Is your post COVID-19 Council Tax Support Scheme sustainable?
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The £500 million Hardship Fund allows councils to give extra support to help people affected by Coronavirus. Councils are expected to use this welcome funding to reduce the council tax bills of working-age people who are already receiving council tax support, by £150 in 2020/21. In this webinar, Zoe Charlesworth presented new nationwide analysis on the Hardship Fund allocations and discussed what this means for collection rates. Megan Mclean explored what this means for those who become newly unemployed, as well as CTR support schemes. Finally, Deven Ghelani looked at what councils can do now to proactively support people. Review the slides to learn: - How the Hardship Fund and council tax collection rates interact - What the future looks like, and how you can plan for future vulnerability - How to identify the most vulnerable households in your area so you can target additional support
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Is your post COVID-19 Council Tax Support Scheme sustainable?
- 1. Is your post COVID-19 Council Tax Support Scheme sustainable? Wednesday 3 June Policy in Practice webinar
- 2. Housekeeping www.policyinpractice.co.uk ● Audio check ● Please ask questions ● Poll and a survey ● Aim to finish by 11:30 ● Slides and recording will automatically follow ● We’re live tweeting via @policy_practice with hashtag #HelpfulPolicy
- 3. Today’s speakers www.policyinpractice.co.uk Zoe Charlesworth Head of Policy Policy in Practice Megan Mclean Senior Analyst Policy in Practice Deven Ghelani Director Policy in Practice
- 4. www.policyinpractice.co.uk Give the best support you can to help people on their way policy software analytics
- 5. Agenda www.policyinpractice.co.uk/coronavirus ● How the Hardship Fund and council tax reduction interact ● What the future looks like, and how you can plan for future vulnerability ● How to identify the most vulnerable households in your area so you can target additional support ● Questions and answers
- 6. 666 Poll 1: Do you think the Hardship Fund will cover your additional CTR claims? www.policyinpractice.co.uk
- 8. Background www.policyinpractice.co.uk The economic fallout from COVID-19 ● increase in unemployment now and in 21/22 The Hardship Fund ● initial and ongoing allocation Collection rates and pressure on council finances ● differences across councils ● pressure to reduce generosity ● relationship to collection rates How to support those who need it most? ● reactive or proactive?
- 9. The economic fallout from COVID-19 www.policyinpractice.co.uk OBR forecast unemployment to peak at 2.5M in 2020/2, average 2.1M in 2021/22 ● An increase in unemployment of 92% in 2020/21 and 80% by next year ● Average earnings reduce and inflation increases until 2024, then slight recovery ● Unemployment predicted to be higher than pre-Covid19 until at least 2024
- 10. The impact for councils www.policyinpractice.co.uk In the last 3 months, councils have lost: ● £470M in business rates ● £506M in council tax payments ● Total loss of £0.5bn from collection funds This is in addition to income loss due to revenue reductions and investment returns
- 11. The Hardship Fund www.policyinpractice.co.uk/hardship-fund-allocations £500M for councils to support low-income residents ● Guidance suggests up to £150/year for all households in receipt of CTRR ● Remainder for new claims and for discretionary support Most councils are following guidance ● Some are looking at targeted support (eg to prevent homelessness) Proportion for initial allocation differs between councils ● Proportion for new claims and discretionary support differs between councils ● Councils with higher max awards (eg 100%) use less Hardship Funds for initial allocation ● Councils with most generous CTR schemes also have sufficient to support new claims and discretionary support
- 13. The Hardship Fund www.policyinpractice.co.uk Taking account of estimated new caseload:
- 14. The challenge for councils www.policyinpractice.co.uk Unavoidable tension between the cost to the council and supporting the increased number of residents in need of support
- 15. Impact on CTR design, 2021 onwards www.policyinpractice.co.uk In-year collection rates are still key PFI for Councils ● Pressure to increase in-year collection at the same time as numbers with ability to pay reduces Is it time for councils to move towards more customer-focused collection practices? ● Income maximisation and targeted support ● CTR schemes that support the most vulnerable CTR scheme and levels of poverty are correlated with collection rates. We could find no correlation with moving towards customer-focused practices or CT charge
- 17. Arrears were already rising before COVID-19 www.policyinpractice.co.uk ● 90% of English councils had made changes to their CTS scheme by 2018/19, almost all of them cuts. ● A quarter of the additional council tax liability was not collected ● Lone parents, single people and renters are more likely than average to fall into council tax arrears as a result of changes in support
- 18. 181818 Options for targeting support www.policyinpractice.co.uk
- 19. Income banded schemes www.policyinpractice.co.uk ● Modelling the financial and social implications of sorting households into set income bands, each with corresponding discounts ● Building in protection for larger households through different ways: ● Different bands for single people / couples with children ● Reverse engineer income bands, and levels of discount for each, to keep scheme cost-neutral or to make savings
- 20. Small tweaks to the scheme www.policyinpractice.co.uk All of these measures would lower costs overall ● Changing maximum support, taper rate ● Introducing band cap, capital limit ● Introducing Minimum Income Floor to all self-employed ● Flat-rate non-dependent deductions ● De-minimis rules
- 21. Protecting vulnerable groups www.policyinpractice.co.uk These measures would protect support for key groups ● Usually include those in receipt of disability benefits, lone parents with younger children, those in LCWRA, carers. ● Protection is typically based on 100% of liability; distributing reduction in support to other groups. ● In income banded schemes, councils can raise the income threshold for households with certain protected characteristics ● A new groups is emerging as vulnerable: younger single households with no dependents.
- 22. 222222 How data analysis can help you design the best scheme for your local authority www.policyinpractice.co.uk
- 23. Why use modelling when comparing schemes? www.policyinpractice.co.uk 1. To understand the impacts at a household level to inform Member decisions. 2. Comprehensive data to cover Member’s questions, inform final scheme design and have information ready for public consultation. 3. Future scheme models can take into account changing caseloads and other economic changes in benefit rates, inflation, wages (etc) for accurate modelling - even more important on a post-COVID world. 4. To target support to those most in need and protect collection rates. 5. To avoid excessive gains and losses in support, and protect vulnerable residents.
- 25. Key considerations www.policyinpractice.co.uk The best scheme for your local authority will depend on: ● Demographics ● Current scheme ● Members’ objectives and local priorities ● The economic impacts of the pandemic in your local area Your scheme will almost certainly need to change in April 2021 We can consider economic and caseload impacts on the cost and social impacts of your scheme on the lowest income households in our modelling
- 26. 262626 Poll 2: What actions are you actively considering to tackle the impact of the COVID-19 fallout? www.policyinpractice.co.uk
- 28. Your Hardship Fund must stretch to cope with … www.policyinpractice.co.uk/hardship-fund-allocations ● The welfare safety net falling away in April 2021 ● Rising unemployment of between 190% (OBR) to 480% (NIESR) ● Gaps in rent affordability and PRS evictions ● The impact on children and adults with care needs ● Changing caseloads as people claim benefits and return to work
- 29. Are you sure support is getting to those most in need? www.policyinpractice.co.uk/data-analytics More than eight in ten DHP applications are paid, but of those most in need, only one in five apply
- 30. 303030 Use data analysis to: 1. Identify household in receipt of council tax support that have fallen into arrears 2. Filter down further to focus on vulnerable groups such as single private renters, people under 35 3. Proactively contact them to offer benefit support in order to bring down arrears and see what other support they may need to get through the pandemic www.policyinpractice.co.uk
- 31. Forward looking analysis from June www.policyinpractice.co.uk Housing and homelessness challenges ● The Local Housing Allowance won’t cover all rents. ● The moratorium on evictions is set to end in September of this year. ● Visibility over PRS households, gaps in rent affordability and arrears is something our clients have found useful. Child and adult services ● We can show the impact of the above measures on households with children, and potential extend this to Adult Social Care Employment and the economy ● Monthly updates to LIFT, so they can keep track of the rising number of people in receipt of CTS and UC. OBR / NEISR economic scenarios
- 32. Future modelling in LIFT dashboard www.policyinpractice.co.uk The future is uncertain but projections help us to see implications for demand for council support and services, and indebtedness. We’ve changed our policy modelling due to COVID-19. We have two approaches: 1. What's happening to current cohort? 2. What’s the new cohort of households going to be? This can help you to: ● Identify people you can help back to financial independence quicker ● Ensure your service is designed around need and impact
- 34. ● For up to date information on the welfare support available see www.policyinpractice.co.uk/your-income-and-coronavirus-covid-19/ ● Access your council’s COVID-19 Hardship Fund allocations here ● Follow up email with webinar recording and slides, with links ● Short survey to follow ● Next webinars: ○ NHC: Covid-19: Changes to the Welfare System - stories from the frontline on Thurs 4 June at 10:30 - 12:30 ○ How data analytics helps councils look to recovery on Wed 17 June at 10:30 ○ How to simplify the complexity of surplus earnings on Wed 1 July at 10:30 Practical tools that can help www.policyinpractice.co.uk/events
- 35. 353535 Thank you Zoe Charlesworth, Head of Policy Megan Mclean, Policy and Data Analyst Deven Ghelani, Director and founder Policy in Practice hello@policyinpractice.co.uk 0330 088 9242 www.policyinpractice.co.uk
Notes de l'éditeur
- We help organisations like you to give the best support you can to help people on their way. We do this by analysing the impacts of welfare policy, and we’ve developed our award winning benefits calculator software to help organisations dissolve the complexities of the welfare system, while our data analytics dashboard helps local authorities to identify vulnerability, target support and track change.
- The £500 million Hardship Fund allows councils to give extra support to help people affected by Coronavirus. Councils are expected to use this welcome funding to reduce the council tax bills of working-age people who are already receiving council tax support, by £150 in 2020/21. Because each council has a different existing council tax support scheme, they will have very different amounts of discretionary support leftover. Those with more generous CTR schemes will have more discretionary hardship funds available to help support vulnerable households. But, with unemployment levels set to rise, what will this mean for council tax collection rates? In this webinar, Zoe Charlesworth, presents new nationwide analysis on the Hardship Fund allocations and discusses what this means for collection rates. Megan Mclean will talk about what this means for those who become newly unemployed, and what this means for CTR support schemes. Finally, Deven Ghelani will look at what councils can do now to proactively support people. Join the Policy in Practice team to learn: - How the Hardship Fund and council tax collection rates interact - What the future looks like, and how you can plan for future vulnerability - How to identify the most vulnerable households in your area so you can target additional support Speakers: Zoe Charlesworth, Head of Policy, Policy in Practice Megan Mclean, Senior Policy and Data Analyst, Policy in Practice Deven Ghelani, Director and founder, Policy in Practice
- Get an understanding of who knows what they have left / how they’re going to use it Poll 1: Do you think the Hardship Fund will cover all your additional claims? No, I know it definitely won’t cover additional claims Doubt it, I think it probably won’t cover additional claims Maybe, I think it might cover additional claims Yes, I know it definitely will cover additional claims I don’t know Before Zoe
- Qus about BBC Qus about LIFT
- Qus about BBC Qus about LIFT
- Poll 2: What actions are you considering to tackle the impact of the COVID-19 fallout? Review current CTR scheme Ensure residents are claiming all the benefits they’re eligible for Identify the most vulnerable households early Get employment support to people early Don’t know yet Reduced income / increased outgoings = we can help
- Poll 2: What actions are you considering to tackle the impact of the COVID-19 fallout? Review current CTR scheme Ensure residents are claiming all the benefits they’re eligible for Identify the most vulnerable households early Track unemployment and get employment support to people early Don’t know yet Reduced income / increased outgoings = we can help
- Qus about BBC Qus about LIFT
- Qus about BBC Qus about LIFT
- The future is uncertain and it’s difficult to make projections about what the policy landscape will look like, what the wider economic trends will be and what will happen to different groups of people. But we need to make projections to see implications for demand for council support and services, and indebtedness. At Policy in Practice we’ve changed our policy modelling due to Covid-19, and this is our number one analytics priority now. We have two approaches: 1. What's happening to current cohort? We're building flexibility into our analytics so that we can do multiple scenario policy modelling, for example if all COVID-19 related changes end after 1 year, as currently planned, or if they are all retained. 2. What’s the new cohort of households going to be? Depending on employment impact of the pandemic, for example if we see major job losses and hours reduced once people come off furlough, the benefit caseload for LAs could be majorly impacted. Our modelling is based on our policy analysis using the numbers from the OBR which give us the best case scenario because they assume everyone on furlough returns to work, and Blancheflower & Bloom who give us the worst case scenario because they assume no one returns to work. On the latter assumption, people coming off furlough become unemployed, therefore claim UC and therefore grow the LAs caseload. What you can do with this kind of modelling: With the information about the new caseloads you can identify people you'll be able to help back to financial independence quicker. This could be people who may be closer to the job market who you can target employment support to, or people in arrears who you can target discretionary support to. This modelling can also help councils look towards recovery. For example, the insights can help you to understand where, in your service, your money will be most needed and where it will be most effective in tackling vulnerability. We'll be covering this in more depth in a webinar on 17 June so please do look out for details if this is of interest to you. ============================================================================================================= The future is uncertain and it’s difficult to make projections about what the policy landscape will look like, what the wider economic trends will be and what will happen to different groups of people. We’ve changed our policy modelling due to Covid-19. This is our top priority now. We have two approaches: What's happening to current cohort? Building flexibility to do multiple scenario policy modelling such as if What’s the new cohort of households going to be? Dependent on employment impact of the pandemic - job losses and hours reduced - what does this mean for benefit caseload for LAs? What happened to people when they come off furlough? Our modelling is based on our policy analytics using the numbers from OBR (best case scenario ie all return to work) and Blancheflower & Bloom (worst case scenario ie none return to work and stay unemployed and therefore claim UC and therefore grow the LAs caseload). What you can do with this: New caseload - identifying people we can help back to financial independence quicker (ie those closer to the job market = target employment support; people in arrears = target discretionary support to them) Help councils look towards recovery - strategic service design (put money where need is and where it will be most effective) --- The future is uncertain but we need to make projections to see implications for demand for council support and services, and indebtedness. We have two approaches: A and B policy scenarios for 2021 A: All COVID-related changes end after 1 year B: All COVID-related changes retained Cohort estimation: We’ll use published projections on workforce and claimant populations to estimate upper and lower bounds of caseload in 2021-22 We’ll supplement these projections with information from SHBE data post April 2020, as we begin to learn more about the incoming UC cohort
- Qus about BBC Qus about LIFT