Preventative approach to poverty and debt

Members of The Highland Council Resources Committee have received a report on the current status of welfare reform and a number of anti-poverty initiatives being taken forward by the Council’s Welfare Reform Working Group.

These initiatives include money and welfare advice, school clothing grants, and assistance with Alternative Payment Requests for those with rent arrears.

Impact assessments relating to measures in the Welfare Reform and Work Bill estimate that affected UK households will lose an average of £63 per week in 2017/18.

In June 2015, 89.5% of the 124 Highland Council Tenants, who are known to receive Universal Credit , were in arrears with their rent. Since May, Community Services has made 23 requests to the Department of Work and Pensions (DWP) for Alternative Payment Arrangements so that the housing costs will be paid direct to the Council. Of the tenants currently receiving Universal Credit, the of level of rent increased in 62% of cases.

Statistics show that 5,420 children in 2,980 households in the Highland Council area are living in an “out-of-work benefit” household. 

Rising employment in the UK between 2009 and 2014 coincided with falls in real earnings reducing the income of working families, with the proportion of children in poverty in working families increasing from 54% to 63% in this period. These two contrasting trends led to absolute child poverty remaining unchanged overall in this period.  In addition to this household debt has soared in recent years, impacting further on poverty.

A preventative approach has been adopted within the Highlands to try and address the cycle of debt and poverty. Demand for Council funded advice and information continues to increase. Over 7,700 people presenting with nearly £21 million of debt were assisted by these services during 2014/15.

A Facebook chat was held in June with staff from the Council’s Money Advice team. 60 people took part and the event reached 3,500 people. Money advice staff reported: “We’ve had some really positive feedback from a customer today who was following our Facebook session. She advised us that this gave her the courage to contact us regarding her situation which had been causing her mental ill health over a prolonged period.”                                       

Two updated publications, including “An essential guide to benefits, money advice, energy advice and other support 2015/16” and a “Funeral Guide” have been produced to assist a wide range of people.

Members also agreed to increase the School Clothing Grant award to £81 in May 2015 and the use of PayPoint allows an immediate payment to be sent to the applicant.

Further Highland Council Welfare Fund projects approved during 2014/15 include:

• Maximising Benefit Take-up Project – this project seeks to identify customers with potential entitlement to additional benefit
• Midwifery Project – offering welfare/money advice to new and expectant mothers
• Mental Health Project – Provision of advice services delivered by the Citizens’ Advice Bureau in partnership with health and social care professionals, to increase levels of income, avoid homelessness, and reduce anxiety

Chair of Resources Committee, Cllr Bill Fernie said: “The Council established a Welfare Fund of £1.67 million last year and this has enabled a range of initiatives to help people. We have £0.649 million left in the fund for this year and we will be identifying how we can best target this to help reduce the impact of poverty on our communities.”

Leader of the Highland Council, Margaret Davidson said: “I raised the issue of Welfare Reform and increasing poverty with the Secretary of State for Scotland at our meeting on Tuesday. The impact of Welfare Reform measures is resulting in the removal of £14.37million from our economy in the Highlands. This is largely due to the considerable impact on working families. Tackling poverty in the Highlands is a key priority for our Programme over  the coming months. Increasing employment opportunities, building a thriving economy, providing affordable homes and affordable energy and reducing the attainment gap are all ways in which we can help people get out of the poverty trap. We can’t do this on our own and we can achieve much more working with the UK and Scottish Governments and with partners.”

The Head of Revenues and Business Support has been invited to give evidence to the Scottish Parliament’s Welfare Reform Committee in October which will contribute to the consultation on the future delivery of social security in Scotland.