A call for action!

We have always maintained that the UK Government’s welfare reform programme will have devastating consequences for communities in Wales.

It therefore came as no surprise when a recent Wales Audit Office report published evidence stating that welfare reform is having an adverse and disproportionate effect in Wales. The report found that a greater proportion of Welsh social housing tenants have had their housing benefit reduced than elsewhere in the UK, with 51% of tenants reporting an increase in personal debt. This was backed by evidence from social landlords showing a £5.3m increase in rent arrears in the first six months of the removal of the spare room subsidy and the introduction of the benefit cap.

For some Welsh social housing tenants, the welfare changes will have created a level of hardship and a spiral of social and economic deprivation that will be hard, if not impossible, to break.

This is easier to understand in the context of:

·                     higher (on average) unemployment than anywhere in the UK

·                     a heavy reliance on the public sector as an employer

·                     households paying 5% more for electricity than the rest of UK 

·                     higher rates of digital exclusion than other UK regions - 39% of social housing tenants have no access to PC 

·                     a five-fold increase in the use of foodbanks over the last 2 years – 29.7% by people who had experienced welfare benefit delays

·                     a £4.1m cut in specialist advice services, despite increasing need 

In 2013, the Welsh Affairs Select Committee also published evidence highlighting how the spare room subsidy had been a “policy failure” in the Welsh Valleys where, effectively, a social housing tenant moving to a smaller property in the private rented sector would cost the tax payer more money.  

  

So what are social landlords doing?

60% of Welsh social landlords have reported an increase in management costs as they refocus their resources to manage welfare changes. Most landlords are also prioritising tenants affected by the spare room subsidy to move, more tenant profiling, providing low level money advice and budgeting services, and investing significant amounts of money in awareness raising, and have programmes in place to help tenants back into work. A rise in rent arrears and the increased costs of managing welfare changes still means, however, that Welsh housing associations and local authorities are struggling to find effective and sustainable solutions to the challenges they face.

These challenges will be exacerbated by direct payments and the roll out of Universal Credit unless action is taken now. We need more control over welfare and the flexibility to provide: 

·                     choice to tenants about payment options 

·                     more investment in specialist services such as Your Benefit Are Changing - a service that demonstrates high levels of success in mitigating the worst effects of welfare reform

·                     local solutions tailored to local needs  

CHC and others have been highlighting the negative impact of welfare reform on Wales for some time and we will continue to make the call for a fairer welfare system for Wales to prevent further deprivation. Prevention is always better, and definitely more cost effective, than cure.

Amanda Oliver
Head of Policy and Research

You can read the CHC Group’s response to the report here, and you can read the report itself here

'Bedroom tax' will mean 1,000 fewer affordable homes. Devolve welfare to Wales!

The moral and ethical arguments against the ‘bedroom tax’ have always been weak. While ideology may lead you to divide between the ‘deserving’ and the ‘undeserving’ poor, ideology cannot deny the evidence, and it is ultimately evidence which should dictate government policy.

Since the ‘bedroom tax’ was introduced just over six months ago, we see a double whammy affecting the housing supply crisis. Arrears from the ‘bedroom tax’ have exceeded £1m and a rise in the number of void properties has meant that over 700 homes in the sector are empty. Just 3% of the 22,000 housing association tenants affected have been successfully downsized. We have always argued that there are simply not enough one and two bed properties to move people to. With an estimated 90,000 on social housing waiting lists, how can we justify a policy that sees Wales losing out on 1,000 affordable homes?

Of course, the effect on housing associations is only half the story. Tenants are already struggling to afford the basics, the use of food banks is increasing, energy companies are increasing their prices and we are seeing a surge in the use of high interest lenders and loan sharks. Some payday lenders are reported to be planning to treble their business on the back of so-called welfare 'reform’, people are being pushed further into poverty and the threat of losing their home is very real.

Landlords are faced with tough choices. We note what’s been happening around Wales with various protests, often the landlord getting the blame. Tenant groups and some politicians have campaigned for a ‘no bedroom tax evictions’ policy, but landlords can’t continue to subsidise the extra costs brought about by welfare reform which would impact on the potential reduction in services for other tenants who pay their rent.

This divisive measure threatens social justice and cohesion, turning tenant against tenant, tenant against landlord and vice versa. We need to stand back and realise that the only solution is to take power closer to the people.

As a sector we have been doing all we can to mitigate against the reforms. We’ve launched the ‘Your Benefits Are Changing’ campaign to raise awareness and have set up an advice line to provide free independent advice to those affected. We’ve also supported the expansion of Moneyline Cymru, a not for profit organisation set up and part funded by Welsh housing associations for people largely ignored by mainstream lenders. Moneyline Cymru branches have issued over 13,000 loans to the value of more than £6m since it was set up in 2009. Customers are also encouraged to open a savings account with nearly a third opting to do so, collectively saving a total of £900k.

Last week the Labour Party tabled a motion in the House of Commons to repel the ‘bedroom tax’, and the vote was lost by only 26 votes. So if robust statistical evidence which shows that this policy is failing is not enough for the UK Government to axe this pernicious policy, what can we do? The solution is for Welfare Reform to be devolved to Wales.

In an asymmetric union, we can now look to Northern Ireland and see them use their powers in welfare policy to do something different. They have legislated to stop the ‘bedroom tax’ affecting existing tenants. Like Wales, it is affected to a far greater degree than England and Scotland, but their devolution settlement has allowed them to protect the people of Northern Ireland from the policy, and also to adapt the upcoming changes to Universal Credit and Direct Payments to fit the needs of Northern Irish tenants. With the Silk Commission due to report on further powers for the Assembly in the New Year, what chance they listen to CHC’s recommendation that Wales is given parity with Northern Ireland on welfare powers?


Nick Bennett
Group Chief Executive, CHC Group


You can read the full press release on CHC's 'bedroom tax' research here.

Working with the Young Foundation's Accelerator Programme

 “Charity is injurious unless it helps the recipient to become independent of it.”

                                                                 John D Rockefeller

Is there an advice or support agency out there who doesn’t agree with this sentiment? It has long been acknowledged that an environment which fosters co-dependency is counter-productive, both for the service user and service provider, whose resources are invariably becoming ever scarcer.

This is mirrored in the relationship between service provider and funding organisation. Gone are the days when advice providers, or any third sector organisation for that matter, can expect indefinite hand-outs from funding bodies. Everyone is being asked to do more for less and with the increase in the number of social enterprises; the expectation is that most organisations will eventually be able to 'wash their own face'.  

This was the situation CHC’s money advice service, the Your Benefits are Changing (YBAC) team, found itself in as we moved far too quickly towards the end of the 3 year funding allocation we had received from the Big Lottery (Thanks BIG!). YBAC is an awareness raising campaign. We aim to raise awareness of changes impacting on the most vulnerable in our communities and offer practical, workable solutions and advice. The YBAC team has spoken to over 4,000 people at community events this year. 

Luckily for us, the Young Foundation happened to be in town and a couple of months ago we found out that, along with 8 other projects, we had been chosen to take part in the Young Foundation’s first Welsh Accelerator programme.  

Every couple of weeks, the projects meet up with experts brought in by the Young Foundation for an intensive two days. We are all at different stages of development but everyone seems to agree on one thing: we know our customers well.  

Nevertheless, the tools which have been bestowed upon us by the Young Foundation have allowed us to look at YBAC under the microscope and spot the gaps in our business plan. And access to people who make funding decisions in their daily work allowed us to ponder on some of those really difficult questions. 

We are just about to reach the half way mark in the process, at which point we can expect to hear news of which mentor we have been matched with.  This is particularly exciting for me as it is the bit I have been looking forward to the most.

But what does this mean for YBAC? It means that by January we will have a water-tight business plan with which to approach funders. It means that we will have skills and expertise at our disposal to develop our products which will make us more attractive to funders – funders who ultimately want to know that we have put measures in place to enable us to become a self-sustaining enterprise, and eventually independent of their charity.  

To date the YBAC team has:

• Advised 3,625 customers

• Helped 740 people in fuel poverty to claim £105,000 via the Warm Home Discount scheme

• Helped people manage over £1.2m of debt

• Identified over £1.3m of unclaimed welfare benefits

• Identified £1.6m of water debt, reducing annual billing for 360 people by over £100k per annum and giving 600 people the opportunity to write-off £800,000

• Identified 216 appropriate trust funds to help people find grants suitable for their need

If you would like to know more about the work Your Benefits are Changing is doing with the Young Foundation, contact clare-james@chcymru.org.uk


Clare James
Housing Services Policy Officer, CHC

Tackling the pay day lenders

Bethan Jenkins explains why she is introducing legislation in the Senedd tomorrow to help people facing bad debt...

It was around a year ago that I first wrote to Bridgend County Borough Council, asking it to block access to payday loan sites from its public library computers. I was told that this was nigh-on impossible to achieve – which was not encouraging, particularly since other local authorities such as Dundee have already done it.
Meanwhile, the present economic situation continues to push people on low incomes into debt they cannot afford from lenders who demand sky-high rates and use harassing methods to get their money back.

I become more and more concerned every time I hear of a constituent who has been through this process – especially when the reasons for going to a payday lender is to borrow for precious things, like children’s Christmas presents.

The extent of these problems is shown by the number of people with financial difficulties who are seeking help from Citizens Advice Cymru. Of those who approached it between April 2012 and March this year, 84 per cent had financial capability issues. Of these, 74 per cent continue to receive support.

How can people work and spend their income in the local economy if they are doomed to spend years repaying a company whose profits are most likely off-shored? Money management is likely to become a greater issue for those out of work as well, with the advent of Universal Credit and its switch to monthly payments. These will require a culture change for generations used to managing finances on a weekly basis.

Legislation I am proposing on the floor of the Senedd tomorrow will give people the tools to turn their lives around. Aimed at helping them to make more informed choices about their finances, my Financial Education and Inclusion Bill is divided into two areas:

• Promotion of financial education to help future generations manage their money.
• Providing greater powers for local authorities to promote financial inclusion – to help people with their current debt problems.

At the heart of the Bill is a statutory duty placed on local authorities to promote financial inclusion. Statutory duties have come in for a fair bit of criticism in recent times. It has been said that they achieve little and are too open to abuse. But you can argue that about pretty much any poorly written piece of legislation or regulation. Provided we have in place the means to measure outcomes, I believe this could encourage local authorities to think outside the box at a time when finances threaten successful service delivery.

Properly implemented, the proposals in the Bill will produce a greater co-ordination of services resulting in:

•  One-stop internet shops that can provide visitors with the help they need – the Bill prevents local authorities from charging for internet access.
• Promotion of the Money Advice Service’s excellent tools and resources.
• Local authorities collaborating to produce an awareness campaign for Money Made Clear and for Welsh credit unions.

The Bill’s proposals have been welcomed by a range of organisations, including Community Housing Cymru, Swansea Council, Consumer Futures, Action for Children, Age Cymru, and Shelter Cymru. Individuals who are supporting the Bill include the Welsh Financial Inclusion Champion, and Martin Lewis, creator of MoneySavingExpert, who has run a long and high profile campaign to have financial education included in the curriculum in England.

It is encouraging that the Welsh Government has already taken steps in this area, particularly in financial education. However, poverty Minister Jeff Cuthbert recently told the Western Mail that 'more needs to be done' on combatting payday lenders, while Education Minister Huw Lewis recently told me in the Senedd that there was 'room for improvement' in financial education.

If my colleagues give me leave to take my Financial Education and Inclusion Bill forward I am sure we will be able to improve its proposals. AMs from all four parties have spoken with great concern on this issue. If we work together I believe we can produce legislation that will bring significant improvements in people’s lives. Indeed, the Bill is a great example of what the Assembly was created to do – to move decision making closer to the people it affects and, in this instance, giving them a better life away from bad debt.
 

Bethan Jenkins AM 

You can read the relevant press release on CHC's website. 

A day in the life of Moneyline Cymru

I’m afraid I am going to start with the C word. It is October, Christmas is fast approaching and Moneyline customers are getting ready for it. Quarterly savings account statements have just been sent out, so the Moneyline office is seeing a stream of customers coming in to withdraw their savings with most looking forward to starting their Christmas shopping.

People are also coming in to ask about how to get a loan. A loan is only approved after checking a customer’s identification and income & expenditure to see if a loan is affordable. It then takes 3-4 days for the money to reach their bank account. However, Moneyline doesn’t just offer loans and savings. When looking at an application, the loan officers also assess whether a Money Adviser could help. For example, they can see if benefits are not being paid that a customer may be entitled to, if they would be eligible for utility discount schemes or if they are making payments to creditors and have debts. For these and many other reasons, customers are referred to the in house Your Benefits Are Changing Money Adviser for free and independent money advice. This helps customers in so many ways.

One customer rang today to say thank you because a loan officer  spotted that she would be eligible for a discount on her water bill and that she wasn’t receiving Tax Credits. After talking to the Money Adviser it was confirmed that she was eligible and she was helped to apply.  She is now £60 per week better off by claiming Tax Credits, is saving on her water bills through Welsh Water Assist and will receive £135 via the Warm Home Discount in the New Year. This has made a massive difference to her and, through coming in for a loan, she has actually found herself financially better off.

Moneyline Cwmbran has been nominated for a ‘Torfaen’s Most Recommended’ award and customers are completing voting forms with lovely comments such as ‘friendly staff'; ‘non judgemental'; ‘love that you can get money advice as well’; ‘ you really help people’.

Our office is in the middle of the town centre, so customers can easily pop in to ask questions or just say hello, and this certainly adds to the good relationships we have with customers. Today one customer popped in to introduce us to her new baby – cue oohing and ahhing all round in an office of mums.

As the Money Adviser, my day today has included appointments for debt advice, a telephone enquiry for a benefit check, processing applications for Welsh Water Assist and Customer Assistance Fund, an application for Discretionary Housing Payment  for someone affected by the 'bedroom tax', talking to customers about Universal Credit and Personal Independence Payment, and searching for grants (it’s amazing how excited I got at seeing ‘army pension’ on an income sheet at the thought of the grant options I could look into for this particular client). And, on a personal level, thinking about how unprepared I am for the C word compared to our customers.

Your Benefits Are Changing is a Community Housing Cymru project and is funded by the Big Lottery.

Kath Hopkins

Money Adviser

I don't buy food

CHC hold training events at our head office and there's often leftover food at lunchtime. We’re informed about this in an email… Come and get it! What happens next? Yes, there's an almighty scramble to the kitchen for the chance of a free lunch or a nibble of a piece of cake. But, hold on, how many people need this? Those who haven't prepared lunch, the majority, will say they need this food. Others will say it will only go to waste, the cheese sarnies always do. But is this real need? The numbers taking advantage of this meal are increasing. Would you turn down a free lunch? Or would it be any different if someone told you that they’d do your weekly shopping today for free and deliver it to the end of your street for free? I for one can be honest enough to say I would never give up the chance of free food.

Foodbanks and food parcels have become an established part of communities across the UK. Many communities need them to survive the deep cuts to welfare, and some communities who run them are 'doing their bit for the poor as part of the Big Society'. But what experiences have tenants had with them? Is it a free meal, as Lord Freud describes it, or is there a real need? A tenant living in Blaenau Gwent told me about the food parcels that arrive at their local Community Centre every other week. 'It’s chaos, like a scene from Africa. Everyone runs out and opens up the packages, trying to get the best things. You know, sweets and stuff.' There's no assessment of need and the whole thing lives up to the free meal stereotype. Another tenant tells me of having to pray before receiving a parcel, as most foodbanks are run by religious organisations. Finally, a tenant asks me, ‘What would you do with 12 bottles of tomato ketchup with a hint of balsamic vinegar?’ Ideas on a postcard? Contrary to Zoe Williams' belief, food parcels do contain luxuries. Champagne is the most expensive product I’ve been told about.

The reasons for increasing use of foodbanks have been cited as a change in benefit, a sanction or a delay, or use of payday loans. However, these have all been around for several years now, therefore the recent welfare reforms are not the reason. The problem lies with benefit take up, application and processing. Payday loans are another problem altogether. Welfare reform is exacerbating these reasons for use, and this is set to get worse with possible 7 week delays for Universal Credit payments which will see the desperate Friday become a desperate week. Weekly or fortnightly payments often leave households in desperate financial situations in the last days between payments, and stories of parents not eating on a day or weekend prior to payment is common. However, when monthly UC payments start these days will accumulate into the 4th week, and there is a real danger of parents trying to go several days without food. Food parcels will therefore become an essential need for many.

One of the reasons UC is being rolled out is to increase personal responsibility of finances and to combat the 'I don't pay rent' belief. However, the ever increasing use of food parcels is creating the same problem. Last month, I heard the phrase ‘I don’t buy food, I get one of those voucher things’ for the first time when asking someone about their expenditure on food. What Lord Freud doesn't understand is that changes to welfare benefits are not recognised by claimants in the same way that policy makers see them. Advice agencies used to assist people in desperate need to claim a crisis loan or community care grant, but now they pass on a food voucher. Has the social fund been replaced by foodbanks? Claimants are beginning to believe so and are therefore seeing food as another entitlement. 'I don't buy food'.


Paul Langley
Senior Money Adviser