Introduction
The Citizens Advice service in London welcomes the opportunity to submit evidence to the Mayor of London Consultation on Tackling Poverty in London. Citizens Advice is not surprised by the scale of poverty in London and we welcome the high profile and resolve that the Mayor’s anti-poverty strategy should bring to this issue.
We hope that the strategy will bring together people who can make a difference in tackling poverty across London. Citizens Advice London would like to play a part in this.
This submission describes Citizens Advice Bureau (CAB) evidence on the poverty related issues experienced by people living and working in London. We comment on the proposed strategy and identify additional issues that should be included.
The Citizens Advice service in London
83 Citizens Advice Bureaux work in London providing high quality advice and information from over 175 service outlets. Bureaux in London helped people with almost 612,000 enquiries in 2002/03. Over 173,000 enquiries concerned benefit problems and 86,000 enquiries concerned housing issues. CAB clients are often living on a very low income or welfare benefits.
Access to advice and information
One of the key causes of poverty has to be lack of information about your rights. The 83 Citizens Advice Bureaux in London dealt with 612,000 enquiries in 2002/2003 from people from all communities covering a wide range subjects including benefit entitlement, employment rights, consumer rights, housing problems and immigration.
Citizens Advice Bureaux provide free, impartial and confidential advice and in London we have one main bureau in each London borough. Our services are in greater demand each year. 90% of our workforce is voluntary who provide advice to the community from the community.
Citizens Advice believes that advice should be easily available to everyone who needs it. Bureaux in London are taking advice to those who would otherwise find it difficult to get advice. We are bridging physical barriers – reaching people in hospital, people with mental health difficulties, people in prison or simply those who are housebound or have restricted mobility. We are also seeking to bridge cultural divides – establishing links in communities who previously thought the CAB was not for them.
Research that Citizens Advice undertook last year into benefit take up by elderly people demonstrates the need for access to advice and information. We recognise that as part of the strategy the GLA has no grant making powers but we would ask that the Mayor support the development of appropriate advice services throughout the capital.
Citizens Advice Bureaux and combating social exclusion
CAB services contribute to combating social exclusion by: maximising the income of individuals through helping people claim benefits they are entitled to through advocacy to ensure rights such as the minimum wage are enforced.
Last year London Citizens Advice Bureaux gave advice on over 173,000 benefit enquiries and 59,000 employment enquiries. Many people still lose out on additional income, for example from benefits intended to help with care needs, or to lift pensioners out of poverty. People are often unaware that they need advice, or are reluctant to seek support.
Preventing homelessness by intervention
- to ensure Housing Benefit is claimed or chased up
- to negotiate with landlords threatening eviction for rent arrears
- to represent at court to prevent eviction
- and to seek improvements in policy and practice
Housing issues are some of the most common types of problems dealt with by CABx. In 2002/2003, CABx dealt with over 31,000 housing benefit related problems and 85,000 housing problems. Behind many of these problems is the lack of good quality affordable housing to rent, the limited security rights of both tenants and homeowners and poor administration of housing benefit.
London Citizens Advice Bureaux are currently involved in a campaign which aims to encourage social landlords to examine their procedures for preventing and recovering rent arrears. In particular we are asking social landlords to publish a statement of practice on preventing and recovering rent arrears to ensure that possession action is only used as last resort and to agree not to use Mandatory Ground 8 in possession action (Housing Associations only) and finally to establish effective procedures for liaison with Housing Benefit departments, to prevent court action while outstanding Housing Benefit issues remain.
The starting point of this project was an evidence report launched by Citizens Advice in February 2003 called “Possession Action – the last resort?” . The report was based on evidence from nearly 400 bureaux across the country and on the findings of a survey of
clients who received advice from bureaux at county courts in England and Wales. Statistics from the Lord Chancellors Department show that the number of outright possession orders granted to social landlords has more than doubled since 1994, at a time when possession orders for mortgage arrears has been falling.
Helping people out of multiple debt, and enabling them to stabilise their budgets
Nationally, over the past five years the CAB Service has seen an increase of 49% in the number of cases on credit and debt problems dealt with. CAB advisers are now dealing with around 1 million new debt problems of all kinds a year. For some consumers the main reasons for the increase are the current boom in consumer and mortgage lending, coupled with irresponsible lending practices and a lack of understandable information about the consequences of taking out too much credit. When people’s circumstances change and income drops many are finding their commitments are unsustainable.
Meanwhile, CABx are still seeing people who are being chased by their former mortgage lenders to repay enormous debts left after their home was repossessed during the recession of the early 1990s and sold at a loss.
Identifying cross-cutting and inter-related problems, which impact on one another, and if not tackled holistically, can lead to greater problems.
For example, someone losing their job may need help in claiming unfair dismissal may not be aware of the benefits available to help them, may find that manageable credit is now debt, and may have problems with mortgage or rent, threatening the stability of the whole family.
Capacity building in the local community by offering quality volunteering opportunities and training
Many bureaux participate in New Deal schemes, or work with their local Volunteer Bureau to encourage participation in active citizenship.
During 2001/2, 31% of CAB volunteers who left the service moved into paid employment.
At Hackney bureau 90% of volunteers move into paid work or education.
Citizens Advice Bureaux directly help achieve race equality through advice and social policy work. But they also have a big impact through the participation of black and minority ethnic people on CAB trustee boards and in the workforce as well as through wider community development.
Improve the health of individuals by supporting them with their finances, their housing and other problems.
Work by CABx in GP surgeries, in hospitals and palliative care settings has been shown by research to increase well-being, decrease levels of depression, and decrease the need for levels of prescription. We now have over 19 projects funded by Primary care trusts based in hospitals, health centres, hospices and GP surgeries.
Brent Citizens Advice Bureau has received funding to enable them to offer welfare benefits advice to patients in some GP practices. The Health Action Zone also helped the bureau to recruit volunteers from refugee communities and train them to give advice to refugees in their first language.
Increasing the circulation of money in a local area by increasing the take-up of benefits.
Recent research by Citizens Advice on benefit take-up among older people shows that on average for every £1 spent on the benefit take-up advice and campaigns, £85 was brought into the local economy.
Enabling individuals to participate in economic activity by relieving crises and stress over inadequate income, housing problems, or debt.
Chelsea citizens advice bureau worked in partnership with social services to maximise the incomes of people over 50 and people with mental health difficulties. Using workshops at venues such as day centres the project raises on average £450,000 per quarter for clients.
-Reaching out to people through home visiting services for the most disabled, frail elderly or housebound and their carers – who tend to be least able to access services. 90 per cent of bureaux offer home visits.
“Over the past five years Sue and Bridget from Harrow Citizens Advice Bureau have been holding once a week special BSL signing sessions to give advice to the deaf community in Harrow. Based on their success, the local health authority has funded a part time post to expand the service and consolidate these activities.”
“The residential population of the City is more diverse than people think. Mny are surprised to learn that there is a residential population at all. City Citizens Advice Bureau works closely with residents on all the City’s estates. We see clients from Golden Lane, Barbican, Middlesex Street, Temple and Mansell Street, plus the City residents who live in individual properties, outside the estates, perhaps in privately owned or rented accommodation or those who are in accommodation tied to their employment.
We are able to make home visits within the Square Mile when we receive referrals from City Social Services Department, and where the person is unable to visit the bureau because of disability. In order to maximise efficiency and make our services as accessible as we can, we are working towards outreach sessions, taking the CAB to the clients.”
Targeting services towards the most socially excluded, including prisoners, ex-prisoners, asylum-seekers, people with mental health problems.
CAB advice sessions are now run in 42 prisons. Many more CABx have advice desks at locations where people may be in a crisis situation – at the magistrates or county court for example.
“At the Royal Courts of Justice Citizens Advice Bureau in London, Director Joy Julien is helping to deliver a unique service to people who are representing themselves at court. An open door service is operated five days a week from 10am to 5pm. “It’s almost like a legal casualty department. They see a receptionist in the same way that they would in a clinic and she has various routes of referral depending on need, a bit like a triage service, “ says Julien. “Most clients will be filtered through either a generalist adviser or a duty solicitor. If the matter needs drafting on the spot or is quite specialist the client will be seen by a honorary legal adviser.”
Identifying where policy change is needed. For example, in tackling fuel poverty or credit regulation.
Reporting evidence about the impact of government policy on individuals and communities, based on actual cases, is a valuable tool for local and central government, and other agencies.
A key issue for CABx as local voluntary organisations, is stability and continuity of funding. Significant energy and resources can be used by small organisations and projects in seeking and obtaining funding, recruiting staff, building skills and services only to have to dismantle the services after a relatively short period of operation.
We believe that a London wide poverty strategy must include ensuring adequate provision of high quality advice services.
We recommend that the Mayor undertakes a review of the provision of advice and information services across London to ensure that all Londoners have access to advice and information. Any strategy addressing poverty issues must include action designed to ensure more stability and certainty in funding for service providers, such as CABx that are providing key services which tackle poverty and social exclusion across London.
Regional Factors contributing to poverty in London
We agree that the factors outlined on page 3 of the consultation paper are likely to be key elements of poverty in London. We believe that the following issues also contribute to poverty in London. There are some very simple solutions to these problems and we would be pleased to discuss them with the Mayor.
Housing Benefit administration in London
London Divided states that “nearly one in five households in London receive Housing Benefit. Over a quarter of households in Inner London receive Housing Benefit, rising to around a third in Tower Hamlets and Hackney.”
London Citizens Advice Bureaux have reported that for many tenants, the housing benefit scheme paradoxically causes rent arrears and homelessness. Tenants are trapped between the legitimate requirements of landlords for full and prompt payment of rent, and the inability of the housing benefit system to deliver.
The Audit Commission has published data on Best Value Performance Indicators for a wide range of council services including the average processing time for Housing Benefits. The following table shows that Housing Benefit claimants in London wait considerably longer for their claim to be processed than the rest of the country.
Housing Benefit, average waiting time in calender days
- London Boroughs 58
- Unitary Councils 36
- Metropolitan Councils 35
- District Councils 34
Tenants can wait months before receiving their benefit, although claims should be processed within 14 days. In the meantime they fall into arrears and face court action and homelessness.
Dalston Citizens Advice Bureau reports the case of disabled couple both pensioners who submitted an application for Housing Benefit in July 2001. The application took seven months to process causing distress and anxiety to the couple.
Beckenham and Penge Citizens Advice Bureau reports the case of a single parent in receipt of income support. Income support provides automatic entitlement to Housing Benefit. The client was sent a renewal application form for housing benefit in February to ensure her claim continued from March. In March the client telephoned for an update on her claim and was told that it was awaiting processing. After many telephone calls the client visited her CAB in May who telephoned Bromley Council and was told that her claim was still awaiting processing. During this time her existing claim had stopped and rent arrears were accruing.
Pimlico Citizens Advice Bureau reports the case of a client who is in receipt of Disability Living Allowance and has been in receipt of Housing Benefit since 2001. He renewed his application at the beginning of 2003 and heard nothing for 3 months. He used his savings to ensure that his rent was paid and eventually incurred an overdraft in his bank account. This caused a lot of stress and the client is now incurring interest charges on his overdraft. Housing Benefit was eventually awarded on 17th April.
These cases are just the tip of the iceberg. The majority of evidence Citizens Advice London receives from London bureaux is about delays and maladministration in Housing Benefit. In the year ending March 2003, London CABx had advised on 31, 571 Housing Benefit problems
The Local Government Ombudsman is responsible for investigating complaints of maladministration against local authorities. Although he states in his annual report for 2002/03 that the numbers of complaints relating to Housing Benefit have decreased, the Ombudsman still dealt with 2053 Housing Benefit complaints during that year.
We recommend that the GLA undertake a scrutiny into Housing Benefit delays in London and the contribution this makes to poverty. The GLA should work with the Association of London Government to encourage all London Local Authorities to meet the minimum performance standards set down by the Department for Work and Pensions for Housing Benefit administration.
Fuel Poverty
The recent report issued by the Mayor, Green Capital defines a fuel poor household as one that needs to spend more than ten per cent of its income in order to maintain a satisfactory heating regime. Green Capital argues for a different definition of fuel poverty to be based on a calculation of net income and not gross income.
The Government has set a target to end the blight of fuel poverty for vulnerable households by 2010 and published a strategy for tackling fuel poverty. Citizens Advice Bureaux are uniquely place to contribute to the Government’s strategy for tackling fuel poverty. First CABx clients are more likely than the population as a whole to be people on low incomes and dependent on social security benefits, in social classes DE . By reason of their low income CAB clients are more likely than the population in general to be experiencing fuel poverty in that their fuel bills will be a more significant proportion of their household expenditure.
Sadly the consultation paper on tackling poverty does not mention fuel poverty at all.
Citizens Advice recommends that tackling fuel poverty should be included in any anti-poverty strategy drawn up by the Mayor. A review of all initiatives currently aimed at relieving fuel poverty including energy efficiency schemes should be undertaken to establish why fuel poverty remains a problem in London.
Housing and tenants rights
Housing is one of the main areas on which London CABx provide advice. In 2002/03 London CABx dealt with 85,000 housing problems across all tenures. Many relate to clients living in the private rented sector.
A major concern to Citizen Advice Bureaux in London is the lack of protection for the very large sums of money, often over a £1000 in London, which private tenants hand over as a rent deposit. Poor management practices by landlords and agents over taking, holding and returning rent deposits are a very common source of complaint to CABx. CAB evidence indicates that the problem is particularly acute in London because of the high levels of rents paid by private tenants.
Beckenham and Penge Citizens Advice Bureau reports the case of a single parent who had to vacate her property as the landlord wished to move in. She had paid a deposit of £1000. The landlord refused to refund her deposit despite the fact that there was no damage to the property. The landlord sent a bill to the tenant to cover upgrades he had made to the property to benefit himself including changing the plug sockets, replacing the carpets, installing new kitchen cupboards, painting the entire property and purchasing a new fridge freezer. The cost of these came to £1918.64. The client’s only option is to commence county court proceedings against her landlord.
Newham Citizens Advice Bureau reports the case of a single man who had paid £800 deposit. The landlord refused to meet the tenant on the last day of the tenancy to go over the inventory of the property but subsequently decided that there was £800 worth of damage and therefore the deposit could not be returned. The client disputes the fact that there is damage and is having to consider county court proceedings to recover the money.
City Citizens Advice Bureau reports the case of a single man who agreed a deduction from his deposit for cleaning the carpet. This was the only expense mentioned when the property was inspected at the end of the tenancy with the letting agency. In the end, a total of £200 was deducted for cleaning, some minor repairs and shampooing the carpet. The client actually knew the new tenant who confirmed that no repairs or cleaning had been done. The client approached the landlord to provide receipts for the cleaning work that the deduction from his deposit had covered. The landlords reply was aggressive and it said that they did not have to show receipts and that the client was “not to harass the new tenant”. The client believed that the landlord, a small company, probably does this on a routine basis assuming that tenants will not dispute a small amount even though remedial work is not carried out on the property.
The reason why these problems are so common is not difficult to understand. Large sums of money – typically four weeks rent – are changing hands without any regulation over:
- How landlords should hold and account for the money,
- How quickly deposits should be returned at the end of the tenancy and
- Who should benefit from the interest on the money held.
- There is no requirement for an inventory of for a written statement specifying what the deposit is held against.
- The remedy is inadequate: if the landlord fails to return the deposit, the onus is on the ex-tenants to take action through the county court, where barriers include fees, long waits and no guarantee that, even if judgement is found in their favour they will be successful in getting the money back.
The pilot Tenancy Deposit Scheme, administered by the Independent Housing Ombudsman was launched in March 2000, following publication of the Citizens Advice report Unsafe Deposit in 1998 . That report documented the case evidence and findings of a survey of CAB clients, which together gave an indication of the scale and nature of the problem. The report also examined alternative approaches developed in other countries and concluded that the best option was to establish a national custodial scheme to safeguard deposits, linked to a dispute resolution remedy to which relevant cases would be automatically referred. Such a scheme would be self financing on the basis of the interest on the sums held on deposit in the single pot.
On 16 June Tony McNulty, the then Housing Minister, announced that the Tenancy Deposit Scheme pilot, would be wound up. Although he acknowledged that poor take-up by landlords had proved that a voluntary approach to resolving this problem will not work, he fell short of committing the Government to legislation on this issue in the near future. This is despite the fact that a Housing Bill, which will address standards in the private rented sector, is expected in the next session of Parliament.
A recent Early Day Motion has been signed by over 145 MPs, 21 of which are from London in the first few days and we believe this shows the support for legislation to resolve this issue.
The loss of deposits is a significant drain on the income of low income households in the private rented sector.
We urge the Mayor to work with others in calling for measures to be included in the forthcoming Housing Bill to ensure rent deposits are properly protected and there is an adequate dispute resolution scheme. Failing this the Mayor could provide leadership for the creation of a London-wide scheme to protect tenants deposits.
The role of London government in tackling poverty
We disagree that the main role in reducing poverty in London rests with central government. We believe that local government has a huge role to play through the delivery of benefits and services to people and at a strategic level of Boroughs individually and and London wide, helping to create the conditions for the creation of jobs through the planning process. We believe Advice and information is critical to tackling poverty so that people are aware of their rights and responsibilities and of the services that are available. Local government are the main sources of funding for advice services. In London, 58% of Citizens Advice Bureaux funding comes from Local Authorities.
We welcome the call for greater co-operation between public bodies on tackling the issue of poverty in London and believe that Citizens Advice London has much to contribute to this debate. The Mayor and GLA are in a strong position to provide leadership on tackling poverty in London and we look forward to the Mayor’s strategy on this important issue.
Specific comments on the Mayor’s recommendations and policies
Below we have outlined our response to the specific recommendations and policies outlined in the consultation paper. We have included bureau evidence on cases that highlight the main issues we believe the Mayor should address. In addition we have provided case studies demonstrating the work that Citizens Advice Bureaux are undertaking in London to tackle poverty and social exclusion.
Childcare
Citizens Advice would welcome action by the Mayor and the London Development Agency and the London boroughs that would increase the availability and affordability of childcare in London. As the following cases demonstrate this is an issue affecting many of our clients and their ability to take up full or part time work. Often the availability of childcare will be a critical part of any decision to return to work and can make the difference to someone remaining on benefits or becoming a wage earner. Currently Working Tax Credit claimants can receive up to 70% of their childcare costs up to a limit of £175 for one child or £200 for two children. If the actual costs are higher then the person will have to find the excess from their wages.
Sydenham Citizens Advice Bureau reports the case of a client with three children who wished to take paid employment. However the childcare costs mean that she may be better off remaining on benefits or taking a part time job only. The bureau calculated that by taking a job her net income would increase by £9 per week only but this would be swallowed up by travel costs, meals and childcare.
Beddington & Wallington Citizens Advice Bureau report the case of a student nurse receiving a bursary. She had no access to Access Funds, nor student loans. The client is a single parent and claims Housing Benefit. There is no facility for her childcare costs being disregarded from her net income for housing benefit purposes. She accrued rent arrears and eviction proceedings started. If the client was working full time she would have been eligible for Working Families Tax Credit and would have been entitled to an additional £112 per week.
This client is trying to better her situation and aiming to work and support herself and her child after completing her training. She is unlikely to be able to do this if she cannot get help with childcare costs.
Flexible working
We support the call for an expansion of flexible and family-friendly employment policies. We have included specific evidence on employment problems and low pay later on in this response to the consultation. The problems that require addressing are compliance with employment legislation by smaller employers, enforcement of employment rights and the affordability and availability of childcare. Further on in this response we also discuss the issue of the “poverty trap” where moving into work means that a person is worse off than on benefit.
Ethnic Minority Unemployment
Citizens Advice recognises that paid work is the best route out of poverty for those able to work and we welcome the initiatives that are already underway to maximise the opportunities for people to find a route out of poverty and benefit dependency through paid work.
Citizens Advice supports the call for action to be taken to ensure that younger members of minority communities have access to high quality employment. In addition it is essential that black and minority ethnic students have access to education and training. Citizens Advice Bureaux in London often see young people who are ineligible for financial assistance to enable them to undertake training or further education as these cases demonstrate:
Kentish Town Citizens Advice Bureau reports the case of a young Somali man who was eligible for an education maintenance award and made a claim. The claim was refused because his guardian was not in receipt of child benefit. His guardian was his Aunt who received Income support for her nephew and herself but this was refused as evidence.
Pimlico Citizens Advice Bureau reports the case of a young Asian man who was an undergraduate at Middlesex University, he made a late application for LEA support. The assessment showed that £219 should be paid by his parents but they were unable to afford this as they received retirement pension and incapacity benefit and were just above the allowance entitling them to income support. The client was reluctant to take up a student loan because he does not want to go into debt. He has not been able to find part time work to supplement his income.
Catford Citizens Advice Bureau reports the case of young black man aged 25 living alone. The client was experiencing financial difficulties, his only income was his student loan and this had caused him to go into rent arrears and have utility debts. His student loan is taken up with travel costs, books and housekeeping.
Citizens Advice welcomes the involvement of young people in bureaux and are attracting a higher number of volunteers from black and minority ethnic groups. Many of these volunteers go onto secure paid employment.
A new Citizens Advice volunteer recruitment line, 08451 264 264, is proving particularly successful at reaching poverty from black and minority ethnic groups. More than 500 calls were received in just the first month after its launch in Advice Week 2002. Nearly a quarter of the calls (24 per cent) were from black and minority ethnic communities, compared with 7.7 per cent of current volunteers.
London’s Bangladeshi and Pakistani communities
We fully support the establishment of a working group within the GLA group to produce a strategic overview of poverty levels in London’s Bangladeshi and Pakistani communities.
We would welcome the opportunity to contribute evidence to this working group from Citizens Advice Bureaux that serve these communities in London.
London Citizens Advice Bureaux are already at the forefront of developing closer links with black and minority ethnic communities.
Brent Citizens Advice Bureau distributed leaflets about the CAB service to Muslim groups and mosques during the festival of Eid. In addition the bureau has access to interpreters in a range of languages through a contract held with the local health authority and the Health Action Zone.
Croydon Citizens Advice Bureau is working within the Croydon Consumer Support Network and is planning to train people in the Asian community to provide basic consumer advice and to keep the CSN informed about trade malpractices affecting ethnic minority groups in the area.
Kingston Citizens Advice Bureau has joined with the police, social services, race equality council and the local authority, to develop a shared protocol and training for the local racist incident and hate crime reporting scheme.
The tax and benefit system
The tax and benefits system is also critical to tackling poverty. We believe that there are four key areas that should be addressed within any strategy that attempts to ensure that tax and benefits system tackles poverty in London. These are the administration of benefits; take-up of benefits; the poverty trap; and the Social Fund.
Administration of Benefits in London
The Mayors report, London Divided states 63% of households are in receipt of at least one benefit and that in May 2002, there were 567,000 people in London claiming IS and 1,056,000 people living in households that were reliant on IS, representing 14.3 per cent of Londoners. It is therefore essential that people in receipt of benefit receive a good service from the offices of the Department of Work and Pensions, Job Centre Plus and Pensions Service. We have already commented on the administration of Housing benefits by local authorities above.
In 2002 Citizens Advice London produced a report on the administration of social security benefits by Benefits Agency offices across the capital . In order to measure the extent of administration problems a sample of 20% of London CABx were asked to monitor the total number of clients they saw during a two to four week period between September to December 2001. CABx were able to select for themselves the period in which to monitor.
The total number of clients in this survey with benefits administration problems was just under 500. The highest numbers of problems were delays in processing claims for both clients in and out of work. There were examples of wrong or inaccurate advice given by the Benefits Agency to clients out of work and examples of disabled clients receiving wrong or inaccurate advice. Problems getting through to the Agency by telephone were problematic for all client groups with examples of disabled clients particularly experiencing difficulty.
Our survey also showed that clients from ethnic minorities you were more likely to experience delays in processing claims, receive a confusing letter about your benefit entitlement and have difficulty getting through to the agency by telephone.
We would therefore recommend that the GLA undertake a scrutiny into the delivery of benefits across London. It is essential that anyone entitled to a benefit should have that assessed quickly and accurately and paid efficiently.
Take up of Welfare Benefits
Benefit levels are set around the minimum amount needed to live on and yet many people are living below these levels when they are not getting their full entitlement of benefits. It is therefore important that any anti-poverty strategy addresses ensuring maximum take up of benefits.
In addition, Take-up campaigns generate significant income for the local economy and grants made by Central Government to local authorities can be increased based on the numbers of benefit recipients locally.
But a significant amount of benefit goes unclaimed. For example, the Department of Work and Pensions estimated that Income Support take-up was lowest for pensioners at 64-78% of those eligible (by number of recipients) and 74-86% (by expenditure); an estimated 500,000 – 870,000 older people fail to claim means-tested assistance . There is significant underclaiming of council tax benefit and disability benefit.
A report on Benefit take-up among older people issued by Citizens Advice in December 2002 was based on a survey of benefit take-up campaigns for older people organised by Citizens Advice Bureaux. The report highlights the reasons why benefit take-up initiatives are needed, highlights what results can be achieved and, based on Citizens Advice Bureaux experience, summarises the effective ways of organising campaigns and the resources that may be required to develop this area of work in the future.
The main findings were that
- Elderly people under-claim for benefits more than any other social group.
- People over 75 tend to be poorer than other pensioners and are the majority of non-claiming pensioners
- Government emphasis on means-testing rather than universal benefits makes it vital to ensure take-up
- Short-term take-up campaigns do not easily address the long-term problems lying behind under-claiming.
- Deterrents to elderly people claiming benefits are their isolation from mainstream sources of information, the stigma associated with means testing and the complexity of forms and length of procedures
- Face-to-face contact is considered essential for this client group to emphasise rights and tackle the stigma of claiming, to generate confidence and assure confidentiality and to help overcome a reluctance to claim and follow through claims.
Citizens Advice Bureaux have significant experience of benefit take up work and advising people who are missing out on benefits.
Addington Welfare Benefits Project reports the case of a client who had worked full time but had to go on extended sick leave due to a problem with his neck and back. His doctor was not optimistic about his chances of returning to work. His only income was Statutory Sick Pay of £63.25 a week. He was struggling to pay his Council Tax and mortgage so he went to the Department of Work & Pensions to ask if there were any benefits that he could claim. He was told that there was nothing he could claim.
The welfare benefits project helped him to claim Council Tax Benefit, Income Support, Incapacity Benefit, help with the mortgage, Disability Living Allowance and free prescriptions. The project was able to increase his income from £63.25 to £147 a week.
The above case demonstrates how important it is to seek advice and how the work of the CAB can make a real difference to people’s lives.
Romford Citizens Advice Bureau reported a case of a client who had been sick for some time and was paying his mortgage from his savings. These were now practically exhausted. No advice had been given to him by the Department of Work of Pensions about his entitlement to income support and also council tax benefit.
We recommend that the Mayor work with Local Authorities and Voluntary organisations to co-ordinate pan-London take up campaigns of benefits. This work could be focussed on the most deprived Wards in London.
Poverty Trap
Another phenomenon affecting the transition from benefits to work is the poverty trap. This happens when someone realises that they will be worse off taking a job than staying on benefits. This is largely due to the interaction of Housing Benefit and income increases and gives further weight to the need to reform the Housing benefit system.
Sheen Citizens Advice Bureau reports the case of a single parent who was working but became ill and claimed incapacity benefit and income support with disability premium. The client got better and went back to work but found that she was worse off financially and got into debt. The Job Centre advised the client to stop work and the client is now back on income support.
Leytonstone Citizens Advice Bureau reports the case of a single parent with two children. The client was in receipt of income support and decided to go on a full time nursing course. The client received a grant from the NHS but because of the extra expenditure she has to make to attend the course she ends up being worse off than when she was on income support. As the client was not working for more than 16 hours per week she was not entitled to lone parent run-on or extended payments of housing benefit. Her NHS grant and Child Benefit exceeds her applicable amount so she has to pay the shortfall between housing benefit and her rent. The client also has to pay for childcare costs and school meals because she is no longer in receipt of income support and she has to pay the travelling costs to the University. The bureau have calculated that by trying to move into employment through education this client is £40 per week worse off than had she remained on Income Support.
The Social Fund
The Social Fund exists to enable people on very low incomes to meet needs that they cannot afford from their normal benefit income. These needs include such things as the cost of clothes and other equipment for a new baby, beds and cookers for people setting up home after homelessness or mental illness, or the costs of replacing essential items destroyed in a fire.
But too often the Social Fund fails the most vulnerable people in society. Citizens Advice produced a report on the Social Fund in October 2002 . In that report we argued that the Social Fund relies to much on loans, that have to be repaid from very low benefit income, and provides too little in the form of grants. We recommended substantial increases particularly to the community care grant budget and budgeting loans budget. We also called for mandatory grants for key events, such as milestones in children’s lives, for example when they change school. At the moment far too much time and money is spent in administering a complex system with high rates of refusal. We called for the Fund to be completely overhauled, so that the Government could ensure that the poorest people in society have the basic necessities, such as beds, cookers, fridges, furniture and warm clothing. At the moment people whose only income is a contributory benefit, such as Incapacity benefit are excluded from many parts of the fund. We consider the eligibility rules should be changed to include them.
In the year ending March 2003, Citizens Advice Bureaux in London dealt with 6,451 enquiries relating to the social fund. The Mayor’s report London Divided is silent on the number of Londoners currently repaying a social fund loan. Nor does it state how many Crisis Loan applications were made by Londoners. However, it is interesting to note that on page 64 of London Divided, statistics are provided that show that 6.6% of all households stated that they cannot afford to replace or repair broken electrical goods.
The following cases show how poverty can be exacerbated by the restrictive rules, delays and budget of the fund or poor decision making by Social Fund officers.
- Chelsea Citizens Advice Bureau reported the case of a client who was left without furniture for over 4 months because of delays in reviewing a decision to refuse a community care grant.
- Harrow Citizens Advice Bureau saw a disabled Somali woman, who is receiving higher rate DLA who applied for a CCG for cooker, fridge carpets and bedding when she moved to an unfurnished flat from B & B. The application was refused and she was sleeping on the floor.
- Hayes Citizens Advice Bureau assisted a Somali woman who was 30 weeks pregnant and had been living in B & B since 1998. When she was provided with an unfurnished housing association flat, she applied for a CCG to furnish it. This was refused, and refused again on review. But when the matter was referred to the Independent Review Service, a grant of £640 was made.
- Dalston Citizens Advice Bureau report that a Turkish speaking pregnant woman with one child, who has been receiving IS for 2 years was told that she could not apply for a CCG because she was “not on IS”.
- Kensington Citizens Advice Bureau reported the case of a lone mother with a baby was kept waiting for 3 hours at a Jobcentre Plus office before being refused a crisis loan to repair a broken cooker. The procedures require that the decision is confirmed in writing (so that a review can be sought) but this was not done.
The Social Fund Commissioner’s Annual report for 2001/02 expresses concerns about barriers to access put in the way of people who need a claim form, or advice about the type of Social Fund payment they could apply for. On access to application forms, the Commissioner notes that benefits offices often do not issue an application form because they judge the application would not succeed. The Commissioner points out that this approach is unlikely to be based on all the relevant information, is often given by reception staff rather than a trained officer, and denies the person the right to challenge any decision.
Citizens Advice fully supports the Commissioner’s call for the Department for Work and Pensions to put in place a system to manage the issuing of application forms and the quality of advice that is given to people. It is essential that when considering issues of poverty in London that the Mayor takes account of the Social Fund.
We would be happy to provide more detailed evidence on the failings of the social fund and the effects these have on contributing to poverty.
Pensioner Poverty
Citizens Advice do not agree that “factors driving pensioner poverty remain poorly understood”. There is a significant body of evidence on this issue. For example, the former Social Security Select Committee of the House of Commons has inquired into Pensioner Poverty . Also, the National Audit Office published a report “Tackling pensioner poverty: Encouraging take-up of entitlements” on 20.11.02 . Amongst the conclusions were:
- a need for the Pensions Service to work regionally and with local authorities to inform appropriate local strategies;
- many pensioners do not apply for benefits as they assume that official agencies will have advised them of their entitlement;
- the Pensions Service should be working with many other organisations including the voluntary sector and local authorities.
Again, as we have identified above the importance of take-up work and the need for people to have the ability to access advice on potential entitlements is well understood. Citizens Advice would emphasise the value of advice provision if the anti-poverty strategy is to be effective.
We recommend drawing up a clear strategy for tackling pensioner poverty rather than undertaking further research into this area.
Low Pay
Citizens Advice agrees that tackling low pay in the capital should be part of the strategy.
Research into average rates of pay for lower paid jobs would overlook the problems that CAB clients face in their employment when often illegal deductions from pay means that pay is lower in practice.
Woolwich Citizens Advice Bureau reports the case of a young woman who works in a restaurant and whose tips are paid into her salary. She is paid the national minimum wage but because her tips are included in this they effectively subsidise her wages. Her wages never fall below the national minimum wage but no matter how much she earns in tips, her wages never go above the minimum wage.
Newham Citizens Advice Bureau reports the case of a young man aged 23 who was employed in a shop and paid £2 per hour, less than half the national minimum wage. The bureau contacted the NMW help line who agreed to investigate the case with the clients permission. However, the client was concerned about losing this job and decided not to pursue the matter.
Enfield Town Citizens Advice Bureau reports the case of a young woman aged 18 who worked for a hairdresser. She worked twelve hour shifts with no lunch break and was paid £1.30 an hour. When she was off sick she received no statutory sick pay. Her pay slip showed £70 per week with any tips she had received deducted.
These cases are typical of enquiries to bureaux from employees struggling to achieve their rights to the minimum wage. Often employees face the choice of challenging their employer and possibly losing their job or remaining in low paid employment. Whilst there is legislation protecting people from unfair dismissal when pursuing a statutory right, there is still the issue that a employer could write a bad reference or refuse to provide a reference for an employee subsequently dismissed.
Employment
Citizens Advice welcomes the inclusion of employment as a theme to be explored around the causes of poverty and social exclusion. Our primary interest when examining employment is with employment rights.
The Government has initiated action in a number of policy areas including the Employment Relations Act 1999, improving the existing right to maternity leave and pay, and introducing new rights to unpaid parental leave and time off for emergencies; the introduction of the National Minimum Wage and the Working Tax Credit aimed at “making work pay”; the implementation of the European Union working time directive, setting a limit on average weekly working-time and establishing statutory rights to rest breaks, time off and paid holiday.
Large numbers of Londoners will have benefited from these policy initiatives when their employers comply with the law. However, the day to day advice work of citizens advice bureaux indicates that the benefits have yet to be felt by many of the most vulnerable workers in the UK economy.
Bermondsey Citizens Advice Bureau reported a case of a woman aged 59 who had worked in a launderette for 4 years. She had worked for 60 ½ hours per week and received cash in hand of £141 per week. She was led to believe that her employers were deducting tax and national insurance.
The client was replaced by her employers son. At first her hours were reduced to 25 per week and pay reduced to £99.05. The client was then told that she was being made redundant. There was no redundancy pay, no holiday pay and no pay in lieu of notice. It was clear that her position was not redundant.
When she left she was told that her employer had never paid tax or national insurance on her behalf (this would have a knock on effect of reducing her benefits and pension). She was offered a compensation payment of £100 if she told the Benefits Agency that she had worked 18 hours a week for £4.10 per hour. The client refused.
Addington Citizens Advice Bureau report the case of a client who works for a sports club. The client was informed that her employer no longer wish to pay her by PAYE and have provided her with the following options: (i) self employment or (ii) cash in hand. Client feels that her employer reached this decision because they no longer wish to deal with her Working Families Tax Credit (now Working Tax Credit) claim. The client had only worked for the club for 8 months and therefore cannot pursue a case of unfair dismissal.
City Citizens Advice Bureau reports the case of an employer that had deducted without proper written authority, nearly £2000 from an employee’s salary when he left his job. They claimed that this was for a training course for which they had paid the fees. Our client maintained that there had been non suggestion, let alone any agreement, that the fees should be repaid on leaving the firm’s employment, and, with the Bureaux help, made a complaint of illegal deduction from wages to an Employment Tribunal. The Tribunal found in our client’s favour. In spite of this, the employer threatened to sue our client for the return of the fees if the Tribunal award were enforced. The bureau wrote to the employer pointing out that they were barred from doing so once a Tribunal had made an award, and shortly afterwards, our client received a cheque for the full amount.
These cases are just a few examples of the many on which CABx in London advice each year. We recommend that further action is needed to increase both employers’ awareness of their statutory duties to their workforce and workers’ awareness of their rights and entitlements.
The London Development Agency could also provide more practical assistance, in the form of business support services. For those employers – such as small firms and those in low profitability sectors - who face the greatest challenge in meeting their statutory duties to their workforce.
In the main it is individuals who enforce employment law by taking cases to Employment Tribunals. Not only does this put all of the enforcement burden on individuals, where people fear to complain this will not work as a compliance strategy. Also central Government is seeking to reduce the number of cases that do come forward to tribunals.
We would ask the Mayor to consider joining Citizens Advice in calling for the establishment of new, pro-active enforcement mechanisms, with a dedicated employment rights enforcement body empowered to investigate individual, anonymous and third party complaints, carry out random spot checks on employers, and impose effective penalties in the event of non-compliance. Without this the poverty and hardship caused by employers who fail to comply with their obligations will remain a feature of London life for those in low paid work. We would be pleased to provide the Mayor with further evidence on the problems in this area.
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