Local Support Service for Universal Credit

CWEG Item 3.2

Local Support Service for Universal Credit Purpose

1. The purpose of this report is to update members on the DWP Local Support Services Framework and its application in Scotland. This report will also outline the possible ways forward to be clarified at a future Leaders’ meeting.

Recommendations

2. Members of the Executive Group are recommended to

i. Note the progress being made with the DWP Local Support Services Framework;

ii. Note and support the efforts being made to engage with Scottish Partners on a possible Scottish arrangement;

iii. Note the key issues of concern:

a. The size of the funding

b. The nature of a shared ambition and its impact on the funding c. The mixed model of funding which will include outcomes d. The management of the resource

iv. Consider the models which Local Government will have to come to a collective and individual position on in the near future; and

v. Agree that Leaders decide between the models once more is known about the issues of concern.

Background

3. In anticipation of the roll out of Universal Credit, and after some significant political pressure, Lord Freud has committed to support claimants as they engage in the new reformed welfare system with a package of provision being called Local Support Services (LSS). In making visible progress on this commitment, DWP set up the LSS Task Group which COSLA is a member of, to develop the LSS Framework. The first version of the Framework was published in February 2013. It is understood that the Framework will be refreshed and updated as more is known about the size and nature of demand for Local Support Service.

4. The first publication was therefore quite broad in nature and left a number of questions unanswered such as how much would be made available to provide Local Support Services and who would manage the funding. Its application is quite limited though, the four Greater Manchester pathfinder authorities engaged in the initial roll out to October 2013.

5. It is important to note that Local Authorities are seen by the UK Government as the natural partner to support delivery of LSS but will not be required to do so through a legal duty.

Each Local Authority will therefore have a choice to make about whether or not to enter into a partnership agreement with the DWP. Some of the complexities involved in this choice are described later in the report.

6. It should also be noted that at the same time as the Framework was published, Lord Freud

wrote to all Local Authority Chief Executives, reiterating the commitment made in the

document to the potential for ‘Scottish and Welsh arrangements’. This is understood by

COSLA to mean that the partnership arrangements for planning, delivering and financing

7. Local Support Services detailed in the Framework might include a mix of new and currently provided services (which will increase in demand as a result of UC). Some of these

services may be best provided by or through local authorities and others may sit more comfortably with the Job Centre Plus. These include;

i. Triage assessment of all UC claimants ii. Online access and support to make a claim

iii. Personal budgeting support / debt management / money advice

iv. Assessment and recommendation for alternative payment arrangements v. Evidence verification

vi. Specialist support for those with complex or additional needs vii. Support to resolve an issue with a claim

viii. Support to move closer to the labour market as part of the single claimant journey (aimed at those not qualifying for the work programme)

8. Having received a significant number of responses to the LSS Framework, the DWP are now working on a refreshed version which will answer some of the previously unresolved questions – particularly around partnership, governance and importantly; finance. In order to develop the refreshed Framework the DWP have re-established the Taskforce, with three subgroups - i) Finance and Capacity - ii) pre implementation design and delivery group - iii) Local Authority Reference Group. The DWP are also in the process of

establishing a Local Support Services Housing and Voluntary & Community Sector (VCS) Reference Group.

9. COSLA is so far represented on the main three groups. However, as some of the

outstanding questions and issues in the first Framework are beginning to firm up, COSLA are increasingly being asked for our own firm views. It has been, and is still difficult to recommend particular positions to the Executive Group or Leaders at this point because of the number of ‘unknowns’ we face. As such, this paper seeks to explore the key issues of importance to Scottish Local Authorities and to describe the potential next steps for political discussion.

Key Issues with the Local Support Service Framework

10. To date, and while the general political position taken by Leaders in opposition of this particular welfare reform agenda, COSLA has seen the following as rational reasons to get involved in the Local Support Services Framework for the delivery of Universal Credit:

i. Local Government currently provides generic support services and is further developing many of those in response to welfare reform. These services are likely to form the basis of the support needed for Universal Credit and therefore there is significant potential for added value to authorities and communities by collaborating with the DWP in this instance.

ii. Local Government is likely to have to pick up significant aspects of the demand for UC support regardless of what DWP do because of our vulnerable client base and it is therefore better to receive the resource for that support and to be influential in how the DWP cost and plan the provision.

iii. Good support services should further benefit local government income streams by supporting people to maximise their benefit income and ensuring they have

financial capability to pay our and other rents as well as council tax, etc on time.

iv. As the LA delivered housing benefit services drop away as new claimants go on to

UC and existing benefit recipients are migrated, there is potential to ensure the

highly skilled staff resource and knowledge is not lost through the provision of

support to access UC.

v. As councils already fund, and in some cases deliver, advice, information,

advocacy, triage, digital access, debt management, financial inclusion etc. along the lines of Christie, combining Scottish Government and local government

investment and DWP monies, provides a potential to do something more ambitious with the combined resource.

vi. The alternative, of separate local commissioning arrangements running in parallel, will put an additional and unnecessary strain on all partners and cause wasteful administrative duplication to government, it will also increase uncertainty over the sustainability of funding.

11. However, a number of key issues have yet to be resolved and these may have a

significant bearing on how attractive it is to local authorities to work in partnership with the DWP in this area.

The Purpose behind Local Support Services

12. Politically Leaders and Executive Group Members have opposed much of what the UK Government has done to further its Welfare Reform agenda and how it has approached it.

However, Leaders have also agreed to engage with the DWP on the detail of the reform as the best means of influencing the detail and delivery so as to better protect communities.

LSS takes this arrangement one step further as Local Authorities would enter into a partnership with the DWP to deliver an aspect of the reforms. This may or may not be politically desirable and the eventual decisions member authorities adopt are likely to come down to how the arrangement is framed.

13. If the wider goal of the LSSF is to deliver Universal Credit then it hints at an agenda which will ultimately be about cutting benefits, reducing reliance on the state and by creating further financial pressures, pushing people towards employment. If Local Authorities were to become the face of some of this activity locally then the opposition to the reforms which should be directed towards to the UK Government will, in all likelihood, also be directed at Councils. Being the face of a DWP service is however not new to local government as we deliver HB and have delivered CTB, and have recently taken on the new Scottish Welfare Fund. However, LSS will be the largest interaction communities have with the deeply unpopular and challenging Universal Credit Welfare Reform. As such, the driver behind the LSS is of fundamental importance.

14. If Local Support Service are framed as assisting people in interacting with / accessing Universal Credit it would be more in keeping with the style and focus of the services we already provide. It would also limit any role councils might be required to have to drive people into certain behaviours thought desirable by the UK Government. Rather, local authorities would be supporting people to maximise their income, manage the changed environment and prevent any adverse outcomes because of their vulnerable circumstance.

15. What the actual stated purpose of the LSSF is will influence the ‘outcomes’ and ‘targets’

associated with the DWP funding and local authorities will want to be sure what they are committing themselves to. This is also an important point because the DWP are costing the LSSF on the basis of assumptions about a maintained baseline level of support provided by the Local Authority. Worryingly, it appears that London based DWP and Scottish DWP are at odds with regards the purpose of LSSF, with our direct partners in Scotland feeling that it will be a major lever for delivering Universal Credit.

The nature and meaning of a shared ambition

16. Costing the LSSF is a difficult task because it depends on a large number of unknowns –

unknown need (for an unknown level of time), unknown demand, unknown levels of

vulnerability and unknown behavioural responses by people. However, within this context

DWP clearly want to limit the overall financial cost of provision and ensure value for money for them. In this context they are looking at government investment in various ways and working on the principle that they should not ‘pay twice’ for a service already being supported. As such DWP are clear that they wish to ‘graft’ the LSSF provision onto local authority investment, paying only for the additional burdens brought on by UC.

Furthermore, where new services are needed, the DWP are identifying areas they think will be a shared ambition and costing those services on an assumption of agreement to shared investment – such as digital investment.

17. There are a number of problems with this approach, firstly the baseline of local provision upon which DWP is costing the additional provision of LSSF, is being assumed/guessed by DWP and may not bear any relation to the actual investment in Local Authorities as a whole or individually. In order to make the service function, Local Authorities may have to increase the local funding available to the level expected by the DWP for an undetermined period. This relates to advice, information, debt management, financial capability and also online access.

18. For many of the new services – particularly those relating to digital inclusion, DWP feel that Local Authorities have a shared ambition which means that any investment in this area should be jointly made. In costing this the DWP are making their own assumptions about where the reasonable split might be, 50/50, 40/60 etc.

19. Local Government investment in many of the support services mentioned, and its prioritisation of any ambitions with regards digital inclusion in this financial climate are discretionary and our own to make. COSLA believe that any funding arrangement which requires, what is effectively a jointly funded approach, should be negotiated with Local Government.

Core and outcome based funding combination

20. Once the GB funding is determined, DWP envisage sharing the money with Local Authorities through a combination of core funding and outcome based/ target driven funding. The reasoning behind this is a desire to ensure that people are not ‘parked’ for ever more as vulnerable or dependent, to ensure that the costs associated with LSS reduce over time, and to remove ‘perverse incentives’ to councils to work against the DWP agenda. This is not a new model of funding or way of working for the DWP, but it presents us with some concerns.

21. Firstly, if the LSSF is being grafted onto Local Government provision (or jointly funded by Local Government) we would expect those targets to be negotiated and agreed jointly. It will be explicitly important what the agreed purpose of LSS are at this point as Local Authorities might have more issue with outcomes which drive the success of Universal Credit than outcomes which support people to access and manage the requirements of Universal Credit.

22. Secondly, Local Authorities may be concerned about the balance between core and outcome based funding; particularly as the overall funding package for LSS and the duration that funding can be expected for is unknown.

Who manages the fund/ accountability and governance

23. There is a fundamental debate being had as to whether Local Authorities or the DWP should manage the resource for LSSF. COSLA is being pushed for a position on this and also on the reassurances needed if DWP were to manage the money. Recommending the best way forward is difficult in light of the uncertainties described above but is also

dependent upon what is meant by ‘managing’ the money. If the financial lead held the

resource but all decisions over how to spend the money, and any requirements to report on outcomes etc were completely joint it may not matter.

24. However, there is a suggestion that part of the role will be to make the final decision where there is disagreement between the key partners. COSLA is potentially more concerned about this issue after input from DWP Scotland suggested that they see the management of the fund as a ‘lever’ and a ‘control’. Part of this view related to their nervousness about being accountable for outcomes and the delivery of UC to the UK Government. It seems that they feel that this accountability could not be achieved if they do not manage the fund.

Potential Scottish Arrangements

25. Split resource but Joint Planning and Partnership - It is suspected that there will be a 75/25 split within LSSF of services more likely to be provided by or through the Local Authority and those services provided by Job Centre Plus (and therefore work related). It seems probable that the DWP will have difficulty handing over resources to local authorities nationally and then receiving money for the JCP related work back from the same councils – and undoubtedly some of the work based interventions are directly related to delivering UC. If this is the case then splitting the resource at the outset might be advisable.

26. COSLA / DWP Agreement (with potential to involve SG), with the whole resource being managed by one of the partners. This hides a great degree of variety / possible options.

One would be LSS money being entirely handed to the Scottish Government, in a similar way that the DWP passed on the devolved Social Fund to the SG, rather than to local councils as they did in England. For political reasons this seems very unlikely, although is not off the negotiation table, yet. Other variations include the DWP seeking agreements to collocate their staff with councils’. This was discounted in the English discussions.

27. DWP commission individual Local Authorities on a case by case basis - Bearing the issue of reputational and financial risk, it may be that supported by a Scottish LSS framework, each local authority would prefer to decide on a case by case basis whether and what they want to provide within the context of the LSSF and be commissioned on that basis by the DWP. This would not have the same opportunities for a comprehensive package and it would not have the same levers as a partnership agenda, but it would limit risk and political and financial exposure.

28. Distancing from DWP - Finally, Local Government may take the view that the risks

associated with managing the LSSF resource are simply too great. For example, demand outstripping the available resource, costs exceeding the available resource, public

perception of local government as the face of LSSF in Scotland and responsibility for some potentially unpopular targets. In this context Local Authorities might prefer to distance themselves from LSSF in its entirety.

Conclusion

29. While this complex matter has some way to go before any decisions can be made, a discussion of this paper, and potential pointers would be helpful, both in officer based negotiations, and more importantly in the upcoming meeting with the Minister Lord Freud in mid-June where the matter will be on the agenda.

Communities Team COSLA

May 2013