Managing the impact of Welfare Reform Nick Selwyn Local Government Manager
Welfare Reform - Principles A system that was originally designed to support the poorest in society is now trapping them in the very condition it was supposed to alleviate Iain Duncan-Smith, Secretary of State for Work and Pensions Welfare reforms are intended to create a system that: Promotes work and makes employment more attractive than benefits. Helps people lift themselves out of poverty. Creates/improves mobility and tenure flexibility. Place public spending on a more sustainable footing, by ensuring that the system is fair to the taxpayer and people in genuine need. Impact assessments highlighted that Spare Room Subsidy would reduce benefits expenditure by 1 billion in 2013-14 and 2014-15.
Context.. The impact of Welfare Reform is greater in Wales than other parts of Great Britain because Wales has.. The lowest employment rate. The third highest unemployment rate. The third highest claimant count. The highest inactivity rate. A higher proportion of social rented tenants on housing benefit A larger proportion of people affected by the spare room subsidy
Employment Rates, November 2014 to January 2015 ONS regional labour market statistics March 2015 East of England South East South West East Midlands Scotland UK Yorkshire and The Humber London West Midlands North West North East Wales 66.0 68.0 70.0 72.0 74.0 76.0 78.0
Unemployment Rates, November 2014 to January 2015 ONS regional labour market statistics March 2015 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 North East West Midlands Wales London North West Yorkshire and The Humber Scotland UK East of England East Midlands South West South East 0.0
Claimant Count rates by region, February 2015, seasonally adjusted ONS regional labour market statistics March 2015 South East South West East of England London North West East Midlands UK Scotland West Midlands Wales Yorkshire and The Humber North East 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5
Inactivity rate by region, February 2015 ONS regional labour market statistics March 2015 East of England South East South West Scotland East Midlands London Yorkshire and The Humber West Midlands North East North West Wales 0 5 10 15 20 25 30
The impact of changes to Housing Benefit proportionally affects more tenants in Wales than in England or Scotland
The impact of changes to Housing Benefit proportionally affects more tenants in Wales than in England or Scotland
And we also have the devolved tension UK Government Welfare spending policies and cuts in welfare budgets Welsh Government Policy for services affected by welfare reform - Housing, Education, Social Care, Local Government, Communities, etc.
WAO study looked at housing impact amongst a group in society where Welsh Government has devolved responsibility We have commented on some of the main intended benefits of the reforms on social housing and tenants in Wales: Promote employment amongst tenants. Help people lift themselves out of poverty. Create tenure mobility and make better use of social housing. Reduce expenditure on Welfare (in Wales).
Tenant Survey Employment status Full time employed 1% In Part time employed Self employed 1% 10% employment or able Out of work and looking for work 17% to Out of work but not currently looking for work 5% work A home maker A student 3% 0% Not in employment Retired 3% Unable Unable to work 58% to Refused 1% work
Promoting employment amongst social housing tenants Key findings from the Housing Association and Council surveys we conducted identified that: Only 48 per cent of councils and housing associations are providing their tenants with access to training schemes to increase their prospect of employment. Only 40 per cent of councils and housing associations have targeted their unemployed tenants with access to apprenticeship schemes. Only 24 per cent of councils and housing associations have encouraged and supported their tenants to participate in regional and national employment schemes.
Many social housing tenants face increasing poverty
Following changes to Housing Benefit social housing tenant debt is increasing
The impact of changes to Housing Benefit is being felt right across Wales
Foodbank usage is increasing
Advice services have been cut which adversely affects tenants and landlords
There is no evidence to show there is increasing tenure mobility
There is no evidence to show there is increasing tenure mobility Letting accommodation far more complicated. Only 26 % of tenants affected by Spare Room Subsidy registered to move. 64 per cent of Councils still allow applicants to under occupy housing, compared to 23 per cent of housing associations. Mismatch between transfers, waiting lists and homelessness unknown impact. Little evidence of tenants moving to private rented homes concern expressed by many that Welsh Government promotion of PRS may not be realistic. No evidence of tenants taking in lodgers.
Managing the impact of Welfare Reform for Social Housing Landlords is difficult
Welfare Reform in Wales indicative housing costs-v-savings 2013-14 and 2014-15 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 Notional Savings Discretionary Housing Payments Mitigation Grants Benefit Cap and Spare Room Subsidy Additional Welsh Government and HA/LA costs in Wales Rent Arrears SHG - New Build
Public Accounts Committee Auditor General for Wales Report presented to Public Accounts Committee on January 13 th 2015. Auditor General for Wales has made a series of recommendations to Welsh Government, Councils and housing associations. Response received from Minister for Communities and tackling Poverty on recommendations. Welsh Government Minister's response to Chair of PAC. Committee has agreed to set up Inquiry on the impact of Welfare Reform on social housing in Wales.
Thank you Nick Selwyn Rheolwr Llywodraeth Leol Astudiaethau/ Local Government Manager Studies Swyddfa Archwilio Cymru/Wales Audit Office Cyferiad/Address: 24 Heol y Gadeirlan/24 Cathedral Road, Caerdydd/Cardiff, CF11 9LJ e-bost/e-mail: nick.selwyn@wao.gov.uk