Rural Poverty, Welfare Reform and ‘FISH’

1. Rural Poverty, Welfare Reform and ‘FISH’ Health Development Day 18th February 2014 Inveraray Gillian McInnes, Community Development Manger, ACHA

2. ACHA owns and manages just over 5,000 homes across Argyll and Bute including ten island communities. The other 3 local housing associations have around 2,000 properties between them. In 2007 ACHA commissioned a Financial Inclusion Strategy on behalf of a partnership of the 4 housing associations. The FISH project came from that and was devised and led by ACHA .

3. So what has the FISH project done since 2009 … Promotion of Credit Unions (5 in Argyll) School Theatre Roadshows Theatre production by an educational charity called ‘At Home with the Wiltons’ gave pupils in Dunoon, Islay and Campbeltown some financial capability training …. and some fun. Money Handbooks Easy to read information and advice covering various aspects of personal finance incl. banking, credit, insurance, savings, pensions and of course debt and budgeting. Local advice giving agencies in Argyll contributed. Young persons book aimed at 15-18 year olds and also includes info on home-making, work, training, study. Both available on our website www.acha.co.uk 88% of pupils said they now know more about credit cards, loans and sensible budgeting.

4. The Welfare Rights Project: • 4 full time Welfare Rights Officers from March 2010 to date • Generated almost £6 million in • previously unclaimed benefits and tax • credits to date. • Assisted 3,100 households with the • complexities of claiming what they were • due and with appeals and tribunals. • 1,308 or 42% are households with • someone suffering chronic health • problems. There are an estimated 42,000 – 67,000 people under- claiming in Scotland which equates to £81 – 157 million !!

5. The Welfare Rights Project • Outcomes ....... • Developed a culture of benefits advice within the housing association and the ability of housing staff to ‘spot and refer’ • Project was designed to specifically target those in rent arrears, elderly tenants(?) and new tenants. As word of mouth has spread, self-referring has overtaken referrals by housing staff. An effective housing association linked welfare rights service should: • Include the provision of support across a range of financial inclusion and poverty issues, including basic budgeting and money advice, information about local affordable credit and financial products and energy advice. Housing Associations & Welfare Rights – Best Practice Guide (SFHA and Welfare Rights Officers Forum 2011)

6. The Welfare Rights Project • Outcomes continued ....... • During 2011 we carried out satisfaction surveying with tenants who had received a service from our welfare rights officers; • 86% reported less worry and stress. • 41% reported an improvement in a mental health condition. • 26% reported an improvement in their relationship with • family or their partner. • 39% reported that the threat of losing their home was • reduced or removed. • 38% were referred to another agency (debt advice, home • energy advice or credit union).

7. Money Advice & Household Budgeting As part of the current Lottery funded project we are working in partnership with Argyll and Bute CAB. A full time Money Advisor (based in Helensburgh but covering the whole area) provides ACHA tenants with advice on debt and money management. Particularly important to protect tenants who are vulnerable to losing their home so we encourage referrals from those in rent arrears as they will invariably have other debts. We encourage all new tenants to get advice on household budgeting to try to prevent problems arising.

8. Some statistics from 2013 report ‘Minimum Income Standard for Rural and Remote Scotland’ Commissioned by 4 local authorities, 3 housing profession orgs, Scottish Enterprise/AIE Weekly budgets (excluding housing costs) range from £198 (urban England) to £277 (Scottish island) Weekly food basket (single person) range from £36.91 (English rural town) to £57.44 (Scottish island) Energy costs can be as important as rent levels in determining whether households can make ends meet. Centre for Research in Social Policy, Loughborough University www.minimumincomestandard.org Cost of living difference for rural Scottish communities is between 10% - 40% more than English rural settlements Skye and Lochalsh Housing Assoc did research last year and found that their tenants are paying £1,000 more on average for household fuel than the Scottish average. (Skye & Lochalsh average annual bill £2,218).

9. “Poverty is most visible in disadvantaged communities in urban Scotland, but it is no less real in rural areas”. (Scottish Government, Taking Forward the Government Economic Strategy : a discussion paper on tackling poverty, inequality and deprivation, 2008)

10. “Our reforms are about changing the culture of welfare, so that it acts as a springboard rather than a trap”. Rt Hon Iain Duncan-SmithSecretary of State for Work and Pensions, June 2010 Most of the increase in benefits in recent years has been driven by pensions. 2013/14 Benefits: Pensions £110 bn Working age and child benefits £94 bn Prof Paul Spicker, RGU Aberdeen Author and Blogger Image courtesy of Neil Alexander

11. Welfare Reform – the first year • The Bedroom Tax began in April last year and in the first • 12 weeks generated an additional £400,000 of rent arrears across Scotland. • There are around 500 ACHA households affected and we have attempted to make contact with all of them. We have assisted 80% of them to claim the temporary ‘Discretionary Housing Payment’ where it was demonstrated that they were in financial hardship. • Our welfare rights officers work hard to make sure • anyone affected by any of the other changes is • claiming all they can and fully understands their position. • What has ACHA done? • Directly lettered and spoken to affected tenants • Training for Staff and monthly updates for our Board • Website briefing papers on Bedroom Tax, Universal Credit and PIP • Articles in all tenants newsletters - archived on our website. • Reviewed Allocation Policy to assist those under-occupying, to move • house. • Risk assessments for our business plan, lenders and housing Regulator. 97% of those affected by Bedroom Tax (UK) could not move to a smaller home. Only 13 ACHA tenants have moved.

12. How are tenants being affected? • Bedroom Tax Case Study • Joe is a young unemployed man who under-occupies a £75 per week home by two bedrooms and is now expected to pay £18.75 from a total income of £71.70 (job seekers allowance). There are no one bedroom flats available for him to move to. • This equates to a 26.4% cut in his income!! • The typical bedroom tax deduction for ACHA tenants is • £9 a week (14% deduction) and £19 a week (25% deduction) • Salami Slicing! • This is the term used to describe how the welfare reforms are taking a thin slice of cash from lots of different welfare benefits which add up to major financial hardship, for example; • Non dependent deductions • Reduction or removal of tax credits • Reductions in benefits uprating capped at 1% • (pensions uprating increased to 2.5%)

13. Cont/d How are tenants being affected? Bedroom Tax We conducted a survey of tenants in Mid Argyll and Kintyre last year who were affected by the Bedroom Tax: 94% of people had a bank account which is good news 71% said that they would make up the shortfall in rent by reducing household budgets - principally from food and household fuel (this was prior to the 9% energy price rise in late 2013) BUT 57% also had other debts to consider and the average weekly income from the group was £116

14. Universal Credit • Westminster announced recently that it will not begin to roll • out Universal Credit in Scotland (outwith Inverness) before late 2014. • Lord Freud further suggested that those claiming sickness benefits may • not be transferred to UC until 2017 (post general election). • It is very important that we continue with preparations. • ACHA has created a risk questionnaire to map who among the 1,500 tenants that are likely to be affected, will be most at risk of failing to meet the challenges of Universal Credit: • Must have a transactional bank account • Must change to monthly budgeting regime • Must cope with being ‘paid’ in arrears • Must learn to pay rent to ACHA from monthly UC • Must claim on-line • (smartphones unlikely to interface with DWP) • From our survey of tenants in Mid Argyll and Kintyre last year we asked a question about internet use - almost 62% of those asked said that they would have to use a publicly available computer or someone else’s.

15. Universal Credit - outcomes from the Scottish pilot • The only pilot of ‘Direct Payment’ in Scotland was through • Dunedin Canmore Housing Association in Edinburgh in 2013. • The results from that were fairly telling: • They were given ‘significant’ financial resourced by the DWP to mitigate any negative impacts. • They were allowed to focus almost entirely on ensuring that impact was dealt with and other areas of their business has suffered badly. • The pilot group was not exactly ‘hand picked’ but known problem tenants were removed. • Of the 1,000 tenants in the test group, 67% of rent payments had a time lag of 4-6 weeks with evidence of tenants delaying rent payment to juggle other financial commitments. • 20% of tenants required long term support and intervention to ensure that rent was continued to be paid – clearly this has a huge resource impact with a knock on effect for other parts of the landlords’ service.

16. The Future George Osborne has announced that a further £17 billion will be cut from the benefit bill this coming year (2014). As pensions are not only protected, but increased, that means the cuts will come from working age and child benefits. Another £20 billion to be cut next year (2015) and £25 billion further across the two years after that That’s cuts of more than £60 billion in total !!!!!!! Nothing concrete from the Government yet on how they intend to tackle the annual £15 billion of corporate tax avoidance!

17. “Happy to try to answer questions” or contact me at any time: Gillian McInnes Community Development Manager Argyll Community Housing Association Dalriada House, Lochgilphead PA31 8ST gillian.mcinnes@acha.co.uk 01546 605801