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Welfare reforms and reducing rent arrears

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Paul Howarth, Policy Consultant for Policy in Practice was invited to speak at the Westminster Briefing in November 2019 on the topic of 'Welfare reforms and reducing rent arrears'.

This presentation provided a detailed look of the current benefits system, a forecast of the latest Universal Credit updates as well as an overview of Policy in Practice's data-led approach to tackling poverty and reducing rent arrears.

For further information visit www.policyinpractice.co.uk, call 0330 088 9242 or email hello@policyinpractice.co.uk.

Welfare reforms and reducing rent arrears

  1. 1. Paul Howarth Policy in Practice Welfare reforms and reducing rent arrears Westminster Briefing 21 November 2019
  2. 2. Agenda 1. Introduction 2. What is the benefit system for? 3. The cost of welfare 4. The manifestos 5. Universal Credit latest 6. Universal Credit and rent arrears 7. What needs fixing? 8. What of the future?
  3. 3. Consistent data-driven analysis that build a detailed granular picture of poverty and living standards. Improve people’s incomes through take-up, targeting local support and actions to promote independence. Better use of limited public funds through better targeting & proactive preparation for future reforms. A common platform to track outcomes and living standards allows best practice to be shared. Influence national policy and funding through evidence-backed research. Our approach
  4. 4. What is the benefit system for? Redistribution of wealth / participation in society? Safety net only? Poverty relief/relative poverty? Basic subsistence/absolute poverty? Basic income / contributory benefits / extra cost benefits? Means testing/conditionality and behavioural change? Relatively high programme cost, low admin cost? Relatively low programme cost, high admin cost?
  5. 5. The benefit system costs £217 billion + 42% £91.6bn 13% £27bn 11% £23bn 8% £16.7bn 7% £15.2bn Source: DWP/HMRC/OBR (2016-17)
  6. 6. Some cost projections for the future State Pension • Spending likely to fall in the short-term reflecting the rising state pension age to 66 – offsets the comparatively generous ‘triple lock’ (the higher of wage growth, inflation and 2.5%) • In longer-term spending increases reflect an ageing population Disability benefits • expenditure likely to increase - the caseload across DLA/PiP/AA is expected to rise by 9.7% between 2017-18 and 2023-24 Other welfare benefits • Spending projected to be relatively flat as a share of GDP over the long term • But depends on economic cycles and impact of policy decisions
  7. 7. Election manifesto clues Manifesto not published yet. Not likely to see much change in welfare policies. Will make much of low taxes and increase in The National Living Wage (£10.50 by 2024, link to two-thirds of median earnings in 5 years) Manifesto not published yet. Likely to advocate scrapping Universal Credit and possibly trialling Universal Basic Income. Will abolish two-child limit and benefit cap. Also increase National Living Wage (£10 for all aged 16 and over in 2020) Manifesto published yesterday. Reform Universal Credit (5 week wait to 5 days) scrap two-child limit, benefit cap and bedroom tax, reform sanctions and work capability tests, reverse ESA cuts, set a ‘genuine Living Wage’, end fuel poverty by 2025 Most radical policy – Universal Basic Income of £89 a week, £178 a week for pensioners, unconditional, allowances for children on top (tapered out for those on high incomes). HB and Carers Allowance paid on top, costed at £82 billion
  8. 8. • 2.6 million people on UC (Oct 2019) • 100,000 a month so at least extra 1.4 million by end of 2020 • 2 million people moving through ‘managed migration’ from 2020 Universal Credit is rolling out fast
  9. 9. • £1.7 billion extra support, benefiting 2.5 million households (1.9m with children & 600k with limited capability for work) • £1.0 billion to help 1.1m people migrating onto Universal Credit • Employed households gain • Self-employed, disabled, ill or out of work don't gain • Download our report Universal Credit after Budget 2018
  10. 10. Universal Credit and rent arrears • Most recent studies (e.g. Citizens Advice, NHF) show some link between Universal Credit and rent arrears, mainly as a result of the five-week wait. • Smith Institute study (in Croydon and Southwark) shows UC claimants with more arrears than HB claimants but stabilises over time. Problems re-emerge if there are repeat claims to UC. • In June 2019, the then DWP Minister, Alok Sharma, stated that DWP were investigating the link between Universal Credit and rent arrears, and quoted research which shows that many claimants (75%) were already in arrears before their UC claim.
  11. 11. Building financial resilience
  12. 12. What needs fixing? • 5 week wait – run-ons at the start could have avoided the problem • Two-child limit – increases child poverty by 10% (266,000) over this year, reduces financial resilience for those affected • LHA freeze – current study indicates marked impact on homelessness • More flexible processes in Universal Credit • End benefit freeze – announcement now made
  13. 13. What of the future? • Difficult to predict outcome of the Election • Universal Credit roll-out likely to continue – very difficult to pause it (though could pause the managed migration) • 1.7% uprating (working-age benefits) from April 2020 • Implications of Brexit on individual households • Pressure to reduce expenditure likely to continue • But also pressure to end austerity and increase living standards • Meanwhile, need to concentrate on identifying people who need most help and preventing them falling into crisis
  14. 14. www.policyinpractice.co.uk Contact us Paul Howarth paul@policyinpractice.co.uk 07854 773164 Jade Alsop jade@policyinpractice.co.uk 07551 165172
  15. 15. The drivers of homelessness
  16. 16. Around 5,000 rough sleepers in England and 8,000 in the UK A 15% increase on a year ago, and the 7th year numbers have risen Rough sleeping
  17. 17. The NAO concluded that government efforts to tackle homelessness could not demonstrate value for money The government needs to: • Evaluate effectiveness • Help local authorities share best practice • Help ensure housing supply meets housing need • Monitor the impacts of policies and interventions on homelessness NAO: A change in approach
  • ClairePearceCrawford

    Dec. 20, 2019

Paul Howarth, Policy Consultant for Policy in Practice was invited to speak at the Westminster Briefing in November 2019 on the topic of 'Welfare reforms and reducing rent arrears'. This presentation provided a detailed look of the current benefits system, a forecast of the latest Universal Credit updates as well as an overview of Policy in Practice's data-led approach to tackling poverty and reducing rent arrears. For further information visit www.policyinpractice.co.uk, call 0330 088 9242 or email hello@policyinpractice.co.uk.

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