Making the cap fit

7 February 2017 | 7 February 2017

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The new benefit cap, the latest welfare reform, is providing a stern test to our sector and we are starting to see its impact on many of our residents.

At Sovereign we took the decision back in 2010 to bring all welfare reform – whether it was ‘bedroom tax’, benefit cap, Universal Credit and so on – into a single project.

So that the lessons we learnt in one phase would not be lost as we approached the next and the residents who need a little more from us would be given more useful, longer-term support.

Despite the challenges, our rent arrears have fallen year on year to just 1.7% last year, which is an exceptional effort from our teams and our residents.

Here’s what we did.

  1. Social rent pays

At Sovereign, working in the south east and south west where market rents are high and climbing, we took a strategic decision to protect our social rented homes. This meant we’ve not converted existing homes to Affordable Rent and also sought opportunities to build new social rented homes too.

We believe social rent is the best way for those on low incomes to achieve their aspirations – and it can be the difference between keeping up with the rent and starting to struggle as the benefit cap is lowered.

  1. Research, then react

We’ve done an awful lot of work to better understand our residents, our markets and our products – and the relationships between them – so we can focus our efforts where they’re needed most.

Working with local authority partners we mapped the potential impact, so we could see where reforms would hit hardest. We modelled the types of households that could be affected – this was no longer a cap that only hit large families.

As you can see the south east, particularly in high value areas such as Wokingham and Oxford, is at greater risk than London because of the lower cap.

Insight has and continues to be key to our Board discussions and the planning of our housing teams.

  1. Everyone is different, and people’s lives don’t stand still

We contacted every household we thought would be affected.

We talked through the impact and talked about how we could help. Many said they’d be fine and would work it out, and some had already found work, or increased their hours. But others wanted to talk a little more about what the cap might mean, and what support was available from Sovereign and other agencies.

Our employment and training officers are great and provide an excellent personalised service to those that want to engage. .

Lorraine, one of our most experienced officers, was telling me of a woman she’d supported who was going back to work after 20 years. Her family had grown up and, as well now being affected by the cap, she wanted to get back to work, but didn’t have the confidence to or know how.

Lorraine arranged work experience with a local employer, which she loved, and has since helped her secure a job as a care assistant. She started last week.

  1. When the cap doesn’t fit

But this is one story.

At the moment the volume of impacted households is still low but still many more times than the numbers affected by the ‘old cap’. But what we’re seeing so far is those who are already in arrears are falling further behind, while many are finding ways to adapt, including increasing hours of work.

With the cap frozen, those volumes are likely to increase. So we’ll keep talking to our residents, but this personalised service will become harder to deliver once Universal Credit comes in across our geography.

Life outside London

All of our 56,000 homes are outside of London, but the map shows how many of our markets are comparable to the capital.

A great deal of policy is London focused, with an ‘outside London’ policy then rolled out across the rest of country. This one-size-fits-all approach can lack the nuances these policies need and our ask would be that the cap is more tailored to fit the diverse local markets.

Welfare reform is here to stay, but we can make sure it’s implemented fairly and appropriately.