The Government must use the “hard lessons” it learnt from welfare reforms which caused “significant financial and human costs”, says the National Audit Office (NAO).
In a new report published today, the NAO criticised the Department for Work and Pensions (DWP) “important and high profile failings” in implementing an unprecedented number of welfare reforms and employment programmes.
The report says the Government “relied too heavily on uncertain and insufficiently challenged operating assumptions, and did not have a sufficient understanding of its portfolio of programmes or overall capacity.”
It adds that the DWP has a “high-level vision but needs to think more strategically when considering how reforms will work in practice.”
“The Department has thought too late about the management information and the leading indicators it needs to understand progress and performance”, says the NAO. “This meant the Department took several weeks to identify backlogs in Personal Independence Payment claims.”
Auditors credited the Government for responding well “to uncertainty”, but added that it “should be able to set out plans with specific timetables, costs and impacts and reflect where flexibility is needed.”
“They should also have clear processes for revising plans against changing circumstances or expectations”, says the NAO.
The NAO criticised the DWP’s initial handling of the Universal Credit. The NAO says the department “held too rigidly to fixed deadlines and now has adopted a more flexible approach. It will need to reconcile this approach with the requirement to monitor progress against milestones.”
In implementing a significant welfare reform programme, the DWP “relied too heavily on reacting to problems and has not been able to anticipate possible failings or establish the principal ways in which performance and progress can be measured”.
The NAO called on the Government to “plan more openly for the possibility of failure, and build an integrated view of portfolio risks and capacity”.
Amyas Morse, head of the National Audit Office, said:
“Any large portfolio of reforms will run into problems. The Department has shown a resolute approach to dealing with them. However, we think it has relied too much on dealing with difficulties as they emerge rather than anticipating what might go wrong.
“As a result it has had to learn some hard lessons with significant financial and human costs. It is important that the Department use these hard lessons to improve how it manages change and anticipates risk.”
Gillian Guy, Chief Executive of Citizens Advice, said the Government must learn from the mistakes of previous changes to welfare.
Citizens Advice has found that delays and problems with the delivery of reforms such as Employment and Support Allowance increased hardship and anxiety for many people. Last year we helped people with almost two million benefit issues, more than any other type of problem.
“As Ministers look to make further savings from the welfare budget it is important they fully understand the impact proposed reforms have on people’s lives.
The Government must be certain that further cuts won’t just shift costs away from the welfare budget and into other areas such as health and social care.
Changes to benefits can have a far-ranging impact on people’s lives, so any reforms need to delivered at a safe and steady pace.”
Source – Welfare Weekly, 29 May 2015
Council tax debt has overtaken credit cards as the most common form of debt requiring advice and support, says a leading charity.
The Citizens Advice Bureau (CAB) says it expects to help more than 191,000 people struggling to pay Council Tax in 2014/15 – up 20% on the previous year.
And according to a report from the CAB, rising rents could result in up to 122,800 people requiring help with rental debts by the end of March 2015.
The Government abolished Council Tax Benefit at the end of March 2013, meaning that some of the poorest people are having to pay for the very first time.
The move has resulted in a postcode lottery, with benefit claimants and low-income households paying more in some areas than others, depending upon each local authority’s Council Tax Reduction scheme.
A growing proportion of people are approaching the CAB for help and advice on paying rent, council tax, water and fuel debts. Meanwhile, financial issues related to credit cards, mortgages and unsecured personal loans have declined.
While more households are struggling with Council Tax and housing costs, debts resulting from credit cards are expected to fall by 12% in 2014/15 – exposing the ‘changing face of household debt’.
The mainstream credit problems of the post-2008 period have turned into problems with priority debts, says the CAB.
Despite a recent fall in fuel and petrol prices, the CAB also highlights how households have had to endure a 210% rise in energy costs over the last 10 years.
The CAB highlights how the Office for Budget Responsibility expects household debt to soar to a record high of £2.43 trillion by 2019.
There has also been a significant rise in the amount of debt held by self-employed people – up 41% to £20,000. They now represent the highest percentage of people helped by the CAB at 29%.
Citizens Advice is carrying out a separate study about the challenges that self-employed people face.
Behind the self-employed come unemployed people, who have an average debt of £17,500. Pensioners come in a close third, with an average total debt of £17,200.
13% of CAB clients had ten debts or more.
Source – Welfare Weekly, 16 Feb 2015
Since the introduction of employment tribunal fees in July 2013, Citizens Advice report that four out of five employees who would otherwise have taken their employer to a tribunal are put off by the cost.
An employee wishing to take action against unfair treatment in the workplace or unfair dismissal faces fees of between £160 to £250 to issue a claim, and between £230 and £950 for a tribunal, which can bring the cost of making a claim to as high as £1200.
Citizens Advice found that of the people experiencing employment problems they surveyed, only 30% were aware that there was financial support available, leading the charity to call for better promotion of the support available, including a web based tool where people could check their eligibility.
Gillian Guy, Chief Executive, Citizens Advice said “The employment tribunal system is imbalanced against claimants. Fees are pricing people out of basic…
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Six of the country’s biggest “debt hotspots” are in the North-East, a report has revealed.
South Tyneside, Darlington, North Tyneside, Gateshead, Middlesbrough and Northumberland have some of the biggest clusters of people seeking help from Citizens Advice in England and Wales.
The charity dealt with 405 clients in Denbigshire between July and September – or 0.54 per cent of the adult population – making this area of North Wales the top debt hotspot.
South Tyneside was fourth with 607 clients seen (0.5 per cent); Darlington joint fifth with 410 clients (0.49 per cent); North Tyneside joint seventh with 776 (0.48 per cent); Gateshead 748 (0.46 per cent) and Middlesbrough 499 (0.46 per cent) in joint 11th and Northumberland in joint 15th place with 1,166 clients seen or 0.45 per cent of its adult population.
The charity, which has helped almost half a million people with debt over the last year, made the findings after analysing the cries for debt help it received over the three month period.
Citizens Advice said since the economic crisis, problems with consumer debt such as credit cards and personal loans have fallen significantly. By contrast, problems with “priority debts” such as rent arrears and council tax debts are growing.
Gillian Guy, chief executive of Citizens Advice, said:
“Times have changed, and so have people’s debt problems.
“Consumer debts like credit cards and personal loans have traditionally been the most common debt problems. But now priority debts such as council tax arrears are gradually building up as people struggle to cover everyday costs.
“In the past, people were more likely to get help for debt problems triggered by life events such as illness, redundancy or separation.
“But in recent years more people are being pushed into debt as they struggle to stretch their income to cover everyday living costs.”
Here are the biggest debt hotspots across England and Wales, according to Citizens Advice, with the number of people it helped between July and September, and also expressed as a percentage of the local adult population:
1. Denbighshire, 405, 0.54%;
2. Merthyr Tydfil, 248, 0.53%;
3. Stoke-on-Trent, 1,031, 0.52%;
4. South Tyneside, 607, 0.50%;
=5. Darlington, 410, 0.49%;
=5. Salford, 908, 0.49%;
=7. Copeland, 276, 0.48%;
=7. North Tyneside, 776, 0.48%;
=9. Mendip, 411, 0.47%;
=9. Liverpool, 1,793, 0.47%;
=11. Stevenage, 303, 0.46%;
=11. Gateshead, 748, 0.46%;
=11. Middlesbrough, 499, 0.46%;
=11. Torfaen, 330, 0.46%;
=15. Northumberland, 1,166, 0.45%;
=15. Lincoln, 348, 0.45%;
=17. Cannock Chase, 336, 0.43%;
=17. Barrow-in-Furness, 240, 0.43%;
=17. Hastings, 310, 0.43%;
=17. Sandwell, 1,015, 0.43%
Source – Northern Echo, 06 Dec 2014
Government funding cuts to local authority welfare provision will leave struggling families starving and at risk of eviction, councils leaders will warn today.
Government funding for local welfare assistance schemes is to be scrapped by the Communities Minister Eric Pickles, removing £347 million in emergency aid for the very poorest in our society.
The funding is used by local authorities to help aid struggling families in their hour of need to purchase food, fuel, rent, clothing, or replacing crucial home appliances such as a freezer or cooker – among other uses. Some of those who will be affected by the change are benefit claimants, who may have been hit by draconian sanctions or delayed payments.
The Local Government Association (LGA) is calling on the government to rethink their position, warning that councils will not be in a financial position to fill the funding gap.
LGA research has found that three-quarters of local councils would be forced to cut local welfare support, or scale back the provision. 15% said they would have to end it completely.
Local welfare assistance schemes replaced crisis loans in 2013. But only a year into the new scheme the government now wishes to scrap central funding; piling unimaginable financial pressure upon local authorities, who have already seen general funding slashed as part of the government’s austerity drive.
Cllr Claire Kober, chair of the Local Government Association’s Resources Board, told the Daily Mirror:
“This fund has been used by councils to provide crucial support to people facing personal crises in their lives, from help paying the rent to putting food on the table.
“We think the Government has made the wrong decision to remove the funding for this safety net and it was misjudged to have done so.
“Thousands of people have been helped through local welfare schemes, which have been far more effective at getting support to those most in need than the Government crisis loans scheme which it replaced.
“If government pulls the plug on funding from April, many local authorities will be unable to afford to make up the difference at a time when we are tackling the biggest cuts to council funding in living memory.”
Citizens Advice Chief Executive, Gillian Guy, said:
“People in crisis would be left stranded by loss of Government support. Even with these important schemes, far too many people are unable to get basics like food, fuel or clothes. Citizens Advice has dealt with more than 25,000 enquiries about local financial assistance in the past year.
“Emergency financial help schemes are a vital part of our state safety net. Acting fast to prevent people in dire financial straits from facing homelessness or health problems is not only the right thing to do for the individuals themselves, but will save councils and Whitehall money further down the line.
“Many councils are good at quickly delivering help to people who have nowhere else to turn. Government should continue to back these lifelines by putting in place long-term programmes which are properly funded and based on the first-hand insight of councils and local charities.”
A government spokesperson said: “This Government has given councils more control because they understand their residents’ welfare needs best. We are now consulting on how funding should be provided for 2015/16.”
Source – Welfare News Service, 06 Oct 2014
Almost a MILLION working parents are being forced to skip meals so that they can afford to pay the rent or mortgage, shocking new figures reveal.
A survey by YouGov, on behalf of the housing charity Shelter, has revealed that more than one in ten working families are going hungry to pay housing costs, while over a third admit they have cut back on buying food.
36.7% said they had cut back on how much they spend on food and 12.9% had put off buying shoes for their children. 9.7% said they had delayed purchasing school uniforms.
Government figures show that households spend, on average, 28% of their total income on housing costs. This rises to 40% in the private rental sector.
Shelter highlights the story of Katherine and her husband who both have full-time jobs but still struggle to pay their mortgage. “My husband and I don’t have breakfast because we can’t afford it, and we miss evening meals two or three times a month to help with the mortgage”, Katherine said.
She added: “We’ve really had to cut back on the basics, and I even had to send our daughter to school in an old uniform that I knew was too small; it made me feel horrible. We are already at breaking point, so I honestly don’t know what we’d do if our financial situation got worse; it really frightens me.”
Campbell Robb, chief executive of Shelter, said:
“No parent should be forced to choose between putting food on the table and paying for the roof over their children’s heads. These shocking figures show that millions of us are having to make these kind of agonising choices every day.
“Sky-high housing costs and cuts to support are leaving many families trapped on a financial knife-edge.”
Shadow Work and Pensions Secretary Rachel Reeves said: “This report provides shocking new evidence of how the Tories’ cost of living crisis is hitting hard-working families.
“While David Cameron says the economy is fixed, people who put in the hours to provide for their children are finding it harder and harder to make ends meet.”
The number of calls Shelter receives related to rent arrears has more than doubled in the last three years, and the majority of people regarded as living in poverty in the UK are in work.
Citizens Advice Chief Executive Gillian Guy said:
“Housing costs have left some families standing on a financial cliff edge. Working households that have already cut back on spending to get by could find themselves in the red if interest rates go up.
“Citizens Advice research shows 3 in 5 households are worried about the impact of rising bills this year, with over half forced to cut spending to balance the books.
“The competing pressures of sky-high childcare bills, rising energy costs and wages which are consistently below inflation, mean many people are struggling to pay for the roof over their head.
“Citizens Advice dealt with nearly 87,000 social housing rent arrears problems last year, up 10 per cent from 2012.
“It is welcome news that more people are in work, putting more households in a position to get on top of their bills. However, with record numbers of people becoming self-employed and increased numbers of jobs with uncertain hours, families face increasing instability in their income.
“An interest rate rise would put some in a more precarious position, so any rise needs to be slow and steady in order for families to manage the extra cost.”
According to the latest figures, there has been a 19% rise in cases of malnutrition in the UK over the past twelve months. Food prices have risen by 12% in seven years, while average wages have only increased by 7.6% over the same period.
Tory Housing Minister Brandon Lewis said: “Contrary to Shelter’s claims, repossessions are actually at their lowest since 2007 and down almost a third since last year.
“Our efforts to tackle the record deficit we inherited have helped keep interest rates at a record low, meaning home ownership is at its most affordable since 2007 while private rent levels are falling in real terms.”
Source – Welfare News Service, 28 Aug 2014
Housing Associations have told tenants in receipt of Housing Benefit to pay their rent a month in advance, due to growing fears over Universal Credit.
Housing providers fear that tenants in receipt of Housing Benefit may default, or fall behind on their rent payments when they are transferred (moved) to Universal Credit, which is replacing six existing benefits and rolling them into one single monthly payment.
Those claimants will then be expected to manage their own housing costs – a month in advance. In the minority of cases where a claimant may not be able or capable of managing their own housing costs, rent payments may still be paid directly to housing providers.
Six Town Housing based in Bury, Lancashire, has told its tenants that “you need to make additional rent payments now if you are affected by the introduction of universal credit. Otherwise, you are at risk of your rent account falling into rent arrears.”
The Town and Country Housing Association, who manage social housing properties across 22 local authorities, is asking its tenants in receipt of Housing Benefit to pay an extra £14.60 every month, until they are a month in credit. “This will ensure that when you transfer to universal credit you will not be in arrears which could put your tenancy at risk,” the Housing Association said.
Town and Country also refused to reimburse a tenant who had wrongly been asked to pay the controversial ‘bedroom tax’. The tenant was owed £362, however the Housing Association said it would be in the “best interests” of the tenant for the over-paid rent amount to remain on their account.
Gillian Guy, Citizens Advice’s chief executive, told the Guardian newspaper:
“It’s for householders to manage their finances, not landlords or housing associations. There’s a difference between advising people to be financially prepared and doing it for them, and it would be concerning if the latter were the case.”
Source – Welfare News Service, 17 Aug 2014
A rise in employment and sharp drop in the number of people out of work has had little effect on the scandal of low wages, the latest figures show.
Figures released by the Office for National Statistics (ONS) on Wednesday show that the UK unemployment rate has fallen sharply by 132,000 between April and June to 6.4%, the lowest since 2008, with a total of 2.08 million unemployed people in the UK. The figure does not include the 8.68 million people who are regarded as being ‘economically inactive’, or unavailable/unable to work. The economic inactivity rate now stands at 21.9% and is unchanged compared with January to March 2014.
The lower than expected wage growth figures come at the same time as other figures show that the UK is now the self employment capital of western Europe. Figures from the think tank IPPR show that the number of self-employed people in the UK has grown by more than 1.5 million over the last thirteen years, growing at its fastest rate during the first quarters of 2013 and 2014. Self employed people now represent more than 15% of the workforce. Around two-fifths of all jobs created since 2010 have been in self-employment.
Unions have expressed concerns that self-employment can often be insecure and low-paid, and may not always include the employment rights other workers are accustomed to.
Unite general secretary Len McCluskey said: “The British economy is in a Jekyll and Hyde situation.
“While the fall in the jobless total of 132,000 is welcome, we have to ask what sort of jobs have those people entered? The situation is compounded by the fact that more and more people are being driven into so-called self-employment in a desperate bid to get off benefits and find work.
“Self-employment is not the economic panacea that ministers crow about; it forces workers into a state without rights and with wage insecurity, and we are increasingly encountering people forced into `self-employment’ by employers who want to swerve their responsibilities.
“At the same time, the wage siege continues. If you strip out bonuses, wage rises are struggling along the bottom at a record low of 0.6 per cent which is hobbling the recovery in the UK economy. If self-employment earnings figures were included it would look even worse as the Resolution Foundation has shown.
“With George Osborne borrowing way beyond what he promised the nation, his mindless austerity policies are costing this nation and its people dear. This is no longer about reducing the deficit; it is about the systematic lowering of the living standards of ordinary people.
“Millions of people feel insecure in their jobs. Hundreds of thousands of our young people are languishing on the dole or press-ganged into workfare.
“Inflation is still running at 1.9 per cent – more than three times the rate of earnings. The case is clear that Britain’s workers need a pay rise – and this can be well-afforded by the companies which are sitting on a cash mountain of reserves.
“This government’s claims of economic competency are laughable. A government serious about job creation would not be borrowing to keep people in benefits, but would be investing to create work and skilled, decent jobs, through a mass house-building programme, rebalancing the economy away from its increasing dependency on the low-wages service sector, and tackling the chronic housing need in this country.”
TUC General Secretary Frances O’Grady said:
“The combination of rising employment and falling pay growth suggests the economy is very good at creating low-paid jobs, but struggling to create the better-paid work we need for a fair and sustainable recovery.
“Self-employment has been responsible for almost half of the rise in employment over the last year. The fact that self-employed workers generally earn less than employees means our pay crisis is even deeper than previously thought, as their pay is not recorded in official figures.
“Falling unemployment is always welcome – particularly for young people who are finally starting to find work – but unless the quality of job creation increases Britain’s living standards crisis will continue and people will be locked out of the benefits of recovery.”
Unison general secretary Dave Prentis said: “Any fall in unemployment is welcome but the rise of the number self-employed is a worrying trend. They are likely to earn less than those in full time jobs as well as being less secure.
“Underemployment is now a bitter reality for millions of struggling families across the UK. And many have no option but to work part-time because they cannot find a full-time job.
“Too many people are stuck in minimum wage jobs, on zero hours contracts and part time work when they are desperate to go full time. Desperate because they need regular, secure employment to feed their families without having to resort to foodbanks, pay their bills without falling into the grip of pay day lenders and decent pay to rebuild consumer confidence and grow the economy.”
The Citizens Advice Bureau (CAB) has described today’s unemployment figures as a “double-edged sword”. The charity says that falling unemployment coupled with low wages and an increase in self employment ‘will lead to instability for working households’.
Citizens Advice Chief Executive, Gillian Guy, said:
“With employment up but wages down, today’s economic figures are a mixed blessing for working families. The rising number of people in work is extremely welcome, but emerging trends in the economy bring a double-edged sword of more jobs but more instability and lower wages.
“The Government has undoubtedly made good progress on jobs and growth but increased self-employment, flexible-hour jobs and Zero Hour Contracts mean insecurity for many working people. Those people who work for themselves are just as likely to seek debt advice as any other working group. Self-employed people in debt helped by Citizens Advice are more likely to face bankruptcy than people in debt who are employed or out of work.
“On Zero Hour Contracts, we’ve had welcome announcements from the Coalition about banning exclusivity clauses but with this type of job a growing part of our economy, people with such a contract should also be guaranteed basic rights like maternity pay and annual leave.”
The Bank of England has responded to today’s news about poor wage growth by cutting its forecast in half. Bank of England governor Mark Carney said that he now expects salaries to rise by 1.25% this year. The figure represents the slowest pace in wage growth since 2001.
Responding to the announcement from the Bank of England, TUC General Secretary Frances O’Grady said:
“It is hugely concerning to hear that the Bank has cut its forecast for wage growth in half. The economy’s getting bigger but not better with Britain’s pay squeeze now set to continue even longer.
“It’s not just wage stagnation that’s pushing down incomes, living standards are falling because so many of the new jobs being created are low-skilled, don’t have enough hours, or are in low paid self-employment.
“It deeply worrying that the Bank says ‘average household real incomes have yet to stage a meaningful recovery’. If people don’t have money in their pay packets to spend on goods and services it’s hard to see how we can return to sustainable growth. Consumer spending is holding up for now despite people’s real pay falling, but the danger here is people running down savings or increasing their debts.
“That’s why Britain needs a pay rise, because a recovery built on stronger household incomes will be a recovery built to last.”
Citizens Advice Chief Executive, Gillian Guy, said: “As the economy continues to grow, ministers must not lose sight of the more than two million people stuck in the shadow of growth, and out of work. The legacy of recession is wages which remain far lower than prices, and with the Bank of England halving its wage growth forecast, many families will find that meeting household bills is even harder.
“Ministers need to make sure good policies, like financial support for childcare, reflect the new realities in the labour market. People taking up the growing number of flexible-hour and low income jobs are likely to struggle to get decent childcare, whilst 41 per cent of Citizens Advice clients say that finding a childminder or babysitter is a barrier to them taking on work.”
Source – Welfare News Service, 13 Aug 2014
The introduction of employment tribunal fees has contributed to a 73% fall in tribunal claims, new research from the Citizens Advice Bureau (CAB) reveals today.
Since the coalition government introduced employment tribunal fees of up to £1,200 last year, figures suggest that the number of claims brought against employers dropped by 73% between October 2013 to March 2014, on the same period the previous year.
Citizens Advice claim that the new fees are deterring employees from bringing forward legitimate claims against employers and are allowing bosses to get away with “unlawful sackings and withholding wages”.
An analysis of 182 employment cases brought to the CAB between June and July 2014 found that only 31% of potentially successful claims were likely to proceed to tribunal. In over half of cases people said that employment tribunal fees, and other costs, were deterring them from taking their case forward.
The analysis also found that a quarter of employment claims worth less than £1,000 were not pursued and a fifth of all claims were based upon alleged employer discrimination.
CAB say that unfair dismissals, withholding wages and holiday pay were the most common reasons given by workers for considering legal action against employers.
The charity has witnessed a 42% rise in people visiting its website seeking employment advice and employment tribunal searches are up 54% on last year. This comes as people say they are fearful of retribution and losing their job if they take legal action against their employer.
A case study included as part of the research tells the story of a kitchen porter known as Jack. The CAB say that Jack was denied £300 holiday pay he was entitled to and sought assistance from the charity.
Jack was advised that because his partner was working he would not qualify for remission of the Employment tribunal fees. On being informed that taking his case forward would cost £390 in tribunal fees, Jack understandably decided that it would not be ‘cost-effective’ to continue with the claim.
Gillian Guy, Citizens Advice chief executive, said:
“Employers are getting away with unlawful sackings and withholding wages. People with strong employment claims are immediately defeated by high costs and fees.
“The risk of not being paid, even if successful, means for many the Employment Tribunal is just not an option. The cost of a case can sometimes be more than the award achieved and people can’t afford to fight on principle anymore.
“Citizens Advice wants to see a fair and robust review of the Employment Tribunal system to make it work for all people and employment abuses eradicated.”
Source – Welfare News Service, 27 July 2014
Citizens Advice has called for further improvements to the sanctions system, as today the Independent review of the operation of Jobseeker’s Allowance JSA sanctions validated by the Jobseekers Act 2013 is published. The review found that the DWP and Jobcentre Plus need to improve communication with claimants who have been sanctioned, particularly those who are vulnerable.
Citizens Advice Chief Executive Gillian Guy said:
The JSA sanctions regime can create more barriers for people already struggling to find work. Communications failures mean sanctioned claimants often don’t know they’ve been sanctioned, why, and what next steps are available to them. We see huge numbers of people whose ability to make ends meet has been shattered when they’ve been sanctioned, in some cases forcing them into debt or to a foodbank.
There’s been a 60 per cent increase in people with JSA sanction problems coming to Citizens Advice Bureaux since the extension of the minimum sanction period from one week to four in October 2012. One of the knock-on effects often experienced by clients is that the sanction led to their housing benefit being stopped, when the rules say it shouldn’t be.
Jobcentre Plus and DWP have a lot of work to do to make sure people know where they stand and where to turn for help. The effectiveness and proportionality of the JSA sanctions regime needs to be addressed, including a reduction in the current minimum four week sanction period. People who can work should be able to and receive the support they need to gain employment. That’s why we need a system that sets people up to succeed, and doesn’t put them in an impossible position where dealing with a sanction means it’s harder for them to look for a job.
Citizens Advice has found that many JSA claimants are already struggling to make ends meet. From October to December last year:
- 1 in 4 Citizens Advice clients with a JSA sanction problem had dependent children
- 1 in 4 identified as being disabled of suffering from a long term health condition
- 1 in 6 also had a debt problem
- 1 in 10 had issues with rent arrears or threat or reality of homelessness
Source – Citizens Advice, 22 July 2014