 11

12 We also believe that the final principle should be broadened to ensure that the new system is economically and politically stable. A stable system is important both for individuals but also for organisations who serve beneficiaries. In the affordable housing sector many tenants are in receipt of housing benefit. It is a key source of support to help millions of families with their rent costs. As such it plays an important role in social housing finance both in terms of managing existing homes, and helping to support new supply. Affordable housing providers work to 30 year business plans, can be complex business using complex treasury management tools. Certainty and clarity around a key source of revenue funding is therefore critical. Having to second guess major reforms makes boards and officers tasks all the more difficult. It may also result in the less efficient use of assets as organisations build precautions in to their plans. Whilst we accept the need to manage long-term growth in expenditure we would dispute the conclusion that expenditure is out of control. Although expenditure has risen in real terms over the period the rate of real terms increase has been less than the growth in GDP and even this fails to take account of the relative position in the economic cycle. The real terms growth in housing benefit expenditure can be also accounted for by the recent growth in unemployment and changes in the structure of the housing market. Question 6: Would an approach along the lines of the models set out in chapter 3 improve work incentives and hence help the Government to reduce costs and tackle welfare dependency and poverty? Which elements would be most successful? What other approaches should the Government consider? The UK benefit system is heavily dependent on means-testing. This can cause some of the problems identified (such as high marginal withdrawal rates and administrative complexity). However, we recognise that extending non-means tested entitlement is viewed as problematic. As a vehicle for addressing some of the problems of the means-tested benefit and tax credit systems, we think that the proposed Universal Credit model is favourable subject to our concerns outlined in this response. We are not attracted by the other options proposed, which are structurally and administratively more complex. The key advantage of the Universal Credit model is the simplicity and transparency of its design. Question 7: Do you think we should increase the obligations on benefit claimants who can work to take the steps necessary to seek and enter work? and 12

13 Question 8: Do you think that we should have a system of conditionality which aims to maximise the amount of work a person does, consistent with their personal circumstances? We agree with the general statement that individuals who are able to look for work or able to prepare for work should be required to do so as a condition for receiving benefit. As stated above we support the principles as set out in the Gregg Review as the basis for conditionality. We are pleased that many of these principles are restated in chapter 4. We would have liked to have seen a restatement of the principle that employment support should also be proportional to the distance from the labour market. If these principles are consistently applied we would have no difficulty supporting extending conditionality in a way that encourages those on part-time work (assuming they are not in a group that is subject to the full labour market conditions) to increase their hours. However, we would only be able to support this change if it could be achieved without extending the time taken to deliver housing costs support. We suggest that this could be achieved if an element of parallel processing was retained. We would suggest that extension of work conditionality should be based on hours worked (subject to a limit) rather than whether a person receives benefit. The risk is that otherwise people with low skills and limited earnings capacity are penalised even though they may be working to the best of their ability. It would also result in unfairness for people living in higher cost areas. They would face the threat of sanctions merely because they are not being paid a living wage. We would prefer that those who attain a minimum acceptable threshold (say somewhere between 16 and 30 hours per week) should not be subject to the threat of sanctions. Rather these people should be encouraged to increase their hours through high quality employment services and support. Question 9: If you agree that there should be greater localism what local flexibility would be required to deliver this? There is considerable change underway across government in achieving a stated ambition to deliver greater localism. It is a complex issue. As such we do not believe it before it is possible for us to state our position except to say that access to high quality personal support can only really be delivered on a local basis. However we would vigorously oppose any moves made to dismantle the UK wide social security system not least because this would tend to lock in and exacerbate regional economic disparities. We would also have reservations about any moves towards greater local discretion except where it is supplementary to any minimum recognised standards (such as local powers to enhance benefit rates). Moving towards a more discretionary system, without minimum standards, risks too great a variation in local services. 13

14 Question 10: The Government is committed to delivering more affordable homes. How could reform best be implemented to ensure providers can continue to deliver the new homes we need and maintain the existing affordable homes? This is another huge issue that is dealt with in just one short paragraph. We believe it should be the subject of a separate and full consultation in its own right. However, we have already indicated some of our concerns above which we have summarised below for emphasis and convenience: political stability in the provision of personal housing support is a huge factor for landlords in their business planning. The leverage of private finance to develop new affordable housing is predicated on a stable system. We were therefore concerned that the 2010 Budget reform proposals have undermined this. Providers business plans will reflect the risks in housing support. If this is subject to severe cuts, or adjustments then this will be reflected in higher lending charges and a more risk averse attitude to the use of their assets. successive Governments have never properly addressed the tension between housing and social security policy. There has been a move away from subsidies for direct provision ( bricks and mortar ) in favour of personal subsidy. And this has been accompanied by a restructuring of supply towards greater market provision. The structure of housing benefit is such that expenditure is driven by rent levels and rents (in particular open market rents) rise in line with earnings rather than prices. The inevitable consequence is that (all other things being equal) expenditure will rise faster than inflation. Unless the structure of housing benefit changes there is little likelihood this will change. The alternative is to re-structure housing benefit so that it is based on a proportion of, rather than the full rent. However, for this to be acceptable there would need to be a considerable uplift in basic benefit levels so that the customer could afford the difference. Even then basic benefit levels would probably need a locally based component (perhaps based on regional averages) to deal with what Beveridge called the problem of rent (i.e. the wide variation in housing costs across the country). Given that creating a stable environment is so critical for both individuals and providers we believe that managing the transition is at least as important as final shape of the reforms. The previous government put some useful building blocks in place for a managed transition towards a single working age benefit (e.g. first abolish income support, then merge JSA and ESA). We strongly support this kind of planned approach. The issue about the form of payment of the housing costs element is never addressed. The implication of a single working age payment is that it is paid direct to consumers regardless of their tenure. This is a huge issue for social landlords and their lenders. Many organisations have significant concerns about the impact that such a change could have on lender business performance and lender 14

15 confidence. We would strongly recommend detailed work is carried out to assess the risks and potential finance costs of going down this route. In particular, fully understanding the inter-relationships between housing benefit, rents and provision of new housing. With that caveat, we are clear that CIH is not opposed to this as a principle. However we would again urge evolution not revolution especially given the potential disruption caused by structural changes. If this is the Government s intention then we like to see a clear plan as to how this might be achieved and risks managed. One approach might be to deal with the easiest cases first (e.g. those who receive only partial help) and gradually work through to most difficult (e.g. long-term unemployed) whilst building up systems of support to help consumers manage their payments. Question 11: What would be the best way to organise delivery of a reformed system to achieve improvements in outcomes, customer service and efficiency? We strongly support the consumer objective of tell one, tell all and there being a single point of contact through whom customers can make their claim. We also strongly support a single income assessment based on current net income. However, we think that it is wrong to assume that moving from current levels of administration will not have a detrimental impact on the quality of service. This applies as much to reducing levels of fraud and incorrect payment as it does to standards of customer care. For the consumer it does not matter who carries out what particular function provided that it is achieved with speed and accuracy. We therefore believe that the elements of assessment and administration that relate exclusively to local housing costs ought to be retained speed and accuracy can best be delivered through this route. We support the concept of real time assessment of income. Question 12: Is there anything else you would like to tell us about the proposals in this document? We would reiterate our central concern that the transition needs to be properly managed. Every effort must be made to protect claimants from administrative disruption during periods of transition from one system to another. We are also clear that the ultimate aim of the reforms should be individuals receiving a better service without eroding basic levels of support. We stress that whilst we agree with the general principles as set out in the consultation ultimately our support for any final proposals will be dependent on the details especially the levels of support that people receive. 15

16 We would strongly oppose any final proposals that severed the link between the payment of housing support and local housing costs unless there was a very substantial uplift in basic benefit levels. We are concerned that over-ambitious assumptions might be made about administrative savings that might be achieved in the long-term without a detrimental impact on service. We accept that there will be losers and gainers from any changes but we would ask for assurances that the most vulnerable customers will be protected. As noted, we believe that the housing element of any universal benefit will present some significant challenges for government. It is therefore essential that detailed work is carried out with landlords, tenants, local authorities and lenders to fully understand the key inter-relationships around housing benefit. This will be important in managing the significant risks associated with moving to a single, directly paid, benefit model. Contact We would welcome the opportunity to expand on our written response. Sam Lister, Policy and Practice Officer, sam.lister@cih.org, tel