DWP: Our Reform Story Presentation slides

1. DWP: Our Reform StoryPresentation slides IRRV Severnside – 6th Dec 2013Alan SullivanDennis CrozierDept For Work and Pensions

2. The Department for Work and Pensions is reforming The Government is working to put the nation’s finances on a more sustainable footing, reducing the country’s debt We believe that DWP policies will help us to create a much stronger society: one where those who can, do; and those who cannot are always helped We are creating a system based on fairness. Overview (1) The Reform Story

3. We have to ensure that support continues to be available to those who need it most Employment must be an aspiration for everyone who is able to work. Overview (2) The Reform Story “A system that was originally designed to support the poorest in society is now trapping them in the very condition it was supposed to alleviate” Iain Duncan-Smith, Secretary of State for Work and Pensions

4. What’s changing? Social Justice • The government published its strategy for Social Justice, Social Justice: Transforming Lives,in March 2012 • Previous approaches to tackling poverty have focused on increasing income levels to bring people above the poverty line • The Social Justice Strategy goes much further • Social Justice principles will increasingly influence our overall direction, our policies, and the delivery of DWP services • In October 2012, we published the Social Justice Outcomes Framework • On 24 April 2013, the Government published Social Justice: transforming lives– one year on.

5. What’s changing Universal Credit • Universal Credit replaces six in work and out of work benefits • Universal Credit requires claimants to accept a ‘Claimant Commitment’. This sets out what is expected in return for receiving assistance • Claimants will be able to apply for their benefits online • Designed to make work pay. As claimants earn more money, financial support will be withdrawn at a slower rate than is the case under the current system • A single payment will be made to a household rather than an individual • Local support will be available to help claimants where appropriate.

6. What’s changing? Support for Pensioners • An additional amount for children, Child Addition, will be incorporated into the Guarantee Credit element of Pension Credit (PC) • There will be no Working Tax Credit replacement within modified PC.

7. What’s changing? Pensions and Ageing • Employers are now required by law to pay into a workplace pension for eligible workers • The proposed introduction of a simple state pension system will make it easier for people to know what they’ll get from the state in retirement. The new single-tier pension will be implemented from April 2016 • The Default Retirement Age has been abolished.

8. What’s changing? Disability • Personal Independence Payment (PIP) has now replaced Disability Living Allowance for new claimants aged 16 to 64. PIP includes an assessment of individual needs and regular reviews • Reassessment to PIP starts from 28 October for some existing DLA claimants living in Wales, East Midlands, West Midlands and parts of East Anglia • 'Fulfilling Potential’, published in July 2013, is a cross-government strategy committed to enabling disabled people to fulfil their potential and play a full role in society • Universal Credit will remove the financial risks for disabled people moving back into employment.

9. What’s changing? Disability • Access to Work support is being made more widely available and funding is being increased to deliver enhanced outcomes for disabled people • Dr Paul Litchfield has been commissioned to carry out the fourth review into the Work Capability Assessment (WCA). His report to the Secretary of State for Work and Pensions will be laid before Parliament by the end of 2013.

10. What’s changing? (1) Housing Benefit has already changed To help people manage the transition to the new Local Housing Allowance rules we have provided an additional £130 million in Discretionary Housing Payments and up to £50 million in funding for local authorities to proactively help people affected by the changes Local Housing Allowance rates will be uprated annually from April 2013. In 2014-15 and 2015-16 increases will be limited to 1 per cent From April 2013 all tenants renting from a local authority, housing association or other registered social landlords will receive housing support based on household size - reduced by 14 per cent for one room and 25 per cent if under occupied by two rooms or more. Housing Support

11. What’s changing? (2) The Government has added a further £25 million to the Discretionary Housing Payments fund from 2013/14 for the removal of the spare room subsidy. On 30 July 2013 the Government announced an additional £35 million in-year funding to help claimants affected by changes to housing benefit in the social sector who need extra support Localised support for Council Tax has been introduced to replace Council Tax Benefit. Housing Support

12. All loans secured on a property will be allowable, up to the capital limit There will be a zero earnings rule for Support for Mortgage Interest There will be no linking rules The waiting period will be 13 weeks and the capital loan limit £200,000 until the end of March 2015 There will be no deductions for non-dependants in Support for Mortgage Interest. What’s changing? Housing Support Support for Mortgage Interest Housing Support

13. Council Tax Benefit was replaced by new localised council tax support from April 2013 Support for pensioners will continue to be governed by a national framework. The government  has  prescribed  in regulations the support to be given to pensioners £100m transition grant was made available in 2013-14 to help councils develop well-designed schemes and maintain incentives to work. What’s changing? Housing Support Localisation of Council Tax Support Housing Support

14. What’s changing? (1) Benefit Cap • From 15 April 2013 a cap was introduced on the total amount of benefit that working-age claimants can receive • The cap was implemented first in four local authorities in London – Bromley, Croydon, Enfield and Haringey • The schedule of capping activity for national implementation was managed over a 10 week period between July and the end of September 2013 • The benefit cap has now been successfully rolled out to all local authorities across the country to the agreed timetable.

15. What’s changing? (2) Benefit Cap • The benefit cap will apply to the combined income from out-of-work benefits; and other benefits such as Housing Benefit, Child Tax Credit, Child Benefit and Carer’s Allowance • Initially the cap will be administered by local authorities through deductions from Housing Benefit payments. These arrangements will continue until Universal Credit is fully in place and the cap from Housing Benefit is no longer required • Some households will be exempt from the benefit cap • There will be a ‘grace period’ whereby the benefit cap will not be applied for 39 weeks to those who have been continuously in work for the previous 12 months and have become unemployed.

16. What’s changing? Community Care Grants and Crisis Loans were abolished on 1 April 2013 From April 2013, local authorities in England, and the Scottish and Welsh Governments have been free to deliver their own local arrangements for assistance for people facing a crisis or short term unavoidable need The help and support provided by local authorities and the Scottish and Welsh Governments is Local Welfare Provision. Social Fund

17. What’s changing? (1) Employment Offer • Universal Jobmatch is an online job posting and matching service available to all jobseekers, not just those claiming benefits • Youth Contract, (including the Wage Incentive), is a £1 billion programme designed to get more young people into meaningful employment, training or work experience • The Work Programme offers greater freedom to tailor support to the needs of individual claimants • Help to Work, from April 2014, claimants returning from the Work Programme will go onto one of three intensive modes of support, determined by a Jobcentre Plus advisor and according to need.

18. What’s changing? (2) Employment Offer • The New Enterprise Allowance (NEA) helps unemployed people who want to start their own business. It provides access to business mentoring and financial support. New referrals to the scheme, due to end in September this year, will now continue until the end of December 2014. • Work Choice is a specialist disability employment programme which was launched in October 2010.

19. What’s changing? (1) Fraud & Error Preventing Fraud • A new service will analyse the information claimants provide on their new and existing claims to check for potential fraud and error • A new IT system allows data to be exchanged with local authorities on Housing Benefit to ensure claims stay correct. • Real Time Information (RTI) on earnings reduces the opportunity to defraud the system, and keeps payments correct. Detecting Fraud • We are bringing together DWP, local authority and HMRC investigation activity • Campaign Management - initiatives were outlined in the joint DWP and HMRC fraud and error strategy to help reduce the level of benefit and Tax Credit fraud and error.

20. What’s changing? (2) Fraud & Error Correcting Fraud • Claimants have a responsibility to ensure that they inform DWP about any changes to their circumstance • For those that don't, a new £50 Civil Penalty has been introduced. Punishing Fraud • A minimum administrative penalty of £350 for benefit fraud or 50 per cent of the amount overpaid, whichever is greater up to a maximum penalty of £2,000 • We have increased the period for which those convicted of fraud will forfeit their benefit, alongside any court punishments.

21. What’s changing? Appeals Reform Appeals Reform • Following receipt of a decision, anyone wishing to dispute that decision will have to request that DWP conducts a mandatory reconsideration before being allowed to lodge an appeal • Those wishing to dispute a decision following a mandatory reconsideration must send appeals direct to Her Majesty’s Courts and Tribunals Service (HMCTS) • DWP has agreed to the request of the Tribunal Procedure Committee to introduce time limits for DWP to return appeal responses to HMCTS. DWP has undertaken to provide an appeal response within 28 calendar days in benefits cases, and within 42 calendar days in child maintenance cases and will begin to report against these time limits from October 2014.

22. What’s changing? The Freedoms and Flexibilities offer was implemented in April 2012. All DWP Work Services Directorate Districts have been given more local autonomy to tailor their back-to-work services to meet the needs of individual claimants and local labour markets This approach encourages innovation and supports the most effective way for us to design and deliver our services to the public We are currently exploring how to expand Freedoms and Flexibilities across DWP where this would be appropriate. Freedoms and Flexibilities

23. Universal Credit update • Early evaluation information releases on 29.11.13 • Latest statistics released 3.12.13 • Ministerial Statement 5.12.13

24. Implementation – April to Oct 2013 April : • Universal Credit launched in Ashton-under-Lyne July: • Oldham, Wigan and WarringtonJob Centres started taking new claims to Universal Credit Aug: • Lord Freud wrote to LA Chief Executives and made it clear that funding for 2014-15 would allow for administration of HB at its current levels Oct: • Claimant Commitment now being introduced into around 100 Jobcentres per month • commenced nationwide installation of 6,000 computers to replace job points • begun a programme of additional training for around 25,000 job centre staff in delivering the Claimant Commitment • eleven in work progression pilots – testing ways to help claimants on a low income increase their work hours and income in order to reduce dependency on benefits.

25. Roll out from October 2013 • Progressive roll out of Universal Credit across England, Scotland & Wales, with offices taking new claims and trialling new job-seeking support activities • Hammersmith (28th October) • Rugby and Inverness (25th November) • Bath, Harrogate & Shotton will take new claims by Spring 2014.

26. Live service - early findings • High rate of access to the Universal Credit service via the Universal Credit website. • The majority of claims from Universal Credit claimants in the Pathfinder locations have been made online. • Claimants making use of services provided by local authorities • internet access • support to make a Universal Credit claim on line • Personal Budgeting Support • Process in place to make alternative payments to vulnerable claimants, including: • split payment • managed payment, i.e. landlord paid housing costs • more frequent payment period, i.e. fortnightly • We have published some early evaluation information on 29th November, and we released an initial set of official statistics on Universal Credit claimants on 3 December.

27. Early evaluation** • Budgeting • Around 78% of claimants receiving monthly payments feel confident about budgeting • Around 37% of claimants who previously claimed JSA feel that being paid monthly is more convenient • Less than 1 in 10 (8%) have sought advances on benefit payments. • On Line • 90% claiming online • 7% making telephone claims • 3% making claims within Jobcentre. • Work Search • Almost two-thirds of Universal Credit claimants think that the new system provides a better financial incentive to work, as well as better rewards for small amounts of work than Jobseeker’s Allowance. (**Interviews with 900 UC claimants + 2 comparator JSA groups, April – Oct 2013)

28. Developing and testing our approach Direct Payment Demonstration ProjectsIdentifying what interventions best help tenants and landlords – e.g. different levels of arrears at which direct payment reverts back to landlords, ways of providing support to tenants and using a range of payment methods. Local authority led pilots Aim to explore approaches on how local expertise can support residents to claim Universal Credit, and so:a) Partnership working which is key area of work b) encourage people to access online support independently c) improve their financial independence and how they manage their money d) deliver efficiencies and reduce homelessness. Aberdeen Dundee North Lanarkshire West Dunbarton Edinburgh South Lanarkshire Dumfries & Galloway Wakefield West Lindsey Rushcliffe Melton Shropshire Birmingham Oxford Southwark Torfaen Caerphilly Lewisham Newport Bath & NES North Dorset Key: DWP UC LA led pilots Scottish Government pilots Direct Payment Demonstration Projects

29. Learning from testing Local authority led pilots • Understand and map local delivery partners and agree shared objectives, focussing on delivering a simple holistic service to meet the needs of the local population • There must be commitment to partnership working at all levels across the organisations, with open communication and regular review points to monitor projected demands. Understanding the partners resources, abilities, flexibilities and expectations is key as is allowing time to build trust. Direct Payment Demonstration Projects • Early and clear communication is essential using a mix communication channels • Direct Debits are not always the best payment method, tenants want to feel in control of their budget • Accurate assessment of people’s support needs is important, and the arrears trigger is used to balance the risk for tenants and landlords.

30. Local Support Services Framework

31. Local Support Services Framework (LSSF) • We know that some claimants will need additional help to make and maintain their UC claim. DWP and its delivery partners will need to work together • LSSF was published in February 2013 and covers: • Who is likely to need additional support • What services will be needed • existing and newly required local level support services • mainly triage, and digital or financial inclusion • How we will make it work using a delivery partnerships approach • We will publish an update and trialling plan shortly: • More detail on implementation • Good practice and feedback from pathfinder, pilots and research (including Scottish Government work on budgeting support) • Prospectus for trialling aspects of LSSF over next 18 months.

32. What can local authorities be doing now ? • Examine local planning forums already in place in respect of their ability to plan for a holistic, single claimant journey under UC • Invite DWP District Managers/Partnerships Managers to attend appropriate welfare reform planning events, especially forums that could, eventually, serve as Local Delivery Groups • Start to map out relevant services, examining both levels of provision and gaps • Build alliances with potential delivery Partners and starting wider conversations.

33. Forward Look • Ministers provided more detail on the delivery plans for UC yesterday • Work is currently underway to develop options for: transition - bringing UC into operation where all new eligible claimants use UC (both new claims and change of circumstances); and migration - moving claimants from existing benefits into UC • This work is taking into account the requirements and constraints of all the delivery partners, to establish a delivery plan to complete transition and migration • We will continue to work with partners including LGA, IRRV and local authorities to develop more detail on LSSF: including costs and trialling in the run up to wider live running.

34. Ministerial Statement 5.12.13 Minister reiterated the outcomes of implementing UC • Universal Credit is a major reform which will transform the welfare state in Britain for the better. Once fully implemented, Universal Credit will account for £70 billion of benefit spending each year, and bring a £38 billion economic benefit to society over 10 years • Rightly for a programme of this scale, the Government’s priority has been, and continues to be, its safe and secure delivery • This has already been demonstrated in our approach to date, which started with the successful launch of the Pathfinder six months earlier than planned in April 2013, and has continued with the controlled expansion of Universal Credit, starting in October 2013 and running through to spring 2014.

35. Ministerial Statement 5.12.13 • Over recent months the Department has worked with the Government Digital Service to assess the options for the next stage of Universal Credit delivery • As part of the wider transformation in the development of digital services, the Department will further develop this work • We will expand our current pathfinder service and develop functionality so that from next summer we progressively start to take claims for Universal Credit from couples and, in the autumn, from families. Once safely tested in the 10 live Universal Credit areas, we will also expand the roll-out to cover more of the Northwest of England. This will enable us to learn from the live running of Universal Credit at scale and for more claimant types, including the more vulnerable and complex. “These steps continue our progressive approach – test, learn, implement – as we deliver this flagship programme”

36. Ministerial Statement 5.12.13 • Conclusions • Our current planning assumption is that the Universal Credit service will be fully available in each part of Great Britain during 2016 • having closed down new claims to the legacy benefits it replaced • with the majority of the remaining legacy caseload moving to Universal Credit during 2016 and 2017 • Final decisions on these elements of the programme will be informed by the development of the enhanced digital solution.

37. Managing LA performance • Recent performance figures

38. Questions alan.sullivan@dwp.gsi.gov.uk