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Deven Ghelani
Policy in Practice
LACEF
Debt, Financial Resilience
and Vulnerability.
We make the welfare system
simple to understand, so that
people can make the decisions
that are right for them
We help people toward
independence by making
government policy simple to
understand.
333
Why are people in debt?
Wider welfare reforms and austerity
People are worse off
Tackling debt, financial resilience and vulnerability at LACEF
Tackling debt, financial resilience and vulnerability at LACEF
• 1.6 million people on Universal
Credit today
• A further 1.6m people moving onto
Universal Credit this year
• 2 million people moving on through
‘managed migration’ from 2020
Key Recommendation:
The DWP and councils can identify
these pressure points, and act
proactively to prevent hardship and
ease the transition to Universal Credit.
Universal Credit is rolling out fast
The average amount of income after
costs for low income households is
£452/month.
• With a deal, income after costs
falls by £100 per year (on
average).
• Under a no deal scenario, which
looks unlikely, income after costs
falls by £250 per year.
• However, unemployment and a
weaker economy driving
austerity could lead to Brexit
impacting incomes by as much
as £1400 / year.
The impact of Brexit
CPI is forecast to hit 3.7% due to devaluation, plus a
further 1% impact on costs due to tariff / non-tariff
barriers.
Unemployment + 0.3% with a deal
Unemployment + 2.6% in a no deal scenario
Cost avoidance through reimagine debt interventions:
• Court costs of enforcement and better collection
• Eviction (referred to panel) and care costs for children
(direct care costs and impacts of moving schools)
• Improved wellbeing and better mental health
outcomes (17% of cohort), e.g. lower GP / Medication
costs (no longer losing sleep, less anxiety, depression,
leaving the house)
• Advisors had impacts on other outcomes too, clients
could be suicidal, facing domestic violence, have
language barriers to overcome, or parental conflict
(parents with non-dependant children)
The impacts of indebtedness
111111
Policy in Practice has been asked by the
Cabinet Office to conduct analysis in support
of a project on the management and
collection of local and central government
debt.
Building on the successful ‘Reimagine Debt’
pilot, the project as a whole seeks to
understand the role of data to generate a
consolidated household level view of debt.
Consolidated debt data, placed in the
context of a household’s wider economic
circumstances, can create a culture of
holistic, proactive and effective service
delivery across local & central government.
Phase 1 of the project saw Newcastle and
Barking and Dagenham councils manually
pool debt data on 39 families to offer them
debt guidance. Phase 2 looks at how this
approach can be scaled to deliver benefits to
the public.
Reimagine Debt
We pool your datasets on
low income families, and link
them over time to create a
single view
Our policy engine shows
the impact of all policies,
now and in the future, on
each family
The insights enable you to
proactively identify who
needs what support,
engage people and track
impact
Household data + Advanced Analytics
16,934 low income households in Neath Port Talbot
2,596 are in council tax arrears
1,255 owe more than one month’s council tax
205 of them are impacted by welfare reform
59 of whom face an ongoing cash shortfall
… and seven will be worse off under Universal Credit
Focus on 1 household
Engage through tailored calculation
Policy / legislative awareness: Look into the three cases where DHPs were
refused. If households affected by welfare reforms had been made aware of
DHPs earlier, then arrears could potentially have been avoided.
Ensure take-up of benefits: many of the improved cases started claiming
Housing Benefit and/or Council Tax Support for the first time.
What counts as an improvement?: There are cases where arrears have
worsened, but their lives may have improved in other aspects (ie they have
started work, agreed a payment plan). We need to track these households over
a longer time period.
Many of the improved households had changed utility provider: Is this a large
opportunity, and does it have implications for the involvement of third parties
eg. utilities?
Consider differences in outcomes between Advisors: 90% of Advisor 3's clients
saw their level of debt improve - compared to 63% of Advisor 2's and 43% of
Advisor 1's. Are different Advisors taking different approaches, and can
improved approaches be scaled?**
Lessons learned in Barking
We tracked the debt severity, living standards, financial resilience and other outcomes for 21 households across Barking
and Dagenham across eighteen months.
• 3 households moved out of arrears completely
• Average arrears fell by £1,100
• Across the 21 households, the total rent arrears balance fell by £17,600 and the total council tax arrears balance fell by
£5,500
The outcomes of reimagine debt
www.policyinpractice.co.uk
Thank you
Deven Ghelani
deven@policyinpractice.co.uk
07863 560677
Adam Kenny
adam.kenny@policyinpractice.co.uk
A team of
professionals
with extensive
knowledge of the
welfare system
who are
passionate about
making social
policy work
We help over 80
local
authorities use
their household
level data to
identify
vulnerable
households,
target support
and track their
interventions
Our benefit
calculator engages
over 10,000 people
each day.
We identify the
actions people can
take to increase
their income,
lower their costs
and build
resilience

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Tackling debt, financial resilience and vulnerability at LACEF

  • 1. Deven Ghelani Policy in Practice LACEF Debt, Financial Resilience and Vulnerability.
  • 2. We make the welfare system simple to understand, so that people can make the decisions that are right for them We help people toward independence by making government policy simple to understand.
  • 4. Wider welfare reforms and austerity
  • 8. • 1.6 million people on Universal Credit today • A further 1.6m people moving onto Universal Credit this year • 2 million people moving on through ‘managed migration’ from 2020 Key Recommendation: The DWP and councils can identify these pressure points, and act proactively to prevent hardship and ease the transition to Universal Credit. Universal Credit is rolling out fast
  • 9. The average amount of income after costs for low income households is £452/month. • With a deal, income after costs falls by £100 per year (on average). • Under a no deal scenario, which looks unlikely, income after costs falls by £250 per year. • However, unemployment and a weaker economy driving austerity could lead to Brexit impacting incomes by as much as £1400 / year. The impact of Brexit CPI is forecast to hit 3.7% due to devaluation, plus a further 1% impact on costs due to tariff / non-tariff barriers. Unemployment + 0.3% with a deal Unemployment + 2.6% in a no deal scenario
  • 10. Cost avoidance through reimagine debt interventions: • Court costs of enforcement and better collection • Eviction (referred to panel) and care costs for children (direct care costs and impacts of moving schools) • Improved wellbeing and better mental health outcomes (17% of cohort), e.g. lower GP / Medication costs (no longer losing sleep, less anxiety, depression, leaving the house) • Advisors had impacts on other outcomes too, clients could be suicidal, facing domestic violence, have language barriers to overcome, or parental conflict (parents with non-dependant children) The impacts of indebtedness
  • 11. 111111 Policy in Practice has been asked by the Cabinet Office to conduct analysis in support of a project on the management and collection of local and central government debt. Building on the successful ‘Reimagine Debt’ pilot, the project as a whole seeks to understand the role of data to generate a consolidated household level view of debt. Consolidated debt data, placed in the context of a household’s wider economic circumstances, can create a culture of holistic, proactive and effective service delivery across local & central government. Phase 1 of the project saw Newcastle and Barking and Dagenham councils manually pool debt data on 39 families to offer them debt guidance. Phase 2 looks at how this approach can be scaled to deliver benefits to the public. Reimagine Debt
  • 12. We pool your datasets on low income families, and link them over time to create a single view Our policy engine shows the impact of all policies, now and in the future, on each family The insights enable you to proactively identify who needs what support, engage people and track impact Household data + Advanced Analytics
  • 13. 16,934 low income households in Neath Port Talbot
  • 14. 2,596 are in council tax arrears
  • 15. 1,255 owe more than one month’s council tax
  • 16. 205 of them are impacted by welfare reform
  • 17. 59 of whom face an ongoing cash shortfall
  • 18. … and seven will be worse off under Universal Credit
  • 19. Focus on 1 household
  • 20. Engage through tailored calculation
  • 21. Policy / legislative awareness: Look into the three cases where DHPs were refused. If households affected by welfare reforms had been made aware of DHPs earlier, then arrears could potentially have been avoided. Ensure take-up of benefits: many of the improved cases started claiming Housing Benefit and/or Council Tax Support for the first time. What counts as an improvement?: There are cases where arrears have worsened, but their lives may have improved in other aspects (ie they have started work, agreed a payment plan). We need to track these households over a longer time period. Many of the improved households had changed utility provider: Is this a large opportunity, and does it have implications for the involvement of third parties eg. utilities? Consider differences in outcomes between Advisors: 90% of Advisor 3's clients saw their level of debt improve - compared to 63% of Advisor 2's and 43% of Advisor 1's. Are different Advisors taking different approaches, and can improved approaches be scaled?** Lessons learned in Barking
  • 22. We tracked the debt severity, living standards, financial resilience and other outcomes for 21 households across Barking and Dagenham across eighteen months. • 3 households moved out of arrears completely • Average arrears fell by £1,100 • Across the 21 households, the total rent arrears balance fell by £17,600 and the total council tax arrears balance fell by £5,500 The outcomes of reimagine debt
  • 24. A team of professionals with extensive knowledge of the welfare system who are passionate about making social policy work We help over 80 local authorities use their household level data to identify vulnerable households, target support and track their interventions Our benefit calculator engages over 10,000 people each day. We identify the actions people can take to increase their income, lower their costs and build resilience

Editor's Notes

  1. Analytics – Software – Policy