The impact of the Welfare Reform agenda on the Council's finances and its ability to provide support to residents of Manchester
- Meeting of Resources and Governance Scrutiny Committee, Tuesday, 3rd September, 2019 10.00 am (Item 45.)
Report of the City Treasurer (Deputy Chief Executive) attached.
This report provides an up to date position statement on the roll out of Universal Credit in the city and the impact on the Council’s finances and its ability to provide support to residents of Manchester. The scope of this report only considers the financial impact on the Council.
The Committee considered a report of the City Treasurer, which provided Members with an up to date position statement on the roll out of Universal Credit (UC) in the city and the impact on the Council’s finances and its ability to provide support to residents of Manchester.
The main points and themes within the report included:-
· The status of Universal Credit in Manchester including claim volumes and the transition from housing benefit to UC Housing element;
· The rise in homelessness in the city and its significant impact on the Council’s finances in terms of direct costs, support services and on discretionary budgets;
· The volume and amount Discretionary Housing Payments made;
· The demand and payments from the Welfare Provision Support scheme continued to increase and it was expected that the budget would be overspent by the end of the financial year should the Council carry on receiving requests and approving payments based on the current demand;
· Collection issues, including the impact on Council Tax recovery and rent collection; and
· Details of financial support to the Council to provide support to UC
Officers also provided the Committee with details of work that had been undertaken between the Council, the DWP and Northwards Registered Housing Provider to try and address the payment of rental arrears of tenants.
Some of the key points that arose from the Committees discussions were:-
· Had the Council undertaken any projections in relation to how quickly UC was rolling out and at what point households were likely to tip into homelessness and the impact this was likely to have on the Council’s presentation of homeless people;
· There was concern that the total rental arrears had increased by over £1million over the last 12 months within two key housing providers and the ability of the Council to be able to offer sufficient support needed to maintain tenancies; and
· How could the Council maximise direct rental payments to landlords for those tenants on UC.
Officers advised that due to the complexity of UC and its potential impact on homelessness it was very difficult to project the likely number of households that would possibly tip into being made homeless but it was acknowledged that this was a risk factor that the Council was looking at. The Director of Customer Services and Transactions commented that the challenge the Council faced was Government kept changing the date of UC roll out and as a consequence it was difficult to collate certain information. What the Council had done was use its Discretionary Housing Payment to help sustain tenancies and help avoid homelessness and this was aided by having good relationships with the Registered Providers. The Director of Homelessness added that the Council was undertaking a homelessness prevention pilot in Moss Side as this was an area of the City that had a high proportion of private rented accommodation and UC claimants to test out what could be done to prevent entry into the homelessness system.
The Committee was advised it was the understanding of Officers that Landlords could apply for a direct payment when rental arrears reached a certain level, but this required Landlords to be engaged with their tenants. The Director of Customer Services and Transactions agreed to speak to Registered Providers for more information on this and provide an update to Committee.
(1) Notes the report;
(2) Requests that the Director of Customer Services and Transactions contacts Registered Providers for more information on how they can maximise direct rental payments for those tenants on UC; and
(3) Requests that all Members of the Council be provided with copies of the report for information.
- Impact of WR on Council's finances and ability to support, item 45. PDF 536 KB
- Appendix 1 - Welfare Reform changes since Jan 2011, item 45. PDF 500 KB
- Appendix 2 – Map of Northwards Housing Universal Credit Arrears, item 45. PDF 332 KB
- Appendix 3 – Number of People on Universal Credit, by Ward, item 45. PDF 181 KB
- Appendix 4 – Rate of People on Universal Credit, by Ward, item 45. PDF 181 KB
- Appendix 5 – Households on Universal Credit, by Ward, item 45. PDF 180 KB