Additional government grant award frees up extra City Council funding to support benefits and homelessness services

Published: Friday, 16th February 2018

In a last minute addition to its draft budget for 2018/19, Oxford City Council has been notified of an extra £193,000 in funding from the Department for Work and Pensions (DWP).

The additional award has produced a surplus that the council intends to utilise through an allocation of £100,000 to its Benefits service to ease pressures arising from Universal Credit rollout, and £93,000 to its Homelessness reserve fund.

The extra funding comes as part of the DWP’s administration grants for housing benefit and council tax support. The council had budgeted for support grants totalling £425,000. The delayed rollout of Universal Credit in October 2017 means that reductions in the council’s housing benefit caseload were lower than expected, and the DWP also applied a lower cost saving than originally estimated by the council.

The actual grants awarded by the DWP for housing benefit and council tax reduction administration totalled £618,000.

On 30 January, Oxford East MP Anneliese Dodds used a parliamentary question to ask about the average number of notices and the cost of sending these to councils as people moved from housing benefit to Universal Credit. Alok Sharma, DWP Minister of State, replied that these notices were sent at “nil cost”.

The DWP shares automated data about benefit changes with the council’s Benefits service. Even though Universal Credit means that fewer working age people are now getting housing benefit, the number of benefit changes – due to monthly notifications of Universal Credit awards – has more than tripled in a year, from 1,123 to 3,668.

The council must process these notifications within five working days even when they have no effect on entitlement to benefits it pays – namely, housing benefit, council tax reduction and discretionary housing payments.

Universal Credit notifications affect the council’s ability to process timely changes to its housing benefit caseload, which could mean loss of housing benefit subsidy. The extra workload is now equivalent to one benefit assessment officer a day. The ongoing rollout of Universal Credit means the council predicts this workload will rise to around 12 officers by 2020.

Councillor Susan Brown, Leader of Oxford City Council and Board Member for Customer and Corporate Services, has written to Anneliese Dodds MP to explain the cost to the council of processing Universal Credit notifications.

Councillor Brown said: “Our Benefits service has seen a substantial increase in workload since the rollout of Universal Credit full service began in October. Unfortunately, this frequently includes notification of Universal Credit awards that are blank or duplicates, that should have gone to other local authorities, or that have no direct impact because we are not paying any benefit to the claimant ourselves.

“While sending electronic Universal Credit notifications may cost the DWP nothing, processing them is proving very costly for Oxford City Council and council tax payers. Based on current caseload, we estimate that processing Universal Credit notifications will cost us around £35,000 a year – and this will only go up as Universal Credit rollout continues unless something is done.

“I have written to Anneliese Dodds to express my concerns, and I hope that the issues I have raised will be addressed by the DWP. In the meantime, we will spend an extra £100,000 in 2018/19 to employ more people in our Benefits service, so we can cope with the extra workload and ensure that we can pay housing benefit to people entitled to it in a timely manner.”       

£93,000 of the unexpected addition to the council budget will also go into the council’s Homelessness reserve for 2018/19.

There were 61 rough sleepers counted on the city’s streets during the 2017 street count, and the council estimates that there could be up to 89 rough sleepers in Oxford on any given night.

The draft budget proposes to increase funding for services to help rough sleepers from £1.4 million a year to £1.6 million a year from 2019/20. It also proposes to contribute an additional £187,000 to the Homelessness reserve for the period 2019 to 2022.

Councillor Mike Rowley, Board Member for Housing, said: “Oxford does more than most councils to help rough sleepers and prevent homelessness, but we are in the middle of a national homelessness crisis and we want to do more. We are working with a wide range of partners – both individuals and organisations – to realise a common vision that nobody should have to sleep rough on Oxford’s streets.

“The additional funding we are putting in place over the next four years will help us to tackle homelessness in Oxford. This includes transitional funding to keep Simon House open next winter for rough sleepers with a local connection while A2Dominion builds a new hostel in Cowley. It also includes increased support for Housing First provision, which helps rough sleepers into accommodation as a first step, and then builds the wraparound support they need to help prevent them returning to the streets. This unexpected addition to our reserves will help us to build extra resilience to cope with the challenges we will face over the coming years.”

Full council will vote on the draft budget on Monday 19 February.