Policy paper

DWP response to SSAC report on young people living independently: government response

Published 30 July 2018

Recommendations

1. Ensure every young person aged under 25 is proactively offered a choice about whether their housing-related benefits are paid directly to their landlord or into their own bank account, and about whether Universal Credit is paid to them fortnightly or monthly.

DWP rejects this recommendation.

The whole of the Universal Credit payment system is designed to mirror the world of work because we believe that is the best way to help people in the long run. And so like most employees, people on Universal Credit receive their payments in monthly instalments. This means that people stay in the practice of managing a monthly budget, and makes for a smoother transition when they get back into work.

There are safeguards in place for claimants if a monthly budget isn’t the right thing for someone, alternative payment arrangements can be arranged. To safeguard claimants from failing to pay their rent, we can put in place a Managed Payment to Landlord (MPTL) to minimise this risk. This payment type can be requested by the claimant, their representative or their landlord and they are considered on a case by case basis. Our latest published statistics show that at December 2017, there were 65,000 households with a MPTL in place. How we make payment of a claimant’s housing costs will be dependent on the claimant’s circumstances and whether they require a MPTL. If a MPTL is not required, the Universal Credit award is paid to the claimant. The payment is made to the claimant’s bank account, other than in exceptional cases. Universal Credit, unlike Housing Benefit, covers more than housing costs and there may be circumstances where the housing costs awarded will not meet the rent owed.

In addition to MPTLs, there are a range of provisions to support claimants, such as advances, available. This is an interest free advance for people needing help during the transition to Universal Credit or while claiming Universal Credit. Claimants can get an advance as long as they can afford to repay the advance over 12 months. Under Universal Support we provide help to build claimant’s financial confidence and computer literacy, which has two components: Personal Budgeting Support and Assisted Digital Support. Our work coaches gauge claimants’ financial needs from their first interview. There are a range of tools available to help claimants budget including a Personal Planner, Budgeting Support guidance and the Money Manager tool from the Money Advice Service. Claimants can also be referred to more specialist support for debt advice if required.

2. Place a duty on Jobcentre work coaches to inform young people about all available grants and funds. Consider ring-fence funds to provide additional support towards work-related costs, such as buying equipment or work-specific clothing, or travelling to and from work.

DWP partially agrees with the recommendation.

DWP agrees that supporting young people into work is a priority and that where a need is identified Flexible Support Fund (FSF) should be used to support addressing that need. Work Coaches have access to guidance products that explain the eligibility as well as how it can be used to support claimants to move closer to the labour market or into work. Work Coaches have a duty to consider using FSF where appropriate. FSF is a budget managed by Jobcentres to supplement mainstream services and tailor support to the needs of individuals and the local area.

We do not agree with the recommendation of ring fencing budgets. Jobcentres generally have flexibility and discretion to make awards that will enhance the employment prospects of the claimants, and other customers, with whom they are engaged. DWP would not want to remove this flexibility and ring fence this budget as this would restrict Jobcentres in using FSF to best meet their local need.

Young people are already a key priority for DWP and are provided with additional support from the Youth Obligation Support Offer and we are confident that in cases where FSF is required by young people our Work Coaches would provide this support.

3. Change the application of sanctions for young people living independently via a number of adjustments to the sanction process to decrease the risk of inappropriate sanctioning:

a. First, before referring to a decision maker, increase the number of attempts at contacting the young person (trialling 6 attempts) to understand why they did not comply, and ensure these attempts are made over at least two days and via multiple channels (e.g., phone call, text, email)

b. Second, ensure that any known support workers for vulnerable young people are contacted before a decision is made – to understand any attenuating issues

c. Third, trial a ‘yellow card’ system whereby the first instance of non-compliance results in a clearly explained warning

d. Fourth, test the current communication materials used in the sanctions process with independent young people themselves. They should adjust those materials based on the feedback.

To keep the sanctions system clear, fair and effective in promoting positive behaviours, we keep the operation of the conditionality and sanction policies and processes under continuous review. On that basis, the Department will consider this recommendation when making adjustments to strengthen the process in place.

The Department has also recently announced that we are now considering a process in Universal Credit to give claimants written warnings for a first sanctionable failure for failing to attend a Work-Search Review, instead of a sanction. We are currently designing a small scale proof of concept to test the feasibility of this process and more details will be made available when the design work has been completed.

a. While we do not accept there should be 6 attempts, DWP agrees that all reasonable attempts should be made to contact all claimants, including young people, before applying a sanction to provide them with an opportunity to give reasons for not complying.

We only ever require people to undertake requirements that are reasonable, taking into account their individual circumstances. When setting requirements, the work coach will explain the potential consequences of not complying and stress the importance of getting in touch to explain why.

Where someone fails to undertake a required activity the work coach will make every effort to contact the customer to find out why. They will do this through the claimants previously agreed preferred method of contact as well as any other available means. Where contact is established, the work coach has discretion (within a general framework) to accept the claimant had good reason and not refer the case to a decision maker. Complex or vulnerable needs will be a factor they take into account.

Where contact cannot be established, the work coach will write to the claimant, via the claimant’s online account in Universal Credit Full Service, requesting information about why they failed to comply.

Where contact is established, but the claimant does not appear to have good reason or where no reason is forthcoming, the work coach is obliged to make a referral to a decision maker for consideration of a sanction. However, in doing so they will include, within the information sent to the decision maker, any identified complex need or vulnerability that may contribute to the claimant failing to understand and/or comply with a specific requirement.

In considering a sanction, the decision maker takes into account all available information, including any provided by the claimant and any information about an identified complex need or vulnerability.

b. DWP agrees with this recommendation.

It is our intention to build this into work coach guidance and learning, so that where we know a support worker is involved, and we have contact details, work coaches will contact them to understand any attenuating circumstances and to enlist their help in getting the claimant to contact us.

However, there will still be occasions where we might have to process a sanction referral, i.e. where there is no contact forthcoming from the claimant. But in doing so, all available information would be included in the referral, including information about the claimant’s circumstances and any known issues that might have undermined their ability to attend.

c. DWP does not agree with this recommendation.

Evaluation of the Early Warning Trial in Scotland found that the majority of claimants would not benefit from the trial, for example, those with no good reason, or claimants with complex needs, or low intellectual capacity, who would not be able to engage with the process as a result of these needs regardless of the additional time. The only measurable change was an increase in administrative costs. Furthermore, in order to undertake the recommended trial of warnings would necessitate legislative change and competing parliamentary priorities make this difficult at this stage.

Nonetheless, we believe that such a process could be beneficial for claimants, although at this moment we have no evidence of the behaviours that the written warning will drive in claimants. It is also partly because of this that, instead of pursuing the legislative change, we have been considering alternatives. As a result, we have designed a process where claimants are given a written warning for their first failure to attend in Universal Credit Full Service. We will initially be running a proof of concept to obtain qualitative feedback from staff and claimants on this new process, with subsequent tests depending on the outcomes of this proof of concept.

d. DWP agrees with this recommendation.

Sanctions material was developed by a communications team trained in writing plain language. Wherever possible content is written at a level that is suitable for 11-12 year olds, using short sentences. Material was tested with claimants to check understanding. The claimants would have been from a range of age groups.

We continuously look to improve communication materials and will give consideration to conducting additional testing with young people and update material based on the feedback.

4. Trial both youth specialist work coaches and also specialist advisors who support work coaches in their interactions with young people with complex needs – focusing first on those living independently. This should be evaluated, and rolled out more widely if successful in helping get more positive outcomes for young people at reasonable cost. It should also be noted that this will only be effective if work coaches partner with outside youth experts and refer young people who are in need of extra support to specialist organisations.

DWP does not agree with this recommendation.

We acknowledge that there may be an appetite for DWP to provide specialist work coaches for young people with complex needs. However, with the introduction of Universal Credit, DWP will be working with a wider cross section of claimants with complex needs. To address this we are ensuring that work coaches are equipped with the skills and knowledge to deal with the full range of claimants.

Claimants have a dedicated work coach who supports them throughout their journey into work. Evidence tells us that claimants prefer to be seen by the same work coach, someone who understands their personal circumstances and can tailor support to their individual needs, including as their circumstances may change over time. Our work coaches build a relationship with the claimant, so that they can openly discuss any concerns or issues they may have and any barriers that are stopping the claimant find work, which can then be reflected in any requirements they are set in their Claimant Commitment. This on-going relationship means that work coaches can tailor their approach accordingly to ensure claimants understand what is expected of them to prepare and look for work. They can repeat messages, where necessary, so that the claimant is clear about any mandatory requirements and the implications of non-compliance, without good reason. The aim is to ensure that claimants understand and are supported to do all they reasonably can to find and move into work.

Work coaches are also able to draw on the support of other Jobcentre Plus staff, where needed, and are able to signpost the claimant to local partners who may be able to provide more specialist support.

5. Exempt care leavers from the Shared Accommodation Rate and the under-occupancy penalty until they reach age 25. This would allow them to live in one bedroom homes in the private rented sector while in the social sector it would allow them to live in a two-bedroom homes if that is all that is available (the exemption from the under-occupancy penalty is currently to age 22).

DWP will keep this under review.

We are keeping this under review as the current lack of data means we are unable to be clear about the size of the problem. We will continue to work with Department for Education to develop the evidence base and consider evidence from stakeholders on the impact that the shared accommodation has on care leavers.

6. Monitor the numbers of 16 to 24-year olds living independently who are eligible for but not in receipt of benefit. Tackle the barriers to claiming the benefits to which they are entitled and receiving the support they might need.

DWP rejects this recommendation.

The Department rejects the recommendation to monitor the numbers of 16 to 24-year olds living independently who are eligible for but not in receipt of benefit due to the inherent methodological challenges involved. People that do not claim benefit are not known to the Department as they do not appear in administrative data and survey based estimates for specific age groups may be not be reliable due to the difficulty of capturing a representative sample for certain groups that could be claiming benefit but are not, e.g. young people. Take-up may be affected by factors such as the attractiveness of the benefit, lack of awareness of the benefit or application procedure, lack of awareness of entitlement, the perceived stigma of receiving a benefit or other factors.

7. Publish evidence, in time for the autumn 2018 Budget, demonstrating the affordability of basic living costs for a young person living independently on benefits and take action if these rates are not enough to cover essential living costs.

DWP rejects this recommendation.

The Department currently does not have plans to undertake such research to these timescales. DWP undertakes a wide programme of research, which is prioritised to make best use of resources, and there are other areas which are a higher priority. There is no agreed methodology of assessing essential living costs, so this would need to be developed (for example, through a feasibility study). If we were to do it we would need to commission independent research which would be in the region of 6-9 months to get results.

Universal Credit gives greater incentives for young people to move into, and then progress in work. Within legacy benefits single young people under 25 without children are not generally eligible for in-work support from Working Tax Credit and can face a severe withdrawal of benefits when they go into work. The introduction of Universal Credit represents a marked improvement in support.

Youth unemployment has fallen by over 40% since 2010. Around 3.0 million young people have left full-time education and have successfully found work, with the employment rate for this group at 74.9%, up by 7.5 percentage points since 2010.

Furthermore, the Youth Obligation Support Programme was introduced in April 2017 to provide intensive support for 18-21 year olds making a new claim to Universal Credit. This programme starts with an intensive activity period of workshops and interventions that encourages 18-21 year olds to think more broadly about their skills and job goals, helps them identify any training they need, and supports them to improve their job search, job application and interview skills.

We also believe that early intervention is particularly important, which is why we have introduced Jobcentre Plus Support for Schools, which was trialled in 10 districts starting in February 2016 and rolled out nationally in England only from November 2016. It helps young people make a smooth and effective transition from school to work, training or further study. This support includes advice on the local labour market, ‘soft skills’ employers expect such as teamworking and resilience, job search skills such as CV writing and interview techniques, and the promotion of vocational routes into employment.

8. Publish evidence, in time for the 2019 Spending Review, on the affordability and availability of housing for young people at the Shared Accommodation Rate in every Broad Market Rental Area, and take action where affordability is too low.

DWP accepts what this recommendation is proposing, however the Department believes that we are already doing this and so rejects the need to do anything more at this stage.

The Valuation Office Agency already publishes detailed information on the distribution of shared accommodation rents and the associated Shared Accommodation Rate (SAR) for each Broad Rental Market Areas (BRMA) in England. The LHA-Direct website shows the relevant SAR once the user has input their family type and postcode/local authority, plus a graph showing how that SAR relates to the distribution of shared accommodation rents in the area. This is comprehensive information on affordability and availability at the SAR which we do not believe needs to be enhanced further.

In terms of taking action where affordability is too low, SARs received significant Targeted Affordability Funding (TAF) in both 2017/18 and 2018/19, with 22 of 48 Local Housing Allowance (LHA) rates increased in 2017/18 being SARs and 60 out of 213 in 2018/19. In each year, more SARs were increased than LHA rates for any other property size. We will also be able to increase significant numbers of rates in the least affordable areas in 2019/20, with Autumn Budget 2017 allocating an additional £125m of TAF across 2018/19 and 2019/20.