The government’s new support packages, whilst welcome, add to an increasingly complex social security landscape. The goal of simplicity is being lost and councils have a job to do to tackle growing financial insecurity.
An expanding web of discretionary support is making the benefit system more complex. We look at why this is happening and what the implications are for national and local policymakers.
We find that gaps in social security are driving the need for discretionary support. We also find that a range of local support is likely to be less effective for people most in need than a single scheme, backed up by data to assess the long-term impact of the support provided.
A single scheme would make it easier for people to know where their support was coming from, and councils could focus their attention on proactive, preventative, local interventions that have a sustained impact on outcomes.
The Household Support Fund
The government recently announced £500m of funding for councils to help those most in need this winter. The scheme is aimed at households who are struggling to afford food, energy and water bills, and other wider essentials, with one-off payments helping to meet these costs. It can also be used to support housing costs if other avenues such as Discretionary Housing Payments have already been explored.
The funding comes in the aftermath of the removal of the £20 a week Universal Credit uplift and the Autumn budget which increased support for households in work through a higher national minimum wage and more generous withdrawal rate in Universal Credit.
Chancellor Rishi Sunak introduced the new Household Support Fund with a commitment to ensuring everyone is “able to afford the essentials”, so the intention seems to be that councils can step into the gap left by the £20 uplift and ensure out of work households in most need can deal with rising living costs.
A growing trend towards discretionary and piecemeal support
The Housing Support Fund joins a range of recent initiatives by the government aimed at mitigating the effects of poverty. These include:
- Help for renters: A £65 million support package for councils to support vulnerable renters in rent arrears and who are now at risk after the end of eviction ban
- Help for people at risk of homelessness: A £47 million boost to funds to help councils tackle homelessness, meaning a total of £310 million has been given to councils with high numbers of homeless people, in temporary accommodation and at risk of homelessness
- Help for families: The £220 million Holiday Activities and Food programme administered by local authorities to provide children with healthy food and enriching activities during the Easter, summer and Christmas holidays in 2021
- Help for people self-isolating: The £500 Test and Trace Support Payment which people who have to self-isolate as a result of COVID-19 can apply for from their local council
- Help with bills: The £160 million COVID Local Support Grant, initially known as the COVID Winter Grant Scheme when launched in December 2020, and then renewed from June to September 2021. It has now been replaced by the Household Support Fund.
Alongside these recently introduced council-administered funds, there is a range of long-standing avenues of support for households struggling to meet essential costs. These include:
- Council Tax Support
- Discretionary Housing Payments
- Free School Meals
- Warm Homes Discounts
- Healthy Start Food Vouchers
- Reduced wifi tariffs
- Free prescriptions
Not the simple welfare system originally envisaged under Universal Credit
While councils and individuals will welcome any support they can get, such a diverse range of support seems contrary to the aim of making the welfare system simpler by introducing Universal Credit.
This profusion of discretionary support is growing. It means that people on low incomes must once again learn about and navigate many different sources of support available to them.
This web of discretionary support is even more complicated than the previous welfare system because each council has its own approach, eligibility criteria and application processes. In addition, funding is often temporary and residents have to make multiple applications.
The approach doesn’t suit councils either. Each time a new package is announced, an officer must interpret the new funding criteria, work out who is eligible, set up an application or allocation process and quickly mobilise council resources to deliver the support or service.
Gaps in support drive the need for discretionary funds
Many households applying for discretionary support do so because of gaps in social security, introduced as a result of policy choices.
- £140 million of Discretionary Housing Payments are necessary because of gaps between housing support and rents, caused by frozen Local Housing Allowance and the under-occupation charge
- Larger families are affected by the two-child limit and the Benefit Cap, meaning they need to apply for additional support to support their families
Long-term, adequate funding of the social security system would make it easier for people with low incomes to adapt and make the best of their available income.
In the absence of properly funded social security, an alternative to the range of discretionary support would be a single pot of local welfare assistance funding for each local authority.
It was disappointing not to see this in the Autumn Budget. A single pot allocated as part of the three-year funding settlement, together with broad guidance on how to target it and supported by local data on low-income households, would drive innovation. Crucially, it would also give councils the ability to evaluate approaches and identify what interventions are more effective in different local areas.
Councils must administer discretionary support schemes despite limited resources
Perhaps in a bid to avoid a postcode lottery of support the government has attached stringent guidelines and conditions to these discretionary support packages. Councils must adhere to these rules and provide the support precisely as the government intends.
On top of dealing with the challenges resulting from struggling households and continuing to meet their statutory obligations to provide emergency support, councils are now also required to navigate the new and regularly relaunched interventions in order to administer the support within each scheme’s guidelines.
While it makes sense for councils to deliver services embedded in their own communities, such as the new Family Hubs or Holiday Activities and Food programme, if emergency funding is to be provided on a regular basis with extremely strict guidelines, the benefits of local knowledge and responsivity are somewhat lost. This is because councils, who know their local area best, are only able to operate within the rules set in Westminster.
In this way, local authorities are just acting as a delivery arm of central government, rather than independent bodies responding to what is best for their area.
Similarly, though improvements are being made in the provision of data by central government to councils to target these schemes, strict guidelines are still in place dictating how this data can be used and when.
Delivering the support and meeting the guidelines has been even more of a challenge in the context of shrinking local government budgets. The recent Autumn Budget may offset this a little, but the overall trend in the last decade is one of reduced local authority capacity, as reflected not least by local government staff numbers declining dramatically in the last decade.
Administering the numerous discretionary schemes outlined above with their accompanying rigid guidelines is an even greater challenge, particularly given the limits on how much of the funds can be spent on administrative purposes.
Difficulty for individuals and councils results in low take-up of support
The result of these challenges, both for individuals and councils, is that the help the government provides is not fully taken up and emergency support in the form of food banks and temporary accommodation sees ever greater demand.
For instance, even at the height of the pandemic, the £500 Test and Trace Support Payment was little known and the majority of those who did apply were not able to receive the support. Likewise, Council Tax Support, worth over £1,000 a year for most households, has low levels of takeup, with households often unaware this support is available to them, and users of our calculator often querying why it is displayed as a separate benefit to Universal Credit.
In addition, DHP budgets are often not fully used, resulting in reduced budgets in future years for councils that underspend. Our work with one London borough has shown that nine out of ten applications for a DHP are successful yet only one in five households that need one apply.
This is all evidence that much-needed support is not making its way to people who need it most through the, at times, labyrinthine system.
Help to best target support for councils
Targeting support where it is most needed is a challenge that some leading councils are meeting head on by analysing their administrative data. With support from Policy in Practice’s Low Income Family Tracker (LIFT) platform they are able to unlock information from their datasets that allows them to identify vulnerability, target support and track change.
Guidance for the Household Support Fund encourages councils to use data to target their interventions to those most in need, and councils we work with have begun to do just that.
Sutton Council, like many councils, are using their administrative data creatively to ensure their residents are getting the right support at the right time. They have used insights from their own administrative data to identify and target support to over 500 households, supporting residents with a range of discretionary funding, including DHP and crisis payments, to boost income and sustain tenancies.
Julian Clift, Welfare Benefits Advice and Support Manager, Sutton Council, will join Policy in Practice’s free webinar on Wednesday 17 November to talk about their work to tackle residents’ Covid-19 income shocks and how Sutton Council uses automated data refreshes to respond to struggling residents more effectively.
View more details and register for the webinar here.
Help to simplify the complex benefits system for individuals
The government recommends that people use a benefits calculator such as our Benefit and Budgeting calculator to see what support they may be eligible for.
We recognise that the benefit system can be difficult to understand, especially if you’re new to it or unfamiliar with the system. People want to know about all the support that’s out there for them and get this information quickly and easily so that they can maximise their incomes.
Many people are unaware of the full range of help and support that’s out there and, as a result, people are missing out on around £10 billion of benefits that they’re entitled to claim each year.
For example, over one million families miss out on housing benefit worth over £3,000 a year.
We want to make sure that people receive the money that they are eligible for and have designed our calculator with this in mind.
With such a range of support from different sources, differing from location to location and month to month, even the best software may not work for everyone.
Support from a trained welfare adviser using our calculator will help but not everyone can or will access this advice. Returning to the original aim of one universal benefit may be an easier solution for all those on low incomes.
Free webinar: How data can help you target your Household Support Fund and other discretionary funding
Wednesday 17 November from 10:30 to 12:00. Register here
Covid-19 has hit low-income households in the UK hard. Universal Credit claimants more than doubled during the past two years, reaching an all-time high of 5.8 million people. As many as 8.9 million jobs were put on furlough and the poorest fifth of households in the UK saw an average fall in earnings of 15%.
To help councils navigate the aftermath of the pandemic the government has introduced a £500 million Household Support Fund, helping vulnerable households to cover their fuel, food and utility bills.
It will be vital for local authorities to use data to identify residents who are struggling or in crisis for targeted support from the Household Support Fund and other discretionary funding.
Sutton Council, like many councils, are using their administrative data creatively to ensure their residents are getting the right support at the right time. They have used insights from their own administrative data to identify and target support to over 500 households, supporting residents with a range of discretionary funding, including DHP and crisis payments, to boost income and sustain tenancies.
Join this webinar to hear:
- How councils can use their data to target their discretionary funding to support vulnerable households before crisis hits
- Sutton Council’s innovative approach to tackling their resident’s Covid-19 income shocks
- How Sutton Council use automated data refreshes to respond to struggling residents more effectively
We will be joined by guest speaker, Julian Clift, Welfare Benefits Advice and Support Manager, Sutton Council.
