Agenda Document Pack - Fairer Renfrewshire Sub-committee - 26/10/2022
Renfrewshire Council · 26 October 2022
Back to Fairer Renfrewshire Sub-committee — 26 October 2022 and its agenda
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Notice of Meeting and Agenda Fairer Renfrewshire Sub-committee Date Time Venue Wednesday, 26 October 2022 10:00 Council Chambers (Renfrewshire), Council Headquarters, Renfrewshire House, Cotton Street, Paisley, PA1 1AN MARK CONAGHAN Head of Corporate Governance Membership Councillor Jacqueline Cameron (Convener): Councillor Graeme Clark (Depute Convener): Councillor Anne Hannigan: Councillor Alec Leishman: Councillor Marie McGurk: Councillor Iain Nicolson: Councillor Jim Paterson: Hybrid Meeting Please note that this meeting is scheduled to be held in the Council Chambers. However, it is a hybrid meeting and arrangements have been made for members to join the meeting remotely should they wish. Further Information This is a meeting which is open to members of the public. A copy of the agenda and reports for this meeting will be available for inspection prior to the meeting at the Customer Service Centre, Renfrewshire House, Cotton Street, Paisley and online at http://renfrewshire.cmis.uk.com/renfrewshire/CouncilandBoards.aspx For further information, please either email democratic-services@renfrewshire.gov.uk or telephone 0141 618 7112. Members of the Press and Public Members of the press and public wishing to attend the meeting should report to the Customer Service Centre where they will be met and directed to the meeting. Page 1 of 30
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Recording of Meeting This meeting of the Sub-committee will be recorded on Teams for subsequent publication and viewing on the Council's Youtube channel. Page 2 of 30
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Apologies Apologies from members. Declarations of Interest Members are asked to declare an interest in any item(s) on the agenda and to provide a brief explanation of the nature of the interest. 1 Cost-of-Living Evidence Session - Summary Report Report by Chief Executive 5 - 12 2 Cost-of-Living Update Report by Chief Executive 13 - 26 3 Fairer Renfrewshire Programme Report by Chief Executive 27 - 30 4 Participation, poverty and practice in Renfrewshire - A test of change Presentation by Chief Executive 5 Alcohol and Drugs Change Programme – Overview Presentation by Chief Executive 6 Winter Connections Programme Presentation by Chief Executive Page 3 of 30
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1 ___________________________________________________________________ To: Fairer Renfrewshire Sub-Committee On: 26th October 2022 ___________________________________________________________________ Report by: Chief Executive ___________________________________________________________________ Heading: Cost-of-living evidence session – Summary Report ___________________________________________________________________ 1. Summary 1.1 The Fairer Renfrewshire Sub-Committee held a cost-of-living evidence session with elected members, and representatives from third sector partners on 12th October 2022, at Renfrew Town Hall. 1.2 Discussion was centred around two questions: “What is the impact of the cost-of-living crisis locally?” and “What action can we take locally to address the crisis?”. Key messages from the event included: • This crisis is happening now in our communities, often we talk about the winter we are facing as a future challenge, but many households are already at crisis point and demand for services and supports is rising. • The cost-of-living crisis is affecting different people, including people who haven’t needed to access support before. We also know that some groups of people are affected differently or face distinct challenges, for example, people with no recourse to public funds. • We need to help the helpers – staff and volunteers working on the front-line to support people are facing increasing demands and challenges (often on top of their own personal situation). People need to be OK to look after other people. • Many organisations and people worked hard to support people through the Covid pandemic, and are now facing another crisis immediately after without space to recover. • There are a lot of unknowns and it can be difficult to find hope, and to give reassurance and hope to people in our communities. • There are good foundations for partnership working in Renfrewshire, and people valued the opportunity to come together and work together on these issues. 1.3 A summary report of key messages and table discussions is attached at Appendix 1. Item 1 Page 5 of 30
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2 1.4 It is anticipated this will form an ongoing dialogue between partners and the Sub-Committee to inform the development of the programme. It was agreed at the session that officers would work on a follow-up session to bring partners back together to further explore the issues and potential actions for the Council and its partners. 2. Recommendations 2.1 It is recommended that members of the Fairer Renfrewshire Sub-Committee: • Note the content of the report Implications of the Report 1. Financial – There are no financial implications associated with this report. 2. HR & Organisational Development – none 3. Community/Council Planning – The Fairer Renfrewshire Programme is a key driver in achieving the ‘Fair’ strategic outcome and theme within the Council Plan, and covers a number of the key actions identified in the plan. It also represents a significant partnership programme of work which supports the ‘Fair’ theme within the Community Plan, with dedicated partnership governance being established to ensure alignment between these areas of work. 4. Legal - none 5. Property/Assets - none 6. Information Technology - none 7. Equality and Human Rights – Equality and human rights are a key pillar of this plan, and it is anticipated that the programme will likely advance equality of opportunity. 8. Health and Safety - none 9. Procurement – none 10. Risk – none 11. Privacy Impact – none 12. COSLA Policy Position – none 13. Climate Risk – none Author: Annabelle Armstrong-Walter, Strategic Partnerships and Inequalities Manager, Annabelle.armstrong- walter@renfrewshire.gov.uk Page 6 of 30
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3 Fairer Renfrewshire Evidence Session – October 2022 Summary report On 12 October 2022 the Fairer Renfrewshire sub-committee held an evidence session which was attended by elected members and representatives from local third sector partners. Attendees provided anecdotal evidence, and a view from those with lived experience, of the impact and issues of the cost-of- living crisis. The discussion of the evidence session was centred around two questions: “What is the impact of the cost-of-living crisis locally?” and “What action can we take locally to address the crisis?”. Each table’s discussions have been recorded and reviewed before being grouped into key themes. There were many points raised within this discussion, and they have been placed into one of four broad themes. In addition, there were a number of overarching messages from the session, including: • This crisis is happening now in our communities, often we talk about the winter we are facing as a future challenge, but many households are already at crisis point and demand for services and supports is rising. • The cost-of-living crisis is affecting different people, including people who haven’t needed to access support before. We also know that some groups of people are affected differently or face distinct challenges, for example, people with no recourse to public funds. • We need to help the helpers – staff and volunteers working on the front-line to support people are facing increasing demands and challenges (often on top of their own personal situation). People need to be OK to look after other people. • Many organisations and people worked hard to support people through the Covid pandemic, and are now facing another crisis immediately after without space to recover. • There are a lot of unknowns and it can be difficult to find hope, and to give reassurance and hope to people in our communities. • There are good foundations for partnership working in Renfrewshire, and people valued the opportunity to come together and work together on these issues. Rising demand for services and resources – this theme covered a wide range of areas including finances, energy, childcare, housing, food, staff resources and assets. Impacts raised: • A wide range of organisations raised issues of increased demand across a wide range of local services and supports. • Energy costs remain a key concern. People don’t have the ability to heat their homes with Martin Lewis saying, “heat the human, not the home”. • Energy usage and costs are a real issue for older people, those with health conditions and people with disabilities. Engagement with the “Winter Connections” programme could be a struggle for vulnerable groups, who could find it difficult to attend, either physically and/or emotionally, without support. • People are requesting cold food from food projects because they can’t afford to heat it at home. • Organisations are worried about sustaining capacity with less funding, some covid resources and funding that were in place have now gone. Page 7 of 30
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4 • Concern shared that rent freeze could cause landlords to sell their properties due to costs. This may impact vulnerable people who are forced to move. • The loss of volunteers is having a huge impact on groups as many volunteers seek paid employment to increase income. In addition, volunteer costs and expenses are rising, and there are still concerns regarding Covid and other winter viruses (especially volunteers who are clinically vulnerable). • As demand for food projects grows, there are issues with the supply of food from organisations such as Fareshare, individual donations potentially reducing or limited funding • Concern raised about Council’s channel shift with reduction in face-to-face interaction, and more emphasis on digital - this impacts if you don’t have digital access (e.g., cut broadband/mobile data due to costs) or have digital capability issues. • Travel – people face costs associated with attending appointments and accessing physical services • Childcare bills are no longer a priority as people struggle to meet essential costs like housing and energy, this will have an impact on people’s ability to take up or sustain employment. Lack of affordable and flexible childcare stops people being able to access work • Increased demand for supports with costs such as school uniforms and Halloween costumes • Impacts will also be felt by businesses, which could impact on jobs, hours, overtime etc which will then affect families • If the voluntary sector cannot cope or be supported, then where do people go? Actions suggested: • Assets – What do we have? How can we better use? How can we share and pool resources. • Gap in provision of resources – there are people who were ‘just about managing’ who are not entitled to any of the cost-of-living payment support from Government. • Make sure there is no duplication of services • Risks of ‘warm hubs’ being taken as ongoing service provision (from residents/Governments/organisations) rather than emergency provision for this year. Can Third Sector afford to help? Funding required to at least cover costs. Potential practical issues surrounding volunteering such as liability, licensing, governance (e.g., food hygiene/ health & safety certificates). There should be activities provided rather than ‘warm banks’. • We should lobby re direct payments going to landlords • Need to have services open where you don’t need to buy things to stay there • Is there scope to bulk buy energy for business and/or third sector? • Could businesses/organisations divert surplus food to local food projects? • Could we make more of corporate social responsibility and community benefits to support third sector? • Are there ways we can grow more food or develop more community gardens? Health and Wellbeing – this theme covered the health and wellbeing of residents as well as the staff and volunteers of Council and partners from both public and third sector who support those most vulnerable to the cost-of-living crisis. Impacts raised: • NHS are expecting more people to present to A&E due to cold homes than cold and flu – cold homes affect the health of both younger and older people Page 8 of 30
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5 • Focusing on financial survival impacts every aspect of people’s lives • Huge rise in mental health issues as a direct result of cost-of-living crisis. • Staff and volunteers are struggling due to dealing with increasingly difficult circumstances. Staff need to be well enough to support families, and are struggling with morale • Behavioural changes in young children are being witnessed, due to cost-of-living stress in parents. Children readily pick up on stress which puts an additional strain on families. • Single person households are disproportionately impacted compared to joint income households. The impact of stress and worries whilst holding burden alone could increase the risk of isolation and mental health issues. • Rise in drug and alcohol abuse being observed and predicted – this will impact both the NHS and HSCP. • There could be impact on the development and learning of children, some of this is already being seen Actions suggested: • “Put your own oxygen mask on first, before helping others” - important to support staff who are doing the work • What scope do employers have to offer support and supervision policies to their front-line workers, or offer other mental health and wellbeing support such as counselling? • Support for workforce such as free meals which avoid stigma and help them to reduce costs and feel cared for • How can the Councill train their staff to give awareness of who offers what and how to access it? Council staff may be struggling too and need support and signposting. • Early intervention – staff, families and teams need to get support before it reaches crisis point. • How do we teach / support community resilience? Community Involvement – this includes strengthening partnership working, greater inclusivity and more direct involvement with communities so they feel that they are heard and involved. Impacts raised: • During covid, the community hubs and council involvement made communities feel supported. • How do we get awareness out, ensure right messages to ‘silent communities’, those where we have found it traditionally difficult to identify and engage with. Who do they engage with? • Language barriers, different cultural expectations with some disadvantaged groups. This also has an impact on health/employability. Actions suggested: • Partnership working and improve working with other community groups. Consider effective use of buildings by sharing spaces to support many groups thus increasing efficiency. • Listen more to groups to hear their ideas and solutions to help • Ethnic minority representation is limited. There is a need to do more to make these groups heard. • More support for disability groups is needed. • Work alongside community anchor organisations to reach a wider range of people • Support groups to get more involved in things like community planning Page 9 of 30
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6 • Events to celebrate diversity and build up relationships and networks, showcase the resilience of communities • Take on board lived experience • Encourage people to volunteer and address the barriers to volunteering Advice and Information – there was acknowledgement of the rise in demand for advice and information, and the need for collaboration on effective messaging and signposting to reach all communities, especially those that have been hard to reach. Impacts raised: • Benefits are so complex, people don’t know what they are entitled to • People don’t know where to go for support. More collaboration is required, there is an information gap. • Increase in enquiries from vulnerable groups, those in employment and middle-income families who have zero experience in benefits/advice. Compared to financial crash of 2007/08, there is no capacity within household budgets (especially where financial agreements exist) and no savings. • People being advised that they would be better off not working – or facing difficult decisions around working hours, pay and arrangements • Are we storing up issues with credit and debt as people max out credit cards to meet costs? • For people who are refusing to pay bills as part of the ‘no pay’ movement, what will the impacts of this look like in 6 months in terms of credit rating and court action • Risk of further harms to people – e.g. meter rigging and tampering, civil unrest Actions suggested: • Need to ensure that the correct partnership working is in place, with emphasis that there should be no duplication. There is a need to identify who is best to deal with certain issues and signpost accordingly. Council should facilitate information exchanges and raise awareness of what support is available. • People might be reluctant to engage with the Council on particular issues, and information and advice might be better coming from different partners. Consideration should be given to collaboration for an effective messaging campaign. • Could there be a webpage with links to other charities websites? • Income maximisation and debt advice is so complex, and people don’t know what they’re entitled to. General statements might not be helpful as often advice depends on individual circumstances. Effective signposting to cover as many situations as possible would be beneficial. • Need to support people to be able to prioritise their essential bills People who may need additional or targeted support • There are new demographics of people presenting for help – including lots of people who might not have done so before. For those who have not had to ask for help they may not know where to start due to pride, guilt or fear. • Recognition is needed that most of us are ‘one paycheck away from poverty’ Page 10 of 30
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7 • Older people may be more reluctant to seek support around issues like energy bills, they might just turn off heating. • People who are working are still being impacted – pay isn’t keeping up with costs. This includes the people who are working for groups and organisations that are supporting others. • Single person households • Older people, people with health conditions and disabled people are facing increased costs from higher energy use • New Scots, people in asylum system, and people with no recourse to public funds. • Informal caring – are carers at a crisis point? Lack of paid carers available as people not attracted to care work or taking other better paid work. • Exploitation of overseas students, particularly for rent It should be recognised that from the discussions at the evidence session, it was clear that all four main themes are inextricably linked and there is a significant overlap. For instance, access to advice and information is restricted if there are limited resources and the requirement for strong partnership working was noted in all themes. Page 11 of 30
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1 ________________________________________________________________________ To: Fairer Renfrewshire Sub-Committee On: 26th October 2022 _____________________________________________________________________ Report by: Chief Executive _____________________________________________________________________ Heading: Cost-of-living Update ________________________________________________________________________ 1. Summary 1.1. At the Fairer Renfrewshire Sub-Committee meeting on 16 August 2022 an overview of key context and evidence around current pressures on household finances, both in terms of household income and expenditure was examined. 1.2. Since then, there have been a number of developments in the cost-of-living crisis, including a number of policy changes at UK and Scottish level. This paper provides an overview of those changes and provides an update on the current pressures facing households. This paper draws on research and evidence from across Scotland and the UK, and includes information local to Renfrewshire where possible. 1.3. In Renfrewshire and across the country more widely, people are making changes to their lives and lifestyles to manage the impact of the cost-of-living crisis. Although rises in the cost of living impact everyone, there will be a disproportionate impact for those with lower incomes and those who rely on social security benefits. 1.4. Since the last Fairer Renfrewshire Sub-Committee in August, key updates include: • The cost of energy has risen due to a rise in the energy price cap on 1st October 2022, and an Energy Price Guarantee has been introduced to reduce the impact of this on households until April 2023. • Inflation is currently 10.1% (September rate) and predicted by the Bank of England to increase to 11% in October. Interest rates have risen in response to rising inflation, and the current Bank Rate is now 2.25%, having risen 0.5 percentage points on 22nd September 2022. Item 2 Page 13 of 30
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2 • Volatility in financial markets has caused the UK mortgage market to tighten, with lenders withdrawing some mortgage products and mortgage rates rising. 1.5. It should be noted that the landscape of policy decisions is fast moving, and it is likely that there will be additional developments prior to the Fairer Renfrewshire Sub-Committee meeting, to be followed by the UK Government’s medium-term fiscal plan currently being planned for 31st October 2022. 2. Recommendations 2.1 It is recommended that members of the Fairer Renfrewshire Sub-Committee: • Note the content of the report 3. Background 3.1. At the Fairer Renfrewshire Sub-Committee meeting on 16 August 2022 an overview of key context and evidence around current pressures on household finances, both in terms of household income and expenditure was examined. 3.2. This report included key drivers of household incomes, including employment trends and recent changes relating to social security benefits. Key messages at this time included: • Renfrewshire has shown positive recovery of employment rates following the Covid-19 pandemic, with unemployment rate now at an all-time low. • It is important to recognise that many households in work may have low or unpredictable incomes due to insecure employment, or face income pressures due to major life events such as having children, separation or ill-health. Data indicates that there are higher rates of low- paid work and underemployment in Renfrewshire compared with Scottish rates. Work is the best route out of poverty but is certainly not a guaranteed one, as the majority of children in poverty now live in working families. • More broadly, incomes are not able to keep pace with rising inflationary pressures – meaning household budgets are squeezed in real terms as the amount people can buy with the money they earn and/or receive through social security is limited. • There have been a number of changes to social security benefits at a UK, Scottish and local level. Policy changes such as the Universal Credit uplift or Scottish Child Payment have a real impact on household finances, and the significance of these policy interventions is reflected within local child poverty figures. However, the impacts vary depending on household composition. 3.3. The report also outlined recent evidence around the rising cost of living, and the significant pressure this extra expenditure puts on household finances. Key messages at this time included: • Current estimates around the rising cost of domestic energy will mean managing household finances will become increasingly challenging, within the context of a wide range of inflationary pressure on essentials. Page 14 of 30
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3 • The impacts of inflation are felt disproportionately in low-income households, who spend a higher proportion of their income on essentials such as groceries and fuel. • Where people do not have a financial ‘buffer’ such as savings, people need to consider if and how they might be able to increase their income, reduce spending, or seek financial support/borrow money. For many, this means facing difficult decisions about what to prioritise or give up, or mean that people need to borrow money or rely on credit. 4. Impacts of cost-of-living crisis 4.1. The Joseph Rowntree Foundation (JRF) published its annual ‘Poverty in Scotland’ report on 3rd October 2022. Focusing on the cost-of-living crisis, the report is based on JRF’s own research which is believed to be the biggest poll so far of people in Scotland’s experiences of the current cost-of-living crisis. 4.2. The report highlights that that nearly two-in-three (65%) have cut back on an essential, while one-in-four (26%) have cut back on three or more essentials like reducing spending on food, cutting down meal size and not replacing clothing that is outgrown or worn. In addition, three- in-four households have also cut back on the basics, such as numbers of showers and baths taken, reduced spending on transport and used electrical appliances less often. This research was conducted over the summer months, when weather is milder. Even then the research found that more than two-in-five (44%) households have heated their homes less than they needed to or less often, to reduce cost. 4.3. The report also highlights that many families, including one-in-five low-income cannot heat their home and have skipped or reduced the size of meals. Three-in-twenty households that had skipped meals or reduced the size of meals had also accessed a food bank. 4.4. These same issues are being reflected across Renfrewshire. The local Manager of Food Train, which provides services, including shopping, to older people surveyed his service users earlier in 2022 and found that ‘Twenty-seven percent of those questioned had started buying less food, while 25% said they would struggle to pay their bills and 60% suggested they will heat their home less often. In addition, 30% have switched to cheaper food brands and 41% are cooking more often by microwave to save using their conventional oven. Others are going out less often to save money, increasing the risk of social isolation.’ 4.5. JRF also found that significant numbers of people have also accessed advice services. One-in-ten households who have cut back have used an advice service. This rises to one-in-four large families (24%) and one-in-five households with no savings (19%). This is reflected in the experience of Citizens Advice Scotland who, even in the early part of 2022, had already seen large increases in the number of people needing support for queries related to the cost-of-living crisis, such as utility and food insecurity advice. 4.6. Locally, our advice agencies have also seen increased demand, with clients in some cases having an increased wait for services. Page 15 of 30
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4 4.7. The cost-of-living crisis is having an adverse impact on people’s mental health. JRF reported that almost three-in-twenty (14%) adults who had cut back or reduced spending have accessed NHS mental health services. This increases significantly for the priority families who have cut back or reduced costs, with more than one-in-five (22%) single-parent households and the same rate for large families and around one-in-four (24%) of families where someone is disabled. 4.8. Some of the key household types that reported a negative impact on their mental health due to the cost-of-living crisis were: • Three-in-four families with a child where someone has a disability (74%). • Seven-in-ten single-parent families (69%). • Four-in-five families with a baby. 4. Income Employment and Wages 6.1. Office for National Statistics (ONS) figures show that the unemployment rate across the UK fell to 3.5% in the three months to August. This is the lowest rate since 1974. The employment rate for the same period was 75.5%. The economic inactivity rate is now 21.7%, largely driven by those aged 50 to 64 years (long-term illness) and those aged 16 to 24 years (students). The number of people not looking for work because they are suffering from a long-term illness is at a record high (2,490,000 compared to 2,262,000 at the same time last year) and it is this fall in the number looking for work has helped to push the unemployment rate to its lowest for nearly 50 years. 6.2. The ONS data showed that although wages were seeing strong rises, they were still failing to keep with rising prices. Regular pay - which excludes bonuses - grew at an annual rate of 5.4% in the June to August period. However, inflation currently stands at a near 40-year high of 9.9%. When taking the rise in prices into account, the value of regular pay fell by 2.9% in the three months to August. National Insurance Costs 6.3. In April 2022, National Insurance rates were increased by 1.25 percentage points. From 6 November 2022, the temporary increase is being reversed for the rest of the financial year. 6.4. In July 2022, the threshold from which workers start to pay national insurance rose to £12,570 (from £9,880). As a result, 70% of those who pay NICs started paying less, while 2.2 million people were taken out of paying NICs altogether. This threshold will be maintained at its current level for the 2023-24 tax year. Social security 6.5. The levels of social security benefits available also have a significant impact on household income. The social security landscape is a complex one, with benefits administered at a UK, Scottish and Renfrewshire levels. Page 16 of 30
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5 6.6. At present, the UK Government is considering the benefit uprating rate in April. The uprating is usually in line with rate of inflation the preceding September. 6.7. Already, the gap between the September 2021 Consumer Price Index rate used to increase benefits, and the actual rate of inflation in April 2022, means that people who claim benefits including Universal Credit are already seeing a real-terms fall in the value of their income during 2022. The impact of continuing high inflation and rapidly rising prices will increase the gap between the rate at which benefits are paid and the cost of living. 6.8. Uprating benefits in line with average wage growth, rather than inflation, would mean increasing them by 5.5% rather than about 10%, according to the most recent official data. This level of increase would effectively leave poorer households £395 a year worse off on average. According to estimates by the Policy in Practice consultancy, households will be £32.91 a month worse off. Uprating by just 5.5% will result in a 7.7% loss in disposable income on average, as prices for energy and housing continue to rise. The cut is even larger for some groups with in-work households losing out by £458, and couples with children would be £640 worse off. 6.9. HM Treasury has confirmed that the triple lock will be reinstated for the state Retirement Pension for the 2023-24 financial year, and so pensions will increase in line with the rate of inflation (estimated 10%). 6.10. Scottish Child Payment is a weekly payment of £20 that you can get for every child you look after who's under 6 years of age. This is paid to those in receipt of certain benefits, such as Universal Credit. The Scottish Child Payment, which was introduced at £10 per week per child under 6 in February 2021 and increased to £20 per week in April 2022. For children between 6 and 16 years old, the Scottish Child Payment has been covered by the Scottish Child Bridging Payment of £130 per quarter, paid via local Councils. 6.11. In September 2022 the Scottish Government announced that from 14 November 2022, Scottish Child Payment will increase again to £25 per week, per child and the benefit will be extended to children aged between 6 and 16. This means that December’s bridging payment will be the last. The Scottish Government, however has doubled this final payment, so those who are entitled will receive £260. As a Council, we are working with schools, advice agencies and e- mailing families in receipt of Free School Meals directly to inform parents/carers about the changes and encourage them to apply for Scottish Child Payment. 6.12. One-off and short-term payments have continued to be delivered by Renfrewshire Council to households to support with additional cost-of-living pressures, such as the Scottish Welfare Fund and our Financial Insecurity Winter Payment. 6.13. At Leadership Board in September it was agreed that the individual grants of £100 being made through referral for people facing financial insecurity should be increased to £150. While these payments were initially restricted to one per household, approval was also given to allowing two payments per household where there was a need. This payment can help households struggling to buy essentials, and can also support in the time between a Universal Credit Page 17 of 30
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6 application being made and benefit being received, so helping prevent ongoing deductions from Universal Credit. 6.14. Leadership Board also approved £300,000 to provide a £50 payment per child for winter clothing for children in receipt of School Clothing Grant. This will be in parent/carers’ bank accounts by 5 November 2022. 5. Expenditure Inflation 5.1. The cost of living has been increasing across the UK since early 2021. The annual rate of inflation reached 10.1% in September 2022, close to a 30 year high, affecting the affordability of goods and services for households. Consumer prices, as measured by the Consumer Prices Index (CPI), were 10.1% higher in September 2022 than a year before, up from 9.9% in August and returning to July’s recent high. 5.2. Not all households are equally affected by rising prices. New ONS data for the UK released in August divides price indices, expenditure shares, and inflation by income quintile, retirement status, whether or not households have children, and residence type. 5.3. This data shows that the households that earn the least are feeling the effects of rising prices most keenly. The first quintile (the lowest-earning 20% of households) faced an effective annual inflation rate of 9.8% in June, compared to 9.0% for the middle quintile and 7.9% for the highest. By October it is estimated that households in the lowest income decile will face inflation of 15% by October, while inflation will be 11% for those in the highest decile. 5.4. The difference in price indices across the income distribution are not new, but according to the Fraser of Allander Institute, they have spiked this year. Household spending patterns drive different effective inflation rates across the income distribution. Food, fuel, and housing make up a larger proportion of spending for lower-income households than for higher-income households. Household composition may also change how households experience changes in the cost of living, also due to differences in the composition of expenditures. 5.5. This year, fuel, food, and transport comprised 64% of the expenditure of the lowest-earning quintile. The highest quintile spends 55% of expenditures on the same categories. Lower-income households are also more likely to use pre-payment meters, and cannot spread energy costs across the year. High energy prices are more likely to result in reduced consumption during the winter for these households. Fuel 5.6. Another important driver of inflation is energy prices, with household energy tariffs and petrol costs increasing. From August 2021 to August 2022, domestic gas prices increased by 96% and domestic electricity prices by 54%. Electricity prices are linked to gas prices and have followed a similar trend. 5.7. On 8 September a new Energy Price Guarantee was announced to start on 1 October, the date the next price cap rise was due to take place. Energy bills rose on 1 October, although the Page 18 of 30
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7 increase was offset by the government cap on the cost per unit. A typical household annual bill rose from £1,971 to £2,500 - which is twice as high as last winter (although bills are not capped at £2,500 and the more you use the more you pay). 5.8. Initially, the Energy Price Guarantee was announced as a two-year guarantee, but the Chancellor has since confirmed the measure will only last in its current form until April 2023. The Energy Price Guarantee will then be reviewed and replaced with a more targeted system. 5.9. A £15 billion support package announced in May provides one-off payments of £650 to low- income households on certain types of benefits, £300 to pensioner households, and £150 to individuals on disability benefits. Although welcome, this support misses some low-income households, including those which have income just above the rate to receive benefit and in some cases, for those in Scotland on special arrangements to have the rent element of their Universal Credit paid directly to their landlord, the landlord receives the payment rather than the client. Heating oil prices 5.10. As identified in the paper for the last sub-committee meeting, there is no price cap for heating oil and extremely large recent price rises have led to concern about the impact on households that rely on it for heating, including those in rural areas and within villages within Renfrewshire. From a low of just over 20 pence a litre in mid-May 2020, following the Russian invasion of Ukraine prices peaked at 160 pence per litre and have fallen back somewhat and were around 109 pence per litre on 19 June. At 6 October 2022 the price was little changed at 105 pence per litre. Petrol 5.11. Prices of petrol have decreased from the high of an average of 186.9 pence per litre and diesel 194.9 pence per litre at the time of last report. According to the RAC, on 6 October, petrol cost on average £162.32 per litre and diesel £180.45. Energy relief for businesses Energy Bill Relief Scheme: help for businesses and other non-domestic customers 5.12. The UK Government has introduced an Energy Bill Relief Scheme to help businesses. This scheme will provide energy bill relief for non-domestic customers in Great Britain. Discounts will be applied to energy usage initially between 1 October 2022 and 31 March 2023. 5.13. The government will provide a discount on businesses gas and electricity unit prices. The estimated wholesale portion of the unit price a business would be paying this winter will be compared to a baseline ‘government supported price’ which is lower than currently expected wholesale prices this winter. Page 19 of 30
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8 5.14. For all non-domestic energy users in Great Britain this government supported price has been set at £211 per megawatt hour (MWh) for electricity and £75 per MWh for gas. For comparison, wholesale costs in England, Scotland and Wales for this winter are currently expected to be around £600 per MWh for electricity and £180 per MWh for gas. 5.15. This support should help businesses stay open and should also help keep costs of products lower, helping prevent prices for goods and services rising more sharply as increased energy costs are passed to customers. Food 5.16. Food costs are continuing to rise. Food and non-alcoholic beverage prices rose by 14.6% in the 12 months to September 2022, up from 13.1% in August. Rises in food and drink prices were the biggest driver in the latest cost of living increase, with the fastest annual jump in prices since April 1980 as the price of bread and cereals, meat, milk, cheese and eggs have risen. 5.17. In June, the predicted increase in average annual supermarket shop across Great Britain in 2022 was £380. In October, the prediction was increased and now stands at £643, according to research firm Kantar. That means shoppers could be paying on average an extra £12 a week for food and other groceries and takes the annual average grocery bill to £5,265, if customers continue to buy the same products. 5.18. Their survey also showed the price of a weekly shop rose 13.9% in September, compared with the year before. That marks a record high since Kantar first started tracking the sector in 2008. 5.19. Renfrewshire’s local community food provision includes a number of pantries and community larders, which should support those on lower incomes shop in a dignified, stigma-free way. Organisations running these pantries are reporting an increased demand for food. 6. Housing 6.1. Since the ending of Covid lockdown measures relating to housing transactions, the property market has experienced a return to trends reflecting pre-pandemic conditions, with an increasing volume of housing transactions as well as an increase in house prices, with average house prices reaching a new high. This is highlighted in quarter four of the 2021/22, where the average house price in Renfrewshire was £162,750, an increase of 5% compared to the previous year (2020/21) and a 10% increase compared to the same quarter in 2019/20. (This compares to an average Scottish price for the same quarter of £202,068, which is an 11% increase compared to the same quarter in 2019/20.) 6.2. With this trend there is a knock on effect to housing affordability both those already in owner occupation and those households seeking to enter owner occupation, however, cannot raise the required deposit due to high house prices. 6.3. A succession of recent bank rate rises has also led to increasing mortgage interest rates, predicated to settle around 5% for a fixed term deal by the end of 2022. As interest rates on mortgages rise many households will face increasing pressures of increased mortgages payments, coupled with higher fuel bills and an overall general cost of living increases. Page 20 of 30
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9 6.4. At the time of the previous report to the Sub-Committee, mortgage costs were expected to rise, however not as rapidly as currently predicted. After the Fiscal Statement (mini-budget) by the chancellor on 23 September, a fall in the pound fuelled forecasts of a jump in the bank of England base rate to nearly 6%. This caused banks and building societies to remove a number of fixed rate or lower rate mortgage products that they were offering. 6.5. Those with existing variable rate mortgages will see their monthly payments rise. The average rate on a new two-year fixed mortgage has risen above 6% for the first time since 2008, according to the latest data from Moneyfacts, with the average as of 14 October being 6.46%. For someone with a £100,000 mortgage, the difference between paying a 2.5% rate over 25 years and a 6% mortgage over 25 years is approximately £200 (£448 against £644). The Bank of England forecasts that about 1.7 million of the country's 11 million mortgage holders will have to refinance their loans in the coming year, moving onto much higher rates. 6.6. There is concern that increasing inability to afford housing costs, may lead to increasing levels of repossessions in the owner occupied sector and evictions in the private rented and social rented sector (once the temporary freeze on evictions is ended – see below). Impacts could be increasing levels of homelessness, which will have an impact on the demand for homeless services and increased demand for social rented housing. 6.7. Renfrewshire has in the region of 10,000 privately rented properties. The average Renfrewshire private rental sector rent has for a long time been lower than average rent levels than Scotland as a whole. Renfrewshire has typically experienced lower rent rises compared to the consumer price index. In 2020/21 the average 1 bedroom property rent was £392 compared to £546 Scottish average and for 2 bedroom property £518 compared to £693 for a 2 bedroom property. 6.8. Recently, in response the cost-of-living crisis and concern regarding the high rent increases in many parts of Scotland, emergency legislation to freeze rents and ban evictions temporarily has been passed in the Scottish Parliament. The Cost of Living (Tenant Protection) (Scotland) Act 2022 gives tenants increased protection from rent increases and evictions for six months. It sets a cap for in tenancy rent increases. The cap, which applies to in-tenancy rent increases, has initially been set at 0% from September 6 until at least March 31. Ministers have the power to vary the rent cap while it is in force, with measures able to be extended over two further six-month periods. The temporary measures also intend to: • where possible, reduce impacts on the health and wellbeing of tenants caused by being evicted with a 6 month moratorium on evictions, with certain exceptions such as anti- social behaviour and criminality. • reduce unlawful evictions by making it easier and more meaningful for tenants to challenge an unlawful eviction and receive appropriate damages to a maximum of 36 months’ worth of rent. 6.9. The Fraser of Allander Institute have indicated that the rent freeze in particular may help some in the short-term, but is likely to reduce rental property supply and quality if not carefully implemented. This has been echoed by Renfrewshire Citizens Advice Bureau who have anecdotal evidence locally that landlords may remove their properties from the rental market. Page 21 of 30
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10 6.10. It will remain a priority for the Council to increase the supply and availably of more affordable housing including social rent and low-cost home ownership through the Renfrewshire Strategic Housing Investment Programme, and to improve the energy efficiency of existing homes. 6.11. To inform the final new Local Housing Strategy as well as influencing local land use planning and delivery of the Affordable Housing Policy, the Council has commissioned a detailed local housing need and demand research project. The research will examine housing affordability issues, the extent and nature of housing need and the role of intermediate housing options in meeting the need for affordable housing. This research will be completed in Spring 2023 and will inform various policy streams, strategies and action plans for future homes. 7. Credit and debt Debt 7.1. JRF research found that almost half (47%) of all households have at least one debt. In Scotland, 7% of households have three or more debts and two-in-five (41%) households with debt have more than £2,500 of debt – roughly equivalent to almost two months of take-home pay for a person working full-time at the minimum wage. In addition to this, over one-in-ten (14%) households that have some debt, have a debt that is more than five times their monthly equivalised income before they pay housing. 7.2. JRF also found that lower income households were more likely to have debt, with around half of low-income and middle-income households having at least one debt compared to just less than two-in-five high-income households. For many low-income households, having access to credit is a way for them to manage the insecurities of living on a low and often precarious income. 7.3. Spending on credit cards increased by £700m in August as households borrowed heavily to cope with the cost of living crisis. The increase pushed the annual growth rate in spending on credit cards to 12.9%, its joint highest level since 2005, according to Bank of England data. 7.4. Economists said the jump in credit card balances this year to £5.9bn showed the stress on many households as they struggled to make ends meet with it more likely households were using their cards to pay food bills and other essential items. Lack of Affordable Credit 7.5. Many of our lower income residents do not have good credit scores, so are unable to access mainstream credit like credit cards or loans from banks. Affordable credit from community lenders such as credit unions and community development financial institutions like Scotcash is vital for these people, however these organisations carry out affordability checks, and recently have reported that they have had to turn down applications from regular borrowers as increased expenditure means repayments are no longer affordable. In the Scotcash annual report provides an example, ‘Imagine a typical Scotcash applicant of December 2021, who we could serve because Page 22 of 30
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11 repayments were affordable. As their costs of living escalate we, and any other responsible community finance providers, will be saying “no” this December to people we were previously able to serve. What happens then? We fear a bloodbath for loan-sharks.’ 7.6. One of our local credit unions, Right Way has also reported a significant increase in credit applications – particularly for debt consolidation and urgent bills. They point out that Members who have borrowed consistently are now not meeting the threshold for affordability due to increases in costs for food and energy. They have also seen a rise in the number of loans they have had to decline. Between April and June 2022, they had to decline 25% of loans that applied due to lack of affordability. 7.7. Renfrewshire’s Affordable Credit Alliance managed jointly by Engage Renfrewshire and Renfrewshire Council has recently been awarded funding from Trading Standards Scotland to continue the project for a year from 1 January 2023. The Alliance will focus on Illegal Money Lending prevention through working with community groups and practitioners and promoting alternative credit where appropriate. Savings 7.8. Many households went into the Covid crisis already struggling financially and without savings to cushion them from a fall in income. A third of households in Scotland (34%) were financially vulnerable in 2016-18, meaning that they did not have enough savings to cover basic living costs for three months. This rose to over half (55%) of households in the lowest 10% income grouping and just 12% of those in the highest income group. While some households with higher levels of income can draw on their savings to cushion shocks to their earnings, those on low incomes or with less wealth may be less resilient. 7.9. JRF research highlighted that around one-third of all people have either no savings or under £250. This rises to nearly two-thirds for households who are unemployed and 70% for single- parents. Nearly half of all households have a debt and, of those, more than one-in-ten of them (or 160,000 households) have debts of five times their equivalised monthly incomes. Almost one- in-five households are already behind with a bill (including 7% on energy bills) and one-in- twenty households are behind on rent or mortgage payments. Figure 1 illustrates savings by employment, income and family type. Page 23 of 30
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12 Deficit budget 7.10. The Citizens Advice ‘in the Red Index’ published in May 2022 highlighted the issue of negative budgets, where someone’s monthly expenditure exceeds their income. They found that proportion of people undertaking a debt assessment who are in a negative budget has increased significantly since 2019 and climbing to its highest level in Jan-Mar 2022 at 45.8%. This is before price increases in energy and other bills, and changes to taxes and benefits came into effect on 1 April 2022. 7.11. In recent months, has been a sharp increase in the proportion of people not in receipt of benefits on negative budgets and while all groups are affected, the most significant jumps have been with black and Asian clients, self employed people and private renters. Single people are now the most likely to be in a negative budget, having overtaken single people with children as the most impacted group in late 2021. 7.12. Local advice services echo these findings. Anecdotal evidence from both Renfrewshire Citizens Advice Bureau and Advice Works indicates that more clients are coming forward, for whom no financial help can be offered. They are already in receipt of all benefits they are entitled to, and debts are being managed. They simply have less income than they need to match their outgoings. Page 24 of 30
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13 Implications of the Report 1. Financial – There are no financial implications associated with this report, which provides an overview of the position and is for noting. 2. HR & Organisational Development – none 3. Community/Council Planning – This report provides a detailed summary of the current evidence relating to household income and expenditure. Wider poverty related issues are a key element of both the Council and Community Plan and the information included within this report is part of the wider Strategic Needs Assessment for these plans. 4. Legal - none 5. Property/Assets - none 6. Information Technology - none 7. Equality and Human Rights – The report provides an overview of the position around household income and expenditure, and is for noting. As such there are no impacts arising from the recommendation of this paper. It is however important to note that impacts on households explored within this paper are likely to be disproportionately felt by equality groups. 8. Health and Safety - none 9. Procurement – none 10. Risk – none 11. Privacy Impact – none 12. COSLA Policy Position – none 13. Climate Risk – none Author: Diane Dunn, Social Renewal Lead Officer, diane.dunn@renfrewshire.gov.uk Page 25 of 30
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1 ___________________________________________________________________ To: Fairer Renfrewshire Sub-Committee On: 26th October 2022 ___________________________________________________________________ Report by: Chief Executive ___________________________________________________________________ Heading: Fairer Renfrewshire Programme ___________________________________________________________________ 1. Summary 1.1. The Council and partners have a key focus on tackling inequality and improving wellbeing and have longstanding programmes of work and partnership arrangements in place such as the Tackling Poverty Programme and the change programme established in response to the findings of the Renfrewshire Drug and Alcohol Commission. 1.2. As agreed by Council on 3 March 2022, all activities will now come together to form a new Fairer Renfrewshire Programme in Renfrewshire. Officers are working with partners to develop this programme, with a more detailed programme of work being developed to inform Leadership Board. Council agreed on 19 May 2022 to form the Fairer Renfrewshire Sub-Committee to facilitate more scrutiny and oversight of issues relating to poverty and inequality in Renfrewshire. 1.3. This paper provides an overview of the initial priorities and workstreams within the Fairer Renfrewshire programme, and sets out a draft programme for the Fairer Renfrewshire Sub- Committee for the next three Sub-Committee meetings. 2. Recommendations 2.1 It is recommended that members of the Fairer Renfrewshire Sub-Committee: • Note the content of the report • Agree the initial programme for the Sub-Committee until May 2023 3. Background 3.1. In March 2021, Council considered the initial findings from a community impact assessment that had been undertaken across Renfrewshire, in order to develop a deeper understanding of the Item 3 Page 27 of 30
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2 impact of COVID-19 on local people and communities. This provided strong evidence that the pandemic has impacted some people and communities more profoundly than others. 3.2. The starting point of local people in terms of the inequalities or challenges that they faced before the pandemic has been important, with issues such as low income, insecure employment, caring responsibilities and disabilities all being exacerbated by the pandemic and its associated restrictions. The community impact assessment process also identified a requirement to continue to listen and learn to the experiences of local people, recognising that the impacts of the pandemic may emerge over time. 3.3. In the report in March 2021, an initial Social Renewal Plan was approved by Council. The plan set out the high-level actions that the Council and partners will take as we move forward from the pandemic with a clear focus on tackling inequality and improving wellbeing. 3.4. Officers worked to bring all of these strands of activity together, and following an initial assessment have identified a number of actions which should be progressed by partners as a priority during 2021-22. Income, poverty and financial insecurity was identified as a key priority for the plan as a result of financial pressures households were facing during the pandemic, and this is likely to require a sustained focus due to the rapidly developing cost-of-living crisis. 4. Fairer Renfrewshire Programme 4.1. The Fairer Renfrewshire Programme brings together a number of existing programmes of work focussed on achieving fairness and equity, including the Tackling Poverty Programme and Alcohol and Drugs Change Programme. These programmes are being brought together alongside the Council’s Social Renewal Plan, mapping a fairer future for Renfrewshire’s residents through the Covid-19 pandemic, as well as the now rapidly developing cost-of-living crisis. 4.2. There are four key emerging themes which are shared across all elements of the Fairer Renfrewshire programme, and these are: • Improving financial security • Advancing equality of opportunity • Building community capacity and resilience • Listening to lived experience 4.3. Based on work being progressed already against these key programmes, as well as emerging workstreams, an initial programme of updates has been drafted for the Sub-Committee for the next three meetings Sub Committee Meeting Proposed items October 2022 • Focus on: Cost of Living Crisis • Get Heard • Alcohol and Drugs • Winter Connections January 2023 • Focus on: Financial Security Page 28 of 30
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3 • Tackling Poverty Programme Evaluation • Alcohol and Drugs Change Programme • Food Partnership • Fuel Insecurity March 2023 • Focus on: Lived experience • Fair work, employability and community wealth building • Equality Outcomes • Child poverty priority groups May 2023 • Focus on: Health inequalities • Local Child Poverty Action Report 4.4. It should be noted that due to the rapidly developing cost-of-living crisis and its implications, that this programme of items may need to be adapted to reflect emerging priorities and developments. 4.5. It should be further noted that the Fairer Renfrewshire programme will continue to be developed in response to engagement from both local partners and also residents. The Fairer Renfrewshire Sub-Committee held an initial cost-of-living evidence session with third sector partners in October 2022, and it is anticipated this will form an ongoing dialogue between partners and the Sub-Committee to inform the development of the programme. In addition, the work being undertaken to establish a panel of local people with lived experience of poverty should also provide the sub-committee with significant further insight to assist with the development of the programme. Implications of the Report 1. Financial – There are no financial implications associated with this report. 2. HR & Organisational Development – none 3. Community/Council Planning – The Fairer Renfrewshire Programme is a key driver in achieving the ‘Fair’ strategic outcome and theme within the Council Plan, and covers a number of the key actions identified in the plan. It also represents a significant partnership programme of work which supports the ‘Fair’ theme within the Community Plan, with dedicated partnership governance being established to ensure alignment between these areas of work. 4. Legal - none 5. Property/Assets - none 6. Information Technology - none 7. Equality and Human Rights – Equality and human rights are a key pillar of this plan, and it is anticipated that the programme will likely advance equality of opportunity. 8. Health and Safety - none Page 29 of 30
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4 9. Procurement – none 10. Risk – none 11. Privacy Impact – none 12. COSLA Policy Position – none 13. Climate Risk – none Author: Annabelle Armstrong-Walter, Strategic Partnerships and Inequalities Manager, Annabelle.armstrong- walter@renfrewshire.gov.uk Page 30 of 30