Universal Credit Roll-out

Debate between Julian Knight and Neil Coyle

Tuesday 24th October 2017 Commons Chamber

[Julian Knight]

I thank the hon. Lady for her intervention. I am about to discuss tax credits and my experience of dealing with that area as a personal finance journalist in 2003, when the credits were launched.

Work is the only long-term route to financial independence. Not only does long-term unemployment sap an individual’s self-confidence and erode their employability, but children who grow up in workless households are far more likely never to enter employment themselves. Generations of people do not get into work, and therefore poverty beds down. By acclimatising claimants to the rhythms of working life and being designed to ensure that employment always pays, universal credit not only supports today’s claimants, but is helping to steer many of the next generation away from the welfare system altogether, which is a very good thing indeed.

This is, undoubtedly, an enormous change, and Ministers have been wise to choose to proceed cautiously. The full roll-out of universal credit will not be completed until 2020, a whole nine years after the policy was first trialled and enacted. That involves many dry runs, and the process is in very stark contrast to the introduction of tax credits in 2003, when I remember very well that there was huge disruption to millions of people’s lives.

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

Is the hon. Gentleman aware that 2017-18 was supposed to be the final year for the roll-out of universal credit under the initial plan, but that the Government had already accepted that they needed to improve the process? Does he wonder why the Government are being so stubborn now?

[Julian Knight]

I applaud the Government for taking the roll-out to 2022—it shows they are listening. They want to get this right so that we do not end up with the situation we saw in 2003 with tax credits when, frankly, there was a dead ear from the then Government.

I will conclude as I am aware that many Members wish to speak. It is only right that we acknowledge the measures that the Government have put into place to protect vulnerable users, to provide an advanced payment system for claimants who cannot afford to wait for six weeks for new payments, and to ensure that people who are transferred on to universal credit see no loss in their entitlement in cash terms. The Government have rightly announced a review of DWP phone lines, which is a welcome and positive development. I hope that all Government Departments are cognisant of such situations and people in need are not charged excessively for using phone lines.

Supported Housing

Debate between Julian Knight and Neil Coyle

Tuesday 29th November 2016 Westminster Hall

[Neil Coyle]

It is an absolute contradiction. Since 2010, we have seen a shocking rise in homelessness across the country, particularly in my constituency. I did a sleep-out for the Robes Project there last Friday evening, in very cold temperatures, so if Members have not already done so I urge them to sponsor if not me the project more generally.

In the 2015 spending review the Government outlined plans to cap the—

[Julian Knight (Solihull) (Con)]

I congratulate the hon. Gentleman on securing this important debate. He seems to be a bit stuck in a time warp from several months ago. Does he not recognise that the situation has changed and that there is a commitment to a new funding model based on localism, which should help with the allocation of resources so that those most in need will get the most help?

[Neil Coyle]

I am about to run through how the Government have ended up where they are now, but when it comes to localism, this Government have a record of devolving responsibility without the resources to meet the demand. That point should not be lost, as it is an important factor in how many organisations see the current consultation.

Coming back to last year’s announcement, the Government said that they would cap the amount of rent that housing benefit will cover to the relevant local housing allowance—the LHA—for supported housing, with a top-up paid by local authorities. Initially, they announced that the measure would apply to those who had signed a tenancy since April 2016. There was an immediate backlash, and it was clear that the Government had not properly thought through the plans or considered very well whom they would affect. They then announced a delayed roll-out of the change, initially for one year.

The hon. Member for Solihull (Julian Knight) alluded to the fact that there is now a consultation on further plans for a 2019 roll-out, including of the new funding model, but it should not be forgotten that the cap poses a considerable risk to supported housing as it might be insufficient to cover full costs for the people affected. Management costs for supported housing are significantly greater than generic housing costs. The limbo period has already caused some damage.

Alongside the delays to 2019 for both the change and the proposed new funding model, the Government have announced further damaging changes in addition to the proposals that they outlined last year. They have now included suggestions that will affect all universal credit claimants when the change is rolled out in 2019, not just those who have signed a tenancy since April 2016. There is concern among many organisations that the universal credit system is too clunky and inflexible to take into account what the Government had originally planned. It would be useful if the Minister indicated whether it is a “computer says no” approach rather than the flexible model that perhaps is needed. In another damaging change, the Government are applying a rent reduction to supported housing, with rents decreasing by 1% a year for three years up to and including 2019-20. That was not in the original plans and it has caused much dismay among the organisations and people affected.

--- Later in debate ---

[Neil Coyle]

It is the individuals who need the accommodation who suffer, and also the taxpayer in the longer term, for reasons I will come on to.

I want to give some national and local statistics. It is estimated by the House of Commons Library, which I thank for the figures, that there are 651,000 supported accommodation places across the country. That is not a massive number, as accommodation goes. Across my borough of Southwark, there are 1,200 places in a range of schemes.

I want to flesh out a bit more who is affected, by citing a couple of anonymised case studies from AmicusHorizon. The first is Mrs W, who is disabled and lives on her own in sheltered accommodation. She has no close family, and has mobility problems, a visual impairment and a learning disability. That is who the Government are targeting. She lives in sheltered housing, which means that she is in an accessible and supportive community with unobtrusive support from a scheme manager who operates as a kind of warden. That support enables her to live independently. Her combined rent and applicable service charge is £123.10, which is £57.44 more than the applicable LHA rate.

The second case study is that of Mrs P, who lives in an extra care scheme. She lives on her own and does not have contact with her children. She moved to the scheme after a spell in hospital because of a fall. In the accommodation her health has improved and the staff provide support to ensure that she stays well and is able to get out more and attend social activities. Without that support she would be in residential accommodation at potentially higher cost. Her combined rent and applicable service charge is £174.71, which is £64.04 more than the applicable LHA rate. Golden Lane Housing, which is a Mencap subsidiary, provides homes for people with very complex needs in my constituency, including people with learning disabilities. I visited its accommodation in Rotherhithe, and the people being supported there do not just have severe learning disabilities; they also have communication impairment. One was deaf and could not speak, and that is who the Government are targeting with the change. The wraparound support that those people need is absolutely essential, and by its very nature it is more expensive than routine housing costs.

St Mungo’s is another brilliant local provider of emergency and supported housing in Southwark. It helps people out of homelessness, and helps people with high support needs. In its client group, as it calls them, in Southwark, 53% have slept rough; 73% have mental health needs; 44% have a significant physical health condition; and 55% have or have had a substance misuse problem. As well as providing shelter for those people, St Mungo’s runs workshops that improve life skills and help many residents to avoid more intensive NHS services and to stay out of the criminal justice system.

The Government’s plans from last year and from before that simply do not take into account the broader benefits of supported housing. First, there is the social benefit. Supported housing gives people who would otherwise struggle to live independently control and choice over their lives while allowing them to receive essential support. There is the human, personal benefit of supported housing. There is also a financial benefit. The cost of supporting people in specialist supported housing can be half the gross cost of residential care placements. Lifeways estimates that the average net saving achieved by moving from residential care to supported accommodation is at least £185 a week.

There is a clear cost saving available if we get the policy right, but the Government have failed to do that. The lack of specialist supported housing is pushing people with learning disabilities, dementia and a range of conditions into more expensive residential care, including hospitals. The National Housing Federation states that stable and certain funding for supported homes and services reduces pressure on public services such as the NHS, saving the taxpayer around £3.5 billion a year. That is the potential saving from getting this right.

I thank all the organisations that have given me briefings or meetings on the issue, including the National Housing Federation, Golden Lane Housing, Lifeways, AmicusHorizon, the London Borough of Southwark, St Mungo’s, the Salvation Army, which I think is here today, and London Councils. Their involvement and all the supported accommodation that they provide has built up in the years following the extensive shift in public policy to enable disabled people to live more independently. In particular, that shift was meant to support disabled people to live outside NHS accommodation and residential care. That reflects a demographic shift, and we need to be aware that we have an older disabled population. We should celebrate the fact that more young disabled people are surviving into adulthood, but that comes at a cost. They need more support. In Southwark, the fastest growing cost group to social services is 18-year-olds with learning disabilities. Mencap estimates that that group alone requires the provision of 1,000 new places a year in supported accommodation.

There are some worrying statistics on how things will be directly affected by the Government’s proposals. Golden Lane Housing has suggested that 82% of local authorities agree that there is a shortage of supported housing for people with a learning disability. More worryingly, 41% of current schemes could be at risk of closure if the Government do not shift their plans. Some 80% of schemes due to be built to support that group would cease and not go ahead, leaving many disadvantaged people unable to access the homes and support they need and directly undermining Government efforts to provide supported housing in the community as part of the Transforming Care programme.

All of that has been put at risk by the mess, limbo and confusion from Government on the issue. There has been a clear lack of co-ordination across Government, with a rush to continue the squeeze on budgets without thinking more strategically or for the longer term. In September, the new Secretary of State said:

“The Government values the role supported housing plays and is committed to protecting and boosting the supply of supported housing”.

However, DWP policies have put existing and planned supported accommodation at risk. For example, Golden Lane Housing had to postpone a £100 million five-year bond to provide supported housing. It would not have relied on a penny of public funding. It is also likely to have to turn down a £500,000 grant from the Homes and Communities Agency it applied for under the care and specialised support initiative to develop new homes. Accommodation has been put at risk as a direct result of the Government’s confusion on the issue.

Unable to meet higher needs, the executive director of operations at AmicusHorizon said:

“The impact of the cap will be more than £1 million of annual rent and service income being put at risk. It will also have a significant impact on our residents. None more so than those living in extra care schemes. We’ve calculated they will have to fund an average shortfall of £41.00 per week”.

The Government have said that

“from 2019/20 core rent and service charges will be funded through Housing Benefit or Universal Credit up to the level of the applicable LHA rate…For costs above the level of the LHA rate, Government will devolve in England an amount of funding for disbursement locally.”

Very little detail has been provided, and there is an ongoing consultation on the issue.

Lifeways is based in my constituency and provides accommodation for more than 5,000 people with learning disabilities across the country. It has commented on the uncertainty that the Government have created and the lack of clarity in the funding model:

“The current uncertainty about the future funding of specialist supported housing is putting at risk our ability to deliver high quality, permanent homes in local communities...The new funding model currently been consulted on needs to ensure that the money devolved is sufficient and gets passed on to the right people. People with learning disabilities must not be overlooked.”

[Julian Knight]

I thank the hon. Gentleman for giving way again; he is most generous. We have had lots of detail from him on what he sees as wrong and so on. I am a member of the Select Committee on Communities and Local Government, and we have heard quite a lot of evidence on this, but I wonder what he proposes to do about the matter. Does he think that the status quo is the way to progress ad infinitum, or does he have any concrete proposals?

[Neil Coyle]

As I have outlined, if the Government introduced concrete proposals and knew what they were doing, we would not be in this position. I have some specific recommendations for how the Government might go forward, even though I fundamentally disagree that this group of people should be targeted for a reduction in support.

Lifeways has expressed concern about the fact that providers need confidence to invest and build. The Government’s position since September last year has undermined that confidence and caused some schemes to be put on hold or cancelled altogether. Some providers of supported accommodation have said that they will pull out of the sector if the policy is not done in a way that reflects actual costs. The pressure is on the Government to get it right. While it is welcome that the Government have made exemptions for some groups—in particular, people fleeing domestic violence—Lifeways’ concern about people with learning disabilities should not be overlooked. Sadly, there is a clear history in public policy of people with learning disabilities often being left behind or neglected in policy initiatives. It would be useful to hear from the Minister whether there are plans for other groups to be offered specific protections.

Many organisations expressed concern about the difference between supported accommodation and sheltered housing. It would be useful to hear how the Government see the difference between supported accommodation and sheltered housing for older people and the homeless.

As a London MP, I wanted to speak about the higher costs in London. I am grateful to London Councils for the information that they have provided. Its figures are based on applying LHA rates to the current total weekly costs eligible for housing benefit. It should be remembered that most providers cannot reduce rents in reaction to lower housing benefit entitlements set by Government due to the higher cost of provision, because of the nature of the needs of people in supported accommodation. If the Government plans go ahead as on paper, it is estimated that the London Borough of Ealing could have an annual shortfall of £528,000 a year. “Red” Kensington and Chelsea has forecast an annual loss of £440,000 a year. My borough of Southwark could have a shortfall of £167,000 a year. It would be useful if the Minister outlined how the Government will ensure that those additional costs are recognised and met. There is a lack of detail on the local top-up fund that forms part of the consultation. An indication of how the Government intend to operate that would be useful.

Conservative Back Benchers are keen to suggest that discretionary housing payments will always cover any housing shortfall from the Government. I hope that we do not hear a lot of that this morning. It is an insufficient answer and only a temporary solution, even when such payments are possible. For Greater London, there was a £23 million cut in DHP between 2013-14 and 2015-16. My borough regularly spends well over what the Government provide for DHP. It would be useful to know how the Minister intends to meet that need without relying on discretionary housing payments.

I have some questions on the operation of the new scheme and funding model. Is there an intention to pilot the new funding model rather than rolling it out nationally? The changes proposed are significant. The National Housing Federation and others are keen to work with the Government to ensure a successful pilot, not just for the individuals but in terms of value for money under any new model.

The Government have suggested an element of ring-fencing, but ring fences do not always work; people are looking for an iron-clad ring fence on this issue. How will the Government give certainty that any ring fence would last in the longer term? If housing associations and others are to be able to plan to meet the higher level of need for supported accommodation that we know we will see, the ring fence must be iron clad, not just for current demand but into the future. The Government need to be clearer about how funding will keep pace with the level of demand. How do they intend to measure and monitor the level of need and the level of funding required?

I conclude by repeating that this policy change is very poorly targeted. It was ill thought-through last year, it has been poorly developed since and the limbo period has caused considerable discomfort. There is still a very poor level of information available on how the Government plan to take the policy forward from 2019.