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A new government: where now for welfare reform? Scottish IRRV Conference 1st September 2010 Paul Howarth, Housing Benefit Strategy Division New government – new priorities • Additional £6bn contribution to the budget deficit this year • Emergency Budget - 22nd June • Spending review reporting in October • New Work Programme • Localism • Longer-term benefit reform 2 Overall context for reform • Budget deficit • Growing expenditure (Housing Benefit will cost £21 billion in 2010/11) • Principle of fairness • Improving work incentives • Working age benefit reform • Different arrangements for pensioners 3 Work Programme • New work programme, simpler and more effective • In place nationally by Summer of 2011 • Supports a wide range of customers • Delivered by contractors drawn from public, private and voluntary sectors • More personalised support, tailored to individual needs • Discussions on how this will apply in Scotland and Wales. 4 Housing Benefit Budget measures: short to medium term (1) From April 2011: • Local Housing Allowance levels will be restricted to 4 bedroom rate. • A new upper limit will be introduced for each for each property size (1 bed, £250; 2 bed £290; 3 bed £340; 4 bed, £400). • £15 excess provision currently payable within the LHA rules will be removed (as previously planned). 5 Housing Benefit Budget measures: short to medium term (2) From April 2011: • Size-criteria adjusted to provide an additional room for a non-resident carer where a disabled person has an established need for overnight care. • Staged increase in non-dependant deductions so that by 2014 rates will be at the level they would have been if uprated since 2001. From October 2011: • LHA will be set at the 30th percentile of rents in each Broad Rental Market area, rather than the median. 6 Housing Benefit Budget measures from April 2013 • Local Housing Allowance rates will be uprated on the basis of the Consumer Prices Index rather than local rents. • Housing Benefit for working age social-rented sector customers will be restricted for those who are occupying a larger property than their household size and structure would warrant. • Recipients of Jobseeker’s Allowance will receive their full Housing Benefit award only for a period of 12 months. After that period, their benefit will be reduced by 10%. 7 Current status and next steps • Impact assessment published – no behavioural assumptions made • Referred to Social Security Advisory Committee • Consultation with local authority associations • Aim to lay regulations in early November • Work with local authorities on implementation • Stakeholders and communications • Policy development on long-term measures (all of which require primary legislation) 8 Easing the transition • Discretionary Housing Payments - £20m funding increased by £10m in 2011/12 - Funding trebled from 2012/13 to £60m • Advice and support – work with CLG, Scotland and Wales, and with local authorities • Helping people who need to move • Welcome any thoughts on this 9 Universal Credit • Tax and benefit system should be made fairer and simpler • Respectable standard of living for all • Deliver affordable change • System more work-focused • Combine in and out of work benefits • Low earners retain more wages • Work preferable to additional benefit payments as a route out of poverty • Reduce high withdrawal rates 10 Universal Credit – including housing? • Implies reform in social rented sector • A much simpler structure • Eliminate separate in-work benefits • Helping people help themselves • Fewer delivery agencies • Greater integration = new delivery arrangements • What is best done centrally, what locally? 11 Further challenges ahead • Spending Review – further measures to address the deficit • All budgets under scrutiny • Impact on local government • CIS prompts and ATLAS • More process improvements • Risk-based verification 12 Conclusion • Major changes to the structure of Housing Benefit • Budget changes may be the first step • Investment funding will be hard to come by • Will need to do things differently • Less central direction • Potential for more data-sharing • Take the best from all worlds 13