Coping with Climate Change
Jules Birch sets the scene for a WHQ special feature on a year of welfare reform since the changes in April 2013
It was a year that began with metaphorical predictions of a perfect storm and at times in the last few months it has felt like that in reality.
But just as attention has turned from the immediate effects of the gales and floods to the need to mitigate against and adapt to their impact, so tenants and landlords have been forced to learn how to cope with their own form of climate change: the wave of welfare reforms imposed by the UK government.
The immediate impacts have been stark as indebtedness and arrears increase and evictions and homelessness start to rise. At a national level, the Westminster coalition has resisted all attempts to repeal the bedroom tax and the Court of Appeal has ruled that the bedroom tax and benefit cap are lawful despite the fact that they discriminate against disabled people and women.
Look away from Westminster though, and things are changing from below. This issue of WHQ reflects the huge efforts made by landlords, local authorities and tenants in Wales over the last year. In some cases these have successfully mitigated against the effects of welfare reform and helped to adapt to a changed environment but with even more cuts on the way there are limits to what can be done.
The features that follow in this issue of WHQ reveal the complex and developing picture that is developing on the ground. They look in more detail at:
• The Your Benefits are Changing campaign run by Community Housing Cymru as it embarks on phase two
• The efforts made by Cardiff Council to make discretionary housing payments go further by helping claimants prepared to help themselves
• The impact of the bedroom tax on NPT Homes and its tenants
• The challenges posed by welfare reform in rural areas as reflected in the experience of Mid Wales Housing Association
• How North Wales Housing has worked in partnership with Fareshare North Wales to set up a food project for vulnerable tenants
• How tenants have successfully challenged bedroom tax decisions at First Tier Tribunals and won a string of victories on room size, room use and human rights grounds.
However, severe challenges remain and the pressure is growing. Disabled people are going through a swathe of changes to disability benefits and they are disproportionately affected by the bedroom tax. Tenants in specially adapted properties are meant to be protected from its worst effects but research by Wales and West Housing has revealed the gap between the theory and the reality and the cost implications that could follow.
Many providers of supported accommodation in Wales feel like they have been left in limbo over the future of housing benefit. The DWP’s plans for exempt supported accommodation have become a little clearer but uncertainties remain.
And the future of universal credit
remains shrouded in uncertainty too. What is perhaps the most important welfare reform of all was meant to have started by now but is instead confined to a handful of pilot areas. The prospect of direct payment of the housing element to tenants has huge implications for the future and for landlords’ finances. It’s still not clear when – or even perhaps if – this will start but lessons are already being learned in the direct payment demonstration project in Torfaen.
For now though it’s a case of making the best of a bad situation for landlords and tenants alike. As Shelter Cymru explains, the funding and operation of discretionary housing payments (DHPs) are now vital issues. In February the Welsh Government provided an extra £1.3 million for DHPs. This work to mitigate against the effects of welfare reform was the focus of a report published in January by a Welsh Government Task and Finish Group. It makes a series of recommendations on how this work can be made more effective and more consistent across the country. While the DWP has already ruled out measures such as allowing councils to carry over DHP underspends again, the aim is to make the most of the help that is available.
However, more cuts are on the way and next year could be the crunch time for decisions on evictions by landlords. And what will the attitude of the courts be? In retrospect, a perfect storm seems the wrong way to describe welfare reform. True, lots of changes hit at once in April 2013 but more are planned and even more could be on the way depending on the result of the 2015 Westminster election.
A powerful illustration of the scale of these impacts came in a cumulative impact assessment of all of the cuts in benefits and tax credits published bythe Welsh Government in January. The analysis suggests that in 2015/16 they will cost Wales the equivalent of £480 for every adult of working age (see box for the estimates for each area). The biggest losses come not from the reforms that have generated the most controversy but from much less-publicised policies like uprating benefits by less than inflation that mean the cuts will keep on accumulating.
Climate change is here to stay.
Making the best of what we have
Recommendations from the task and finish group report on the impact of welfare reforms in the social rented sector published in January include:
• The Welsh Government should top up the discretionary
housing payment (DHP) fund to local authorities
• The DWP should allow local authorities be to carry over DHP underspends
• DWP should alter guidance so that specific client groups are protected and local authorities ringfence DHPs for them and ensure that disability benefits are treated more fairly
• Local authorities should adopt a ‘triage’ approach to DHPs to identify problems and solutions and build on the experience of housing benefit mitigation officers
• DWP should agree to take all disability income into account without any disregards and then offset any pertinent expenditure supported by that benefit
• An appeal toolkit to enable people to challenge bedroom tax decisions should be made available to all local authorities
• Tenants who choose not to engage or try to help themselves should be treated as a low priority for DHPs
• CHC and local authorities should report regularly to the Welsh Government on the levels of bonds and rent in advance being demanded to secure tenancies.
The cumulative impact on Wales
A Welsh Government study estimates that welfare reforms will reduce benefit and tax credit entitlements in Wales by £900 million in 2015/16.
The report also estimates the average loss per working age adult per year at £480 for Wales as a whole in 2015/16. These are the figures for each local authority area:
Neath Port Talbot £606
Blaenau Gwent £585
Merthyr Tydfil £580
Bridgend £548
Rhondda Cynon Taf £543
Caerphilly £541
Torfaen £539
Denbighshire £522
Newport £508
Swansea £486
Carmarthenshire £485
Conwy £484
WALES £480
Pembrokeshire £470
Isle of Anglesey £457
Wrexham £449
The Vale of Glamorgan £436
Cardiff £433
Flintshire £410
Monmouthshire £394
Powys £391
Gwynedd £373
Ceredigion £363