Welfare Reforms - time for action

In my last post, I talked about the huge impact of the welfare reforms on Wolverhampton’s citizens. We have partnered with our Council and other key players to provide a full impact assessment. This will tell us the financial impact on the City, which is in the many £10s of millions, and drill down to street and household level. It will help us build on the work we have already started, in supporting our customers through these changes.

So now's the time for action. To ready ourselves for the tsunami, we've grown our Money Smart Team by five new members drawn from across our business. We wanted to draw on the great skills and experience of staff, who know the business inside and out and they have truly hit the ground running. They are speaking to everyone affected by size criteria (bedroom tax) and the benefit cap, outlining the impacts on individuals and their families and working through the various option available.

We are delighted to have launched LEAP, our own work programme, to help unemployed tenants become “work ready”, gain qualifications, work experience and apprenticeships.

With a new expanded Money Smart Team the emphasis has changed, from being reactive and receiving referrals for support to being proactive. Now that we are contacting customers we are able to support them in many ways, not just with welfare reforms, but emergency support from the City’s Foodbank, providing debt advice, access to cheap furniture and new white goods in association with the City’s Credit Union.

We know that customers will need to alter the way they budget, with many needing to move from operating on a weekly basis to monthly. We are working with customers, giving advice on budgeting and this is proving to be a mammoth task. The key here is choice; we hope that by informing our customers they will be able to make decisions about their financial future.We are working with our City’s credit union to develop a suitable product for customers to allow them to effectively continue with “direct payments” of rent.

This month we are holding our first “speed dating” (or “speed mutual exchange”) event in the North of the City, where tenants, both those who are under-occupying and those who are over-crowded, can meet to see if they can resolve their housing issues by selecting a mutual exchange.

Then in December as part of WMBUS (West Midlands partnership Best Use of Stock) we will partner with several housing providers in a similar “speed dating” event, which will provide a wide choice of properties and tenures.

All in, it's a lot of action that will hopefully go some way to supporting our customers and the city to deal with the impact of welfare reform.

Thank you very much to Anne Herrmann who is leading on our welfare reform approach at Wolverhampton Homes for providing this information.

What will be the impact of welfare reform?

I’ve been talking to tenants, community groups and councillors about the likely impact of welfare reform in Wolverhampton. 

We all appear to be thinking along the same lines – that Wolverhampton is likely to be particularly hard hit.

Why? Well, we have nearly double the national average unemployment and 70% of Wolverhampton Homes tenants are on housing benefit. In fact 36% of working age tenants are on full housing benefit – compared to just 20% nationally. And a significant proportion of our tenants have a disability or are vulnerable in one or more ways.

We estimate that an extra £3.95m extra “cash” will need to be paid by tenants – either as a result of benefit cuts or because the benefit will go direct to them rather than paid on their behalf direct to their rent account.   This includes £2.4m as a result of under-occupation of family homes. 

Although last year was our best ever year for rent collection and the average debt per tenants is among the best nationally (and we have worked hard with tenants to have a really good payment culture) – what will happen when we have nearly £4m more to collect?

Everyone involved in supporting tenants locally feels there is a real risk of serious arrears. It could be as high as 20-25% of the £4m. That’s £lm less income for the Council –  fewer new homes, reduced services or delayed improvements and major repairs. Although thank goodness the decent homes programme is quite safe. And that’s not including the cost to Wolverhampton Homes of employing more staff to support tenants,  to deal with arrears or the cost of all the additional transactions.  

Of course work has already begun to raise tenants’ awareness, pass on budgeting skills and encouraging moves to different sized homes – although with the mismatch of the stock size to peoples’ needs and the overall shortage of housing, this sadly isn’t a realistic option for many.

We can go a long way to encourage tenants to be more resourceful, move to monthly budgeting and become internet savvy – with rent always being the priority, but everyone I have spoken to shares the view that dealing with this financially and practically will be a step too far for many folk.

I'll write another post soon about the steps we are taking, but in the meantime it would be interesting to hear other peoples’ views while we continue to develop new approaches to help mitigate this difficult situation.