Baroness Hanham
Main Page: Baroness Hanham (Conservative - Life peer)Local Government Finance Bill
Baroness Hanham Excerpts
Baroness Hanham
“Estimates of amounts to be disregarded39A (1) The Secretary of State may by regulations make provision for—
(a) calculations of a kind mentioned in paragraph 37(1)(d) or 38(1)(d) to be made on the basis of an estimate of an amount or proportion that is to be disregarded under regulations under that paragraph; (b) for the making of a payment by the Secretary of State to a billing authority or vice versa where it is subsequently determined that the amount or proportion to be disregarded is more or less than the amount of the estimate. (2) Regulations under this paragraph may make provision about the administration of payments under the regulations, including as to—
(a) the time and manner in which a payment is to be made, and(b) the consequences of non-payment.”
Baroness Hanham
Baroness Hanham
“( ) In subsection (1)(b), after “major precepting authority” insert “or the Secretary of State”.”
Lord True
The noble Baroness presents another possible wrong to defend the particular wrong that I am addressing.
I am sorry that I was slow coming into the Chamber when the noble Lord, Lord McKenzie, started his speech; I heard it on the monitor and I agreed with many of the things he said about the timing of this announcement, which is also implicit in what the noble Baroness has said. But I return to the fundamental point that if your Lordships pass this amendment, the Royal Borough of Kensington and Chelsea can ask the Treasury to go on funding the scheme as it now is. The noble Baroness thought it was absurd that those leafy boroughs should be funded, and I rather agree.
The other thing one has to accept is that surely there is somewhere between no saving from council tax benefit, which is the potential position if this amendment were passed and every local authority put that upon the Treasury, and the extent of saving, the problems of which we have heard described; there must be some amount that can be saved under this heading, because I believe—I do not have the figures before me—that spending on council tax benefit doubled during the Administration of the party opposite. I do not accept that there cannot be reductions. Therefore, because of the technical flaw in the second part of the amendment and because I think that there is scope for making reductions, I cannot support the amendment if it is put to a Division.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, I thank everybody for their contributions and the noble Lord, Lord McKenzie, for the way in which he moved the amendment, which was rather through gritted teeth.
We listened carefully in Committee to what was said about the implementation of this council tax scheme. During the Recess—noble Lords will recall that we have been back in this House for only one week—we looked at whether there was any amelioration that we could offer to local authorities to help them through the first year of the new scheme. That arose from discussions in this House, so, rather than being traduced for that, perhaps people would recognise that we have taken some notice and are setting about trying to help. I grant that the transitional scheme is for one year, but, during that one year, we would expect local authorities to have a much better idea of how they might “smooth in” the scheme.
We were also told that many local authorities were looking to charge people who have 100% benefit at the moment anything up to 30%. Noble Lords have spoken about the difficulty involved in collecting sums of money, but that is just an absurd way of looking at this scheme. We have therefore limited the amount that can be charged to people who are on 100% benefit to 8.5% and effectively enabled local authorities to do that by helping them with a grant along the way.
Local authorities do not have to collect 8.5%; they do not have to charge it. They can accept that it will cost more to collect it than to say, “We will let that go for this year while we look further into our schemes for the future”. That is quite correct. As has already been said, some local authorities will not implement that aspect that all.
However, it is pretty rich of noble Lords opposite to suggest that this is somehow an absolutely dreadful imposition. We are giving money to local authorities to help them through a first year which we have recognised may not be very easy to handle. Rather than noble Lords opposite gasping and continuing to tell us that this is just awful, perhaps they might have given us a little bit of credit for listening and trying to help.
The deficit is serious. The increase in council tax benefit during the past 10 years has been enormous, being, as my noble friend Lord True said, well over 100%. That is just ridiculous. We cannot go on like that and we have to make some room for bringing that down. There are a number of ways of doing it, as noble Lords have pointed out.
I have given the House a Written Statement. I have given the broad outlines of how the scheme will operate. It is not very difficult. It is being made very easy for local authorities to fulfil the criteria and to claim the money. I have already said that we will give fuller details on the amount of money that local authorities are likely to be able to retrieve. I hope to do that this week or, if not, at the beginning of next week.
I do not accept that all the grumbles here are justified. I do accept that local authorities are having quite a difficult time. I also accept that the country is having a more-than-difficult time with its finances and the economy. That is why, as my noble friend Lord True said, everybody, sadly, is having to play a part. I just add that to what has been said. I am sure that this will come in again in other amendments that are on the way. This is not an amendment to the Bill but a transitional relief to the council tax scheme.
Those councils which have already consulted on the scheme or are consulting at the moment will need to decide, when they see about this grant, whether they wish to reconsult. It is very unlikely that that will be necessary because they will have a scheme that is slightly better than the one they were looking at, but it is up to them. If they want to do that, they need to take legal advice on whether the changes to their scheme justify them consulting again in any way, even on part of the scheme. That is up to them. We are giving them a helping hand. We hope that that will at least ameliorate for some of them the concerns expressed here today. As I said, I gave the Written Ministerial Statement at a time when I could really do nothing much about the change because there was not the ability to lay it. This has not been going on for months; we have not been considering it for months. We have considered it ever since we were in Committee in this House.
Amendment 98A would make it explicit that billing authorities can run a local scheme along the same lines as the existing council tax benefit scheme. It is not necessary for this amendment to do that or to put it in the Bill. If a local authority wants to have the default scheme, it may base its local scheme on that, retaining the criteria and allowance of the council tax benefit regime. Of course, it will do that against the background of the 10% reduction, so nobody will make up that 10% if they do that. The amendment would also require central government to continue funding council tax support schemes to the same levels as the existing council tax benefit scheme. As I said, that would be minus the 10% and would not be funded to the full amount.
The reforms we are making provide a vital contribution to our deficit reduction. To requote the figures, council tax benefit expenditure in England increased from £2 billion in 1997-98 to £4.3 billion in 2010-11. It might be interesting for noble Lords to hear and take note of the fact that in 2010-11, we spent more on welfare than on education, defence and health combined. Our reforms give councils stronger incentives to support local firms, promote local enterprise, cut fraud—there is plenty of that within the system—and get people back into work. I heard what the noble Lord, Lord Smith, said, that when people start working they can progress if they wish and are able to. On the noble Lord’s question, I slightly challenge what he said about inflation. My understanding is that inflation fell to 2.29%. I think the noble Lord said that it was 11%. Our reforms give councils stronger incentives to promote local enterprise and help people into work. We are moving on that basis.
From now on, local authorities will have real control over how they design their council tax support scheme for people of working age, enabling them to offer council tax reductions that match local circumstances and funding. This amendment potentially removes any saving and as such would constitute a spending commitment. I am not sure whether noble Lords opposite have cleared that with their Front Bench in the other place. If so, it might be helpful to know that. Local authorities already have choices and levers to design and manage their schemes, making their essential contribution to this deficit reduction.
As I think noble Lords will understand from that, I cannot accept the amendment, though I have listened to the concerns raised—as I did in the past. One reason that we have a transitional scheme today is that we as a Government have listened.
The noble Lord, Lord McKenzie, asked how we were going to manage the handling of the transitional scheme. The answer, as I understand it, is that given by my noble friend Lord Strathclyde. There are very precise ways to come back at Third Reading. I do not think that bringing this issue back at Third Reading would constitute one of them. Noble Lords must take that into consideration. I hope that the noble Lord will feel able to withdraw his amendment.
Lord McKenzie of Luton
My Lords, I am grateful to all noble Lords who have spoken in the debate on the amendment. I am particularly grateful to my noble friend Lord Smith for his interjection on some of the data.
As for procedure at Third Reading, I was not suggesting that we would necessarily consider bringing back this amendment at Third Reading. I was referring to some of our other amendments—on issues such as tapers and vulnerable people, for example—which are affected by a greater understanding of the transitional funding that has just been announced. From the briefing session that we had on Monday we very much took it that there would be some flexibility because of the timing of the announcement. If the noble Baroness is saying that that is not the position then we will have to take account of that as we proceed later today.
Baroness Hanham
It may help the noble Lord if I repeat what my noble friend Lord Strathclyde said. As the noble Lord knows, it is my noble friend and the Whips who guide business in this House, as well as the Companion. The Companion states:
“The principal purposes of amendments on third reading are: to clarify any remaining uncertainties; to improve the drafting; and to enable the government to fulfil undertakings given at earlier stages of the bill”.
Those are the three purposes for coming back with amendments.
Lord McKenzie of Luton
Well, my Lords, it seems that clarifying remaining uncertainties could keep us going for a month of Sundays, given what is outstanding on the Bill and the tardiness with which some of its provisions have been made available.
The noble Baroness talked about the 8.5% maximum that would be required for people to access the scheme. She referred to it meeting the cost. What we do not know is the extent to which it will cover the costs for councils which move from the existing scheme on which they have consulted to the new arrangements. We do not yet even know how it is to be allocated and apportioned. We may know that later in the week; we may not.
The noble Baroness said that it is easy to fulfil the criteria of the new scheme. It may be easy to identify what those criteria are, but how you move from where you are on the scheme on which you have consulted to that position is a completely different matter. There will be a whole variety of arrangements on which people have consulted. I doubt whether the Government have done any analysis on how practical or easy it will be or how costly it will be for people to move from where they are to where the Government want them to be. In any event, even if that were accomplished, that does not deal with the issue of what will happen in year two. I do not see the connection between knowing that this is available in year one and having a better idea of how councils can smooth it in for subsequent years if the plug is to be pulled on the transitional funding.
The noble Lord, Lord True, went on about the deficit and of course the deficit has to be addressed. Our point is: why does this have to be a component of it? Does every line in the government accounts have to cough up some sort of proportion? Why this one? Surely it is right that the Government have to evaluate the consequences of each cut that they are trying to make—and not only each cut. What the Government have singularly failed to do is to look at the cumulative effect of cuts on people. My noble friend Lady Hollis made the point about housing benefit and council tax benefits. We know that those two things often go together and that some people will get dramatic reductions in housing benefit because of underoccupancy provisions: an average of £14 a week. My noble friend Lord Smith referred to the importance of £3 a week for people in some of the poorer areas for which he has responsibility. How are those judgments made? The reality is that they are not, which is why we are justified in bringing forward an amendment on this basis.
The noble Lord, Lord Tope, said that this really was not something for the Bill but if we want to constrain the Government and cause them not to create the upset that they are going to cause by this legislation, what other mechanism do we have? He referred to the amendment of the noble Lord, Lord Best, which we will come on to in due course. We believe that this amendment is a better way of dealing with the situation. The noble Lord, Lord Tope, may disagree but, at the end of the day, the root problem that we are trying to deal with here is the so-called localising of council tax benefit and the massive cut that goes with that process. So long as the colleagues of the noble Lord, Lord Tope, support that approach, they cannot challenge us on where we end up on these issues.
When we heard from my noble friend Lord Smith, your Lordships heard then the voice of somebody who has to deal with these issues on a day-to-day basis and in challenging circumstances. It is not only about the council tax costs that people are suffering and the increases that this will bring but about housing benefit, about what is happening on food prices and about inflation generally. As my noble friend put it, there is also the growth of payday loans and worse forms of lending. That is the authentic voice of someone who is dealing with the chaos that these measures are creating. As he put it, there are no more cuts that can be made in the system and the Government should recognise their responsibility for that. My noble friend Lady Hollis spoke with her usual passion and the great analytical approach that she has to things. Again, that is the authentic voice of someone who is dealing with housing on the ground and knows local government through and through.
We do not have a meeting of minds on this. We see this as a very important issue—
Baroness Hanham
My Lords, I thank the noble Lord, Lord Best, for introducing this amendment. I do not like not agreeing with him either—he is someone whom I think everyone admires in this Chamber and whom I have known for a long time—but disagreement there is going to be. I note that the noble Lord opposite said the same thing.
I start by declaring an interest in that I receive a single person discount, and very welcome it is, too, but I am not starting out from that basis today. The amendment is about the local authority’s discretion to change the rate of council tax to a single person, which it can discount by 25% at the moment. The noble Lord suggests that that could go down to 20%. As has been pointed out, that is not what the amendment says. It says that you could remove the discount. Local authorities could be left going from 25% to 0% on the back of it. There is nothing in it at all to limit this to a reduction to 20%. If the noble Lord did that, I am absolutely certain that there would be objections from all around that that was not localism, it was restrictive, and that if we wanted to go further down this discount route the right thing would be to have the full range. We have to be very careful about this.
It is also true, as my noble friend Lord True said, that we have never consulted on reducing council tax discounts. This is a tax and there has been no consultation on that at all. In effect, even if we accepted that the discount would go down to 20%, it would be a potential tax increase for over 8 million people who at present receive the single person discount. It would hit them. There has been some sort of idea all through this debate that this would have no effect on people who are poor. That is ridiculous. Lots of people who are poor pay council tax. They are in a position of being in property, having to pay council tax and getting suitable benefits for that. They might be single parents, lone pensioners or—there was an aside about this—people living in a big house. People live in big houses because they start in them. They do not particularly want to sell that house, and would probably get to the state where they do not know how to because it is so complicated. Why should they move? Why should they not be entitled to that single person discount? That does not mean that they are rolling in money. They are not. We have to dispel the idea that everyone who receives a single person discount can afford to give it up. That is a false impression and we cannot allow it to go on.
To reinforce that, over three-quarters of the claimants of the single person discount live in bands A to C, with over a third living in band A. Only 10% of claimants live in properties that are band E or above. This is not a tax that can be reduced just for the rich. It is very much a tax borne by people who are not particularly well off. However much we might say that they “only” have to lose a certain amount of money, they would only have to lose, as other people would, money that they cannot afford.
The amendment would undermine the fundamental principle behind council tax. I was fascinated by how the noble Earl, Lord Lytton, trailed through all the forms of property and council tax that there have been. Rates were certainly not popular. The principle behind council tax is that it is part property and part personal tax, and is based on two people in occupation. It is clearly defined. The discount reflects the fact that there is only one person in the property, where it is clear that one person does not make as much use of services as a family would. It also has a wide range of support. It is clear and easy, and people understand that it is a relief just for a single person. As my noble friend Lord True and I said, the Government did not consult on changing this discount, as it is a tax, in the consultation on technical reforms to council tax and have no plans to change that.
Noble Lords have previously commented on the amount of revenue that might be raised by reducing the rate of discount. I sound a note of caution on that. People losing the single person discount under this amendment, such as single pensioners and lone parents, might ultimately find themselves in greater need of help to pay their council tax. They might need benefit, so that would not be very helpful. This would mean curtailing the impact of any additional resources, putting more people in need of state support and creating unintended pressures on councils. I am sure the House would agree that that is not quite the hoped for consequence of the amendment.
The technical reforms to council tax in the Bill change the way empty properties are treated with a view to bringing them more quickly back into use. That may also generate welcome additional revenue for local authorities. However, as I said, changing the single person discount would lead to a significant hike in tax on a very large number of people. The amendment would also affect the operation of council tax discounts for empty dwellings. The default discount that applies where there is no resident of a dwelling could be varied by the billing authority. This change is not necessary as the Government already plan to extend authorities’ discretion over discounts for empty dwellings. We discussed that in Committee.
I understand that noble Lords have concerns about local authorities’ ability to make savings and to raise revenue from the flexibilities in the system at the moment. We have offered transitional support, which has been sneered at a bit today. I hope that with a little more time and consideration noble Lords and local authorities might appreciate that that is a helping hand, even if it is for a year at this stage. It is important that we recognise that the Government have made a significant move here. As a result of what I and other noble Lords have said, and the fact that this is a government initiative—so the coalition is wrapped up in it—I cannot support the amendment of my friend the noble Lord, Lord Best. I am sad about that because I normally like to do so. I hope he will withdraw the amendment.
Lord Best
My Lords, I am enormously grateful to all noble Lords who have participated in this debate. I will pick up on one or two points that have been made. I am deeply grateful to the noble Lord, Lord Jenkin, who reminded us of the poll tax riots and told us to learn from experience. Those were wise words. I am extremely grateful to the noble Lord, Lord Tope, who made the point that there is a shortfall that must be met. Can it not be met by people other than the poorest? I was grateful to my noble friend Lord Bichard, who felt that this was a practical way of helping those in most need and was a last chance to do something. My noble friend Lord Palmer had done the arithmetic and made the point that it would be very easy to collect a reduction in the single person discount as opposed to the incredible difficulty of trying to collect from people who have never paid tax before. The noble Lord, Lord Shipley, made the point that with no increase in council tax because of the freezes, the better off will be paying no more tax next year, but the poorest, rather paradoxically, will pay for the first time. He emphasised the value of localism.
The noble Lord, Lord True, was the first voice contrary to the mood of the House at that stage that this amendment was well worth pursuing. His comments were reflected in some of what the Minister said. I will take those points together. The noble Lord made the specific point about Richmond that if the single person discount was abolished altogether, people would face a council tax increase of £6 per week. He pointed out that that would clearly be significant. However, he mentioned that if the reduction was confined to a reduction from 25% to 20%, the worst situation for those people would be nearer to a £1 a week rise, which does not sound as bad. That was certainly the intention behind the amendment.
The noble Earl, Lord Lytton, gave us a wonderful history lesson and supported the whole essence of localism that is built into the arrangements that we would be extending with flexibility under the amendment. The noble Lord, Lord Smith of Leigh, with some reluctance, felt it important to support the amendment. There are better ways, but we have to be careful that we do not go for the best and drive out the good. This is our best shot to make a significant difference. The noble Lords explained that the amendment would be very helpful to places such as Wigan, even if it is not a panacea that would solve all the problems there.
I turn to the noble Lord, Lord McKenzie. I fully recognise that without the support of the opposition Benches, the arithmetic of this House means that it is impossible for me to carry an amendment tonight. I am sorry that political differences came into play outside the scope of Cross-Benchers. The noble Lord makes the point that a broader approach is needed. No one would disagree with that. He makes the same point as the noble Lord, Lord True, and the noble Baroness that the amendment could mean more than a reduction from 25% to 20%. Because it is an open amendment, it could mean abolishing the single person discount altogether. That could be painful to people on lower incomes. He makes the point that the amendment does not exclude pensioners. Many would argue that, at whatever income level, they should be removed from the equation. He is not sure about how the distribution from council to council would work. Richer local authorities may do better, and we need some more work on that. However, the better amendment proposed from the noble Lord’s Benches has failed to get support. Therefore, I hope that something lesser might find acceptance on his Benches. It has not so far.
The Minister also made the point that some restriction on such an amendment, so that it could not lead to the single person discount being removed altogether, is important. She points out that the single person discount has a justification and a purpose. The noble Lord, Lord True, also mentioned that. It is hard to argue that a 25% reduction for single people equates with any precision to the difference between the services required by a single person household and a household with more than one person. Indeed, as pensioners are included, single pensioners require a lot of services which a household with two pensioners does not require, because those people look after each other. It does not follow that if you are on your own you necessarily cost less. If you are a single parent with several children, you may be costing the local authority a good deal. It does not follow that a single person household necessarily uses fewer services from the council.
As a general principle, I do not argue that the single person discount does not have some merit, but a reduction from 25% to 20% can be argued just as easily as the retention of a 25% line. Any amendment that would find favour in your Lordships’ House is likely to be more precise about that. It is likely to state that the level of discount should never be less than X—perhaps 20%. There should continue to be such a discount. Perhaps it should state that pensioners should be excluded. As the Minister pointed out, that would reduce the amount of localism in the amendment, but perhaps an amendment that contains such an element would be more likely to find favour with your Lordships. My colleagues and I need more time to see how the £100 million transition plays into that. Every little helps, and I know that local government is grateful for that amelioration, relatively modest as it is.
This is not the time for me to press the amendment. I, and I hope others, have learnt that different forms of an amendment might find favour across the House, and I reserve the right to return with a different amendment at Third Reading. At this stage, I beg leave to withdraw the amendment.
Lord Best
My Lords, I have put my name to this amendment as well. As a long-time campaigner on the famous bedroom tax, I am very supportive of this amendment, which I think affects only between 2,000 and 3,000 households. For them, however, it would be very important and to have a double whammy would be disastrous for that group. I support the amendment.
Baroness Hanham
My Lords, we discussed this in Committee and, while I appreciate and understand the intention behind the amendment, the trouble is that this would reopen debates that I know have already been had on what is now the Welfare Reform Act. The Government do not plan to revisit what is in that Act. Blanket exemptions for specific groups, including for disabled people and those living in adapted accommodation, were extensively discussed then. I appreciate that the noble Baroness has now reduced this exemption to thousands of people rather than tens of thousands, but the fact of the matter is that it reopens something which I do not think we can reopen here.
Blanket exemptions can also be an inefficient and complex way of targeting resources, so the Government favour discretionary housing payments to help meet any shortfalls between a person’s rent and a housing benefit award. Noble Lords will recall that we announced that an additional £30 million would be added to the discretionary housing payments fund from 2013-14. This is aimed specifically at two groups: disabled people living in significantly adapted accommodation and foster carers. Local councils make the decisions on them on their individual circumstances. However, I assure the House and the noble Baroness that the Government have no intention of changing the long-standing council tax disabled band reduction scheme and that anyone in receipt of a reduction will not lose it as a result of the underoccupation measure. As I say, I cannot support this amendment and I hope that the noble Baroness will feel able to withdraw it.
Baroness Hollis of Heigham
My Lords, I am extremely disappointed by the Minister’s reply. She has made two points: first, basically, that we cannot reopen something that has already been discussed. Forgive me, but that is precisely the point of the Report stage on this Bill. We are opening up issues on housing, particularly disabled persons’ right to housing support. After all, council tax benefit is part of the housing support that families receive. They pay rent and council tax, and in the past those two have been brigaded. To say that while DCLG recognises their need and reduces their council tax bands, the department’s colleagues a few stones’ throw away are perfectly able to penalise them for the very same discount that they are receiving from DCLG is really quite shocking.
The Minister said, secondly, that they could go to discretionary housing payments. By my calculations, that money has already been spent about three times over, given the number of families who will be capped and the like. I know that we are running very late for all sorts of reasons. I would dearly like to test the opinion of the House but I may leave this to Third Reading. I beg leave to withdraw the amendment.
Baroness Hanham
My Lords, I acknowledge immediately that carers play a vital role in society. We all know of people who have provided enormous support and care to their families and others, and I accept exactly what the noble Baroness says in that some of them must feel very isolated and find things very difficult.
The Government expect local authorities to consider what provision to make for carers as part of their broader responsibilities to those with protected characteristics under the public sector equality duty. In exercising that duty under the Equality Act with regard to the design of their council tax reduction schemes, local authorities should have regard to the treatment of carers associated with those who are, for example, disabled or older people, given their general duty to eliminate discrimination. I am happy to clarify this point for the record and to bring it to the attention of local authorities that they have that responsibility.
County council tax benefit makes provision for people who are carers through a specific income disregard and a premium towards their applicable amount. Local authorities will be free to do the same under localised council tax support. To facilitate this further, the Department for Communities and Local Government, as I said last time, is working with the Department for Work and Pensions to ensure that local authorities will continue to receive data on current benefits and the universal credit. I cannot give the noble Baroness the news that I think she is asking for, but as soon as those consultations are in position I will make sure that she is made aware of them.
As I have said, local authorities already have an existing framework of statutory responsibilities in relation to individuals who are vulnerable, and I do not think it necessary to create new guidance or highlight specific groups, which would risk cutting across this. I reiterate that the introduction of the transitional grant will give those authorities that undertake to avoid significant cuts to awards in the first year time to find other, more helpful ways of managing the reduction.
Amendment 107ZD would remove the powers to make regulations creating criminal offences in new Section 14B of the Local Government Finance Act. The noble Baroness is looking slightly puzzled. Have we not got to Amendment 107ZD?
Baroness Hanham
I apologise; I noticed the noble Baroness’s face and was getting a bit alarmed.
We have been asked about how we are talking to local authorities about this and other recent legislation. We are regularly communicating with them and will use this regular communication to bring to their attention recent legislation relating to carers. I think that we had some guidance, which I am also happy to discuss with the noble Baroness and, if necessary, reissue.
I apologise to the House for not realising that Amendment 107ZD had not been moved. I hope that the noble Baroness will feel satisfied with my response and will withdraw her amendment.
Baroness Hanham
I could do that, but I notice the words of the noble Lord and for the moment I will leave out the transitional arrangements because what the noble Baroness is asking for is not transitional but permanent. I am afraid that again I am not going to be able to accept the amendment.
The noble Baroness will be aware that we have consistently made clear that local authorities must take into account the needs of vulnerable groups in designing their schemes. Our draft regulations set out how the default scheme will take universal credit into account. Local authorities may wish to take this into account as they finalise their schemes in relation to people of working age. Under our proposals for the default scheme, universal credit income will be assessed as part of the means test for council tax support. Therefore the level of income, whether from universal credit or earnings, will be calculated in the means test determining the level of award. It is open to local authorities to take a similar approach in their own schemes.
The amendment would require that central government provides sufficient additional funding for councils to cover them to provide 100% support for the groups the noble Baroness was speaking about. As I explained earlier in relation to the set of amendments on funding, the saving from localisation is an essential contribution to tackling the deficit. The amendment also completely undermines the strengthened incentive for local growth. Making councils financially responsible for providing support brings incentives to get back to work.
I note what the noble Baroness said about the small amounts that potentially have to be collected from vulnerable people. I reiterate that we have drawn vulnerable people to local authorities’ attention and indicated that we think they must be taken very much into account. These proposals leave this in the hands of local authorities, and we are not prepared to change that for this group. Therefore, I hope the noble Baroness will withdraw her amendment.
Baroness Meacher
I thank the Minister for her response. The difficulty we have is that local authorities are squeezed to pieces. I have been very close to local authorities until very recently. They are cutting CAMHS services. They are cutting all sorts of things such as care homes and support for elderly people in their homes. They are desperate. Therefore, they are not going to be able to be generous to people in the situation we are talking about today. It is only at central government level that one can make rational decisions about where the pain should strike. The argument of this amendment is that it should not strike the very poorest people any more. They have already been pinched a very great deal. On that basis, I want to test the opinion of the House.