A commission, led by cross bencher Lord Low is calling today in a report for urgent reforms to ensure ordinary people can get the help they need to deal with employment, debt, housing and other social welfare law problems.  The Low Commission was the biggest inquiry of its kind into the impact of cuts in funding for social welfare law advice.

In the report the commission calls for a national strategy for advice and legal support, to replace the current piecemeal approach, which is failing to protect the poorest and most vulnerable.  It also calls for a £100m implementation fund – with half the money coming from central government, and half raised from other sources, including a levy on payday loan companies.  

Other recommendations include:

 – Creation of a new, cross-departmental ministerial post, to oversee implementation of the advice and legal support strategy;

– Restoring legal aid for housing cases so people can get help before they face imminent eviction;

– Urgent reform of the ‘safety net provisions’, introduced by the Legal Aid, Sentencing & Punishment of Offenders Act, which are proving unwieldy and unworkable.

 During its year-long inquiry, the Low Commission heard evidence from around the country:

 – Tameside, near Manchester – 5-week wait for appointments at local Citizens Advice Bureau; only 10% of those needing specialist help are able to be referred on (down from 50%);

– Gloucester: housing charity Shelter has closed its office, the CAB has gone into administration; while Gloucester Law Centre is still going, demand for immigration and debt advice has doubled, compared with last year;

– Birmingham: local CAB lost more than half its local authority grant (down from £590,000 to £265,000), plus £700,000 in legal aid funding;

 – Sutton: CAB has seen trebling of demand for welfare benefit appeal advice in last three years;

 – Swansea & Neath Port Talbot: CAB has had to axe 12 out of 36 staff posts because of 30% cuts in budget.

 Read the full report

 

The report released today proposes that a radical review of Big Society thinking is needed in light of millions of people being excluded from the Big Society, whilst the charities that support disadvantages people are themselves experiencing cuts to their funding.

 

The Big Society Audit, released by Civil Exchange and supported by  the Barrow Cadbury Trust, Joseph Rowntree Foundation and DHA points out that despite the rhetoric surrounding the Big Society, some of the most vulnerable are adversely affected by the policy. People with disabilities will experience 29% of the cuts, whilst 500,000 people in the UK are now dependent on food aid.

 

The report highlights stark differences between communities with regard to how they have been affected by the Big Society. The Big Society is at its healthiest in affluent and rural communities. Those living in the most deprived 10 per cent of the country were less likely (52%) to  agree that people pulled together to improve things than those in the least deprived 10 per cent (79%). Charitable giving and formal volunteering were more common in affluent areas and those living in affluent areas were more likely (73%) to say people in their neighborhood could be trusted that those living in disadvantages areas (22%).

 

The voluntary sector, despite an increased demand for its services has been largely left out in the cold. Many voluntary sector organisation, particularly those that work with vulnerable people, often in disadvantaged areas have experienced cuts to sources of income that they relied on. Many are now ‘running on empty’ with further funding cuts in the pipeline.

 

There are, however, positives to report. Communities are taking over vital assets and local services, greater transparency and accountability, and higher levels of volunteering, particularly amongst young people.

 

Read the full report here.

The Fairbanking Foundation’s latest report looks at how well British banks serve their customers, and argues that the people leading Britain’s banks have the potential to change their industry for the better.

 

A Better Kind of Banking, supported by the Barrow Cadbury Trust, proposes that the main banks’ business model based on ‘free banking’, alongside a banking culture that has encouraged managers to pursue profits at the expense of their customers’ needs, is greatly flawed. The report highlights alternatives to this approach that illustrate how banks can work with customers to enable them to manage their money more carefully and intelligently.

 

Authors Charles Leadbeater and Antony Elliott look at four banking innovators that could transform the banking industry if they were taken into the mainstream. thinkmoney has a customer base of 100,000 who pay a monthly fee for a service which guarantees that they will not go overdrawn, ensuring that they do not pay charges for unauthorised overdrafts. Secure Trust Bank help customers set up a current account which is used to pay direct debits and standing orders for regular bills, but no debit card is provided. Customers are instead given a prepaid Mastercard which they can upload their spending money onto. Saffron Building Society encourages people on modest incomes to save by allowing them to track progress toward a goal and get regular encouragement to do so. And the Capital One Progress Card rewards people with lower interest rates on their debt as they pay more money off.

 

The report points out that these innovations come out of the margins as opposed to the mainstream. It argues that banks need to alter their business models and adopt higher standards to create a better banking system.

 

Read the full report here.

A new report by the Centre for Social Justice, supported by the Barrow Cadbury Trust, finds that personal debt in the UK is on the rise, and households are increasingly turning to short-term high-cost credit.

 

The report, Maxed Out: Serious Personal Debt in Britain, finds that personal debt in the UK is close to its all-time high, currently standing at £1.4 trillion. Average household debt is £54,000, almost twice the level it was decade ago.

 

In the poorest ten per cent of the country, indebted households have average debts that make up more than four times their annual income, whilst average repayment amount to nearly half their gross monthly income. The rising cost of domestic energy and other household bills has led to fears that more households will be pushed into personal debt.

 

Alongside increasing household debt, the report finds increasing use of short-term high-cost credit such as payday loans, pawnbrokers, rent-to-buy and doorstop lenders. The market for such sources of credit is now worth £4.8 billion a year. Payday loans have received a particularly marked increase in business, increasing from £900 million in 2008/09 to over £2 billion in 2011/12.

 

Maxed Out highlights vulnerable groups who are disproportionately affected by large amounts  surge of personal debt, such as the elderly, ex-offenders, single parents, the unemployed, people dependant on benefits, households with the lowest incomes and young people classed as Not in Education, Employment or Training (NEET). People in these groups often find themselves in cycles of debt due to low financial resilience and a lack of savings.

 

Read the full report here.

Martin Holcombe, Chief Executive of Birmingham Settlement, gives his personal take on welfare reform, housing, and the perfect storm currently facing many of the Settlement’s clients.

 

Welfare reform, the ‘bedroom tax’, tougher sanctions for those receiving Jobseeker’s Allowance, reductions in council tax benefits, reductions in benefits; all happening at once with reduced funding to administer and/or advise those affected – for many the nightmare has just begun; and we haven’t even hit universal credit yet.

 

What seems to have been overlooked is that many people on benefits already live hand-to-mouth and change at this level is enough to upset the balance and literally send families and individuals lives into chaos; so a whole raft of changes introduced at once with more to come has been nothing short of catastrophic for many.

 

I’m not saying things shouldn’t change but change on this scale needs to be properly thought through and resourced; implemented at a realistic pace and most importantly, it must be fair.

 

The number of new food banks opening up and the caps being placed on the number of food parcels people can have shows the reality of the situation – I was on the High Street at the weekend and without moving could see four shops advertising loans or offering cash for goods – to me it’s the payday loan companies benefitting most from these changes and not the taxpayer.

 

Some statistics from Birmingham Settlement to demonstrate the point: last year for our biggest single advice contract we had 1200 contacts; in April and May alone this year we’ve seen 660 – that’s more than 50% of last years’ total in just two months. At the same time our funding has reduced and we have had to cut our delivery team from 12 to 8.

 

There has also been a significant increase in the number of people being referred from other agencies who are also struggling to cope – in the last six weeks two advice agencies near us have closed due to lack of funding.

 

We are advising people that they may have to wait up to three hours, sometimes more, and the fact that most people are prepared to wait says it all; some days we have to simply close the doors because we cannot see any more people.

 

There is also a real danger to staff struggling to maintain the service. I was in the corridor outside our offices with an adviser last week and he was stopped by an existing client seeking advice, once outside the building he was stopped again by another client – the pressure being placed on small responsive agencies (and their staff) like the Settlement is immense, and is not sustainable.

 

It’s interesting that Birmingham City Council recently said they had seen a 91% increase in rent arrears since the inception of welfare reform; and a couple of Housing Associations in the North East reported a 300% increase in arrears – and they have empty properties because people aren’t prepared to move into family accommodation – clearly there is a problem.

 

At Birmingham Settlement we see hundreds of people and it seems to me we’re penalising those who are least able to deal with the situation – it’s out of their hands.

 

I propose that a much fairer solution would be to send the bill to the housing provider or local authority. If this was the case, pressure would be taken off the people who literally cannot pay; whilst you could be assured the provider would work quicker to find an alternative solution or accommodation – and perhaps even plan for future needs? Obviously, there could be problems as the tenant could, in theory, be offered something totally unsuitable (think of an elderly or disabled lady with mobility needs on the top floor of a tower block), so there would need to be some safeguards. However, at least the problem would be addressed by those who have a voice or ability to influence – and it’s good to see some providers are beginning to stand up and use their position. The reality is that unfortunately our clients don’t have a voice. Who is fighting for them?

 

Government has said there is flexibility in the system, but the reality doesn’t seem to reflect this – and welfare changes are being applied across the board with little apparent discretion. Even if there was discretion – what allowances would be made and how would they be implemented? That’s another reason why we need to shift responsibility to the provider.

 

We often talk about inequality and the need to close the gap between the haves and have nots. Indeed, an independent inquiry by MPs recently concluded that the poorest and most deprived parts of the country are the worst affected by public spending cuts. Here in Birmingham we can certainly agree on that.