CYP(3)-7a

Children and Young People Committee

Inquiry into Child Poverty

Additional Evidence from Citizens Advice

Child Poverty Inquiry: Additional Information from Barnardo’s Cymru

Citizens Advice Cymru welcomes the opportunity to respond to the scrutiny inquiry by the Children and Young People Committee.

Background: role of the Citizens Advice service

The Citizens Advice Bureaux (CAB) service is the largest integrated network of independent advice agencies in Wales with service delivered from 52 main offices and 159 secondary advice outlets. Each CAB offers access to services by telephone, which is available 670 hours per week and the CAB service have arrangements in place to provide home visiting where necessary in every County.  The local CAB service is delivered by the efforts of a variety of people. There are 1,605 people involved in the CAB service in Wales.  Of these, 75% are volunteers.  

The Citizens Advice service provides free, independent, confidential and impartial advice to everyone on their rights and responsibilities. It values diversity, promotes equality and challenges discrimination.

 The Twin Aims of the Citizens Advice Bureau service are

• to provide the advice people need for the problems they face
• to improve the policies and practices that affect people’s lives.

Local Bureaux, under the terms of membership of Citizens Advice (the operating name for the National Association of Citizens Advice Bureaux), provide core advice based on a certificate of quality standards on consumer issues, welfare benefits, housing, taxes, health, money advice, employment, family and personal matters, immigration and nationality and education.  

Evidence from Citizens Advice clients: key issues

In the year 2006/07, Wales Citizens Advice Bureaux dealt with 281,219 client issues.  These included 95,674 enquiries related to welfare benefits and tax credits; 91,368 enquiries in relation to debt; 19,501 related to employment; 15,536 housing issues and 12,481 legal issues.  See table below for full breakdown of main headline enquiry areas.  

CAB client issues in Wales, 2006-7

As can be seen from the table, the majority of these queries were concerned with benefits and debt.   Citizens Advice Bureaux in Wales dealt with a combined total of over 187,042 debt and benefits client issues in 2006-07.

Policy Context in Wales

The percentage of children living in poverty Wales has reduced from 33% to 27% as a result of the combined effect of fiscal measures at Westminster, specifically benefits and tax credit policy, and an increase in employment in Wales.   (During the Second National Assembly 2003-07)

The Wales average for the proportion of children living in poverty is now the same as the average for the rest of the UK.

Poverty still affects 170,000 children in Wales.

The WAG Child Poverty strategy, launched in February 2005, gives a commitment to eradicating child poverty in Wales by 2020.   This has been endorsed by the One Wales Agreement.   We welcome the ambitious targets set by WAG and its commitment to use the powers at its disposal to combat child poverty.   It would be helpful to have more information on how these targets, in addition to the 2010 milestones, will be met when WAG is unable to directly address poverty via the benefits and taxations system.   

Citizens Advice Cymru welcomes calls made by other NGOs in support for the establishment of a Child Poverty Unit within WAG to ensure strategic direction to Government policy.

In October 2006, WAG published its Child Poverty strategy entitled 'Eradicating Child Poverty - Measuring Success’.   In common with an earlier DWP paper, WAG introduced new criteria for measuring Child Poverty.   For future milestones, WAG (and the DWP) have set new measuring criteria all based on a Before Housing Cost criteria.   After Housing Cost criteria have been dropped as calculi.   Across the UK this means that based on the 2004/05 milestones a million children are not statistically calculated as being in poverty.   Citizens Advice Cymru is concerned that in a climate of inflationary pressures on housing budgets, that solely using Before Housing Cost to measure poverty does not give a true reflection of the levels of children living in poverty- as any increase in Before Housing Cost income does not necessarily lead to an improvement in quality of life.    This is of particular importance when considering the effects of the recent Westminster Budget.

Citizens Advice Cymru Response to the 2008 Westminster Government Budget

Citizens Advice Cymru welcomes the announcement to increase Child Benefit to £20 a week for the first child, beginning in April 2009.

Citizens Advice Cymru also welcomes the increase to Child Tax Credit by £50 a year in real terms from April 2009.

We welcome the announcement that from October 2009, Child Benefit will be disregarded when calculating housing and council tax benefit.  However, as Wales has a higher percentage of owner occupiers as a percentage of its housing make up, this is likely to have less of an impact in Wales than in England.

We welcome the proposal for proactive support for vulnerable tax credit customers to help ensure renewal within timeframes in order to avoid overpayments.

We are concerned that increasing inflation in energy and food prices in particular will negate progress made in the Budget.   WAG should measure the increase in prices in these sectors and consider innovative means of helping families ease the financial burden.

We are also very worried about the effect on children living in a household with one or more disabled parent following the Budget.   We are concerned at proposals that from 2010 all long term recipients of Incapacity Benefit will be asked to undertake a Work Capability Assessment.   We are concerned that the assessment is untested on a wide scale, in particular as it relates to the new Employment Support Allowance (ESA), which is not due to be scheduled for introduction until October 2008.   Citizens Advice believes that it is premature to make this commitment before the ESA system is operational and is found to genuinely help people with disabilities seek and retain employment.

The Budget announced funding for the piloting of enhanced work-focussed services for parents in 30 children centres in 10 Local Authority areas in England and Wales. This will include placing HMRC advisers to help people claim tax credits - particularly childcare element and help them keep their awards up to date.   Citizens Advice Cymru welcomes such initiatives by HM Treasury, and would like at least one Welsh Local Authority Area to be included in the pilot.  We urge WAG to make representations to the Westminster Government on this issue.

Benefits and Tax Credits

Overpayments of benefits cause considerable stress and uncertainty to claimants.   Citizens Advice Bureaux report dealing with cases of overpayment as one of their major areas of work.  Clients who have experienced problems with the reclaiming of overpayments, are often discouraged from making future legitimate claims.   

Citizens Advice would like HM Treasury commit to offsetting all overpayments that arise from failure to report a change in circumstance that has not resulted in a decrease in their award.  Currently some claimants who fail to notify of changes in circumstances are forced to pay virtually the whole entitlement back, even if there has been no change in the amount of money received, leading to severe financial hardship.   Citizens Advice evidence suggests that most overpayments result following a change of circumstance rather than rises in income.   Citizens Advice would like to see standardisation of recovery practices by HMRC; and an agreement not to recover both old and new overpayments at the same time. We would also welcome an adoption by HMRC of the DWP practice of offsetting against an overpayment, the sum which should have been payable.

In its report, 'Out of Reach: benefits for disabled children’, the Child Poverty Action Group argued 'that increasing take-up of DLA is an effective way of targeting support to the poorest families and enables parents to purchase essential preventive and support services for children who face significant barriers to education, training and employment. Improving take up would take the Government some way towards reaching its 2010 target to halve child poverty. Citizens Advice would like the Welsh Assembly Government to actively encourage the take-up of DLA for children in Wales.  We welcome the funding which has been provided to the Better Advice Better Health project.  

Cost of Education

Citizens Advice is currently campaigning to raise awareness of the cost of schooling.  

For the vast majority of children, securing a decent education is a critical factor in determining success in adult life.  Yet for a whole host of reasons, children from low income families are less likely to flourish at school. Research has found that for these children, their experience of school can be divisive and contribute to exclusion. Children are suffering during their school years, and are likely to experience disadvantage in their working lives.

The high costs associated with attending school can have a severe impact on low income families.  Families can face hardship and children are at risk of exclusion if they are not in the correct uniform or unable to afford to participate in activities and trips.

The WAG issued guidance to LEAs in 2005 to introduce statutory grants of £85 to children who are eligible for free school meals.  Citizens Advice Cymru endorsed the policy as a positive step to reduce discrepancy of support within Wales.  We remain concerned however at the implementation of the grant and the action of some LEAs in reducing or scrapping discretionary grants as a result of the policy.   Citizens Advice Cymru has found evidence that 5 Local Authorities have scrapped their discretionary grants following the introduction of statutory school uniform grants, and that 8 in total do not offer any sort of discretionary grant aid.  (View Appendix 1 & ).

In September 2007, Citizens Advice published the results of its joint survey 'Adding Up: The Range and Impact of School Studies’.   The survey indicated that three quarters of secondary school parents and two thirds of primary school parents found it difficult to meet the costs of school trips.   Furthermore the study reported that only 1 in 4 parents were aware that support was available to fund school trips for children from low income families.   Respondents to the survey further indicated that 79% of Secondary School parents and 71% of Primary School parents found it difficult to meet other education related costs such as the cost of photographs; equipment for lessons and non school uniform days. In England, the regulations were changed to make it easier for parents or guardians on Pension Credit (Guarantee Credit) to get help with costs of residential school trips. The regulations in Wales were not altered to allow for this. We would welcome the introduction of this provision in Wales.

Citizens Advice Cymru believes that a study of the cost of education should be undertaken by the WAG, to provide comprehensive evidence to help formulate effective policy for addressing the cost of education on low income families.   We also urge that WAG consider detailed recommendations made by the End Child Poverty Network in their briefing paper 'The Cost of Education’.   

We are concerned at the delay in introducing a new Admission Code and Admission Appeals Code which was due to come into force in June 2008 but has yet to go out for consultation.   The WAG has issued guidance on school uniform costs and provides grants at the point of transition to secondary education. However, the DCSF code also covers issues such as school trips, voluntary contributions etc.   Deferring consultation means that any new admissions code for Wales will now come too late to affect school entry in September 2008.

We welcome the Legislative Competence Order relating to Education and Training (Additional Learning Needs)  and the possibilities it  offers to bring forward measures for special educational provision for children, young people and adults with additional learning needs.

Education

Wales has the highest proportion of the population without basic literacy skills and the second highest without basic numeracy skills of any area in the UK.  Given the significant correlation between poverty and educational attainment on a longer term basis, the low educational achievements in Wales must be addressed as part of a comprehensive strategy to address child poverty.

Rural Context

WAG anti poverty strategies tend to be targeted on the most deprived communities based on the Welsh Index of Multiple Deprivation.   This fails to identify or target deprived individuals and households living in less deprived areas. This is particularly likely to affect rural communities. Individuals and households are often disadvantaged within relatively prosperous communities, and small pockets of deprivation exist in otherwise prosperous areas. Those individuals and households may often suffer disadvantage arising from several causes at once such as debt, lack of services, lack of public transport and isolation.   It is important not to address causes of disadvantage in isolation but in the complex interlinked nature in which they occur in many individuals’ lives.

In rural areas the low density of population can mean that the provision of a range of services may be sparser, with a lack of choice, a lower level of service available or a need to travel to access services.  Similarly, the range of choice in employment and housing is likely to be more restricted than in urban areas.  Living in a rural area can often have a substantial impact on how these issues affect people.

Low incomes, dependence on welfare benefits, lack of affordable housing and poor transport infrastructure are all contributory factors to indebtedness.   Bureaux evidence indicates that all these areas are prevalent in rural areas.    Low incomes and seasonal work is a significant factor in the rural economy and has a significant impact on child poverty.   People unable to find employment will normally be dependent on welfare benefits.  Distance from Jobcentre Plus and other offices may exacerbate the problems which people find themselves in.   Particular problems have occurred as a result of closure of DWP Offices and Jobcentre Plus Offices in rural areas and limited facilities in others.  For instance Bureaux in Wales has received evidence from clients who have had to borrow money to travel to the appropriate office to receive crisis loans via the Social Fund.

Housing

Homelessness and access to housing can have a significant effect on child poverty.   

Citizens Advice Bureaux have identified extensive evidence from bureaux across Wales of local authority and housing association tenants facing possession action on grounds of rent arrears, before all other avenues to recover arrears have been explored.  We have suggested a number of steps that the Welsh Assembly Government could take to discourage this practice and ensure more sustainable tenancies.  These include introducing performance indicators, a joint statement of practice for arrears recovery, better liaison between social landlords and housing benefit departments, arrangements for independent advice for tenants in arrears and steps to discourage possession action on "ground 8”.  

A Citizens Advice Cymru report on housing benefit administration in Wales recently highlighted two overarching causes of problems with the administration of housing benefit - delay and poor communication - and the detrimental impact this can have on tenants and their families.  Uncertainty about payment or eligibility and the subsequent threat of homelessness is a significant issue for anybody wishing to enter the workplace, which in turn has an impact on local economic development.  Delays tend to impact more on people who experience frequent changes of circumstances.  This is particularly pertinent in rural areas where seasonal employment is prevalent, for example, in Ynys Môn and on the North Wales coast.  The Welsh Assembly Government should work with WLGA to explore ways of encouraging better practice by local authorities.

Citizens Advice is concerned that when homeowners fall into arrears with their home loan, mortgage lenders’ arrears collection and enforcement practices exacerbate the problems faced by borrowers rather than resolve them.  In particular we are concerned that lenders take possession action for arrears rather than accept instalments off the arrears.  In the last two years, the CAB service across England and Wales has seen an 11% increase in the number of problems about mortgage and secured loan arrears.  Where arrears lead to repossession action, people are likely to lose their homes and require re-housing by the local authority.  

At present, people in work but on low incomes cannot receive financial help with mortgage interest.  Citizens Advice believes there is a compelling case for helping low income homeowners via payment of housing benefit, on a similar basis to working tenants. Under the current system homeowners are penalised by the benefits system, and may not be able to afford to return to or continue in work because of lack of housing support.  We recommend that WAG make representations to the UK Government on this issue.  This measure could help support sustainability of homeownership and also enable people to keep their own homes, which will help the economic and social viability of local communities.

Tenancy Deposit Scheme - Citizens Advice is delighted with the success of the Tenancy Deposit Scheme which helps protect families living in rented accommodation from unwarranted loss of deposits.  Since its introduction, the TDS has safeguarded £885m of tenant’s deposits.   The aim of the scheme is to prevent bitter disputes between landlords and tenants over deposits at end of tenancy.  However we are concerned that a reported 22% of landlords remain unaware of their legal obligations under the Scheme.   As the average tenancy deposit in England and Wales is now over £1,000, we would welcome greater effort by all tiers of government to ensure compliance to the scheme in order to reduce tenancy deposit abuse and the particularly acute effects it can have on low income families.

We  are concerned that the introduction of Local Housing Allowance, with its provisions that housing benefit will usually be paid to the tenant , not the landlord, may act as a disincentive to landlords to let to prospective tenants who are, or seem at risk of becoming, on benefits.  This could make finding a home in the private rented sector even harder for low-income families.

Health

Citizens Advice Cymru urges WAG to specifically concentrate on access to health services and education of healthy living lifestyles for very young children.   A lifetime of ill health can often be a legacy of unhealthy living habits during early years and lack of access to healthcare services.   We are particularly concerned about access to dentistry, especially in rural areas.  We would like to see specific health strategies created for early years to build healthier lifestyles.  We welcome proposals by the WAG to improve nutrition at state schools; the establishment of primary health care centres in areas of greatest need; and a specific health plan for rural Wales.   We would welcome innovative proposals to encourage healthy living at a very young age.

The 'Better Advice, Better Health’ scheme operated by Bureaux in various primary health care settings, also receives referrals from midwifes and nurses based in the community.   The scheme whilst receiving an annual budget of £700k from the WAG Health Department since 2001, does not get adjusted for inflation increases.   Citizens Advice Cymru calculates a shortfall for the coming financial year of £170k.  Consequently Bureaux are reducing service provision under the scheme for the current financial year.  

Employment

Low wages and lack of employment opportunities are a major factor in financial disadvantage.   GVA in West Wales and the Valleys are amongst the lowest in the EU 25.   The creation of a high skilled, well paid employment is a key objective in strategies to reduce child poverty.

In addition to wider economic development strategies, we would specifically welcome the creation of a Low Pay Unit within WAG to concentrate on tackling the low wage nature of the Welsh economy.

Citizens Advice Cymru is very concerned about proposals by the Westminster Government to introduce regional pay structures across the public sector.   Wales is more reliant on the public sector than other regions of the UK, and therefore the introduction of regional pay is likely to exacerbate growing regional and individual wealth inequalities within the UK with particular ill effects on low income Welsh public sector workers.   We fear that differential rates of public sector pay could lead to the economic migration of Wales’ most talented public sector workers to areas of the UK where pay is more competitive.  This could lead to the brain drain of the sort of public sector workers needed to deliver effective anti poverty policies and strategies.

We support the Westminster Government’s proposals that people should be better off in work but are concerned that estimates of how much someone will be better off often fail to take account of the full range of individual factors including all passported benefits and the drop of tax credit income at the end of the first year.  We were disappointed that the Government’s position changed from saying that claimants would not be expected to take a job if they would not be better off as a result, to guaranteeing they would be better off in the short term by introducing another temporary credit.  In order to be better off many households will be reliant on short term boosts to their incomes such as the new in-work credit, the proposed in-work better off credit and the higher rate of tax credits available in the first year of returning to work.  Short term income boosts are complex and if not properly explained and budgeted for can result in later debt when these income sources dry up - or worse still individuals could end up leaving work again.  Better off calculations themselves should recognise that the loss of benefits such as free school meals, usually as soon as someone enters work can mean that in fact people can be little better off overall.  We urge WAG to ascertain from the Westminster Government whether or not additional costs such as travel or the loss of free school meals will be taken into account when assessing whether someone will be better off in work.

We welcome the  substantial commitments made in the One Wales Agreement to improve provision of affordable child care.   Citizens Advice Cymru views universal provision as a key component of WAG anti child poverty strategy as it enables parents to increase income via employment.   We are anxious that strategies to increase universal affordable child care are implemented on an all Wales level.  

Access to Financial Services

Access to bank accounts is crucial if financial exclusion is to be tackled successfully.  Having a bank account helps to make people "job ready” since almost all employers now insist on paying people directly into bank accounts. It also enables people to obtain cheaper deals on fuel, insurance and credit.  Equitable access to banking services could therefore have a dramatic effect on helping low income families.

Citizens Advice has campaigned for a number of years to improve access to free cash machines.    In 1999 virtually all cash machines in the UK were cash free.  However, by 2006 over 40 per cent of the 58,000 ATMs charged a fee.   Surveys carried out across the UK by the Citizens Advice service in 2006 identified a number of problems, including the fact that some people have effectively no choice when it comes to using fee-charging machines.     Enabling all bank customers to withdraw their money from the post office would not only provide greater convenience for bank customers but could also help to enhance the viability of rural post offices.  However, current central government policy is leading to a reduction in the number of post offices in all areas.    We would like to see the Welsh Assembly Government mapping the location of fee charging ATMs and establish ease of access to free ATMs, including working with local authorities to encourage them to secure placement of free machines on council property to help meet financial inclusion goals.

Access to basic bank accounts and availability of free ATMs is likely to become even more of an issue with the introduction of Local Housing Allowance which will usually be paid to the tenant and must normally be paid into an account.

Access to Advice

CAB has a clear vision and purpose for the delivery of its independent advice and support services. Every person in Wales should be able to enforce their legal and human rights and every person should be able to campaign for change where existing rights are inadequate.   In order to achieve this the Citizens Advice Cymru is committed to achieving the creation across Wales of a strong and sustainable bureau network which provides excellent and accessible advice services and which is respected.  There remain in Wales areas of inadequate core funding and consequently little capacity to develop new and additional funding streams.    Specialist advice is still inadequate to meet demand for every part of Wales.   Gaps have been identified in the field of employment advice which we have been unable to fill.  Where services are available some bureaux operate waiting lists.  

We consider that we are particularly well placed to help tackle social exclusion and the advice we give can have large implications for the client, community and economy.  Many of our users tend to be those on low incomes experiencing problems with their benefits, housing, employment and debts including low income families.

Bureaux raise the income of over one third of their clients.

We are concerned about the increasing complexity of incomes.  The Westminster Government seems to be increasingly keen on providing low income families with bits of money for different purposes from different government departments without considering the complex and sophisticated administrative systems that will need to be in place to ensure take-up as well as stability of income.  This increases the complexities of take-up and the need for Government departments and systems to be joined up.  For example, two in-work credits via Jobcentre Plus, tax credits via HMRC, Sure start maternity grant via Jobcentre Plus, healthy start vouchers from department of health (but dependent on HMRC), new health in pregnancy grant via HMRC as well as core income from HMRC via child tax credit or child benefit.   The complexity of the administration of the Benefits system indicates the importance of access to independent advice.

We believe that the development of an equitable, sufficient, and sustainable funding base encompassing both the Welsh Assembly Government and Local Government would allow the development of an effective and efficient service which would have the capacity to sustain a 'rights based’ Wales as part of the Citizens Centred Approach and complement efforts by both the Westminster Government and WAG to eradicate child poverty.

Outcomes of Wave One of a Longitudinal Study of Citizens Advice Bureau Clients in Wales - Bangor University and Citizens Advice Cymru

The research set out to assess the impact of Citizens Advice Bureau advice on health and quality of life of a random sample of CAB clients receiving casework/specialist level advice in relation to Welfare Benefits, Debt, and Discrimination problems in Wales.

During the research 50 clients with dependent children were asked, whether their child or children had gone without specific items due to a shortage of money during the past year.  82% of respondents (41) said they had.   The results are summarised below.

Table 1 - Items Child has Gone Without in the Last Year

The study found that 33 of the 41 clients who had gone without a particular item had gone without multiple items.

Furthermore, the deprivation experienced by these children does not fully convey the deprivation experienced at household level.   The study found evidence that parents were likely to sacrifice their own personal well being in order to provide for their children.  Of the 9 clients who reported that their child 'never goes without’ it should be noted that 5 came to the CAB for advice on debt problems.   8 of the 9 had financial problems, most of which were serious.   The study concluded that wider debt problems were created in order enable parents to provide for their children.

CAB Case Study Evidence

A North West Wales couple came to the Bureau with virtually no money because their income support was not due and, since they had provided insufficient information in applying for child benefit, it had not yet been awarded. The local Jobcentre Plus could not deal with crisis loans, and sent the clients to another office, involving a 50 mile round trip. Although the local Jobcentre Plus would have paid the bus fare, by the time they had caught the next bus, they would have risked arriving after the other office had closed.  They decided to wait another day and try and borrow money from friends to tide them over.

An eligible lone parent client living in private rented accommodation in Flintshire was refused Sure Start Maternity Grant. The client applied for SSMG when her daughter was born and received a refusal letter.  The client was in receipt of tax credits but was not told in her refusal letter why she had been refused the SSMG.  The maternity grant form also did not indicate that proof of qualifying benefit was required.    

A client in Port Talbot was not informed he was entitled to child tax credit by the job centre or the benefits agency when he applied for benefit. He was left to believe only working families could claim child tax credit.

A lone parent in Flintshire sought advice when her child tax credit claim ceased without warning. She had provided all relevant information and filled in renewal forms as they were sent to her.  The client was left for weeks without payment of her entitlement.

A North Wales client and her two young children were evicted by her partner.  One child had a bed wetting problem and the other was still in nappies.  They were re housed in a village with no shops, no regular bus service and no post office. The house was heated by oil with no other means of heating the water. The client could get oil only if she paid for a minimum of 600 litres and could not join a budget plan because of poor credit scoring.  She was not allowed payment from the social fund for a tumble dryer though there was no access to a launderette locally.

A client with a 7 year old child with severe anxiety and compulsive behaviour visited a Bureau.   The client was a lone parent on income support.   Advice by the Bureau led to the award of DLA middle care. The child is unable to go on school trips because of his disabilities and as a result of this dramatic increase in their income the client has been able to afford to take him on similar trips herself.

A client with a 2 ½ year old child with global developmental delay.   The client was a lone parent, working part time on the minimum wage. Following the award of DLA, the client has had an increase in tax credit payments and is now able to afford for the child to stay in the same nursery which allows for continuity and meets the child's additional needs.

A client with a 4 year old with anxiety, behavioural and continence problems visited a Bureau.  The client was entitled to income support and DLA.   The Bureau secured the award of DLA high care for child which has allowed the family to use taxis and go on outings.

A client with an 8 year old with ADHD.   Bureau secured the award of DLA which has allowed the child to have one to one swimming lessons. He was unable to take advantage of group lessons because of difficulties concentrating

A client with a 15 year old with mental health problems who does not attend school.  The client was being awarded DLA low care.   The client is a lone parent who would have had to make herself available for work as she was not entitled to Income Support.    Yet the client was unable to leave her daughter on her own.  The Bureau helped ensure a successful conclusion to an Appeal process resulting in the payment of middle care award.   The client was also able to claim IS/CA and able to provide the necessary support to her daughter.

A client visited a South Wales Bureau.   She lives with a partner, two dependant children and non dependant children.  Shelter had helped the client avoid possession, they now have a Postponed Possession Order and the Bureau helped with their other debts. Homelessness would have had a great impact on the children's lives.

Citizens Advice Cymru
April 2008
Contact: Jonathan Edwards, Wales Public Affairs Officer

029 2037 6757, jonathan.edwards@citizensadvice.org.uk

Appendix 1 - WAG Grants and Position of Discretionary grants

Appendix 2 - Discretionary Gant Details