Welfare Reform mitigations have problems that could be helped by an Executive
An Audit Office report has highlighted huge Welfare Reform underspend. Several NI organisations say bigger problems are coming. With no Assembly, we are rudderless – but Stormont struggled to deal with this first time round.
The hurricane of subsequent events make it seem history, a worry from another epoch, but just a couple of years ago Welfare Reform was the biggest issue in Northern Irish politics.
The insoluble matter of dealing with the past (and its sister, dealing with the present) is the central tentpole in NI’s circus of problems but even it was in static equilibrium. Welfare Reform, however, was on a slow-moving and bitter journey.
With hindsight, the 2011 to 2016 mandate looks like a festival of success for Stormont; this says more about the current shambles than it does about the first half of this decade.
Welfare Reform was a flagship policy of the early days of David Cameron’s Conservative government, the baby of then Work and Pensions Secretary Iain Duncan Smith, who announced sweeping changes to social security at the 2010 Tory Party conference.
Although social security is a devolved matter, in practice NI has had little choice but to mirror any changes made in Westminster due to the parity principle and its attendant financial consequences.
Nonetheless, it failed to pass through the Assembly. After years of wrangling, the Welfare Reform Bill was sunk at the Final Stage, in March 2015, by a Petition of Concern.
Following the Fresh Start Agreement at the end of that year, The House of Commons enacted the Welfare Reform (Northern Ireland) Order and committed NI to the changes already ongoing in Great Britain:
- Six means-tested benefits – Employment and Support Allowance, Jobseekers Allowance, Income Support, Working Tax Credits, Child Tax Credits, and Housing Benefit – were combined into one new benefit: Universal Credit
- Disability Living Allowance (DLA) was replaced by Personal Independence Payments (PIP)
- The enforcement of a Benefits Cap, limiting the total that could be received per household
- Placing social security in a stricter context, with the Claimant Commitment, conditionality and sanctions
There were, however, some crucial differences in the roll out to Northern Ireland – in the form of mitigations.
The extension of Universal Credit and PIP to Northern Ireland came with some agreed concessions. The bedroom tax, a source of major controversy in GB, was delayed by four years.
A Welfare Reform Mitigations Working Group was established, overseen by Professor Eileen Evason, and its recommendations were broadly accepted by the NI Executive, with mitigations in three strands:
- Supplementary payments to those adversely financially affected by Welfare Reform (with various facets applying to different benefit criteria)
- Advice and protection for vulnerable people
- A look forward to the introduction of Universal Credit and how best to deal with that
The group had worked under the assumption there was £585m available and, remarkably, their report came in with an £84m underspend. It did, however, provide a roadmap for how Welfare Reform could be given a gentle landing in its implementation period (which we are living through now).
Two recently-published reports have outlined various failures in the execution of these mitigations.
Last Thursday, the NI Audit Office warned that the full impact of welfare reforms has yet to hit NI and there is a risk of significant hardship for some claimants after the mitigation period aims in March 2020. Its key findings include that:
“£136 million of the £213 million in mitigation payments allocated for 2016- 17 and 2017-18 has not been spent. Over 25% of this underspend relates to a key element of Working Tax Credits and Universal Credit mitigation, the Cost of Work Allowance, which has not been introduced. Our analysis suggests a number of other reasons for the underspend which include uptake being lower than expected…
“The Department [for Communities] estimates that implementing welfare reforms will cost more than £0.5 billion. A further £0.5 billion has been set aside to mitigate the impact of welfare reforms. The Westminster Government has not allocated any additional money to cover the additional £1 billion costs…
“Universal Credit was introduced in the rest of the UK nearly 5 years ago. In June 2018, the National Audit Office concluded that this reform had not delivered value for money to date and it was uncertain that it ever would. It was introduced in Northern Ireland in 2017 and will be rolled out to all claimants on legacy benefits, such as housing benefit, by 2023…
“Personal Independence Payment: Introduced in June 2016 for new claimants with the process of transferring existing Disability Living Allowance claimants expected to continue until April 2019. An independent review of the assessment process in June 2018 concluded that the process was viewed with “distrust and suspicion” and had a negative impact on both claimants and those who support them.”
Other NIAO observations included that one key strut of Welfare Reform – simplification of a complicated system – had backfired, with many stakeholders saying things are now more complex. Part of the mitigations package was a commitment to fund independent advisory services for potential claimants, but this money is only committed until March 2020 whereas the roll out is scheduled to carry on into 2023.
Further to this: “Claimants with mental health problems and learning difficulties are particularly vulnerable under the new benefit processes. Without expert advice and support there is a real risk that some claimants will be unable to access their full benefit entitlement.”
Auditor and Comptroller General Kieran Donnelly also told the BBC that: “The absence of democratic scrutiny over the past couple of years has exacerbated the difficulties here.”
A trio of NI organisations have produced their own joint paper looking at the impacts of Welfare Reform.
Advice NI, Housing Rights and Law Centre NI first published Welfare Reform: Mitigations on a Cliff Edge in November, while an amended version following in December.
It identifies three options for mitigations after the current round finishes next year:
Option 1: Discontinue the mitigation package This option will give rise to considerable financial hardship. As outlined in section 1.4, the end of the mitigations scheme will result in significant financial loss for many claimants and is likely to result in increased poverty for both adults and children in Northern Ireland.
Option 2: Continue the mitigation package in its current form This option will be helpful insomuch as it will continue to protect claimants from some of the existing measures; however, it will not protect claimants from the evolving landscape – specifically, the hardships arising from Universal Credit. Nor do the current mitigations offer help with housing costs to claimants living outside of social housing despite successive benefit changes which make it more difficult for them to stay in their homes.
Option 3: Continue and re-profile the mitigations package. This option would retain a number of the current mitigations while re-profiling the substantial underspend in the mitigations budget to provide protections for evolving welfare reforms. The re-profiled mitigations package would include investment in order to the mitigate hardship associated with emerging issues which fall under the following priorities:
· Priority 1: Universal Credit;
· Priority 2: Housing;
· Priority 3: Children and families;
· Priority 4: Advice support
Option 3 is our preferred approach. The continuance of and re-profiling of the mitigations package is consistent with the direction of travel set by the NI Executive prior to its collapse, including the commitment to ensuring protection for social security entitlement in Northern Ireland.
The underspend – which has occurred for many reasons – is unfortunate but the idea here that the mitigation package can evolve and that the money earmarked but unspent could give such an evolution some teeth is a good one and the figures are considerable.
In 2016/17, £65m was set aside and only £20m was spent, and in 2017/18 these figures were £149m and £58m.
The organisations’ report outlines the underspend in more detail (as does the NIAO paper) – and also explores each of the three options for mitigations in future.
They believe that discontinuing mitigations could be open to certain legal challenges and, regardless, is an unacceptable choice that would increase hardship felt by an increasing number of vulnerable people.
The second option is considered better than the first but, being less flexible and ultimately less insightful than a reworked allocation, it is the third option the organisations would like to see.
A move such as that, however, requires political leadership – and ministerial approval.
Before Brexit, and RHI, and perhaps changes in the leadership of the DUP and Sinn Fein (Arlene Foster took over as DUP leader and First Minister between the signing of Fresh Start and the publication of the Evason Report), Northern Ireland had a whole raft of problems that remain unfixed.
In many cases, such as with Welfare Reform, they are only getting worse. Without a functioning Assembly, solutions are hard to imagine.
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