Universal Credit (Standard Allowance Entitlement of Care Leavers) Bill [HL]

Baroness Blake of Leeds Excerpts

2nd reading
Friday 17th January 2025 Lords Chamber

[Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)]

My Lords, it gives me enormous pleasure to respond on behalf of the Government. I thank the right reverend Prelate the Bishop of Manchester for introducing the Bill, for his eloquent advocacy and for taking the time for the briefing we had. I am sure that all noble Lords pass our best wishes to my noble friend Lady Sherlock for a speedy return to her rightful place on this Bench.

I will be open and honest in saying that this subject is very close to my heart. Before I became leader of Leeds City Council, I was the executive member for children’s services on Leeds City Council and moved an inherited inadequate service to one with outstanding provision. My experience in local government, across the piece at the LGA, has stood me in good stead to have some understanding and has left me with the firm conviction that everyone in all our communities has a responsibility and a role to play in addressing the challenges facing care leavers. We have heard about many of these from Members across the House, and I thank everyone for their contributions. Every partner organisation and every sector, whether it is public agencies or the private sector, have a contribution to make. We have heard some brilliant examples of where work is being done to address the challenges.

What we have heard today, and what we all know, is that the adverse experiences faced by many care leavers can have a significant impact on their ability to transition into independent living. Without meaningful support, many struggle with financial, emotional and health challenges, and are often left lonely and isolated, without support from family—the mental health issues that have been brought up by noble Lords today.

On the long-term impact, we have had quite a good discussion about the increased number of NEETs. I suggest that there is another category that we need to take account of: the not knowns, the ones for whom we do not have any data. The right reverend Prelate the Bishop of Manchester, my noble friend Lord Davies and the noble Earl, Lord Effingham, all raised issues around that.

To respond to the comments from my noble friend Lord Watson, again, it is about how we draw everyone’s experience together to make sure that we have a holistic package to support care leavers into independent living. I note the comment that was so well made by my noble friend Lord Davies about the financial stress that we are talking about.

We must emphasise in this debate that the Government offer a range of services and support for care leavers. First and foremost, of course, is ensuring that the benefit system meets their specific needs. Because care leavers are less likely to receive family support for accommodation, they can receive the higher local housing allowance one-bedroom rate of either housing benefit or universal credit, up to the age of 25. We provide staying-put arrangements whereby care leavers aged 18 to 21 who remain with former foster carers may be eligible for means-tested benefits.

We need to take into account that, in addition to the exemption from the shared accommodation rate, discretionary housing payments, administered by local authorities, can be paid to those entitled to housing benefit or the housing element of universal credit. Government guidance includes care leavers under 35 on the list of priority groups for that support.

I think we are all looking forward to the discussions on the Children’s Wellbeing and Schools Bill, which will make the Staying Close programme a national offer to applicable children up to the age of 25. Care leavers under 25 will also be exempt from rules that require a connection to a local area before accessing social housing. I am pleased to say that additional funding has been given to local authorities to provide extra support to care leavers at the highest risk of rough sleeping.

Care leavers receive priority access to universal credit alternative payment arrangements, offering greater flexibility for those who need it. To support the transition to the adult welfare system, care leavers’ single points of contact work with the local authority leaving care teams, and care leavers can prepare their universal credit application before they turn 18.

We know that the best way to support care leavers into independent living is through work, which is why the DWP works across and beyond government to offer bespoke educational and employment support. The Second Chance Learning scheme ensures that benefit support is available to care leavers aged 18 to 21 who want to catch up on missed education. I pay tribute to the noble Baroness, Lady Benjamin, for her comments and the work that she is involved in with the first STAR Scholars.

We work to ensure that care leavers get the most out of the DWP’s youth offer, which includes tailored work coach support for those aged 16 to 24. Of course, the Government must lead by example, which is why it is so important that different departments are offering career opportunities to care leavers through schemes such as the Civil Service care leaver internship. I commend organisations such as the NHS and private companies that have outstanding practice in this area.

More widely, the Government have improved support for those in care so that they get the start in life they deserve and are prepared for adulthood. In addition, our focus has to be on early support and early intervention, which means intervening at the earliest possible moment when problems within families start to emerge. We want to move to a position where we can enable children to safely remain with their families, kinship carers or fostering families. We are putting in work to try to attract more foster carers to the system. We are also looking at fixing the care market so that it puts the needs of children first.

In response to the right reverend Prelate the Bishop of Manchester, statutory guidance requires local authorities to work with children in care aged 16 and 17 to develop a pathway plan setting out what support will be provided when they leave care. This includes how they will support the young person to develop their financial capability and money management skills. It is vital that care leavers, and their supporters, understand the full extent of the support available to them. This is the issue about consistency across the piece. We are working with partners in local authorities and elsewhere to raise awareness, including through factsheets to signpost how and where to access support. We know that this needs to be extensive, inclusive and continually updated.

In response to the consistency points raised by the noble Earl, Lord Effingham, there have been concerns about patchy support across local authorities. There are obligations on local authorities to meet the standards specified in the Children Act. Jobcentres work with local authority leaving care teams to support care leavers who need to claim benefits so that they can transition to jobcentre support and find employment. Gathering more effective data is, of course, a prerequisite to all of this work.

Councils already have powers to provide council tax discounts, including for care leavers. It is for councils themselves to determine whether a discount is appropriate. I note the comments made by the noble Baroness, Lady Bennett, and the right reverend Prelate the Bishop of Derby about this.

The DWP has updated guidance and introduced additional support to help care leavers navigate the benefits system. There is a report on these issues from the Children’s Society that goes back a number of years, and I recognise there is a frustration here. There is a requirement, however, that before imposing sanctions, work coaches must speak to a care leaver’s single point of contact, who works with the local authority personal advisor to consider relevant information. We believe this has led to improvements, but reliable data is not yet available. Of course, we would welcome any further evidence of this from partners and noble Lords so that we can get a much more up-to-date picture.

Universal credit is an important part of the support available to care leavers on low incomes, as referenced by so many of the contributions today. My noble friend Lord Davies raised the specific issue of adequacy of universal credit. The fair repayment rate, to be introduced from April, will reduce the overall cap on universal credit deductions from 25% to 15%. This will make a contribution, but it does not address the wider points. We need to ensure that we get continual feedback and evidence on these issues.

The right reverend Prelate the Bishop of Manchester correctly identified the key point in the Bill that under-25s are paid slightly lower rates than the universal credit standard. Indeed, there are reasons why the standard allowance differs according to age. Younger workers typically receive lower wages, with the lower rates of standard allowance maintaining the incentive to find and progress in work. As we have heard, younger people are also generally more likely to live in some someone else’s household, with living costs decreasing significantly for under-25s. Of course—this is the point—care leavers are much less likely to live in someone else’s household.

However, as I have noted, the Government offer support and easements to help care leavers meet their additional needs. The point I need to make again is that it is not possible to make a reliable assessment at this point because data coverage on care leavers is still limited. This is not about cutting costs, however. We want to make sure that we do everything in our power to enable care leavers to move into long-term employment as we believe this is the is the best way to support their transition to independent living.

More generally, support for accommodation and other living costs is available to those most in need. For example, the Government have provided £742 million to extend the household support fund in England until 31 March 2026. Local authorities can also use discretionary housing payments to provide further assistance.

For these reasons, the Government do not believe the Bill is the best way to deliver all the support that we believe care leavers deserve. However, I assure noble Lords that the Government have committed to reviewing universal credit to ensure it tackles poverty and makes work pay, and we commit to listening carefully to all perspectives and to welcoming input from across the House, as has been expressed today. The noble Lord, Lord Palmer, has requested that this be fed in; I hope he will come forward to feed his comments into the overall review that is being undertaken. It is critical that we get the widest possible background to support this review. Of course, we will continue to improve the support available to care leavers.

On future work, the youth guarantee announced in the Get Britain Working White Paper will be available to young people aged 18 to 21 in England, including care leavers, to ensure they can more easily access quality training opportunities and apprenticeships or help to find work. The Children’s Wellbeing and Schools Bill, as I have referenced, will introduce a staying close duty, requiring local authorities to support care leavers to find accommodation and support services, and to publish plans for facilitating their transition into independent living.

This work is a cross-government priority. Indeed, a care leaver ministerial board, comprising Ministers from 12 government departments and chaired by the Education Secretary and Deputy Prime Minister, has now been established to identify what more can be done. As well as the voices of noble Lords, we have to make sure that we hear the voices of care leavers and young people generally and learn from those with lived experience to ensure that we are not in this Building passing judgment, when it is clear from the testimonies that we have heard today that it is so important that their experience is front and centre of any changes that we take forward.

The noble Baroness, Lady Bennett, referenced the Wales universal basic income. I acknowledge that comment; DWP officials are working closely with Welsh local authorities to ensure that transition can take place smoothly.

On the comments from the noble Earl, Lord Effingham, in exceptional circumstances 16 and 17 year-olds may claim universal credit in their own right, but there is no direct entitlement to universal credit for children under the age of 17. I do not have time to go into the detail, but I am happy to pick up on that at another point.

Again, I thank the right reverend Prelate the Bishop of Manchester for bringing this matter to the House. I look forward very much to the continuing discussions. The Government share his commitment to supporting care leavers. We will continue to build on existing support to ensure that care leavers, and indeed all young people, receive the support that they need to live securely and independently into adulthood. I have not had time specifically to refer to the comments about mental health issues, but we know how significant that is—and I reference the work ongoing in this area.

One thing that we know in this area of work is that we all need a relentless focus. We know that too many of our vulnerable young people have been let down in the past. I emphasise that we remain committed to working closely with care leavers and those who support them to bring about the transformation that we need in the way that support is given to them.