The Impact of Welfare Reform in Scotland - Tracking Study - Year 1 Report

Executive Summary

This report presents the findings from the first year of a study that aims to explore the impact of ongoing changes to the welfare system on a range of households in Scotland over time. This report builds on the results of both the Sweep 1 interviews, which took place from September 2013 to January 2014, and the Sweep 2 interviews, which took place from April 2014 to July 2014. The study is being carried out for the Scottish Government by the Employment Research Institute at Edinburgh Napier University and the University of Stirling.

The study is concerned with those in receipt of working age benefits, and analyses the impact of the current benefit reforms and new rules. This includes changes to: the uprating of benefits and tax credits and the introduction of a benefit cap; Housing Benefit, e.g. the 'bedroom tax' (also known as the 'removal of the spare room subsidy') and the setting of rates for Local Housing Allowance; support for job seekers, including new requirements on lone parents to seek work; and the replacement of Incapacity Benefit (IB) with Employment and Support Allowance (ESA), and of Disability Living Allowance (DLA) with Personal Independence Payments (PIP). The study also addresses participants' opinions about the move to Universal Credit (UC) including a shift to monthly payments, and the move towards making all claims through an online system. At the time of writing, some changes to welfare benefits have been implemented while others are underway. All changes, including the transition to UC^[1], are expected to be implemented by 2017.

The study utilises a longitudinal qualitative methodology to explore participants' perspectives on the way in which welfare reform is having an impact on them, and to follow their experiences over time. Forty-three individuals took part in Sweep 1 of the study and 35 in Sweep 2, each with different reasons for claiming benefits. Participants were recruited to the study from across Scotland, including rural and urban areas and the major cities, and had a range of demographic and other characteristics. Baseline information on participants was collected in the Sweep 1 interviews. The Sweep 2 interviews explored changes in participants' circumstances, and also looked in greater depth at participants' barriers to entering or continuing in employment.

Other factors not directly related to welfare per se, but that impact on those receiving benefits, are also considered in this analysis; such as the availability of transport, childcare and suitable employment opportunities, which are relevant to people's ability to find, and maintain, employment.

Findings

Moving people into work

• A key aim of welfare reform has been to move people into work: by offering more personalised and intensive support to help individuals find work; by incentivising employment by ensuring that it pays more to be in work than claiming out of work benefits; and by intensifying the requirements upon certain groups of benefit recipients, including lone parents, and those out of work due to a health condition or disability.
• The lone parent participants stated that they wanted to work, but struggled to find suitable job opportunities that could be reconciled with their caring responsibilities, or to find and pay for suitable childcare that would allow them to take up work.
• Even participants with fairly debilitating conditions expressed a desire to work, but ill health and disability presented a huge barrier to work for many participants.
• The reassessment of Incapacity Benefit recipients for Employment and Support Allowance was relatively straightforward in some cases, but a considerable struggle in others. Several participants were initially found fit for work, or placed in the Work Related Activity Group (WRAG), and subsequently appealed the decision. Most did so successfully, although it was stressful to prepare and wait for, and some found the experience traumatic. Participants felt they benefited greatly where they had received support from advocacy organisations with the process of applying and appealing DWP decisions.
• Perspectives on the helpfulness of interactions with Jobcentre Plus with regard to helping to find work were lukewarm. Some had found the experience broadly positive, but noted that staff were limited in the assistance they could offer. Others had a more unpleasant experience, finding staff unhelpful or encountering negative or hostile attitudes from them. Even those receiving support from the Work Programme did not feel that it particularly helped them to find and move into work. Participants reported that some third sector organisations provided more useful and targeted support. Jobseeker's Allowance (JSA) and ESA recipients were sometimes signposted to this by Jobcentre Plus, but others were left to find out about these services for themselves.
• Participants who had moved into work between the two sweeps felt that they were slightly better off, although they still did not necessarily find it easy to make ends meet. Those out of work were not always sure that they would be better off in work, partly because they found it difficult to envisage what their income would be due to the complexity of the system.
• However, the participants' accounts of their barriers to employment suggest that the decision to work is not purely monetary, and work is valued for a number of reasons. Those who had moved into work, despite not necessarily being much better off, nonetheless reported a substantial increase in well-being.

Managing expenditure on welfare

• As well as moving people into work, a central aim of welfare reform has been to reduce overall expenditure on the welfare budget. Participants in the study were affected by a number of measures taken to limit expenditure: changes to disability benefits such as the replacement of DLA with PIP; the restriction in uprating of certain benefits and tax credits; and the changes to housing benefit for social housing tenants known as the 'bedroom tax'.
• Participants reported a lot of uncertainty regarding the transition to PIP, and many were worried that their entitlement would be lost or reduced.
• The main issue for participants with the time-limiting of contributory ESA seemed to be the way in which the transition to income-based ESA was managed. In some cases, a lack of information and support meant that the transition was not smooth, and this created financial problems.
• Benefit freezes or restricted increases have meant falling real-term incomes; many participants found it difficult to meet basic needs, and noted that costs were rising but their incomes were not.
• The 'bedroom tax' initially created hardship for some of those affected, but most successfully obtained a DHP to mitigate the negative effect. However, in some cases this was not straightforward and took several attempts.

Communication from government and agencies

• Some participants felt that the way in which the UK Government has communicated its rationale for welfare reform has unfairly represented benefit recipients as not wanting to work. Participants also noted this kind of negative portrayal of benefit recipients in the media. They acknowledged that there are some who fit this description, but argued that this is a minority and did not represent them.
• The DWP were reported to be poor at communicating changes to entitlements. Their correspondence was described as long, confusing and sometimes conflicting with previous correspondence. This made it more difficult for participants to understand the changes that were affecting them.

Differential impacts

• Access to affordable basics such as food was found to vary geographically - although it did so along lines of whether the participant had access to a large, cheap supermarket or not, rather than along strictly urban-rural lines.
• Participants' experience with Jobcentre Plus varied according to which centre they attended and which advisor they got.
• The findings suggested local variations in other support services, such as social work or mental health services. Some felt very well supported by a social worker or other support worker, while others felt adrift.

Policy implications

• The findings of this study show that, according to the views of participants, stronger conditionality is unlikely to get more people into work, due to a lack of suitable work, and barriers in the areas of education, skills, employability, childcare, and health. Positive experiences by some participants suggest that there are a number of interventions, such as targeted employability services, that can help address such barriers to work.
• Current plans to extend free childcare provision are a welcome development, but do not address the gap identified by participants in provision outside of standard hours. To meet these needs, childcare provision needs to evolve to reflect the widespread expectation that workers should be available to work non-standard hours in both the public and private sectors.
• Some of the reforms have changed the way in which recipients interact with the system, requiring them to give different information, or go through new procedures, in order to access support. However, this kind of change does not necessarily cause intractable problems - the findings show that in many cases, it can be navigated with appropriate support, whether this is helping those affected to understand confusing correspondence, fill in forms, locate specialist services or provide support for a benefit tribunal. Those who are affected by welfare reform can be supported in understanding and responding to changes. This feeds into the Scottish Government mitigation work in the area of providing advice and support, through advice services, third sector organisations, social landlords and Health Boards.
• The findings suggested that frontline services (such as health, social care and social work) could play a role in supporting those affected by welfare reform to access the support available to them, but that in places their involvement could be stronger and more joined up. For example, health services could advise patients who might be entitled to ESA or DLA that these benefits exist, and how to apply for them. This practice already exists for Child Benefit; new mothers are given an application pack in hospital, and take-up of this benefit is over 95 per cent among those eligible for it.
• The impact of welfare reform appears to vary depending on service provision at the local level. This feeds into existing mitigation work with COSLA, the Improvement Service and NHS Health Scotland about how local authorities and Health Boards can best support people. Best practice should be shared and adopted, and local authorities should be made aware of instances where their activities are creating problems for benefit recipients (such as high care costs).
• The impact on benefit recipients who fall foul of new rules - or who are affected by a mistake on the part of a benefits agency that is not their fault - can be severe. When things go wrong, it is important that there is recourse to a well-funded crisis support service that can respond quickly to financial emergencies. The Scottish Welfare Fund will be crucial in mitigating the impacts of welfare reform.
• The experiences of participants in this study raise some questions regarding whether the Work Capability Assessment (WCA) is effective at determining who is fit for work. In particular, the assessment should be revised to take better account of the impact of conditions that fluctuate over time and/or are less visible.

The next stage of the study

Sweep 3, which will commence in October 2014, will further explore the longitudinal impacts of benefit changes. It will also examine the role of organisations, social networks and sources of support in mediating the impact of welfare reform.