TACKLING POVERTY BOARD CONTRIBUTION TO EQUALLY WELL REVIEW: FINANCIAL INCLUSION
Paper for Discussion
Equally Well includes the following financial inclusion-focused recommendations within the tackling poverty and increasing employment chapter:
· Recommendation 17: universal public services should build on examples of effective financial inclusion activity, to engage people at risk of poverty with the financial advice and services they need.
· Recommendation 18: the Government should help people to maximise their income and encourage them to take up means-tested benefits, starting with older people and extending activities through intermediary organisations such as Registered Social Landlords and healthcare services.
This is reinforced by the recently-published strategic review of health inequalities in England Fair Society, Healthy Lives which acknowledges the importance of income and recommends standards for minimum income for healthy living.
Questions for discussion:
· Should these recommendations be reconsidered or stepped up, particularly in the light of the recession and tight future budgets for public services?
· How can the recommendations be delivered through embedding, into the day-to-day business of specific public services, effective practice such as signposting of clients to expert help and advice?
· Where should we focus attention? Client groups, settings, key transition points?
· How can local projects that work be scaled up to deliver at a national level?
Considerable activity and funding is in place to support the implementation of these recommendations at national and local level, but there is scope for further action.
The information annexes to this paper set out: a summary of what we know about the potential impact of income maximisation and attempts to promote it (from information provided by Communities ASD); an outline of social inclusion policy on financial inclusion and income maximisation including project funding; and, an annex containing examples of a range of local good practice.
ANNEX FOR INFORMATION
What we know about the potential impact of income maximisation and attempts to promote it
Financial inclusion, and in particular income maximisation, has the ability to deliver a significant, immediate and sustainable impact on tackling poverty and income inequality with direct links to the 3 Scottish Government and CoSLA social policy frameworks and the Solidarity purpose target[1].
Key to this is ensuring that people, particularly those in the lower deprivation datazones, maximise their entitlement to benefits and tax concessions. Preliminary SG analysis has indicated that moving from current take-up rates to full take-up would make a very significant contribution to delivery of the Solidarity target which lends weight to policy interventions by the Scottish Government in this area.
The latest DWP estimates of take-up of the major benefit types are in Table 1. The caseload figures show take-up by the number of people entitled to the respective benefits while expenditure figures show take-up as a share of the estimated maximum amount of benefits to which people are entitled.
Of the main income-related benefits, the ones with the lowest take-up rates and the most room for improvement are the income-related aspect of Job-Seekers Allowance, where even at the high end of estimates less than 2/3 of eligible money is claimed; and Council Tax benefit, which has a take-up by expenditure of between 63 and 70%.
The single highest amount of unclaimed benefits in Scotland is for Pension Credit, which represents 29% of the total. Pension Credit may be a particularly fertile area to increase take-up activity because, not only are the rewards highest in this area, but a significant part of the identification of entitled non-recipients (ENRs) is made easier by the fact that those entitled to Pension Credit must be of pension age. Information from DWP suggests that 81% of ENRs of Pension Credit are owner-occupiers, further narrowing the target group and making it easier to identify those who are entitled.
Therefore, Council Tax Benefit and Pension Credit would be good targets for increasing take-up from the point of view of having existing low rates and reasonable amounts of unclaimed benefit. Beyond this are two further considerations for targeting – (i) the extent of passporting to in-kind benefits and (ii) the interdependence between income-related benefits. An important interdependence exists between Housing Benefit and Council Tax Benefit, while the (guarantee component of the) Pension Credit passports entitlement to 100% Housing Benefit and Council Tax Benefit. This further underlines the importance of maximising take-up of Pension Credit in particular. It is equally important that efforts are focused on benefit uptake where potential financial gain is highest.
Table 1: Take-up of major benefits 2007-08, Great Britain
Caseload (%) / Expenditure(%)Income Support (Non-pensioners) / 78 - 88 / 85 - 93
Pension Credit / 61 - 70 / 70 – 78
Housing Benefit / 80 - 87 / 85 – 91
Council Tax Benefit / 62 - 68 / 63 – 70
Job Seeker’s Allowance / 52 - 60 / 54 - 65
Source: Department for Work and Pensions (2009a). First Release: Income Related Benefits Estimates of Take-Up in 2007-08.
The take-up estimates are for Great Britain as DWP Scottish data is currently unavailable. However, there is no reason to assume that Scottish take-up rates would be significantly different from those in England and Wales.
Applying GB take-up rates to Scotland on a population basis suggests that there is between £520 million and £875 million in unclaimed income-related benefit due to Scottish individuals.
The complexity of the benefit system is not something that the SG can currently address directly – the design of the system is reserved to DWP. However, transfer of social security powers is flagged as a high priority issue in the National Conversation.
The SG can, and does, run benefit awareness campaigns. It provides funding to third sector organisations, and bodies such as Citizens’ Advice Scotland, to provide analysis and advice of individuals’ and families’ situations, and to determine if they are eligible for any benefits that they are not claiming.
Macmillan Cancer Support, who have some experience with implementing benefit uptake programmes using advisers to ensure that cancer patients receive their full entitlements, have claimed in an unpublished document that for every £1 of government spending running benefit take-up campaigns, an additional £85 of benefits are claimed by those entitled to them. This is a level of effectiveness which is not seen in many other areas. Their expectation is that they expect an improvement in benefit uptake in the order of £21 for each £1 they spend on the uptake service. These estimates for efficacy of benefit take-up programmes should be treated with caution.
Citizens’ Advice Scotland has also run campaigns on benefits take-up. It has publically reported that ‘some CAB benefit take-up campaigns net as much as £85 for claimants for each £1 spent on running them.’ However, like the above result for Macmillan Cancer Care, this claim has not been subjected to close scrutiny and should be treated with caution.
A Social Return on Investment report of Linkwide Housing Association’s Older People’s Advice Project based in Falkirk concluded that for every £1 spend, the project realised a social return of £27.49.
Benefits account for a significant share of income in the lower three income deciles. Increasing benefit take-up has the potential to play an important role in delivering the Solidarity target.
In terms of low-income groups to focus uptake activity upon, academic evidence suggests that marginalised low-income groups tend not to claim their benefit entitlement and would therefore benefit from targeted campaigns. These groups include those who might struggle with the complexity of the benefit system, including the over 80s, those with language and literacy challenges, mental health service users and certain ethnic minority groups who may face social, cultural and language obstacles.
The prospect of high returns would support properly evaluated pilot take-up schemes in Scotland. As Solidarity is a policy priority, such schemes should focus on effectively identifying and locating entitled non-recipients in the lower three income deciles as well as on improving the effectiveness of the income maximisation service.
Social inclusion policy on financial inclusion and income maximisation, including project funding
Achieving our Potential is clear in setting out the importance of financial inclusion to tackling poverty. From the Achieving our Potential budget over 2009-11 the following projects are receiving funding:
· £1.1million to Macmillan Cancer to provide cancer patients and carers with advice and information on welfare benefits and other financial matters in the 5 cancer treatment centres in Scotland
· £160k to Citizens Advice Direct to provide free telephone benefit entitlement checks to those people under 60 that access the Energy Assistance Programme. (Note: those over 60 are referred to the Pension Service for free benefit entitlement checks).
· £700k to Linkwide Housing Association to provide financial advice and information to older people in Falkirk, Clackmannanshire, North Lanarkshire and West Lothian. We are considering other initiatives and interventions which will provide support to those people that are most difficult to reach.
· £1million to Greater Glasgow and Clyde NHS Board to provide support to low-income families with children. It brings together a range of services to tackle health inequalities and child poverty, through early intervention, reaching out to them through the Healthy Start programme.
National services and infrastructure
Increasing advice and support to businesses and individuals is at the heart of our economic recovery programme. We have provided Citizens Advice Scotland with an additional £1.1 million to increase the availability of face-to-face advice on debt, welfare rights, housing and employment issues, through the Citizens Advice Bureaux network. We undertook a successful campaign (with funding of £500,000) to promote the National Debtline service to help individuals at risk of financial difficulties and debt problems and to raise awareness of advice services and financial support.
Further funding for the Scottish Helpline for Older People (SHOP), Citizens Advice Direct, and the Lone Parent Helpline. We also fund training in welfare rights, though the Child Poverty Action Group and training in money advice, through the Money Advice Training, Information and Consultancy Service (MATRICS), a collaboration between Citizens Advice Scotland and Money Advice Scotland.
We are undertaking the strategic review, with COSLA and the Scottish Legal Aid Board, on information and advice services which will be published in March 2010.
A number of Networks exist to support financial inclusion activity and the sharing of challenges and best practices for example and the COSLA-led Financial Inclusion Network which is a sub-group of the Tackling Poverty Officers Group reflecting CPPs across Scotland.
The DWP Financial Inclusion Champions initiative is designed to increase the awareness of financially excluded people about the services available to help them to manage their money better, including how to set up basic bank accounts, access financial services including low cost loans, start saving, and where they can get financial and debt advice. Scotland has 3 local Champions and a Regional Manager. One of their main objectives is to engage with CPPs to support their development/refreshment of a Financial Inclusion strategy to support implementation of Achieving Our Potential, Equally Well and Early Years outcomes which address financial exclusion. The DWP Champions have invited tenders from the Third Sector to enhance financial inclusion initiatives with a focus on employability, positive youth destinations, decreasing poverty, homeless/vulnerable housed, addiction, learning disabilities and mental wellbeing. The Scottish Government is in contact regarding match funding these initiatives.
Local services and infrastructure
Many local authorities and their planning and delivery partners have a financial inclusion strategy to ensure that those in, or at risk of, poverty are supported through the provision of accessible services, information and advice. Financial inclusion in particular can be tackled using the £435million Fairer Scotland Fund (2008-10).
Additional benefits checks, income maximisation and money advice services are provided through a range of key intermediaries such as Registered Social Landlords, NHS primary and community care (GP practices, outreach nurse services, health visitors etc), the Energy Assistance Package and Home Insulation Scheme services, third sector organisations such as the Royal National Institute for the Blind, Enable, Macmillan Cancer Support, Addaction, Working for Families.
UK Government-led action
In response to the recommendations of the Take Up Task Force, a Financial Support Steering Group was established in May 2009 representing government departments involved in benefits and tax credits and child poverty, local government, third sector and devolved administrations. The Take Up the Challenge[2] report outlines ways that services can take action to tackle child poverty by maximising families’ incomes. The main proposals focus on effective engagement with key partners/intermediaries, the availability of a simple signposting leaflet and e-links to existing material and information. The latter elements are to be delivered via dedicated pages on the Child Poverty Unit website. Proposals and draft materials will be submitted to Uk Ministers shortly. The SG are represented on the Steering Group with advice from the Child Poverty Action Group Scotland.
The DWP are undertaking a Pension Credit Payment Pilot in Spring 2010 which will utilise data held to make Pension Credit awards for a limited amount of time to a small sample of pensioners without the need for claim. The pilot will be evaluated as part of DWP’s commitment to explore what opportunities there are to use data in more innovative ways to drive take-up in the longer-term.
Examples of a range of local good practice
East Glasgow Community Health and Care Partnership
East Glasgow CHCP’s money advice service is an example of a partnership approach to health improvement and health inequalities. A successful model has been developed to deliver money advice services to the most vulnerable client groups within the CHCP, involving home visits, open access surgeries and targeted events.
Over 7 years, the service has successfully raised £7,604,615 in unclaimed benefit and has supported clients to reschedule £930,288 of debt.
West Dunbartonshire Community Health Partnership
The West Dunbartonshire Community Health Partnership Health Improvement Team are working with West Dunbartonshire Welfare Rights and Money Advice Centre to pro-actively target vulnerable over 75’s via 3 GP’s patient lists since. The service began in July 2007 offering income maximisation, money advice and an holistic assessment of needs, identifying unmet need and providing a gateway to other services by referral/single shared assessment via a Welfare Rights Officer. The findings of a draft evaluation report January 2009 details positive outcomes of this project which include, amongst others, the method of delivery and the impact that contact with the Welfare Rights Officer has made in older people’s day to day lives. Over 2 years, the initiative generated £500k in patient financial gain.