IRRV Annual Conference and Exhibition 2012

Speech by Lord Freud, Minister for Welfare Reform.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
The Rt Hon Lord Freud

Good afternoon. Thank you for inviting me here today.

It’s good to have the opportunity to outline our welfare reforms and to hear your views.
Most people agree with the principles of what we’re doing.

  • We want a welfare system that provides financial support for those unable to work - that goes without saying. But for those who can work, we want a system that encourages a return to employment as quickly as possible.
  • At the heart of Universal Credit are some simple goals which are:
  • That work should pay - so people are always better off in work;
  • There is no risk involved in taking a job or increasing your hours - because Universal Credit will be paid in and out of work;
  • That the experience of Universal Credit should be more like the experience of being in work and receiving a wage - so Universal Credit will be paid monthly

More importantly, we all agree that we need to prepare for change. And I have been impressed by willingness of housing associations, local authorities and third sector groups to engage with us.

We are already working with councils across England, Wales and Scotland to prepare for Universal Credit, for example - so you can tell us how best to support people with more complex needs. 

The feedback I’m hearing is that good working partnerships are developing between the DWP and local councils. I am keen that we continue to build even stronger relationships in future.

Today I hope to give you a broad overview of how welfare is changing, what I think that means for local government - and to hear your views.

I’m only going to talk for about 20 minutes so there should be plenty of time for questions at the end.

2013 will see the start of major reforms that will affect many of your residents

Next year sees the start of:

  • Universal Credit,
  • Personal Independence Payments,
  • local council tax support schemes,
  • a Housing Benefit size criteria in the social rented sector
  • the Benefit Cap,
  • the Single Fraud Investigation Service, and
  • Around £170m Local Welfare provision a year, formerly the Social Fund.

In a considerable number of cases, we are passing responsibilities over to you.

This means that you can make use of local expertise and ensure that services are tailored for residents in your areas.

And where it makes sense we are moving to a single national service: as in the case of Universal Credit. 

I don’t underestimate the scale of change. But I will emphasise that many of these measures will be implemented gradually over a number of years, to ensure a smooth transition.

That is why we are moving on an incremental approach rather than big bang.

DWP and local councils already have a history of effective partnerships in delivering of local services.

I know Councils work closely with their local Jobcentres. And District Managers in Jobcentre Plus now have much greater flexibility to optimise their Jobcentre services and a number of new delivery models are emerging.

For example, in Central Bedfordshire, Jobcentre Plus and council staff now work side-by-side as teams co-locate in single premises.

In other areas, councils and Jobcentre Plus are integrating services much more closely.

So residents looking for some support receive a more seamless service - from both Jobcentre Plus and from their council.

Community Budget pilot areas allow funds to be pooled - so distinct neighbourhoods or larger areas can be focused on - and councils, Jobcentre Plus and other bodies work more closely together.

Councils are also playing a strong role in helping people into employment, supporting Work Programme providers in their area - as well as working directly with local businesses.

Looking ahead, local authorities have a major role in the joint delivery of Universal Credit.

We’re working with you to test elements of the reformed service now.

We have Demonstration Projects in 6 areas that are testing direct payment of housing benefit to tenants.

In another 12 areas, pilots run by local authorities are focusing on ways of delivering Universal Credit successfully to people with more complex needs. 

One of the most interesting things I’ve learned from the Demonstration Projects is how housing providers are developing their role far beyond that of a landlord.

They are beginning to look at their tenant base in a much more intensive way.

They are learning more about their tenants and are uncovering and tackling problems as a result.

The work that is being done with tenants has resulted in more people opening bank accounts and becoming financially aware. 

We will be publishing some early findings at the end of the month to ensure that what we are learning is being shared with you and with social landlords. 

The Local Authority Led pilots are looking at budgeting too. And at ways to help people to get online, both to claim Universal Credit but also to access other online services and to develop the sort of IT skills that are often required by employers.

I was really impressed with the quality of the Local Authority pilot proposals. The important thing is that we find solutions that work locally to help people get online, to manage their money and to find work.

In order to do this I know you will need to know more about Universal Credit and the services that DWP will provide to claimants who may need additional help to do certain things. This will enable you to identify the changes to services that you may need to make in supporting vulnerable people - beyond the existing support you already provide - as Universal Credit comes in.

We’re working on all of this now. And soon we will be able to provide you with more detail about exactly how we will work with you to establish a framework for this local support.

Continuing on the theme of partnership working, different branches of government will work together with common goals under the new Single Fraud Investigation Service

Investigators fighting against fraud will be able to work far more closely - so they can investigate fraudulent benefits claims in their entirety.

The new model will see teams across HMRC, DWP and local authorities operating with the same procedures when investigating all benefit fraud.

This will help them to carry out single investigations from start to finish.

We will also look at how the Single Investigation Service can work in partnership with other fraud teams - for example when a housing fraud leads to the uncovering of a living together fraud or a criminal gang exploiting the benefits system wholesale.

This will save the countless hours spent working across different branches of government as we try to nail these criminals.

I am pleased to announce here today that the four pilots that will be going ahead to test the model for the single service. They are:

  • Corby Borough Council
  • Glasgow City Council
  • London Borough of Hillingdon
  • Wrexham Council

We are looking forward to working with all four pilots.

We are also calling on other councils who have not yet become involved, to engage with us to work with us as we move forward.

The success here - as with much of what I have discussed - depends on all partners coming together to help us make sure that services are delivered successfully on the ground.

As well as developing strong partnerships, major powers and responsibilities are being devolved to local authorities - most importantly Council Tax Benefit and the local welfare provision - what was the Social Fund.

These are both clear examples were it makes sense for people with local expertise to be in charge of local decisions and spending.

 DCLG is providing councils with £30 million to help with the costs of planning the new Council Tax support schemes and we have also provided clear guidance on how new schemes can complement Universal Credit in ensuring that people are better off in work.

Taking control of around £170m local welfare provision will also allow local authorities to respond far more actively to local people’s needs.

This means families being helped by one branch of the council will be able to access further support more clearly from the same organisation.

I want councils to build on what they do well - and continue what many are currently doing now by bringing different services together. 

So to conclude, 2013 will see major changes come in that will affect councils, residents and service users.

I know it will be a busy period for you and will require your customary support and flexibility as you help claimants to move to new systems.

However, I want you to leave here certain that our reforms will be introduced incrementally. It will not be a single big bang.

This will give you time to adjust and also for us to listen and adapt as necessary.

We will work in partnership with you to develop local welfare support and services that work for your residents. And which support people into work where possible - and to independence.

We have a huge agenda of change.

Thank you for your work to date - and I look forward to strengthening our partnerships as we move towards implementation in 2013.

Published 4 October 2012