Universal creditors

It has been another terrible few weeks for the ministers and civil servants at the heart of the universal credit debacle, what with the release of the NAO report into the roll out, their own full service survey and the legal case which showed that they were discriminating against severely disabled people who moved between areas during the roll out period. I’m trying not to shed a tear, but it is pretty hard. Not for the politicians and civil servants, you understand, but for those on the receiving end of the clearly failing benefit.

There are plenty of reasons for this failure- the reports I have already linked to have more than enough detail, but to fully understand why this is so damaging (and to get some wider context into people’s lives rather than simplistic models often used by government) then you need to look no further than the JRF’s 2018 report on destitution in the UK.

Rather than rewrite a very sensible report, I want to try and unpick why people claiming universal credit might find themselves destitute in a bit more detail. If you want, all I’m doing here is fleshing out a couple of sentences closely and with some examples. Crucially I want to point out that this isn’t just “shocks” but in many ways the general running of the benefit that can lead to a spiral of debt and destitution.

The starting rates of universal credit are myriad, but a single person over 25 has a personal allowance of £395.20 a month, with any elements (including the housing element) paid on top. That’s £73.34 a week, roughly equivalent to other means tested benefits.

Private renters may find that their housing element doesn’t cover the rent, if this is seen as “too high” (ie. above the 30th percentile) in the area. Most under 35 year olds will be particularly hit by this, as they can only claim for a room in a shared house, no matter what their actual living circumstances are (or where they can reasonably move to). Social tenants will find their housing element may be reduced if the are seen to have a “spare” bedroom under the much loved bedroom tax. Homeowners will only be able to claim an interest only loan to cover some of their mortgage interest costs.

I’ve written elsewhere about the lack of a severe disability premium in universal credit. Needless to say, compared to the previous benefits system, those who live by themselves who have care needs are going to be significantly worse off.

As you can see, before we even get to the nitty gritty of people’s lives, the amount they receive is at or below a subsistence level. Those subject to the bedroom tax or living in higher rental properties (often because that was what was available when they moved and they could afford it) will be struggling to make ends meet from their remaining income.

So, let’s start at the beginning of a claim: the NAO report shows that 60% of people who claim universal credit also claim an advance. This is a loan from the DWP, that has to be repaid over the next 12 months (it used to be 6, but the government increased it last year following public outcry).  The NAO also stated that the average advance are around £43 a month, so that comes off before payment is made.

Of course the size of the debt (and therefore the size of repayments) is based on how long the household had to wait for the benefit. So it is worth pointing out that the NAO is expecting up to 338,000 households to be paid “late” (at the end of the first month-long assessment period) in 2018. So this is well over a month of having to rely on a DWP loan (or other begging/ borrowing) for a very large number of households.

Then payments get going, claimants might be paid in arrears, but they’ll spend it when they have the money. Payments will usually be based on the last month’s income (although woe betide anyone on very variable earnings subject to the surplus income rule) so what people get in one month and what they need in that same month may be two different things.

If people pay the rent (including any surplus bedroom tax or amount above the local housing allowance) then the money left after deductions and after rent may not be enough to see them through the month. They may be flush at the start, but even very careful spending is going to make the last weeks very difficult. So whilst the headline rates of universal credit may allow for a subsistence existence the sheer act of going through with the claim could be enough to push the household into destitution.

One way out of that trap, to smooth the curve, at least in the short run, is debt. Debt can happen in many ways- some less active than others. Households might not pay all of the rent. They may take out a short term, high cost loan. They might not pay their bills (those that they can not pay- prepayment meters abound).

They may get help from family or friends- a form of social debt. The ebb and flow of universal credit payments may mean that such support is reciprocal- if you’ve just received your payment and someone who loaned you £30 a week ago needs help, would you say no because you’ve got to get to the end of the month? They may also as a last resort look to the less friendly and scrupulous lenders you can find if you really need money quickly.

The other options are of course going without essentials (which is about as clear as destitution can be) or relying on charities or other non-reciprocal social giving.

Any debt taken on of course has to be paid off and if that comes with interest then you’ll have to pay more next month, leading to exactly the same (or worse) situation again in the next month. Give it a few months and reputable organisations (landlords, utility companies, council tax, etc.) can take repayments straight from your universal credit entitlement, meaning at least they get paid, but the amount the household receives gets smaller and smaller and the challenge of making ends meet becomes harder and harder. Just about managing becomes occasionally struggling becomes struggling all the time.

The point I’m trying to make is that whilst the actual allowances for universal credit are arguably slightly above the minimum level, the way that the system works means that households will actually be paid (or have after housing costs) puts them below what they need to fund their necessary expenses. Attempts to even stay afloat in those conditions is destined to make the situation worse in the long run.

This isn’t necessarily about monthly payments, but it is clear that on such a low daily income it is hard to manage a budget over a month. It isn’t also necessarily about paying rent to tenants- but again paying an amount less than their living costs including rent means that they have to make a hard choice-like it or not rent arrears are a choice people make to put food on the table for another week.

It also isn’t necessarily about shocks such as sanctions or payment hold-ups, but these no doubt cause destitution themselves. A sanction is enough to put many people into destitution and even if a hardship payment is authorised this is itself a debt, which has to be paid back- reducing payments when they do return.

So sanctions are one way into the destitution-spiral that can happen under universal credit, but it isn’t the only way by a long shot. According to the survey commissioned by the DWP, only a quarter of people say they do not struggle with financial commitments (a further 2% do not know). The rest, some 73% say that they struggle in one way or another. 35-36% of those surveyed stated that they were in housing arrears.

There is a contradiction at the heart of the DWP’s responses to all this. On waiting for payments they argue that advances are available, and they are- as a loan. On sanctions they argue that hardship payments are available, and they are- as a loan. On ‘extra’ housing costs such as the bedroom tax or above local housing allowance rent they argue (inaccurately, mostly) that people make a choice and can pay for this through their standard allowances. Finally, on payment amounts they argue that they are enough to cover basic living expense- and they possibly are unless there are other deductions, such as loan repayments or payments towards rent.

In very few cases are all of these things true at the same time- indeed, it needs someone not to have the first three for the fourth to be right. And that is why people end up somewhere below the safety net, wondering how the heck to get out.

Presenting and incorrect?

Would you like a new job? The hours might be difficult, but you will get to meet judges, doctors and people with experiences of disabilities. You might have to get used to severe, crushing blows and knocks in your confidence for things that are not your fault. You may have to get used to judges, doctors and people with experience of disabilities justifiably haranguing you for the actions of others.

A recent parliamentary question has confirmed that the Department for Work and Pensions are recruiting presenting officers- those long fabled people who will turn up at tribunals to represent the decision making power of the Secretary of State. When I was a welfare rights worker the chance of a presenting officer turning up to appeal was somewhere lower than zero. Indeed, the answer confirms that not one presenting officer was recruited between 2012 and 2017, with more than 200 now recruited in 2017.

Now, if you’ve read my blog you’ll know I’ve shown a strong interest in this process and have suggested that the DWP need to be fronting up for appeals- so in a very limited way I support this change. What I want to look at this time is what impact it will have and whether the presenting officers will be allowed the kind of changes that will allow a real impact on decision making across the health related benefits.

But what will the role of presenting officers be? They’re very lucky (in one way) in that their role is government by a statutory instrument (a piece of secondary legislation) setting out their duties (and everyone else’s) in an appeal. There’s also, for universal credit and personal independence payments, a whole chapter on the decision makers guide which goes into great detail about what they should be doing. Let’s try and precis them!

Presenting officers aren’t lawyers- but they don’t necessarily need to be. What they need to have is a very good understanding of the benefit system and the operation of the tribunal. Their job is to:

  1. Check that the original decision was right in light of the evidence in hand. If it isn’t (and do remember than two thirds of ESA decisions are overturned at Tribunal) then they can and should change the decision- at the very least sending it back to the decision makers. For universal credit and personal independence payments the decision makers guide is very clear that the presenting officer must satisfy themselves that the decision is right before they attend the appeal.
  2. Attend the appeal and put explain the Secretary of State’s decision, including how the evidence has been weighed. The presenting officer can ask questions of other people present (including the claimant) but these shouldn’t be combative and should be focused on understanding any disagreement in the written submissions. In benefit appeals people aren’t there to win or lose, but to find the truth through collaboration. I know that sounds otherworldly, but it is an important point- if you do a victory dance at the end of an tribunal you are likely to be rebuked pretty quickly!
  3. After the appeal- reflect, consider and think on what happened and what could have been done better. In a way, this is simply number 1 restated- the next time they have a similar case they have to ask themselves if they should be taking it at all to appeal.

Now, anyone who has spent any time working with benefit claimants will know that there is often a gap between what the legislation and guidance says and what actually happens on the ground. If you’ve ever had to sit there (usually on the phone) whilst a decision maker pulls up the guidance (trying to talk legislation on the phone is often pointless), turns to the page you are talking about, looks at the paragraph you are talking to, reads it through, tries to justify their existing argument then grudgingly accepts you are correct will know that what happens on paper and in real life are two different things.

So what am I worried about? Primarily, that 1 and 3 above won’t happen. The presenting officers will not use their powers to spot cases that don’t stand a chance of winning, will go to the appeal, the decision will be overturned by the tribunal and they won’t learn anything about why this was. This is perhaps unfair, or even cynical. Perhaps I should give it a chance before I predict doom?

Well, in any case it won’t be long. For ESA alone the number of appeals attended by a presenting officer has shot up since April 2017. The number of attendances between April and December last year is nearly 10 times the total number for the year before, which we know again due to a parliamentary question! Perhaps in their early months presenting officers are there to comprehend and understand, but you’d hope that pretty soon they will get to grips with which cases have a chance at having the decision upheld and which should be overturned quickly now to save the bother of a failed appeal.

As they get better at this you would hope that the original decision makers understand which decisions are unlikely to get past the presenting officers (ie. those people who have to try and make the case) and start amending their decisions. You’d also hope that presenting officers would get better at spotting marginal cases (where their presence may make a difference) and start attending these- rather than being sent on fools errands either by decision makers or even worse an algorithm telling them which to attend.

If this change to the system worked perfectly it could have a huge impact. When I look at the stats in the next few months I’ll be looking for some big changes. If decision makers know they have to make fully reasoned cases then a lower proportion may be turned down in the first place, followed by a lower proportion of appeal cases making it to the tribunal (as they have been sent back by presenting officers) and finally a higher proportion of decisions being upheld (ie. staying the same) rather than overturned as the unwinnable cases have been weeded out and presenting officers have been able to argue the case in some cases successfully.

If the system doesn’t work perfectly the presenting officers will be receiving payment for turning up and being told off, which isn’t fair on them or anybody else. I’ll be looking through the stats as soon as they come out, and so should you.

What I’d prefer to see, instead of a separating out decision making into different sections is decision makers having responsibility for the whole process, holding onto a case and having to present it at appeal. As I’ve spoken about before, the process of decision making is becoming incredibly mechanistic. Indeed, some good soul has been able to winkle out of the DWP their set lines for appeals. Yes, we all knew they existed, but how can individual people with their individual health needs be reduced to set words? If decision makers actually saw what happened in cases that go to appeal they may think twice before making a sloppy decision a second time.

But, as a final point, all of this is essentially moot because of one thing. Mandatory reconsideration still means that a huge proportion of people being turned down for health related benefits are not formally appealing them. Whilst this is the case we won’t know if these claimants are genuinely entitled to benefit. I have no reason to believe those decisions aren’t as second rate as those getting to appeal.

So let’s hope the presenting officers make a big difference, far bigger than their relatively small numbers may show. But that will only happen if they are empowered to act and able to get the department to understand how obvious the failures of decision making are to tribunals and independent observers.

Since you are doing sensible things…

And hooray! The 18-21 year old restriction on housing costs in Universal Credit is gone! This seems to be a big win for common sense, backed up by major charities and other sensible folk who knew it was a ridiculous policy.

I worked for a young person’s charity a while back (when this possibility was first mooted) and it was clear even then what a nightmare it would cause. In fact, it was not only obvious, we had first hand (daily) experience of trying to convince the DWP that people were estranged from their families in order to claim income support whilst in education. This was usually young people who had been kicked out (sometimes literally) by their parents.

Sometimes getting these decisions made in the young person’s favour was easy, sometimes it was hard. But we almost always were successful. Why? Because a young person doesn’t swan off to a hostel, get accepted for housing association or council housing or sleep on the streets for no reason. They certainly didn’t do it for the pittance paid by income support, although that money meant that they could continue with their education and seek to overcome the challenges they’d met in their life so far.

I suspect this particular Easter present is a one-off, but in my own optimistic way, I hope this could be a time of government accepting sensible changes to policies for young people.

So here are some suggestions on what it can do next:

  • Increase the under 25 rate of universal credit to the same as the 25 and over rate. What happens when you reach 25 that suddenly means your expenses go up? Beats me, but the under 25/ 25 and over distinction in benefits has been around for ages. Too long. In 2018/19 the standard allowance for a single person under 25 is £251.77 a month. For someone 25 or over it is £317.82 a month. That’s £66 a month. The couples it is £103. This is for no other reason than tradition (well, and saving money, and some nonsense about needing to provide an incentive and the rates of national minimum wage). Which brings me on to…
  • Remove the minimum wage distinction for under 25s. The escalator on the minimum wage is about trying to allow companies to invest in new (young) staff. However, it can also look like a way to pay younger people less, even as they take on more and more responsibility. So having the same floor of post mandatory education income for all would be a great way to help young people get a start in life. And you know what- higher incomes means less dependency on benefits like universal credit and means potentially more taxes for the government: win win.
  • Restore the work allowances in universal credit for everyone, including young people in order to, in the words of someone I vaguely remember repeating ad nauseam, make work pay.
  • Remove the shared room rate cap for single private tenants under 35. Did you/ do you want to live in a shared property until you are 35? I thought not. The most worrying thing about this policy is that it forces young(ish) people to live cheek by jowl even if they are very vulnerable. This creates its own knock-on issues for landlords, social care, police etc. etc. The rate used to be 25, but the government made it 35 for reasons perhaps not related to sheer spite. It could be changed so the amount paid relates to the actual accommodation the person is living in- perhaps with a bedroom tax type reduction for young people on benefits who somehow convince a landlord to let them rent an 8 bedroom mansion to themselves. Oooh, someone mentioned the bedroom tax…
  • Get rid of it [the bedroom tax, weren’t you reading the last point?]. Of all the silly, pointless, nonsensical policies ever imagined, forcing people to pay because social landlords had historically not built one bedroom properties is about the worst. Or forcing them to pay because they have health problems and need to use a different bedroom to their partner. Or so on. Social landlords didn’t give young people (or not-young people) bigger homes because they were frittering away their stock, they did it because that was all they had and there was a housing need to be met. If the government wants people to live in the right size houses it could build some.
  • Get rid of the 2 child limit. Yes some younger people have more than two children. Do we even need to discuss this one? The one with the form to tell the government that your child is the outcome of a rape? No, good.
  • And the benefit cap. And the other benefit cap. Yup, both of them.
  • Do you have any you want to add? Let me know and I’ll think about putting them in.

Now, here comes the punchline. With the exception of the minimum wage change (which, I repeat may save the government money) each of these would end up costing the government -or at least the benefit budget- money. The thing about the under 22 housing rule was that it was so poorly thought through and so few people actually were caught in it that it most likely cost more to administer than it saved. It certainly will have cost more when looked over the whole of government’s budget, especially when social care, homelessness, family support, etc. budgets are considered.

This policy was one of those that was created to meet a perceived problem, not a real one. The government could say they were doing something about the legion of indolent young people who could simply just move home, without recognising that this was actually a tiny to non-existent part of the overall number of claimants.

So let’s celebrate that the government has seen sense. But the sense that they have seen is that this policy was costing them money. Until they start working their way through the list above I’ll not be convinced they have suddenly decided to support young people through the benefit system.

Supported housing- details, details, details

Forget what the calendar says, last week was the one for fireworks. This is the week for detailed policy analysis (yay!). The announcement that the LHA cap wouldn’t be imposed on social rented housing was (as far as I could tell) universally welcomed. However, the next step is to see what is being proposed in its place.

It is hard to think of a more foolish attempt at supposedly saving money than trying to pretend people needing supported housing (defined widely) could only receive the LHA amount (the 30th percentile market rent) for their area. The supposed top up fund was poorly thought through and led to a lack of confidence in the sector about how it would fund new housing when it couldn’t be sure how much income it would receive in the long run.

But let’s first take a couple of steps back and work out how we got here.

As the population ages (something Brexit may well hasten) more of us are going to need housing that is more than a roof and some walls. We might need specialist equipment, alarm systems, help nearby, visits or adaptations to suit our needs. At one point the solution to this issue was institutional and one size fits all. Now people rightfully expect that their needs are provided for, but that their freedom and independence is respected. Instead of care homes people are more likely to want to have homes that support their needs without institutionalising them.

I doubt there would be much discussion about there being a need for housing tailored to individual’s needs and a mechanism, through the state if required, to both provide appropriate housing and the additional support a person requires.

Housing-related costs have traditionally (in England) been provided by housing benefit with a means test and some arbitration system for unusually big costs. Other costs, such as general care and support visits was paid for through other, locally administered schemes, like supporting people or the general social care budgets.

This is one of the reasons it can be frustrating to hear politicians bemoaning the size of the housing benefit budget without proper reflection on what it actually contains. Paying for supported housing through this budget is a choice, but really only an accounting one. If it wasn’t through housing benefit then it would have to be paid through another route, but claiming housing benefit is growing beyond all proportion (and insinuating that is solely due to unemployed working age jobseekers) really does a disservice to what it is actually paying for. To repeat, paying for supported accommodation is a cost that will keep on growing in the short and medium term, no matter what schemes the government try to insist on imposing on working age tenants.

But, of course, housing benefit is on the way out. It is being rolled into the super-colossus of universal credit, the benefit that is doing so well at winning hearts and minds at the moment.

So getting the government to stop, shake their head and then turn on the heel for an LHA cap, not just for supported housing but all social housing, has been a massive achievement for the sector. That said, I doubt there would have been much of a social housing sector, particularly for supported accommodation, if they hadn’t been successful.

The government have stepped back from the brink, but what are they proposing instead? On Tuesday they announced their plans and things are about to get complicated…

They’ve tried to split supported housing into three main groups:

  • Sheltered and extra care housing, where tenants can receive a new payment (noted as “through the welfare system” but it is unclear (to me at least) if this is part of universal credit) called “sheltered rent”.
  • Long term housing, which is meant to meet the needs of people who will need significant support in the long run, such as those with learning difficulties or mental or physical ill health. This will be provided through universal credit, but with no upper limit on payments although the government is still mulling and asking for advice on “cost control measures”.
  • Short term housing, such as accommodation for people experiencing homelessness or people (overwhelmingly women) fleeing domestic violence. This is proposed to to be a grant payment made through local authorities. So local councils will have to negotiate with central government about their local needs in order to secure their bit of the pie and then negotiate with providers in order to fund them.

Taking the last point first, I can see the sense in directly paying for short term housing. From my housing benefit assessment days I remember the succession of 2 day claims for hostels and the local women’s aid, usually with no proof of income or details to really decide a benefit claim. Of course, any reasonable authority simply paid up- why would anyone stop to try and enquire further on a benefit claim for a woman fleeing domestic violence? So the whole thing was a bit of a paper exercise. A 40 page paper exercise that had to be completed as part of the stay. Not something you want to be doing if you are homeless, fleeing violence or trying to overcome an addiction.

But there are some issues with the grant approach. Firstly, government gives grants but it can also take them away. At least the benefit system is a right rather than a process of continuing negotiations, especially in the context of austerity. With priorities changing and if there is an insistence on delivering savings then grant funding can always be cut, either the total amount England-wide or the amount paid by the local authority to each individual provider.

There is also the tricky issue of assessing needs between areas. Not everywhere is lucky enough to have a women’s aid and many women experiencing violence need to leave the area completely to get away from their abuser. So does the funding go to their “home” authority or the authority they are staying temporarily in?

Some national charities have already commented that payment through local authorities may negatively affect them. This is for two reasons. Firstly, local authorities will each incur costs that they will want to recoup through the funding grant. Secondly, local authorities are unlikely to want what remains of their allocation going to fund the national management of organisation; they’ll want it spent in the local area. Thirdly, and they haven’t said this outright, local authorities may prefer to fund local organisations, especially if they know them and get on with them, rather than the big boys who operate all over the country. So local funding tips the balance in favour of local organisations without management costs elsewhere in the country and perhaps with people they know running it or sitting on management boards.

This all means that fateful and fashionable word: “disruption”. If this is a big enough issue then national organisations could choose to become umbrella bodies rather than directly manage services, spinning local provision out to local organisations. They may also need to have a think about how they use charitable donations. No-one wants to know that their monthly direct debit is paying for a middle manager to attend a meeting with a middle manager from a local authority or central government, but that is often what they do. So it might be that they have to push hard for more charitable donations in order to do the advocacy and campaigning that go alongside actual provision.

Moving on, perhaps you had to read the definitions of long term housing and supported/extra care housing a few times to work out the difference? I know I did and I’m still not 100% sure. How exactly government plan to differentiate between the two, especially as there could be quite a big jump between the payments received for each, will be something to watch out for.

I’m going to stick my neck out and say that there will be appeal cases where providers have tried to claim a particular tenancy is long term housing rather than supported housing/ extra care and other cases where a landlord is trying to claim their housing is supported housing whilst decision makers disagree. Thinking back on the housing benefit system there seemed to be an large number of cases (at least for a few years) where what counted as “exempt accommodation” or provision “of care, support and supervision”, particularly by third parties, was debated again and again. So I think there will be a similar pressure to define both what housing can be included in any of these categories and then which are “long term housing” and which are “supported accommodation/ extra care”.

If this is a matter for universal credit decision makers then we have a whole other issue to consider, which is how we think people sat many miles away can make decisions about local areas. At least with housing benefit the authority would either know the organisation, get them in for a chat or visit the housing to look at it. I doubt universal credit decision makers will do that- they’ll just look at the details on paper and come to a view. The outcome: more appeals.

What we don’t know yet is what the payment gap between sheltered/extra care housing and long term housing will be.

The government have proposed that “sheltered rent” should be the formula rent (basically ratios of local rent and national rent levels and the estimated house price relative to the national average) plus or minus 10% plus eligible service charges. All of this is set to an overall cap, but we don’t yet know what that is and it is likely to be calculated on a local basis.

So the big question mark is will this be enough to pay for decent accommodation and secure new investment in the kind of housing people will need in the future? I’m guessing that there will be finance staff looking at spreadsheets up and down the country this week trying to work that out. The real difference is the extra 10%, but is 10% on top of the formula rent enough to imbue confidence across the sector? I don’t know, I don’t have access to the data, but as soon as those spreadsheets start coming up with an answer I am sure we will hear about it.