Agenda item

Welfare Reform Update

To receive an update on from Mr. Ian Harrison, Corporate Director, on the latest position of Welfare Reform, nationally and locally.


The Panel welcomed Mr. Ian Harrison, Corporate Director, who had been invited to the meeting to give an update on the latest position of Welfare Reform both nationally and locally.


            Mr. Harrison referred to the current political landscape, post General Election and the continuation of the Welfare Reform programme, including an acceleration and extension of some elements.   In the Queen’s Speech, the Government had pledged to remove a further £12 billion from the Welfare Bill whilst mainly protecting pensioner welfare.  It was known that Welfare Reform would play its part in the creation of a “budget surplus” by 2019/20.  The specific measures which had been announced were:


·         four year freeze on most working age benefits

·         reduction in the benefit cap from £26,000 to £20,000 (£23,000 in London)

·         18-21 year olds not automatically entitled to help with housing costs

·         most welfare support restricted to two children

·         programme of broad based reduction in tax credit awards

·         introduction of a National Living Wage for 25+ age (£7.20 rising to £9.00 per hour by 2020)

·         £800 million additional Discretionary Housing Payment funding for five years for local authorities.


            The July 2015 budget had only set out around £17 billion of the £37 billion required to achieve the surplus in 2019/20.  The remaining £20 billion would be announced in the autumn Spending Review. 


            Mr. Harrison referred to an Ipsos MORI poll that had been carried out in September, 2015 to gather information on people’s views on austerity measures.  In addition, Mr. Harrison briefed Members on research by the Resolution Foundation on spending within the welfare budget, where it was stated that, by 2020, working-age adult welfare was set to fall to its lowest level since 1979; spending on children would be back to its 2002 level; while pensioner spend would fall to its immediate pre-crisis level. It was also advised that pensioner spend reduction was being driven by increasing the State Pension to 66 by 2020.  In respect of the focus of welfare spending, it was noted that pensioner benefits accounted for 45% of total welfare spending immediately pre-crisis, but were set to account for 52% by the end of the decade.  In contrast, tax credit and child benefit spending would fall from 21% to 17% of the total.   It was further noted that, by 2020/21, the share of Government spending flowing to older people and health could reach 43%, which was its highest level since comparable records had begun in the 1990s.  In contrast, it was forecast that the share allocated to education and economic affairs would reach a new low of 19%. 


            In respect of the situation in Rushmoor, Mr. Harrison advised Members that, overall since March 2013, there had been a 6.3% decrease in the Housing Benefit and Council Tax Benefit caseload.  The eligible population levels had increased over the years from 2009 to 2014 from 71,300 to 76,374 with the Benefits caseload as a percentage of the population increasing from 8.5% in 2009 to 10% in 2014.  It was also noted that, between the period of November 2008 and May 2015, Rushmoor had seen the largest increase (46%) in Housing Benefit claimants across the whole of Great Britain.  In respect of Job Seekers’ Allowance, Rushmoor had seen a decrease in the past year of 160 (21%) claimants and of 625 (51%) in the past two years.  It was noted that the August 2015 figure was 0.8% lower than the national figure and 0.1% lower than the South East figure.   It was further noted that the number of Employment and Support Allowance claimants had increased in Rushmoor since the Allowance had been created in November 2008, although this figure was relatively low. 


            Mr. Harrison displayed maps of the Borough which showed the indices of multiple deprivation in 2010 and 2015 which demonstrated a general shift in areas towards being more deprived, although contrasted with some pockets of improvement, indicating the changing picture of the Borough. 


            The Panel was then briefed on the national caseload for Universal Credit.   The age range of claimants was shown, together with the caseload figures for the nearest authorities who currently processed Universal Credit.  It was noted that Rushmoor would be in the tranche of authorities to start dealing with Universal Credit from December 2015 to April 2016, with Rushmoor expecting to see its first claimants in February 2016. 


            The Panel noted that, in April 2015, there had been 500 people in the Borough who would be affected by the benefit changes relating to additional bedroom restrictions. However, by October 2015 this number had reduced by 154 as these residents were no longer affected due to a change in their circumstances.   Members were advised that there were currently 24 Benefit capped cases in Rushmoor.  Continued engagement was taking place with residents affected to support them through joint working by Housing Services at Rushmoor and other organisations.


            In respect of Discretionary Housing Payments, the Panel was advised that the total fund for 2015/16 was £125,516.  It was noted that 72% of Discretionary Housing Payments had been awarded to support people affected by the social sector size criteria (additional bedroom restriction).


            In respect of Council Tax collection rates, it was noted that, for 2014/15, the collection rate had been 98.2% which compared extremely well to other areas in the UK. 


            The Panel was reminded about the provisions of the Council Tax Benefit Scheme and the local Council Tax Support Scheme.  Members were advised that Council Tax support spending had continued to drop and that caseload work had also reduced by 16.1% over the period from March 2013 to June 2015.   Details were given of award data for the Council Tax scheme, how the Scheme operated across Hampshire and how this compared to Rushmoor’s immediate neighbours and to Rushmoor’s audit family.


            Rushmoor’s Council Tax Support Scheme had performed well but was currently under review and subject to consultation on various options for change.   Responses would be considered by the Welfare Reform Task and Finish Group for submission to the Cabinet for consideration to then be recommended for approval by the full Council on 27th January, 2016.


            In conclusion, Mr. Harrison advised that the Government’s intent and mandate was to continue to deliver welfare reform through a complex and wide-ranging programme.  Locally, the Council had some different and difficult issues with welfare and income generally.  Housing demand versus supply and costs supporting rent in the private sector remained a challenge. Mr Harrison reported the Task and Finish Group’s view was that changes needed to be made, but it was important that the genuinely vulnerable should continue to be protected.


            During discussion, Members raised questions regarding the Council Tax Benefit Scheme, the Council Tax collection rate, indices of multiple deprivation and the changing local demography.  Members expressed great satisfaction that Rushmoor was the best local authority in England for processing benefit claims and extended their appreciation and congratulations to the department responsible for this achievement.


            The Chairman thanked Mr. Harrison for his comprehensive and informative presentation.   The Panel NOTED the update.