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Tackling debt, financial resilience and vulnerability at LACEF


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Deven Ghelani, Director and founder of Policy in Practice, was invited to speak at the Local Authority Civil Enforcement Forum on the topic of 'Debt, Financial Resilience and Vulnerability'. He focused on our early intervention work on arrears with local authorities who are using data analytics insights to identify vulnerability, target support and track change.

For further information visit, call 0330 088 9242 or email

Published in: Government & Nonprofit
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Tackling debt, financial resilience and vulnerability at LACEF

  1. 1. Deven Ghelani Policy in Practice LACEF Debt, Financial Resilience and Vulnerability.
  2. 2. We make the welfare system simple to understand, so that people can make the decisions that are right for them We help people toward independence by making government policy simple to understand.
  3. 3. 333 Why are people in debt?
  4. 4. Wider welfare reforms and austerity
  5. 5. People are worse off
  6. 6. • 1.6 million people on Universal Credit today • A further 1.6m people moving onto Universal Credit this year • 2 million people moving on through ‘managed migration’ from 2020 Key Recommendation: The DWP and councils can identify these pressure points, and act proactively to prevent hardship and ease the transition to Universal Credit. Universal Credit is rolling out fast
  7. 7. The average amount of income after costs for low income households is £452/month. • With a deal, income after costs falls by £100 per year (on average). • Under a no deal scenario, which looks unlikely, income after costs falls by £250 per year. • However, unemployment and a weaker economy driving austerity could lead to Brexit impacting incomes by as much as £1400 / year. The impact of Brexit CPI is forecast to hit 3.7% due to devaluation, plus a further 1% impact on costs due to tariff / non-tariff barriers. Unemployment + 0.3% with a deal Unemployment + 2.6% in a no deal scenario
  8. 8. Cost avoidance through reimagine debt interventions: • Court costs of enforcement and better collection • Eviction (referred to panel) and care costs for children (direct care costs and impacts of moving schools) • Improved wellbeing and better mental health outcomes (17% of cohort), e.g. lower GP / Medication costs (no longer losing sleep, less anxiety, depression, leaving the house) • Advisors had impacts on other outcomes too, clients could be suicidal, facing domestic violence, have language barriers to overcome, or parental conflict (parents with non-dependant children) The impacts of indebtedness
  9. 9. 111111 Policy in Practice has been asked by the Cabinet Office to conduct analysis in support of a project on the management and collection of local and central government debt. Building on the successful ‘Reimagine Debt’ pilot, the project as a whole seeks to understand the role of data to generate a consolidated household level view of debt. Consolidated debt data, placed in the context of a household’s wider economic circumstances, can create a culture of holistic, proactive and effective service delivery across local & central government. Phase 1 of the project saw Newcastle and Barking and Dagenham councils manually pool debt data on 39 families to offer them debt guidance. Phase 2 looks at how this approach can be scaled to deliver benefits to the public. Reimagine Debt
  10. 10. We pool your datasets on low income families, and link them over time to create a single view Our policy engine shows the impact of all policies, now and in the future, on each family The insights enable you to proactively identify who needs what support, engage people and track impact Household data + Advanced Analytics
  11. 11. 16,934 low income households in Neath Port Talbot
  12. 12. 2,596 are in council tax arrears
  13. 13. 1,255 owe more than one month’s council tax
  14. 14. 205 of them are impacted by welfare reform
  15. 15. 59 of whom face an ongoing cash shortfall
  16. 16. … and seven will be worse off under Universal Credit
  17. 17. Focus on 1 household
  18. 18. Engage through tailored calculation
  19. 19. Policy / legislative awareness: Look into the three cases where DHPs were refused. If households affected by welfare reforms had been made aware of DHPs earlier, then arrears could potentially have been avoided. Ensure take-up of benefits: many of the improved cases started claiming Housing Benefit and/or Council Tax Support for the first time. What counts as an improvement?: There are cases where arrears have worsened, but their lives may have improved in other aspects (ie they have started work, agreed a payment plan). We need to track these households over a longer time period. Many of the improved households had changed utility provider: Is this a large opportunity, and does it have implications for the involvement of third parties eg. utilities? Consider differences in outcomes between Advisors: 90% of Advisor 3's clients saw their level of debt improve - compared to 63% of Advisor 2's and 43% of Advisor 1's. Are different Advisors taking different approaches, and can improved approaches be scaled?** Lessons learned in Barking
  20. 20. We tracked the debt severity, living standards, financial resilience and other outcomes for 21 households across Barking and Dagenham across eighteen months. • 3 households moved out of arrears completely • Average arrears fell by £1,100 • Across the 21 households, the total rent arrears balance fell by £17,600 and the total council tax arrears balance fell by £5,500 The outcomes of reimagine debt
  21. 21. Thank you Deven Ghelani 07863 560677 Adam Kenny
  22. 22. A team of professionals with extensive knowledge of the welfare system who are passionate about making social policy work We help over 80 local authorities use their household level data to identify vulnerable households, target support and track their interventions Our benefit calculator engages over 10,000 people each day. We identify the actions people can take to increase their income, lower their costs and build resilience