1. Welfare Reform – The Challenges Tuesday 22 nd May 2012 Angela Forshaw Director of Housing & Customer Services

2. A little bit about LMH..... Liverpool Mutual Homes is a LSVT We are ‘tenant led’ We manage 15,500 homes We are the City’s largest HA We were the City’s ‘final transfer’ We set up in April 2008 We have a CEO, 3 Directors and 300 staff We will have invested £380m in our stock & neighbourhoods by March 2013

3. Tenants at the heart of what we do.... Started work programmes on day one Tenant priorities - c/heating and double glazing Good progress made - out performed the business plan - focus on quality and efficiency Award winning schemes e.g. Daneville - standard setting structural programme On-going tenant input, consultation & choice

4. More than just ‘housing’...... Local service delivery focus Resources based on area need and characteristics Good fit with partners across the wards and neighbourhoods Wider regeneration role – physical environment, ASB, education and employment, health and older people Whole community approach - work with all residents, partners and organisations

5. Welfare Reform Act – March 2012 Recap Improve work incentives – work always pays Simplify benefits system - make it less costly to administer Fairness – to those claiming benefits and the taxpayer Fairness – protect the most vulnerable Control expenditure and housing costs Encourage mobility in social housing sector Make better use of social housing stock

6. Universal Credit / Direct Payments Under-Occupation (Bedroom Tax) Non-Dependent Deductions Capping Disability Living Allowance / Incapacity Benefit Council Tax Benefit Liverpool Context 43,000 social housing tenants claiming HB (full & part) in Liverpool 11,636 LMH tenants claiming HB (full and part) Approximately 75.5% of LMH rent received direct Main Changes….

7. Timelines Royal Assent 8 th March 2012 - Some changes now, some April 2013, some October 2013 Move to Universal Credit to be completed 2017/18 For a period - 2 systems running - UC administered by DWP – October 2013 (maybe April 2014) - HB administered by LA until 2018 Welfare Reform Act

8. UC & Direct Payments - main features National Scheme administered by DWP Replaces: IS, WTC, JSA, HB, Child Tax Credit, ESA etc. Paid to working age claimants – monthly in arrears – direct Ambition - 80% plus of claims to be made online New work related requirements / commitments / tough sanctions October 2013 new claims / change of circs will go onto UC NOTE For people of pensionable age – housing costs part of Pension Credit from October 2013. New claims both claimants need to be of pensionable age (61 years as at April 2013 and rising).

9. Direct Payments – Risks Loss of Income – forecast 3 -10% nationwide LMH 1% = £550,000 ! Arrears increase – abandonment - homelessness Increased collection costs / court costs Relationship with DWP 13-15% new tenants - no bank account / don’t use DD regularly On-line claims - digital exclusion Claimant commitments / requirements / sanctions Welfare Reform Act

10. Under Occupation - main features DWP criteria per bedroom: Every adult couple Any other adult aged 16 or over Any two children same sex under 16 Any two children regardless of sex under 10 Any other child aged under 16 Note size criteria currently excludes - fostering, staying access, pregnant women Working age households from April 2013 (new and existing claimants) Note size criteria not applied to people in receipt of Pension Credit Social rent and affordable rent tenancies Reduces housing costs entitlement by 14% (£12) for 1 bed under occupation and 25% (£22) for 2 or more Welfare Reform Act

11. Under-occupation – Risks Estimated12 - 60% under occupation rate amongst HAs Financial impact £600-£1300 per year per household Hardship & increase in arrears Unable to meet demand for downsizing Tenant transfers - increased void costs Increased relet times - lack of demand for certain properties Welfare Reform Act

12. Non Dependent Deductions 10 year freeze on NDD reversed over 3 yrs - April 11 / 13 Lowest rates from £7.40 to £13.40 Highest Rate from £47 to £90 (average rent £70.70 !) DLA replaced by Personal Independence Payment - NDD no longer exempt from April 2013 Welfare Reform Act

13. Capping- April 2013 - main features ‘’No household will receive more in benefits than the average earnings of working households after tax” £350/week for singles £500/week for couples and lone parents (current figs) Doesn’t apply to Pension Credit or WTC recipients Who will the cap affect? - Large families entitled to a significant amount of CTC / families in high rental areas - Families with 4/5 children likely to see £12 / £40 per week shortfall applied to housing costs element of UC

14. Welfare Reform Act Other Risks Failure of tenants to engage with what’s happening Data gaps Changing job roles flexible teams / structures /different skills / competing priorities / resources Increased demands for support services e.g. RAISE, CABs Increase in Debt Relief Orders Void rates increase

15. Welfare Reform Act Preparing for the challenges Lobbying Information gathering / risk assessments Staff training & resource planning Policy & procedure reviews Relationship building with DWP New ways of working - including working with Banks / Credit Unions Communication !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

16. Welfare Reform Act Preparing our tenants for the challenges Employment & Training Initiatives - Shared apprenticeship scheme - VIP scheme - Work Clubs - Work Placements - Procurement

17. Welfare Reform Act Preparing our tenants for the challenges Digital Inclusion Initiatives - Internet cafes - Silver surfers - Training partnerships - Direct help

18. Welfare Reform Act Preparing our tenants for the challenges Financial inclusion Initiatives - ‘Money Matters’ in secondary schools - Tenant Newsletter articles - Work with Credit Unions / banks - Special mail-outs - Welfare Rights Advice – increased provision

19. Welfare Reform Act ‘Good housing is a determinant of good health, education and life chances. The Government’s housing and welfare reforms however, present a huge challenge for social landlords & tenants. As tenants are increasingly forced to make harsh financial decisions – ‘ digital inclusion, financial inclusion, worklessness initiatives’ – these phrases are becoming as common place in the housing office as ‘rent accounting and lettings policies’.

20. Welfare Reform Act Rising to the challenge… What can we do that we are not doing now? What works? What doesn’t work? How do we focus on those most affected? How do we help them? How do we prevent homelessness? How do we create safe and stable communities

21. Thank you for listening Let’s discuss?