Policy and Government

We entered this pandemic with a social security system that could not give families adequate support. The Government recognised this and took swift action, implementing a £20/week lifeline for those with Universal Credit and Working Tax Credits. Families in receipt of legacy benefits must be thrown the same lifeline despite facing the same circumstances. 15% of CAP clients were in this position. Nine in ten (88%) of these households are amongst the poorest 10% in the UK, often living on as little as £74.35 a week for everything except housing costs. This briefing paper sets out the need to extend the lifeline to legacy benefit claimants during the second wave, and the difference such an uplift would make.

Each year the Warm Home Discount Scheme provides two million households with a £140 rebate to help pay for winter energy bills, as well as £40 million of funding for initiatives to help people living in fuel poverty. The current scheme is due to end in March 2021 and CAP has responded to the Department of Business, Energy and Industrial Strategy’s consultation to support its extension. We’ve advocated for changes to ensure the scheme better provides funds for debt write-off and to help people facing financial crisis. This is essential maintenance, and in the longer term we need we need a more fundamental review of the scheme. More than half (55%) of CAP clients have rationed their energy at least occasionally in the last two years, with three in ten (29%) doing so weekly.1 Warm Home Discount (WHD) is an important source of support for many of the people helped by CAP who struggle to keep the heat on over winter, but does not ensure essential energy is affordable for all. 

CAP has responded to the Financial Conduct Authority's (FCA) latest consultation on the Guidance for firms on the fair treatment of vulnerable customers. This revised Guidance comes at a salient time, as many firms are facing new challenges and preparing for the anticipated increase in the number of customers in vulnerable circumstances. In general, CAP welcomes this Guidance, which is thorough and if implemented well, will help vulnerable customers experience good outcomes. Read our full response below. 

The Government is currently undertaking a Comprehensive Spending Review to establish their spending plans for the next 3-5 years. These decisions could not be more key with so much economic uncertainty and low income households at the sharp edge. CAP has submitted a representation to the Review setting out what we consider to be the key priorities for welfare spending, debt collection, fuel poverty and local government. These include permanently extending the £20 per week uplift to Universal Credit and Tax Credit payments, increasing the Local Housing Allowance (LHA) to the 50th percentile of local market rents and ring fencing funding for local councils to provide 100% Council Tax Support to low income residents. Read our full list of priorities via the link below.

The current approach to debt management is problematic and inconsistent across both local and central government organisations. Over the last decade CAP has seen a threefold increase in the average amount of priority debt owed by clients, and with Covid-19 impacting many household finances, this call for evidence has come at a pertinent time. In order to provide holistic support to the growing number of people in debt, the Government must increase flexibility, work out more affordable repayment options and improve its communication with debtors, to name a few. Read our full response below.