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Peter's blog

peter brown chief executive of herefordshire housingIn this blog series, the Chief Executive of Herefordshire Housing – Peter Brown – shares his thoughts on the big issues in housing.

“We get overwhelmed with information nowadays so I thought it would be helpful if I described my thoughts on topical issues. There will occasionally be guest entries, but as always, if you have any feedback, please contact me.”

Putting some myths to bed

I’ve been listening to the recent discussions around the EU referendum and the US Presidential election and getting a bit depressed. I’m not talking about the results, you can make your own mind up about that - and only time will tell. No, what’s been getting me down is the throwing around of claims and counterclaims, pretending to be facts. We all just end up totally confused. And in the absence of any ‘truths’, we have to judge whether we trust the individual, regardless of whether they are lying to us.

So I was interested when I stumbled across a survey by Ipsos MORI highlighting how wrong we can be on the size of key social issues.  In the interest of knowing the truth, I copy the top nine misperceptions below:

1.       Teenage pregnancy: on average, we think teenage pregnancy is 25 times higher than official estimates:  we think that 15% of girls under 16 get pregnant each year, when official figures suggest it is around 0.6%.

2.       Crime: 58% do not believe that crime is falling, when the Crime Survey for England and Wales shows that incidents of crime were 19% lower in 2012 than in 2006/07 and 53% lower than in 1995.  Just over half of us think violent crime is rising, when it has fallen from almost 2.5 million incidents in 2006/07 to under 2 million in 2012.

3.       Job-seekers allowance: 29% of people think we spend more on JSA than pensions, when in fact we spend 15 times more on pensions (£4.9bn vs £74.2bn).

4.       Benefit fraud: people estimate that 34 times more benefit money is claimed fraudulently than official estimates: the public think that £24 out of every £100 spent on benefits is claimed fraudulently, compared with official estimates of £0.70 per £100.

5.       Age: we think the population is much older than it actually is – the average estimate is that 36% of the population are 65+, when only 16% are.

6.       Benefit bill: people are most likely to think that capping benefits at £26,000 per household will save most money from a list provided (33% pick this option), over twice the level that select raising the pension age to 66 for both men and women or stopping child benefit when someone in the household earns £50k+.  In fact, capping household benefits is estimated to save £290m, compared with £5bn for raising the pension age and £1.7bn for stopping child benefit for wealthier households.

7.       Foreign aid: 26% of people think foreign aid is one of the top 2-3 items government spends most money on, when it actually made up 1.1% of expenditure (£7.9bn) in the 2011/12 financial year.  More people select this as a top item of expenditure than pensions (which cost nearly ten times as much, £74bn) and education in the UK (£51.5bn).

8.       Religion: we greatly overestimate the proportion of the population who are Muslims: on average we say 24%, compared with 5% in England and Wales.  And we underestimate the proportion of Christians: we estimate 34% on average, compared with the actual proportion of 59% in England and Wales.

9.       Immigration and ethnicity: the public think that 31% of the population are immigrants, when the official figures are 13%. Even estimates that attempt to account for illegal immigration suggest a figure closer to 15%.  There are similar misperceptions on ethnicity: the average estimate is that Black and Asian people make up 30% of the population, when it is actually 11% (or 14% if we include mixed and other non-white ethnic groups).

You can see the original source of this information here. And despite no. 6 above, on 28th November, the overall benefit cap will reduce from £26,000 to £20,000.

Council Tax…and how financial support has changed

Liam Jones, one of our specialist Financial Inclusion Officers tries to demystify the changes in Council Tax support.

The majority of us pay Council Tax…and most of us will feel like it goes up every year.

In fact there has been an increase in Herefordshire’s Council Tax Bills in 3 of the last 5 years, and this is likely to be 4 of the last 6 when it increases again in April 2016.

However since April 2013, if you rely on the support of benefits to pay your Council Tax bill then the amount of help you will have been able to claim has been reducing.

A boring bit of history now, but it will help contextualise the huge change over the last few years…..

Pre April 2013 Council Tax Benefit for low income households was the same throughout the country and claimants were able to claim benefit up to 100% of their council tax bill.

From April 2013 the government passed responsibility to each local authority to come up with their own Council tax benefit policy with the government footing the bill. Sounds easy enough…..but the catch comes when you realise that the government reduced the council’s budget to deliver their new policy by 10%. Therefore if Herefordshire Council wanted to provide the same level of support to its residents then it would have to cover the 10% deficit from their own budget.

Oh and one more thing…you can’t change the amount of help available to pensioners.

April 2013 arrived and Herefordshire Council decided to cap the amount of help it was able to provide to 91.5%. Every working age customer would have to pay 8.5% of their bill.

From April 2014 and April 2015 this reduced to 84%

And from April 2016 it will reduce to 80% (with certain groups protected at 84%)

So in 4 years certain low income households will have gone from paying £0 a year in council tax to 20% of their bill. The table below shows the increase in the minimum Council Tax bill for residents of Herefordshire over the last 5 years: (*figures based on Council tax bill for Hereford City for year 2015/2016)

Council Tax Year

Council Tax bill increase Council Tax Reduction available Minimum Council Tax Bill (£)
      Band A

( total bill – £1056)

Band B (£1232) Band C (£1408)

April 2012

0% 100% £0 £0 £0
April 2013 0% 91.5% 89.76 104.72

119.68

April 2014

1.9% 84% 168.96 197.12 225.28
April 2015 1.9% 84% 168.96 197.12

225.28

April 2016 3.9% 80% 211.20 246.40

281.60

To put this into context the table below shows the increase in basic rates of Job seekers allowance, Income Support, and Employment and Support Allowance over the same 5 year time period:

Year

Benefit Rate (per week)

April 2012

£71

April 2013

£71.70
April 2014

£72.40

April 2015

£73.10

April 2016

£73.10

A 20% increase in Council Tax payments with an extra £2.10 per week to cover it…..doesn’t take maths genius to realise customers will be out of pocket.

This has placed a huge squeeze on many of our tenant’s finances and with council tax recovery processes quite aggressive many incur extra recovery costs on top of their bill.

The struggle is clearly evidenced in the amount of summons’ Herefordshire Council have issued for non-payment of council tax. Herefordshire Council issued 4,900 summons in Council Tax year 2012/13…..this increased to 6,975 for 2014/15. So that’s an extra 2,000 customers having the £85 summons costs added to their bill.

Herefordshire Council isn’t on its own in reducing the amount of help its providing it residents. There are 75 other authorities offering support up to a maximum of 80% and over 50 authorities who offer less than 80%.

If you come across a Herefordshire Housing tenant struggling with Council Tax debts, please send them in the direction of our Financial Inclusion Officers.