Finance & Debt

Hidden young people

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New research explores why young unemployed people are turning their backs on the benefit system
by Dr Katy Jones, University of Salford

There is growing concern about so-called ‘hidden young people’ – those young people who are neither in employment, education or training, nor claiming the benefits they are entitled to. There are approximately 21,890 hidden young people in Greater Manchester. Recognising the issue, Greater Manchester Combined Authority (GMCA), in its strategy ‘Our People, Our Place’, commits to ‘ensuring that fewer young people are ‘hidden’ from the essential support and services they need’. However, the evidence base relating to this group is incredibly limited – this is the case both locally and nationally.

In response to this, and as part of the Salford Anti-Poverty Taskforce, Salford City Council commissioned researchers at the University of Salford to undertake a qualitative study exploring the experiences of ‘hidden young people’. From interviews with 14 young people with experience of being both ‘not in employment, education or training’ and ‘Hidden’, and a series of focus groups involving 25 stakeholders from across the city, this research has uncovered some of the stories behind the statistics – and a range of reasons why many young people are shunning the benefits system.

The research shows that a lack of knowledge about benefit entitlements is widespread. As one young woman explained:

            “I didn’t know that I could claim… until I was told by the people from [accommodation provider]… If not, I
wouldn’t have known. You hardly hear it from anywhere, these things.”

Others are deterred by the ‘stigma’ associated with the Jobcentre. In the words of one young person:

            “Like if someone said to me, ‘Where do you get your money from?’ I think I’d be a bit embarrassed to tell
them.”

However for others, an increasingly ‘conditional’ welfare system, combined with poor experiences of the Jobcentre, made them reluctant to engage with the benefits system. As one stakeholder explained:

            “Why would you continue to engage with a system that treats you so overtly badly and has all the power in
that situation? You would just withdraw from it.”

Negative perceptions of Jobcentre Plus services were widespread amongst both young people and practitioners involved in the research.

Whether or not young people need or want to claim benefits, not engaging with the social security system excludes them from mainstream support and service provision – as most youth unemployment interventions are routed through the Jobcentre and related contracted providers.

Katy Jones Hidden young people article for GM Poverty Action

Dr Katy Jones

The report makes a series of recommendations for policy and practice, some of which apply at a Greater Manchester level – namely – that the GMCA should continue to monitor the issue, updating and measuring progress in meeting its strategic commitment against the estimated number of hidden young people in the sub-region (currently 21,890). Furthermore, in line with its commitment in the Greater Manchester strategy, we call on the GMCA to outline the steps it is taking to ensure effective support is provided to all hidden young people across Greater Manchester.

The report was launched at the University of Salford on 31st October, with a presentation from lead author Dr Katy Jones, followed by a response from Salford City Mayor Paul Dennett, and representatives from Salford City Council, Greater Manchester Combined Authority and the Greater Manchester Talent Match Youth Panel. A copy of the report can be accessed here.

 

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Cap on cost of rent-to-own

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The End Child Poverty coalition has welcomed the Financial Conduct Authority’s announcement that it will consider a cap on the total cost of goods bought through rent-to-own.

Anna Feuchtwang, Chair of End Child Poverty and Chief Executive of the National Children’s Bureau, said “We welcome the FCA’s announcement. It is the poorest families that pay the highest prices for essential household items. By considering a cap on the total cost of rent-to-own goods, the FCA has recognised the need to protect households who incur real financial hardship simply through purchasing essential items such as fridges

“As child poverty increases across the UK it is imperative that regulators and businesses play their part to ensure families are not forced to service high levels of debt at the expense of putting food on the table, or heating their home and we urge the FCA, at the end of their consultation, to impose a cap.”

The End Child Poverty coalition is calling for a cap of not more than double the total cost of rent-to-own goods and welcomes the move to consider banning the sale of warranties at the time of purchase.  In their report Feeling the Pinch: Furnishing your home with rent-to-own published in November 2017, the coalition found that rent-to-own customers have the lowest incomes of all high-cost credit customers and are likely to be in arrears for other households bills. Unable to afford to buy goods outright, low income households often have little choice than to buy essential goods through rent-to-own.

The rise in families turning to high-cost credit has come as the Government has frozen children’s benefits. End Child Poverty is calling on the Government to end the freeze and create a single interest free fund for anyone eligible for Universal Credit so that low income families can access an alternative to high-cost credit.

GMPA is a member of End Child Poverty.

 

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PIPs & ESAs

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Work & Pensions Committee: PIP & ESA trust deficit fails claimants and the public purse

In November 2017, the Greater Manchester Law Centre (GMLC) submitted a contribution to the Work and Pensions Committee, who requested evidence and experiences of the medical assessments for disability benefits. Specifically, the Committee focused on the assessments for Personal Independence Payments (PIP) and Employment and Support Allowance (ESA), carried out by private contractors Capita, Atos and Maximus.

GMLC’s submission focussed on the Mandatory Reconsideration (MR) process. If a claimant’s application for benefits is rejected, they must go through the MR process before they can appeal. GMLC collected evidence from service-users and advice workers as well as other Greater Manchester individuals and organisations. The final report shows: there is a severe lack of trust in the application process, many claimants are caused unnecessary suffering, and an inefficient process costs more in the long run.

Many benefit decisions are reversed. Since 2013 there have been 170,000 PIP appeals taken to the Tribunal. Claimants won 63% of cases. In the same time, there have been 53,000 ESA appeals. Claimants won roughly 60%. The DWP spent about £100m on benefit appeals including the Mandatory Reconsideration (MR), creating immense stress for claimants and literally losing money during the process.

In the full report, the Committee says public contract failures have led to a loss of trust that risks undermining the operation of major disability benefits.

Frank Field MP, Chair of the Committee, said: “For the majority of claimants the assessments work adequately, but a pervasive lack of trust is undermining its entire operation. In turn, this is translating into untenable human costs to claimants and financial costs to the public purse. Government cannot, must not, fail to recognise the unprecedented response the Committee had to this inquiry, remarkable for the consistency and clarity of themes that emerged through thousands of individual accounts.

The Department for Work and Pensions (DWP) attests that the most common reason for decisions being overturned at Appeal is that new evidence has come to light. However, organisations who support claimants say that many decisions are revised by considering pre-existing evidence. Quite simply, the benefits should never have been denied in the first place. The DWP’s own data shows that this “new evidence” is most often oral evidence provided by the claimant, which could have been gathered at the initial assessment. The Department’s “lack of determination” in addressing this shows real weaknesses in its feedback to, and quality control over, contractors, which must be urgently addressed.

Tom Griffiths, GMLC member and Chair of the Manchester Mental Health Charter Alliance, said: “It appears that there is some progress being made as a result of persistent submissions from concerned organisations, individuals and legal networks. However there is still a long way to go to bring justice and integrity to the heart of the assessment process.”

Visit www.gmlaw.org.uk for a full summary of the Committee’s report.

Both Work & Pensions reports can be downloaded here:  Full report    Claimant experience

 

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Welfare Reform

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By Megan Blake, Director of the MA Food Security and Food Justice, University of Sheffield

UC and PIP have received considerable attention recently. While the specifics of these reforms are causing considerable difficulty for households and communities, welfare reform actually includes a wider suite of changes that are affecting different types of families in very different ways.  This list highlights the range of changes that have been introduced*:

Reforms 2010-2015

Housing Benefit—Local housing allowance
Changes to the rules governing assistance with the cost of housing for low-income households in the private rented sector. The new rules apply to rent levels, ‘excess’ payments, property size, age limits for sole occupancy and indexation for inflation.

Housing Benefit—Under-occupation in the social rented sector (bedroom tax)
New rules governing the size of properties for which payments are made to working age claimants

Non-dependent deductions
Increases in the deductions from Housing Benefit, Council Tax Support and other income-based benefits to reflect the contribution that non-dependent household members are expected to make towards the household’s housing costs (including adult children and lodgers).

Benefits cap
New Ceiling on total payments per household, applying to the sum of a wide range of benefits for working age claimants.

Council Tax Support
Reductions in entitlement of working age claimants arising from a 10% reduction in total payments to local authorities.

Personal Independence Payment
Replaces Disability Living Allowance.  Includes more stringent and frequent medical tests, as the basis for financial support to help offset the additional costs faced by individuals with disabilities.

Employment Support Allowance (ESA)
Replacement of Incapacity Benefit and related benefits by ESA, with more stringent medical tests, greater conditionality and time-limiting of non-means tested entitlement for claimants in the Work-Related Activity Group.

Tax Credits
Reductions in payment rates and eligibility for Child Tax Credit and Working Tax Credit, paid to lower and middle-income households

Child Benefit
Three-year freeze, and withdrawal of benefit from households with a higher earner (not joint household income).

1% up-rating
Limit in annual up-rating of value of most working age benefits.

Reforms 2015 onward

Housing Benefit: 18-21 year olds
End of automatic entitlement for out-of-work 18-21 year olds

Benefits Cap
Lower ceiling per household than previous cap.  Applicable to a total sum of a wide range of working age benefits.

Mortgage interest support
Change from a payment to a loan to be repaid

Universal Credit
Includes tapers and thresholds for withdrawal of benefits.  Includes a reduction in the level of earnings and an increase in the rate at which Universal Credit awards are withdrawn. Universal Credit will replace or include tax credits including those listed above.

Employment Support Allowance (ESA)
Reduction in payment to Job Seekers Allowance rate for new claimants in the Work-Related Activity Group

Tax Credits
A further change to Child Benefit and pre-2015 tax credits. Further, reductions in payments and thresholds, notably the removal for new claims of the ‘family’ element and a limit on the ‘child’ element to two children for children born after March 2017.

Benefit freeze
4 year freeze of the value of most working-age benefits

  • The reforms are being challenged as they are being rolled out, so there may be some recent changes not reflected.
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Impact of debt by Mike Kane MP

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Debt and its impact on our communities
by Mike Kane MP for Wythenshawe & Sale East

Mike Kane debt article for GM Poverty Action

Mike Kane MP

There​ ​is​ ​a​ ​wealth​ ​of​ ​evidence​ ​around​ ​the​ ​issue​ ​of​ ​problem​ ​debt​ ​and​ ​its​ ​impact​ ​on​ ​our communities. ​ ​​ ​In​ ​my​ ​constituency​ ​alone​ ​there​ ​are​ ​more​ ​than​ ​16,000​ ​people​ ​who​ ​are​ ​‘over​ ​indebted’​*.​​  ​Yet​ ​we​ ​have​ ​seen​ ​little​ ​action​ ​from​ ​Government​ ​to​ ​address​ ​the​ ​multiple​ ​and complex​ ​issues​ ​which​ ​cause​ ​it.

A​ ​recent​ ​report​ ​by​ ​the​ ​Money​ ​Advice​ ​Service​ ​revealed​ ​that​ ​renting​ ​a​ ​property​ ​indicates​ ​that you​ ​are​ ​twice​ ​as​ ​likely​ ​to​ ​be​ ​over-indebted​ ​as​ ​those​ ​owning​ ​their​ ​home. ​ With​ ​1​ ​in​ ​4​ ​people renting​ ​being​ ​over​ ​indebted. ​ ​For​ ​those​ ​renting​ ​a​ ​social​ ​housing​ ​property​ ​this​ ​increases​ ​to nearly​ ​1​ ​in​ ​3.

Debt​ ​has​ ​become​ ​a​ ​‘significant​ ​problem’​ ​for​ ​an​ ​estimated​ ​4,920​ ​families​ ​in​ ​my​ ​constituency. On​ ​top​ ​of​ ​this​ ​my​ ​constituency​ ​is​ ​one​ ​of​ ​those​ ​hit​ ​hardest​ ​by​ ​the​ ​bedroom​ ​tax​ ​with​ ​3038 affected​ ​tenants.   Families​ ​are​ ​facing​ ​debt,​ ​poverty​ ​and​ ​eviction​ ​and​ ​fighting​ ​this​ ​has​ ​been​ ​my​ ​main​ ​focus​ ​as​ ​an MP​ ​since​ ​I​ ​was​ ​first​ ​elected.​ ​​ ​Too​ ​many​ ​people​ ​in​ ​Wythenshawe​ ​and​ ​Sale​ ​are​ ​turning​ ​to payday​ ​loans,​ ​expensive​ ​credit​ ​cards​ ​and​ ​doorstep​ ​lenders​ ​and​ ​this​ ​all​ ​too​ ​often​ ​lands​ ​them in​ ​a​ ​cycle​ ​of​ ​debt​ ​that​ ​is​ ​difficult​ ​to​ ​break.

In​ ​Westminster​ ​I​ ​have​ ​been​ ​supporting​ ​the​ ​work​ ​of​ ​the​ ​All​ ​Party​ ​Parliamentary​ ​Group​ ​on Debt​ ​and​ ​Personal​ ​Finance​ ​and​ ​the​ ​charity​ ​StepChange.​ ​Their​ ​campaign​ ​for​ ​a​ ​Breathing Space​ ​scheme​ ​for​ ​families​ ​in​ ​problem​ ​debt​ ​who​ ​need​ ​time​ ​and​ ​space​ ​to​ ​get​ ​back​ ​on​ ​their feet​ ​received​ ​cross-party​ ​support​ ​and​ ​I​ ​look​ ​forward​ ​to​ ​the​ ​Government​ ​putting​ ​a comprehensive​ ​Breathing​ ​Space​ ​scheme​ ​in​ ​place​ ​quickly.  By​ ​providing​ ​a​ ​period​ ​free​ ​from​ ​additional​ ​interest, charges​ ​and​ ​enforcement​ ​action schemes​ ​like​ ​this​ ​can​ ​help​ ​families​ ​recover​ ​their​ ​financial​ ​situation​ ​and​ ​put​ ​in​ ​place​ ​a​ ​plan​ ​to affordably​ ​repay​ ​their​ ​debts.

Mike Kane debt article for GM Poverty Action

Launching​ ​payroll​ ​deduction​ ​for​ ​staff​ ​with​ ​Manchester​ ​Credit​ ​Union​ ​at​ ​UHSM

Locally​ ​I​ ​have​ ​been​ ​working​ ​with​ ​Manchester​ ​Credit​ ​Union. ​ ​As​ ​an​ ​ethical​ ​lender​ ​they​ ​help​ ​to make​ ​sure​ ​people​ ​get​ ​a​ ​fair​ ​deal​ ​on​ ​a​ ​loan, ​ while​ ​also​ ​encouraging​ ​saving​ ​and​ ​keeping money​ ​in​ ​the​ ​local​ ​area.

I​ ​take​ ​the​ ​opportunity​ ​of​ ​any​ ​visits​ ​to​ ​employers​ ​in​ ​my​ ​constituency​ ​to​ ​encourage​ ​them​ ​to work​ ​with​ ​Manchester​ ​Credit​ ​Union​ ​to​ ​offer​ ​payroll​ ​deduction​ ​at​ ​source​ ​for​ ​their​ ​staff. Working​ ​with​ ​University​ ​Hospital​ ​South​ ​Manchester​ ​we​ ​have​ ​already​ ​secured​ ​this​ ​for​ ​5,900 employees​ ​at​ ​the​ ​Hospital.

To​ ​solve​ ​the​ ​problem​ ​in​ ​the​ ​long​ ​term​ ​however​ ​we​ ​must​ ​give​ ​our​ ​children​ ​a​ ​strong​ ​financial education​ ​from​ ​the​ ​outset. ​ ​​ ​That​ ​is​ ​why​ ​I​ ​have​ ​been​ ​working​ ​with​ ​local​ ​employers​ ​to​ ​get them​ ​into​ ​primary​ ​schools​ ​so​ ​our​ ​children​ ​understand​ ​about​ ​money, ​ ​budgeting​ ​and managing​ ​finances.

Mike Kane debt article for GM Poverty Action

Visiting​ ​Sandilands​ ​School​ ​‘numbers​ ​at​ ​work’​ ​day​ ​supported​ ​by​ ​One​ ​Advice​ ​and​ ​City in​ ​the​ ​Community

However, ​ with​ ​the​ ​roll​ ​out​ ​of​ ​Universal​ ​Credit​ ​(UC) looming​ ​I​ ​know​ ​the​ ​situation​ ​is​ ​about​ ​to become​ ​even​ ​more​ ​challenging. ​ ​The​ ​6​ ​week​ ​wait​ ​risks​ ​pushing​ ​people​ ​into​ ​debt. ​ ​Over​ ​half​ ​of the​ ​people​ ​the​ ​Citizens’ Advice Bureau​ ​(CAB) have​ ​helped​ ​who​ ​receive​ ​UC​ ​were​ ​forced​ ​to​ ​borrow​ ​money​ ​while waiting​ ​for​ ​their​ ​first​ ​payment.   People​ ​CAB​ ​have​ ​helped​ ​with​ ​debt​ ​issues​ ​who​ ​receive​ ​Universal​ ​Credit​ ​are​ ​14%​ ​more likely​ ​to​ ​have​ ​problems​ ​with​ ​priority​ ​debts​ ​like​ ​rent​ ​and​ ​council​ ​tax.

That​ ​is​ ​why​ ​we​ ​are​ ​calling​ ​on​ ​the​ ​Government​ ​to​ ​pause​ ​Universal​ ​Credit​ ​Full​ ​Service​ ​roll​ ​out, and​ ​work​ ​with​ ​us​ ​to​ ​deliver​ ​a​ ​more​ ​effective​ ​system, one​ ​which​ ​delivers​ ​on​ ​the​ ​original ambition​ ​of​ ​simplifying​ ​social​ ​security​ ​and​ ​making​ ​sure​ ​work​ ​always​ ​pays.

Ultimately​ ​to​ ​get​ ​on​ ​top​ ​of​ ​this​ ​debt​ ​crisis​ ​we​ ​need​ ​better​ ​access​ ​to​ ​fair​ ​credit​ ​for​ ​families who​ ​are​ ​struggling​ ​to​ ​make​ ​ends​ ​meet. ​ ​We​ ​need​ ​to​ make​ ​our​ ​credit​ ​unions​ ​more​ ​easily accessible​ ​and​ ​we​ ​must​ ​continue​ ​to​ ​fight​ ​the​ ​usury​ ​that​ ​is​ ​payday​ ​lending.

 

*​over-indebtedness is ​defined ​as finding ​keeping ​up with bills ​and ​commitments as a heavy burden ​and/or ​falling behind or missing payments in at least three of ​the previous ​six ​months

 

 

 

 

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Community Wealth Building – Greater Manchester and the Preston Model

Last month GMPA Director Graham Whitham wrote about the consequences of a failing economic model and how Greater Manchester can build an alternative local economy that addresses these challenges. We invited Councillor Matthew Brown to respond based on his work in Preston.

Communities in Greater Manchester and across the country must ask some quite challenging questions if we are serious about tackling inequality, with the last decade seeing the exacerbation of a systemic crisis rooted in the dysfunctional nature of corporate capitalism.

Matthew Borwn: Community Wealth Building article for GM Poverty Action

Matthew Brown

The global economic downturn which struck ten years ago saw billions of pounds of public money bail out a financial system under little form of regulation and democratic control.  Despite this injection of public wealth banks lend little to local businesses and large corporations often sit on wealth rather than invest to create jobs and growth.  As a result austerity continues to bite and inequality and insecurity continues to grow.

In this context it is not unfair to conclude the system is broke, as GMPA has recently argued, and new and radical solutions are needed to fix it.  The interest shown in what has become known as ‘The Preston Model’ or Community Wealth Building offers part of this solution by building more democratic and self sufficient local economies.  It is a strategy employing many levers to create and retain wealth in place and tackle inequality from the grassroots upwards.

In Greater Manchester, ‘anchor institutions’ such as councils, universities, hospitals and housing associations spend billions every year on goods and services as part of their everyday business.  Much more of this wealth sitting in communities already could be redirected to local suppliers, expand social outcomes like the real Living Wage and the number of democratic enterprises like cooperatives.  I know that the Centre for Local Economic Strategies (CLES) and the University of Manchester, through the Inclusive Growth Analysis Unit (IGAU), have already instigated a meeting earlier in the year with many anchors, and plans are afoot to explore how an anchor approach could be progressed. Furthermore, CLES are working with Oldham Council and partners on an anchor approach, and that is an excellent basis for scaling up the approach across GM, assisted by Oldham Leader Cllr Jean Stretton’s role, as GM lead on equality, fairness and cohesion.

In Preston, we have collaborated with CLES and around 10 local public sector organisations since 2013 to instigate a cultural shift that has seen a £200m investment dividend across Lancashire by the local public sector, more than triple goods and services bought from suppliers in Preston and double from Lancashire.  The amount of GVA added we calculate has supported 1500 jobs in Preston and increased the number of people receiving the real Living Wage.  We see there are significant gaps in the local supply chain and are working with our university and others to potentially fill some of these with worker led cooperatives to inject more democracy into the local economy.

Manchester City Council very successfully pioneered a similar strategy from 2007 onwards with CLES to increase their own spend in the Manchester economy from 51% to 73%.  If this was scaled up to persuade the vast majority of the local public sector in Greater Manchester to support local suppliers, expand the social economy and social value outcomes it could be transformative.

Local and public banking and energy democracy are other essential tools to tackle inequality and democratise local economies.  The extractive nature of many large banks needs to be challenged by promoting alternatives which also instil a sense of civic pride.

Preston City Council is currently exploring opportunities to establish the Lancashire Community Bank based upon the successful German Sparkassen model which ensures Germany possesses the most vibrant SME base in Europe.  Preston has also joined with another local authority to launch a not for profit local alternative to the Big 6 energy companies called Red Rose Fairerpower offering fairer, more accountable energy to Lancastrians.

Local investment by public sector pension funds, credit unions, living wage policies, municipal enterprise and employee ownership are other ideas which build new economies from the grassroots upwards creating social movements which genuinely ‘take back control’ by promoting local ownership.   The Greater Manchester Combined Authority and Mayor Andy Burnham are aware of the anchor approach and are ideally placed to bring such initiatives together in a coordinated way with many of these ideas already growing within the city region.

Despite best intentions local government has often been seen as a little too managerial when it should be transformative.  The severity of the system problem we face is arguably contributing to outcomes like the decision to leave the European Union out of a sense of misplaced anger despite the EU contributing much to our region.  That debate aside we have little choice but to seek new solutions to protect our communities.  To do this we must be brave and radical.  When the problems remain big the solutions to tackle them must be big also.  Let the movement grow in GM!

Councillor Matthew Brown is Cabinet Member for Social Justice, Inclusion & Policy on Preston City Council. You can read more about the Preston Model in context here.

 

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The unstoppable steamroller that is Universal Credit

Earlier this month GMPA, along with many other organisations signed an open letter sent to the Manchester Evening News which read as follows:

“To​ ​the​ RT Hon David Gauke MP, ​Secretary​ ​of​ ​State​ ​for​ ​Work​ ​and​ ​Pensions,​

We​ (​the​ ​undersigned​) ​are​ ​concerned​ ​about​ ​the​ ​roll​ ​out​ ​of​ ​Universal​ ​Credit​ ​as​ ​announced​ ​in the​ ​commencement​ ​orders​ ​number​ ​17,​ ​19,​ ​22,​ ​23,​ ​24​ ​dropped​ ​in​ ​the​ ​statutory​ ​instrument​ ​on October​ ​2nd.​ ​This​ ​will​ ​see​ ​the​ ​full​ ​service​ ​digital​ ​roll​ ​out​ ​of​ ​UC​ ​in​ ​the​ ​following​ ​postcodes​ ​on the​ ​following​ ​dates,​ ​where​ ​legacy​ ​benefit​ ​claims​ ​will​ ​no​ ​longer​ ​be​ ​possible:​ ​October​ ​4th​ ​M16; October​ ​25th​ ​M14,​ ​M15,​ ​M20,​ ​M21;​ ​November​ ​29th,​ ​M4,​ ​M11,​ ​M18,​ ​M40;​ ​January​ ​24th, M12,​ ​M13,​ ​M19;​ ​May​ ​1st,​ ​M9,​ ​M8.

As​ ​it​ ​the​ ​system​ ​of​ ​UC​ ​stands,​ ​we​ ​have​ ​identified​ ​and​ ​are​ ​concerning​ ​with​ ​the​ ​four​ ​key problems​ ​in​ ​digital​ ​UC.​ ​Firstly,​ ​the​ ​issue​ ​of​ ​the​ ​waiting​ ​time​ ​for​ ​the​ ​first​ ​payment.​ ​Waiting periods​ ​of​ ​6​ ​or​ ​even​ ​12​ ​weeks​ ​are​ ​common,​ ​causing​ ​people​ ​on​ ​UC​ ​to​ ​fall​ ​into​ ​debt​ ​from which​ ​they​ ​find​ ​it​ ​difficult​ ​to​ ​recover.​ ​There​ ​is​ ​evidence​ ​to​ ​show​ ​that​ ​this​ ​is​ ​driving​ ​evictions and​ ​arrears​ ​in​ ​existing​ ​digital​ ​areas.​ ​Secondly,​ ​the​ ​roll​ ​out​ ​will​ ​have​ ​a​ ​particularly​ ​sharp​ ​effect on​ ​an​ ​already​ ​vulnerable​ ​group;​ ​who​ ​don’t​ ​have​ ​access​ ​to​ ​the​ ​required​ ​ID​ ​or​ ​computer access,​ ​such​ ​as​ ​homeless​ ​and​ ​disabled.​ ​Thirdly,​ ​in​ ​areas​ ​where​ ​UC​ ​is​ ​placed,​ ​sanctions​ ​are being​ ​applied​ ​erratically​ ​and​ ​arbitrarily.​ ​Full​ ​service​ ​rollout​ ​means​ ​that​ ​this​ ​will​ ​now​ ​apply​ ​to housing​ ​benefit​ ​in​ ​the​ ​form​ ​of​ ​the​ ​UC​ ​housing​ ​element,​ ​directly​ ​increasing​ ​the​ ​risk​ ​of evictions​ ​and​ ​homelessness.​ ​Finally,​ ​we​ ​believe​ ​there​ ​is​ ​a​ ​lack​ ​of​ ​knowledge​ ​among​ ​job coaches​ ​and​ ​job​ ​centre​ ​staff​ ​around​ ​the​ ​implications​ ​of​ ​UC​ ​and​ ​the​ ​regulations​ ​surrounding it.​ ​This​ ​produces​ ​poor​ ​decisions​ ​and​ ​wrong​ ​advice​ ​that​ ​is​ ​often​ ​overturned​ ​on​ ​appeal.​ ​For example,​ ​people​ ​who​ ​are​ ​made​ ​redundant​ ​can​ ​still​ ​access​ ​contribution​ ​based​ ​JSA,​ ​but Jobcentre​ ​staff​ ​are​ ​frequently​ ​turning​ ​them​ ​over​ ​to​ ​UC.

We​ ​call​ ​on​ ​central​ ​government​ ​to​ ​halt​ ​the​ ​roll​ ​out​ ​while​ ​all​ ​of​ ​these​ ​problems​ ​are​ ​looked​ ​at, and​ ​avoid​ ​creating​ ​so​ ​much​ ​more​ ​suffering​ ​by​ ​the​ ​poor​ ​and​ ​low​ ​paid.​ ​Universal​ ​Credit,​ ​if rolled​ ​out​ ​in​ ​its​ ​current​ ​form,​ ​is​ ​a​ ​universal​ ​catastrophe​ ​that​ ​will​ ​place​ ​an​ ​unsustainable burden​ ​on​ ​the​ ​finances​ ​of​ ​local​ ​authorities​ ​and​ ​the​ ​third​ ​sector,​ ​who​ ​will​ ​ultimately​ ​be​ ​left​ ​to pick​ ​up​ ​the​ ​debt.”

We are keen to hear from organisations and individuals about their experiences of Universal Credit and the concerns they have about its continued rollout.  Please email us with your comments.

 

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Greater Manchester Credit Unions have joined forces to take on national lenders

Soundpound consortium people for GM Poverty Action article

SoundPound Consortium


People across Greater Manchester are being supported to break free from debt by a new partnership of local loans and savings providers.

Greater Manchester credit unions have joined forces to create a new consortium – called SoundPound – to take on national lenders and show people there is an ethical, local alternative that could save borrowers hundreds of pounds.

SoundPound is holding a Credit Union Awareness Week between October 16 -20, 2017 to raise awareness of the dangers of turning to national and doorstep lenders, as well as using expensive credit cards.

Angela Fishwick, chief executive of Unify Credit Union, which is part of the SoundPound consortium, said: “Too many people in Greater Manchester are turning to pay day lenders, expensive credit cards and doorstep lenders to help get them through each month or when in a financial crisis.

But this can mean they end up in a cycle of debt that is not easy to break. SoundPound partners want to help combat this problem, making sure people get a fair deal on a loan, while also encouraging saving.  It is free and easy to join a local credit union, with the benefit of an online, phone, and email service as well as a central branch.

The good news is, that thousands of people are already choosing not only to borrow with the consortium but save with us too, keeping £24 million in the local economy. We would urge more people to get in touch to find out how you could borrow and save.  Employers too can sign up as payroll partners.”

The Greater Manchester Credit Union Awareness Week is being supported by Andy Burnham, Mayor of Greater Manchester who is a member of a credit union.

He said: “Our community credit unions are the local, ethical alternative to the high-interest payday loan companies and loan sharks.  Through their lending and savings schemes, Greater Manchester credit unions support thousands of people across the city-region. During this Credit Union Awareness Week, I hope more people will sign up to their local credit union and show that there is a real, local, alternative when it comes to saving and borrowing.”

To find your local credit union visit the SoundPound website

 

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Our economy isn’t working

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Can Greater Manchester pioneer a new way of doing things?

By Graham Whitham

The UK is failing to ensure economic and jobs growth leads to higher living standards for all. GDP growth has been positive in every quarter since the end of 2012. The employment rate is at a record high and the unemployment rate at its lowest level since 1975. Yet, living standards aren’t going up and the IFS says incomes for the average family will not grow over the next couple of years.

In contrast, the richest 1% have recouped losses in income from the financial crash. That’s because the economy is configured so that wealth is increasingly captured by capital rather than workers. The richest 1% have received a quarter of the £4 trillion national increase in wealth since 2000.

Policy encourages a business culture that promotes short-term, shareholder driven approaches, at the expense of workers, who have found their position undermined. The UK has adopted this business culture and approach to its economy despite high levels of economic inequality hindering economic success, and evidence that putting money in the pockets of those on low incomes reaps greater economic rewards than concentrating wealth in the hands of the very rich. A new approach is needed.

As the birthplace of the cooperative movement, and a place with a proud tradition of doing things differently, Greater Manchester should be at the forefront of a new economy that fosters alternative business models that re-balance wealth distribution and shift power relationships. The phrase, ‘What Manchester does today, the rest of the world does tomorrow’ may stem from a very different economic school of thought, but this city region should be at the vanguard of a new, more human centred economy that lights the way for the rest of the country.

Alternative structures of business are emerging that are better geared to sharing wealth more evenly. These are either mission driven or ensure that the stakeholders most impacted by the business also own the business. Such business structures are geared to not only reinvest more into their business but also work more constructively for the benefit of all stakeholders.

Employee-owned businesses, such as John Lewis, have grown significantly in multiple economies, outperforming other businesses on sales and employment growth. Studies on employee ownership show that those types of businesses generate more employment growth and lead to significantly higher pay for their employees.

Multi-stakeholder cooperative models also aim to balance the interests of various stakeholders, such as consumers and workers. These typically structure company governance to ensure that the interests of workers and consumers, or producers and buyers are balanced in key decisions, including on how profits are used. The Go-op train cooperative is one example of this model.

Fostering an alternative approach to business and the economy in our city region will require an acknowledgement across GM that ‘trickle down’ doesn’t work. Whilst the Manchester economy has remained relatively robust, the city region is home to lower than average wages, some of the highest levels of child poverty in the country and growing inequality between the south and north of the conurbation. A plan for addressing these challenges and implementing an alternative GM economy should include:

•  Adoption of human centred indicators as a means of measuring economic success.

•  Promotion of companies that adopt alternative business models through

◦  active public procurement that favours such models

◦  access to finance for such businesses through a regional/local investment bank

◦  tailored start-up and business development support

◦  trialling business rate deductions and working with central government to identify other incentives for such businesses.

•  Promotion of decent work, including the voluntary Living Wage, through

◦  Development of a Decent Work Standard and appointment of a Decent Work Commissioner

◦  Adoption of the Decent Work Standard across all public sector bodies.

◦  Introduction of a GM wide Employment Charter (based on the Standard) with real teeth

◦  Active public procurement that favours businesses that provide decent work

◦  Working with businesses to identify means of effectively measuring the business benefits (e.g. employee morale, productivity and retention) of adopting decent work employment practices.

•  Promoting positive corporate behaviour through greater transparency around business behaviour and practices.

Graham Whitham, Director of GMPA and author of report on economy for GM Poverty Action

Graham Whitham

The UK faces major challenges of in-work poverty, stagnating living standards, low productivity and the prevalence of poor quality work. There is widespread acknowledgement that the economy doesn’t work for all, but lack of a concerted effort to adopt a new, alternative approach at central government level. Greater Manchester should be a beacon for a new way of doing things, becoming a home for companies that do things differently.

 

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BCTFS

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Profile: Bolton Community Transport and Furniture Services

Bolton Community Transport and Furniture Services, or BCTFS, offers furniture, white goods (cookers, washer-dryers, fridge freezers), and community transport for people across Bolton. 10,000 furniture items were collected and delivered to homes across Bolton last year, with 80% of total sales to communities within the top 15% of the most deprived areas nationally. The big warehouse or ‘showroom’ is full of these items, neatly ordered in long rows, sitting in central Bolton just behind the town centre. Prices advertised are much less than the brand new DFS sofas, or a cooker from Currys. These are new, second hand and graded furniture in addition to new, graded and refurbished white goods. “We’d like to provide an alternative to the high street retailers”, says Diane, the centre manager, “affordable and ethical, and with a focus on our community”.
BCTFS warehouse photo for GM Poverty Action

A lot of the people we work with have actually fallen through the bottom of Bolton’s safety net. They don’t qualify for benefits anymore”, explains Diane, detailing the different referral agencies where many clients come from, women’s refuges, prisons, drug and alcohol services, homeless charities. BCTFS supplies furniture to fill their flats and hand in hand with this service, runs community transport, trips for individuals who would otherwise see no one. “It’s such a valuable lifeline to a lot of people who would otherwise go week to week without seeing another person”, says Diane. Booking excursions as individuals but joining a larger group enables them to get out and make friends. BCTFS’ 2017 Excursion Calendar is full of pub lunches, garden centre visits, trips to the Lakes or the beach, and evenings out. There’s at least 2 events each week, and the service carried 16,000 people last year – an impressive figure.
BCTFS bus for GM Poverty Action article

BCTFS faces the same financial pressures as other community organisations. The Community Transport service doesn’t cover costs, so the furniture sales need to make up for it to balance the books. Much of this depends on the quantity and quality of goods that BCTFS can put on the warehouse floor: it’s an organisational model depending on the necessity to accept unwanted furniture. The majority is donated, but new goods are also bought and then sold at cost (including the costs of collection and repairs) in the warehouse. “Business is business”, says Diane, “and we shouldn’t apologise for that. Anyway, it’s only by selling things to people, that we can pay for the service to support the vulnerable.” But ensuring a full flow of furniture is not straightforward. In 2008, when the recession hit, furniture sales halved. “The impact hit us overnight, I had to make 8 people redundant within a few months over 2008-09. It was a very difficult time”, explains Diane.

White goods donations fell when new regulations placed responsibility on retailers to collect the old appliance when supplying a new item. “It’s a different environment to 10 years ago”, says Diane. “Today people are less willing to donate their old furniture, and instead try to sell it first on Ebay or Gumtree. Some donors view us as a dumping ground for furniture that’s no good anymore. When the Council introduced a charge for collecting bulky waste – for example, old furniture, we were flooded with requests. There was sometimes an attitude that “if you’re homeless and poor, you should be grateful for any furniture”. We’re promised items in ‘pristine condition’, but often they are not”, Diane explains.

BCTFS provides a lifeline for those who struggle in Bolton, either to be mobile outside their own homes and meet up with friends, or for those who need furniture and electrical items to make a house a home. It’s an innovative model and a vital part of the social safety net.

Visit their Facebook page.

For other providers of similar services in Greater Manchester visit the Furniture Re-use Network’s website map

 

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