Latest Public Sector News

18.02.14

‘Calm before the storm’ on welfare reform

The full challenges of the impact of welfare reform could be yet to be felt, a new report has cautioned.

Professional services firm Grant Thornton analysed how local authorities and housing associations have been managing the changes, and how they will continue to cope in the future.

The report found that the best performing organisations are taking a holistic view of their operational needs, and that the financial constraints of welfare reform are so far being met.

Close partnerships between the authorities are needed to ensure social disruption is minimised, Grant Thornton suggested.

Concerns raised in the report include a rise in rental arrears, signs that direct payments may be contributing to benefit money being used for other purposes, a rise in homelessness, and a lack of evidence that the bedroom subsidy reform has brought about significant movement to smaller properties.

Councils must ensure Discretionary Housing Payments are part of a long term solution rather than a short-term fix, to meet future demand.

Paul Dossett, head of local government at Grant Thornton UK LLP, said: “The early indication is that the impact of reform felt by local authorities and partners has not been as great as expected and councils have so far acted in a fiscally responsible manner in planning ahead for the reforms.

“However, this could be the calm before the storm. Some worrying signs are emerging, particularly around rising rental arrears, homelessness and reliance on food banks, which may be linked to the reforms and could put further pressure on authorities as the reforms are phased in.”

Jenny Brown, head of social housing at Grant Thornton UK LLP, added: “Given that welfare reform is such a crucial area for HAs, it's interesting to note that the way forward appears to be for agencies and authorities to work more closely together to deliver the support that's needed. Importantly, due to the wide variety of experiences going on at the moment, it is unreasonable to expect that there will be a 'one size fits all' approach to this.”

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Image c. Trowbridge Estate

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