The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
I congratulate the hon. Member for Sedgefield (Phil Wilson) on securing the debate.
I believe that, in the long run, the process of welfare reform on which we have embarked will enable more people in County Durham to find work, and will help those who are in work but on low incomes. The hon. Gentleman implied that Durham county council was fearful of universal credit, but I believe that the council should welcome the opportunity that it presents. Our intervention and support will encourage and help people to move up the earnings scale.
Mr Hoban
I shall return to the subject of jobs shortly.
My Department has been asked a number of questions about food banks in recent weeks, and this evening I have listened to what the hon. Member for Sedgefield has said about constituents of his who make use of them. I hope he will be reassured to know that we do not think that they form part of the welfare system. We do not measure their use, but we do “signpost” people to them, just as we might direct people to any charity that provides help and support. I should add, however, that we know from the Trussell Trust’s own figures that only 2% of people say that they were directed to a food bank by Jobcentre Plus.
Under the current benefits system, it is not obvious to people that working will make them better off. The problem lies not with claimants, but with the system. Our reforms will, over time, deliver dynamic benefits as more people are encouraged to work and to increase their earnings. As all the evidence shows, work is the best route out of poverty for individuals and households. Universal credit is a seamless “in and out of work” benefit which will make it easier for people to move into work. Because people should know that work pays and earning more pays more, incentives are built into the system to encourage them to move from low incomes to higher ones. Over the next few months, we shall be identifying ways in which we can help people to increase their earnings and reduce their dependence on the welfare state, thus giving them more dignity and boosting their self-esteem.
Universal credit will make 3 million households better off and will lift a quarter of a million children out of poverty, because we are putting more money into the system. The hon. Gentleman asked about family poverty. Statistics relating to households with below-average incomes show that the number of children in workless poor families has fallen by 100,000 over the past year.
As well as making work pay, however, we must ensure that benefit payments are directed towards those who need them most, that they provide a fair deal for the taxpayer, and that they restore fiscal responsibility to our finances. The reforms that we have introduced are already helping more people to move into work. In the last year alone, there has been a 6% fall in the number of claimants of jobseeker’s allowance in County Durham, and the figure for young people is even better: 14% fewer are claiming the allowance.
The Work programme in County Durham is helping people to find sustained employment. Of the 12,000 who have joined the programme in County Durham, 1,200 have secured jobs, and four out of five of those have remained in work for longer than six months. That demonstrates—here I address the point made by the hon. Member for North Durham (Mr Jones)—that there are jobs there, and that people are staying in employment. We are seeing a break in the pattern of worklessness that persisted under the last Government, who wrote off many of those people.
Let me give an example of what is happening under the Work programme. Wesley McGinn had applied for more than 1,000 jobs since leaving school. His provider worked with him to improve his interview skills and his CV, and helped him to search for jobs that matched his skills and aspirations. Now he is working for Care UK. Wesley has said:
“I'm so glad that Ingeus helped me succeed...I have a good job, I feel I am making a real difference, and I can now pay my own way in life.”
The system that we inherited from the last Government simply wrote people off when they were unfit for work, but in the last two years the number of people in County Durham receiving employment and support allowance and incapacity benefit has fallen by more than 3,000. Some of those people had been receiving incapacity benefit for more than five years. Now, either those people are in work or we are actively helping them to find work rather than writing them off and leaving them stuck on a life of benefits. We are beginning to see real change as a consequence of our reforms.
Mr Jones
The Minister is from County Durham, and presumably knows the area well. I must tell him, however, that when people in my constituency obtain work, it is low-paid work involving short-term contracts. Those people cannot secure the long-term security that they need. For instance, they cannot gain access to credit. The proposal in the autumn statement not to pay jobseeker’s allowance for the first seven days of unemployment will lead to poverty, and people in that position have no savings to fall back on.
Mr Hoban
People who lose their jobs are paid in arrears and the money we are saving by increasing the period from three days to seven is going to be used to provide more support to get more people into work and to get them into work quicker.
The benefit cap is often cited as a cause for referrals. We have decided to cap the total amount people can receive in benefits, and we will restore the incentive for them to move back into work. That is very important. We are working with Jobcentre Plus and local authorities to get people affected by the benefit cap into employment. We have given more money to councils through discretionary housing payments. In County Durham, only 200 households have been affected by the benefit cap, but we will work with those families to get them into employment.
Crisis loans were mentioned, so let me say a bit about the reform of the discretionary social fund and support for short-term financial need. From 1 April this year, locally based provision of crisis loans is being delivered by local authorities in England and the devolved Administrations in Scotland and Wales, because local authorities are best placed to ensure help is targeted at those most in need. Durham county council has delivered support through HAND—Help and Advice Network Durham.
Crisis support is provided in two forms. The first is settlement grants, where the applicant must have applied for a budgeting loan or advance from DWP if they are eligible to do so and have been declined. This aims to help people to remain in the community or move back into the community after a period in supported or unsettled accommodation. Awards are only available for items such as beds, bedding, furniture, white goods and kitchen equipment. The second is daily living expenses, to help to meet immediate short-term needs for goods or services that arise because of a disaster or unforeseen circumstances. Awards are available only for food, baby consumables, clothing, heating and travel, and for a maximum of seven days’ support. At a meeting last week County Durham local authority confirmed it was receiving about 50 to 60 applications a week, much less than the 250 to 300 per week it had anticipated. National provision is also available in the form of advances of benefit delivered by DWP for those awaiting first payment of benefit.
Provision is therefore available for those who have had a delay. The hon. Member for Sedgefield might want to ask Durham county council why it thinks it is getting far fewer applications for support than it expected.
Phil Wilson
I am still waiting for the Minister to get to the main point of my comments. What he is saying is all very well, but there are still half a million people using food banks for three main reasons, and other reasons as well. Are the Government going to do any analysis? Are they going to look at why people are using food banks, to see whether there is any way they can close the holes in the safety net that people are falling through? We should continue to reform welfare, so it is the state that is doing this, not charities.
Mr Hoban
We are making reforms to welfare. The hon. Gentleman raised the issue of people on low incomes using food banks, and I am saying that we are introducing universal credit, which will support people on low incomes and increase their earnings. The Department for Environment, Food and Rural Affairs is doing a review of food aid. That is in the public domain and it will be reporting shortly.
The hon. Gentleman raised the issue of benefit delays. The Trussell Trust has said that benefit delays are accounting for an increase in referrals to food banks, from 18.6% to 32.8% over the last year. However, our figures show that since April 2010 we have speeded up our processing of benefit claims by almost 5%. It is therefore hard to square the argument put by the Trussell Trust and the hon. Gentleman with what is happening in benefit centres.
The hon. Gentleman asked what is happening locally in benefit centres. In the Sunderland benefit centre, there has been a delay in processing jobseeker’s allowance claims. It is below the national average, but he will be reassured to know that it is back on an upward trajectory, so we are clearing work faster. The national target is 90%, and we hit that. In the year to date, we have hit 79.5% in Sunderland, with the figure for May being 81.4%, so we are improving.
On employment and support allowance clearance rates, hon. Members will be pleased to know that in the Sunderland benefits centre, which covers County Durham, we exceed the national target of 85%. [Interruption.] Nationally, the argument the Trussell Trust is making is that the situation is down to benefit delay, but the point I am making is that we have speeded up the processing of benefits, so there is a mismatch. There has been an issue to address in the Sunderland benefits centre, but that has been tackled in respect of jobseeker’s allowance. In the north-east, the Sunderland benefits centre is processing claims faster than the national target, so there is a disconnect at a local level between what is being said by the Trussell Trust and others, and what the statistics show. We publish the figures for processing times and for sanctions, so that hon. Members can see them.
In conclusion, we are seeing a process of benefit reform that is helping the north-east; it is getting people off benefit and into work. We see that in the Work programme, in the falling levels of incapacity benefit claims and in what is happening with JSA claims. We are trying to tackle a processing backlog in County Durham, but what we are seeing generally is that we are processing benefits far faster than we were in April 2010, and Labour Members should welcome that. Our reforms are the long-term solution to the welfare issue, as they ensure that we give people the dignity and self-esteem that comes from being in employment.