Agenda item

Welfare Reform/Universal Credit and Review of Energy Fund

Presentation attached.


The Committee received a presentation on the current position with regards to Universal Credit.  The Committee were advised that 16% of the population live within the 10 most deprived area and this equates to approximately 30000 people.  With regards to Local Council Tax Support, 21,112 people are eligible, 12, 695 are of working age and 8,417 are of pension age.  Over 7500 children are on free school meals.  And 6070 of Council tenants are in receipt of Housing Benefit.


Demand from local people for financial support continues to be a priority;  An average of 250 calls per day are received with regards to Council Tax and approximately 200 per day in relation to Benefit issues.  A average of 25 calls per day are in relation to Housing Advice and Support.


With regard to Council Tax and Benefits we are reviewing recovery processes and letters to encourage more contact, we are working with Citizens Advice Gateshead to offer direct access to support.  We are working with Adult Social Care Teams, Housing and Legal.  We are looking to maximise benefits when people are contacting us.  We are making sure every contact counts. 


In terms of impact on Council tenants and rental income.  It appears that the link between Universal Credit and higher levels of rent arrears is still very evident, the problem is that more people will be moving over from Housing Benefit to Universal Credit in future.  Support currently for tenants has mitigated against the impact.  Request from tenants for support have increased, the higher  levels of requests are for help with energy costs,and issues.  Higher incidences of direct debits failing.  Some tenants who have previously managed are now struggling.


Over 2838 tenants were affected by the under-occupation penalty in 2013 when this was first introduced.  1,132 tenants are now known to be affected.  This still represents a burden for those affected.  917 tenants currently in receipt of a Discretionary Housing Payment.  In 2013 when Universal Credit was first introduced 15 tenants were affected by the benefit cap, now 130 tenants are affected.


With regards to Cost of Living Impacts in relation to Council tenants, a recent monitoring exercise showed a 60% increase in requests for support this year compared to last year, 147% increase in energy referrals, 39% increase in referrals for specialist debt advice and a 28% increase in direct debt payments failing.  Out of 100 tenants contact in a sample exercise, 65 said that the cost of living was a reason for them missing a rent payment.


The Council are providing support and mitigation for tenants in the form of several options.  There are debt advice officers within the team, we are also using partner organisations such as 2-Way Tenancy Solutions and Citizens Advice Gateshead.  In 2021/22 we delivered over £1.7m in financial gains for tenants.  It is expected that we exceed that level in the current year.  We have also made referrals to Northumbrian Water to help reduce tenants bill.


We have provided energy support for tenants with emergency top ups for prepayment meters, grant applications to have energy arrears reduced and support for residents with prepayment meters with unexpected standing charges.  We are developing a growing network of warm spaces (75 so far) and have energy roadshows arranged for across the borough.


The Household support fund has provided support for households with children who are eligible for free school meals, older peoples households and the remaining fund was to support residents through the support of voluntary and community organisations and warm spaces.

The teams have learned lessons from the administration of the scheme to date and there are still some challenges to be faced.  The scheme has been extended to March 2023.  There have been some changes to the scheme including:


·         The application process

·         Targeting of more vulnerable households

·         Households not eligible for other support

·         No set proportions for children or pensioners


The Council took part in the administration of the Energy Rebate Scheme so every household on Council Tax Band A-D would be entitled to £150 rebate.  Over 86,000 payments were made, the majority of which were paid in the first 8 weeks. 


Some of the lessons learned included:


·         Cross council effort worked well

·         Dedicated phone line

·         Increased number of people paying by direct debits

·         Quick to respond to the digitally excluded

·         Post office payments worked well

·         Additional support and advice needed was discussed if anyone mentioned they were having financial struggles

·         Communication around the expectation

·         Already had systems in place


The report highlighted the cases of two people who contacted the Council.  The anonymised case studies were discussed.  In both cases the residents had a positive experience in contacting the Council and had written thank you letters.  

It was queried that when people are migrating over from legacy benefits to Universal Credit will they be worse off.  It was noted that it depends on what their circumstances are.  In certain circumstances they can be better off if they are working/ or have children.  It was also noted that transition protection may apply for residents migrating to Universal Credit.


It was queried whether we have information about whether the failed direct debit payments from Council Tax are from people who aren’t necessarily in council property as this is affecting people across the Board. 


It was noted that when the energy rebate scheme came in there was an increase in people paying by Direct Debit, there are people who are not typically known to the council as non-payers.  We are doing some public service reform work in Council tax to see how we can understand the whole picture.


We are also doing some work with the National Innovation Centre for Data (NICD)– to understand need so that the Council is able to help and support as many people as we can. It was noted that in the past people in receipt of benefits were able to build up some resilience and rely on support networks, however, this is now stretched with the increase in the cost of living. Concern was raised around the implications for future generations.


It was queried whether any progress had been made with regards to the connection between benefits and free school meals.  It was noted that this is DWP information and is not held by the Council.  It was noted that we do have a good relationship with the DWP locally and that we lobby DWP nationally in relation to the better use of data.


It was noted that congratulations should be offered on the work being done.  It was suggested that with regards to Citizens Advice Gateshead, in terms of the help being offered by them that we are as joined up as possible. One of the case studies mentioned IVA as a solution to the circumstances for that individual.  It was noted that an IVA shouldn’t be the first port of call to be offered when someone is in need of help as this would mean they would have to re-build their credit rating. 


It was noted that we do have a debt officer in Gateshead and an IVA or bankruptcy wouldn’t be where we would look to avoid that as an option.  However, in some cases the only option is to go down the IVA or Bankruptcy route.  It was noted that financial education is sometimes necessary so people know how to deal with the aftermath of an IVA.


The Committee commented on the issues relating to the cost of living increases and felt that the current financial situation and the level of financial support available from government was inadequate.  


RESOLVED    -           That the comments of the Committee be noted.


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