the problems of homelessness: what's going wrong? homelessness, welfare reform and the social...

The problems of homelessness: What's going wrong? Homelessness, welfare reform

and the social impact of payday loans.

Dr Paul MonaghanGeneral Manager

Highland Homeless Trust Ltd.

Highland Homeless Trust

Challenging Homelessness

Homelessness

Roughsleeping or “Rooflessness”Living in unreasonable housing, e.g. dangerous, unhealthy or overcrowded conditionsLiving in temporary accommodationLiving in an institution, e.g. hospital or prisonLiving in insecure accommodation, e.g. no longer able to live in the family home

Homelessness is not having a permanent home!



Who is Homeless in Scotland (2012-13)

39, 827 households made homeless applications to their local council in Scotland. (13% decrease on the number of households who made homeless applications in 2011-12).

31,964 households were accepted by their local authority as homeless or potentially homeless.

There were over 18,000 children living in households accepted as homeless.

The number of households in Scotland accepted as homeless or potentially homeless has decreased by 19% since 2002-2003.

Source: Scottish Government, 2013




44% are single men21% are single women17% are single parents who are female6% are single parents who are male5% are couples with children4% are couples without children

The majority of evictions in the social rented sector are for non-payment of rent, with anti-social behaviour accounting for less than 6% of cases.





The most common previous housing circumstances of homeless people in Scotland are:

Living with family, friends or partner (45%)Private sector rented accommodation (17%)Council or housing association rented accommodation (12%)Prison (6%)Owner-occupier (5%)




The Scottish Government’s response

New targets introduced in 2012:1. No-one need sleep rough2. Existing homelessness is made more visible3. Sustainable resettlement is secured for people who become

homeless4. Fewer people become homeless in the first place5. The duration of homelessness is reduced

New focus on preventing homelessnessNew focus on fighting poverty and inequalityScotland recognised as having among the most progressive homelessness legislation in the world.



Absolute Poverty

Absolute poverty is:

‘A condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services.’

Source: United Nations, 1995



What’s Going Wrong?

The United Kingdom is now the 4th most unequal society in the developed world. Soon to overtake Portugal to become 3rd behind USA and Singapore. London is the most unequal city in the developed world. Wealth inequality is greater than any city in any developing country, e.g. Brazil, Mexico or Panama.

The richest 10% of adults have 273 times the wealth of the poorest 10%.

The richest 5 families in the UK hold greater wealth than the poorest 12.5 million individuals combined.

Source: Sheffield University, 2012




In the UK “the bottom 50% of households” own assets equivalent to just 9.9% of the UK’s wealth, i.e. less than £1 Trillion or less than an average of £30,000 per household. The “top 10% of households” own assets equivalent to 43.8% of UK wealth, i.e. around £4.5 Trillion or more than an average of £750,000 per household.

Source: UK Office for National Statistics, 2013




The United Kingdom is the only G8 state in which the International Red Cross currently provides humanitarian aid directly to citizens.

Source: Telegraph, 2013

Many households in the so called “bottom 50%” exist in absolute poverty.



The Welfare Reform Act 2012

To address poverty, UK Government policy is to encourage people off benefits and into work and training.




Mr Duncan Smith, the Secretary of State for Work and Pensions, believes that an individual should be able to live on £53.00 per week and that “work should pay”.

At the same time, he himself has claimed parliamentary expenses for lunches, haircuts, food for his own home, his laundry and even new underpants! His claims from public funds include £39 for a breakfast and £9 for a cocktail.

The Secretary has been accused of living in a different world!

Source: Daily Mirror, 2013




Demonisation of claimants as lazy scroungers.

Welfare Myths:

41% of the entire welfare budget goes on benefits to unemployed people

27% of the entire welfare budget is claimed fraudulently

48% of those claiming Jobseeker’s Allowance go on to claim it for more than a year

Source: The Independent, 2013




Demonisation of claimants as lazy scroungers.

Welfare Myths:

41% of the entire welfare budget goes on benefits to unemployed people. Actually just 3%

27% of the entire welfare budget is claimed fraudulently. Actually just 0.7%

48% of those claiming Jobseeker’s Allowance go on to claim it for more than a year. Actually just 27.8%

Source: The Independent, 2013




Welfare Cap set at £119.5 Billion – some benefits excluded Universal Credit – Direct payments, sanctions and principle of responsibilityBenefits Cap £26,000 – actually £18,000 if no childrenMonthly payments in arrearsRemoval of crisis loansRemoval of legal aidRemoval of funding to advice centres and advocacy services“Young” redefined as below 35 years of age rather than 25 years of age for the purposes of Housing Benefit and Local Housing AllowanceRecent initiatives to remove entitlement to Housing Benefit completely for every adult under 25 years. Estimated to effect 20,000 children in Scotland.

Source: BBC




UK Government policy is to encourage people into work and training. This often involves individuals undertaking ‘mandated work training’ in menial, unpaid training roles or face sanctions, i.e. Work Programme

Recent unpaid training opportunities advertised:

Unpaid “graduate trainee shelfstacker” at PoundlandUnpaid 25 week “work training” as a Fish Fryer in a chip shop‘Exotic Dancers’, ‘Hostesses’ etc.

All positions advertised via “Universal Job Match” with no scrutiny.




By 6 November 2013 Jobseekers Allowance was withdrawn from more than 400,000 people through sanctions. Lower level sanctions result in loss of benefit for up to 13 weeks for failures such as not attending an interview with a JobCentre Adviser. Benefit restarts automatically.

Intermediate sanctions are applied for failures such as not actively seeking work or not being available for work. Benefit is initially lost for a month, or 13 weeks for subsequently breaking the rules. Unlike an low level sanction, claimants must then reapply for benefits and start over.

The highest sanction sees Jobseeker's Allowance withdrawn for 13 weeks when, for example, an individual has left a job voluntarily. This rises to 26 weeks for a second "failure" and 156 weeks for a third.




The UK Government’s Work Programme helps fewer than 1 in 10 people back to work.The Work Programme has been shown to deliver poorer results than simply leaving the unemployed alone with UK Government doing nothing at all.The Work Programme has so far cost £5,000,000,000 and has missed every single performance target set.

Source: Telegraph, 2013

In the 3 constituencies of Chingford and Woodford Green, Wirrel and Witney nobody has ever been helped off any benefit and into work by the Work Programme.

Source: Inclusion, 2013




UK Government policy is to encourage people into work and training. If over 21 years any individual entering full-time training is required to “sign off” and has no entitlement to Local Housing Allowance or Housing Benefit and must rely solely on their bursary or grant. In practice this means they cannot afford to attend college unless they can meet their accommodation costs. JobCentre Plus now defines going to college as a “luxury”.

If over 19 years any individual taking up work will find that they cannot continue to live in Temporary Emergency Accommodation or Supported Accommodation as employment removes entitlement to Housing Benefit in these settings. In practice this means they cannot afford to take work unless they can immediately meet their accommodation costs to avoid homelessness.




Additional changes implemented via Universal Credit:

With few exceptions, all claims must be submitted electronically

All telephone numbers now 0870 and charged. UK Government made over £56 Million from this change alone in the last year.

Other service cuts:

Privatisation of welfare, e.g. Capability Assessments via ATSO, CapitaPrivatisation of NHS in England and Wales




‘Cuts to public services estimated to hit poorest tenth 13 times harder than richest tenth’

Source: Oxfam GB, 2013




Within the United Kingdom wealth is moving from the poorest to the richest.

For example: Bedroom Tax projected “saving” to the UK £832 million. Tax rebate to those earning over £150,000 p.a. projected “saving” to individual taxpayers of £1,315 million. Two changes implemented on the same day, only one publicised, with an obvious net cost.



The Welfare Reform Act 2012Bedroom Tax:82,000 households in Scotland affected (2,857 in Highland)80% involving a disabled person 15,500 households are families with childrenTypical reduction worth around £15.00 per weekBedroom Tax accepted to disproportionately impact upon disabled peopleMitigated in Scotland by Discretionary Housing Benefit Payments

Legislative error recently uncovered means that anyone who has lived in their house continuously since 1996 is not affected. Equivalent to around 15% of all claims. Some of those affected have already committed suicide.

Source: Welfare Reform Committee, Scottish Parliament, 2013




By October 2015 all claimants of Disability Living Allowance (DLA) will be reassessed by ATOS or Capita.

The assessment process for Personal Independence Payments, that replace DLA, can take up to 9 months.

560,000 claimants will be reassessed and “330,000 of these are expected to either lose their benefit altogether or see their payments reduced”.

Source: Esther McVey, Minister for Disabled People, 2013




Unclaimed benefits:

620,000 people fail to claim Employment Support Allowance to which they are entitled at a saving of £2.04 Billion to the UK Government.

1.58 Million people fail to claim their Pension Credits at a saving of £2.80 Billion

1.14 Million fail to claim Housing benefit at a saving of £3.1 Billion

2.34 Million fail to claim Council Tax Credit at a saving of £2.42 Billion

600,000 fail to claim Job Seekers Allowance at a saving of £1.95 Billion.

Total value of unclaimed benefits £12.31 BillionSource: UK Government, 2013




Universal Credit: "DWP seems to have embarked on this crucial project, expected to cost the taxpayer some £2.4bn, with little idea as to how it was actually going to work. Confusion and poor management at the highest levels have already resulted in delays and at least £34m wasted on developing IT” Result: budget to create Universal Credit has been increased by 60%.

Source: Public Accounts Committee, UK Parliament, 2013




UK political parties now arguing about who can make the biggest cuts to the welfare budget.

Currently promised to be a further £25,000,000,000

With promised reduction of a further £4,000,000,000 to local authority budgets in Scotland



Payday loans and Pawn Shops

Over 1,000,000 households now use “payday loan” companies regularly.

Source: Shelter, 2013




Wonga Payday Loan:

£150 borrowed for 18 days.

Interest charged £27.99 (5,853% apr.)‘Transmission fee’ £5.50Total repayment £183.49

Total cost for 18 days £33.49

Source: Wonga, 2014




Ramsden’s Personal Loan:

£260 borrowed over 26 weeks

26 payments of £16.80

Total interest £176.80 (793.8% apr.)

Total repayment £436.80Source: Ramsdens, 2014




CashGenerators Pawn £300 mobile phone:

Phoned valued at £100 so raises £100 for 28 days

Within 28 days “buy back” for £130.00 or

“Roll over” for a further 28 days at a cost of additional £30.00 or

Your property sold!Source: CashGenerators, 2014




Lending Stream Payday Loan - 5,387.8% apr.Wonga - 5,853% apr.Wage Day Advance - 7,069.3% apr.

24/7 MoneyBox - 17,203.7% apr.

Source: Various, 2014




An example of the social impact of poverty:

“Shoplifting now at nine year high with the cost of thefts rising by 62%”

Source: British Retail Consortium, 21-01-14




Another example of the social impact of poverty:

Enterprise Minister, Treasury Exchequer Secretary and Treasury Economic Secretary all have direct financial interests in payday loan companies and all supported the termination of crisis loans.

Source: Independent, 2013




Are we supporting the poorest and most vulnerable in our society into work and training or driving them further into absolute poverty because of

the political ideology of austerity?



What can we do?

Deliberately and visibly challenge austerity and inequality.

Show vulnerable, impoverished people they are not alone and provide them with support and guidance they need to shorten the time spent between housing crisis and recovery.

Establish a responsible and socially just alternative to payday loan companies and pawn shops.



Thank you very much



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