Local Government Finance Bill
Debate between Baroness Hanham and Baroness Sherlock
Baroness Hanham
Rather than rising to speak, the noble Lord was nodding his head, so I was not sure whether he was going to intervene. We shall have to come to an agreement for the next two groups of amendments.
Amendment 2, moved by the noble Baroness, Lady Sherlock, and Amendment 3, spoken to by the noble Baroness, Lady Donaghy, are concerned with the interaction between the local schemes and work incentives. I share the concern that work incentives should be supported. That is why earlier this year the Government published guidance to which the noble Baroness, Lady Sherlock, referred, setting out the key features that local authorities should consider including in their schemes to support work incentives. All noble Lords have acknowledged that the transition grant scheme will provide a financial incentive for local authorities to implement those schemes that support work, ensuring that there are no cliff-edges—that is the 25%—as claimants enter work and increase their earnings, and that support is tapered away steadily as their earnings increase. Amendment 2 is intended to control the rate at which council tax support and other benefits are withdrawn to help preserve those work incentives.
In Committee we set out our intentions for the default scheme that will come into force if a local authority fails to adopt a local scheme. We clarified in particular how we intended to take universal credit income into account in that scheme. Officials from my department have continued to work closely with officials from the Department for Work and Pensions to refine the proposals we set out earlier this year so as to ensure that the default scheme avoids unintended interactions with universal credit and supports the strong work incentives that universal credit was intended to deliver. Indeed, my officials have discussed this with the noble Baroness, Lady Sherlock.
The approach set out in the default scheme to treating universal credit income clearly supports work incentives, and I will expand on two key features. First, universal credit will be tapered away by 65% before it is taken into account as income under council tax support schemes. This means that the 20% taper under the default scheme will apply only to residual income once universal credit has been tapered away, and helps to control the overall withdrawal rate. For people below the income tax and national insurance thresholds, the combined marginal deduction rate would be 72%, which for many households would be a significant improvement on the current system. Secondly, the default scheme reflects the fact that universal credit will allow people to earn more income before it starts to be withdrawn. The default scheme allows for council tax support to be withdrawn earlier, minimising the extent to which the means tests interact. Local authorities will not be required to treat universal credit cases in the way provided for in the default scheme, but there are very good reasons why they should want to use this framework as a starting point.
Amendment 3 is intended to require local authorities to have regard to work incentives in designing their local schemes. As I explained when this amendment was first tabled in Committee, I agree with the noble Baroness that work should be supported. As I have said, the Government have published guidance that will help authorities to do that. We are very happy to revise and reintroduce this guidance in order to set out clearly the approach that the department is taking to provide for the treatment of universal credit in the default scheme and to emphasise the benefits of this approach to local authorities, which I think is more or less what the noble Baroness, Lady Sherlock, is asking for. I am also content to use the refreshed guidance to set out the implications for work incentives of increasing the taper rate to help local authorities in their considerations. More particularly, officials will continue to discuss the content of the guidance with the two noble Baronesses as it is developed, and I am very grateful to them for their constructive contributions. I hope that, with their help, we will be able to produce guidance that they can accept. While I cannot accept the amendments, I hope that my assurances go some way to addressing their concerns.
Baroness Sherlock
My Lords, I am grateful to the Minister. For the record, I would like to clarify that I think her comments about Amendment 2 in fact relate to Amendment 4 and those about Amendment 3 relate to Amendment 5. Obviously the amendment numbers have changed—I see that the noble Baroness is nodding in assent—so I should like to clarify the record for those who read the proceedings in Hansard later.
I would have preferred it if the Government had felt able to accept the amendment, but I am grateful to the Minister for her willingness to change the guidance in the way she has described, and for her department to continue to engage. In the light of that, I beg leave to withdraw the amendment.
Riots, Communities and Victims Panel
Debate between Baroness Hanham and Baroness Sherlock
Baroness Hanham
My Lords, as I said previously when I answered a question about the riots, there will be a further response in due course. The Government are already taking quite a lot of action that chimes with the report. We are already funding cadets, summer schools, the National Citizen Service, and Myplace, which is a national programme to build world-class youth centres. All of those will contribute to helping young people develop their resilience and character.
Baroness Sherlock
My Lords, in their response to the riots panel report—I declare an interest as a panel member—the Government were kind enough to agree with us that when it comes to children, early intervention is crucial. Given that, will the Minister reassure the House of the inaccuracy of the reports that are abroad that the Government’s plans to fund nursery places for deprived two year-olds are to be funded not from an underspend but by raiding £1.6 billion over three years from the early intervention grant, thus putting Sure Start intervention at risk?
Baroness Hanham
My Lords, I am not in a position to confirm that. However, it is worth saying that one thing that the Government are doing is to provide and support parenting courses. One aspect of this is that young children need a family background; they need the support of parents; and they need nursery education. All of that will start to build the resilience mentioned over and over again in the report, to help them resist things later in life when they may be faced with problems such as riots.
Local Government Finance Bill
Debate between Baroness Hanham and Baroness Sherlock
Baroness Hanham
My Lords, the applications will be made to the local authority, which will presumably decide whether they are warranted or not.
The letter will make explicit that the funding is make new provision for when community care grants and general living expenses—crisis loans—are abolished. It will explain what community care grants are awarded for and why the crisis loans were awarded. Without curtailing the freedom of local authorities to tailor provision, the settlement letter will ensure that the money intended for vulnerable people goes to them. In addition, the Department for Work and Pensions plans to conduct a review in 2014-15 of a cross-section of local authorities to ask them to report on how they have used the funding for the new local provision. That will be aided by the fact that the funding is through a separate, identifiable grant.
I assure noble Lords that the Government are committed to ensuring that the funding goes to help the most vulnerable. That is why we have put the provisions in place. I therefore urge noble Lords to conclude that the amendment is not required to meet that aim.
Baroness Hanham
Directing local authorities to use funding in a particular way would go against one of the fundamental principles of this reform. The policy gives local authorities the freedom to deliver for the public rather than central government and to do what is right for people in their area. We think it important to resist any attempts to curtail those freedoms or dampen down local innovation, so I urge that the proposed new subsection (1) in the amendment be rejected.
I turn to proposed new subsection (2). It is intended to ensure that certain particularly vulnerable groups are not rendered ineligible for support on the basis of a test for local residence or connections. The Department for Work and Pensions has discussed that issue with local authorities—who, of course, are already familiar with it. It is not an issue limited to the Social Fund, as local authorities already deal with boundary issues in the delivery of other services, such as housing the homeless.
Baroness Hanham
This is an example of how the new local provision will allow local authorities to deliver a more comprehensive service as they can use the new provision alongside already existing support. As regards young people leaving local authority care, local authorities have a duty to safeguard and promote the welfare of a child, and have duties until the child is 21. Local authorities also have duties to support disabled people or those who are destitute. They must make arrangements for promoting the welfare of those with a disability or mental disorder, including the welfare needs of people leaving hospital, having received in-patient care for a mental disorder.
The National Health Service and Community Care Act 1990 requires local authorities to prepare a plan for the provision of community care services in consultation with relevant bodies and to assess the needs of people who may be in need. Local authorities are therefore already required by multiple legislative duties to provide support to the most vulnerable. I think that one would accept that they have a moral duty to do so. They will be able to use this experience to deliver the new local provision, so there is no need for local connection eligibility rules to be published. They already have duties to the most vulnerable and are familiar with dealing with boundary issues. I also remind the Committee that the new local provision is not the only support that will be available. There will also be a national payments-on-account scheme to replace budgeting loans and crisis loans for alignment. This will cover need that arises as a result of the benefit system, such as a change in circumstances or a delay in receiving benefit. It will also enable those on the lowest incomes to access interest-free advances of their universal credit as budgeting advances.
In conclusion, the safeguards to which I have referred will ensure that money intended for vulnerable people goes to them. The most discretionary support will be better tailored so that they receive what they need when it is delivered locally. The new local provision and the national provision of payments on account will complement each other. Taken as a whole they will provide more effective and better targeted support. I hope that with that long explanation the noble Baroness will withdraw her amendment.
Baroness Sherlock
Before the noble Baroness sits down, may I ask two questions? I will respond to her points in a moment. First, is there any requirement that some or all of this provision by local authorities should be in cash? Secondly, I understood her to be saying that the letter of settlement would specify the purpose to which the money should be applied and the outcomes to be expected.
During the passage of the Welfare Reform Bill there was a detailed debate in the Chamber in which the late and much lamented Lord Newton of Braintree asked the Minister what would happen if the local authority were to take the money and spend it on something totally different, such as a road or a swimming pool. This became a matter of some debate. In the end I finally got up and pressed the noble Lord, Lord De Mauley, myself and asked, what would happen if a local authority spent the money on a swimming pool? His response was:
“My Lords, the local authority will not spend the money on a swimming pool”.—[Official Report, 17/1/12; col. 475.]
So I put the question now to the Minister: what would happen, what action would the Government take, if a local authority spent the money on a swimming pool or a road?
Baroness Hanham
If the noble Lord, Lord De Mauley, said that it was not going to happen, it will not happen.
Baroness Sherlock
A very nice try on the Minister’s part and stylishly done, but one of the reasons I am so glad that she is here is that, during that point we were very conscious that this is a matter of what local authorities do themselves and how they make a choice is a matter in which the DCLG has particular expertise. I would not expect the noble Lord, Lord De Mauley, to have the level of expertise in local authority behaviour that I know the Minister has. Surely, she can do better than that.
Baroness Hanham
The noble Lady is not going to get better than that. I have had a huge number of detailed questions about the Social Fund. They are all the responsibility of the Department for Work and Pensions, by and large, until those things are formally announced and we can see how they are going to work. We will ensure that noble Lords and the noble Baroness receive any further information that there is.
Baroness Hanham
This is funding being moved from one area to another, so is it additional? I suppose the answer is probably yes, because it is coming from the Department for Work and Pensions into the Department for Communities and Local Government. Is it additional in terms of revenue support grant? I think the answer is probably yes, because it is within the funding of the local authority but expected to be used for the Social Fund purpose. As for the settlement letter, it will include the detail. I do not know, I am afraid, what the settlement letter will be. I suspect that there are a lot of people in the DWP who do not know either, but I have told noble Lords that as soon as we know when it is being issued and what it contains, we will let them know.
Baroness Sherlock
I thank the Minister for the information she has given me today. I confess that I am disappointed, partly by her belief that I was asking questions of enormous detail. I really only asked two questions at the end. One was, will somebody have to give money out in cash? The second was, what will the Government do if they do not spend it in the way that they are asked to spend it?
They do not seem to be matters of detail: they are important matters about how the scheme will work and whether the Government will be able to do what the Minister, as well as the noble Lords, Lord De Mauley and Lord Freud, have pledged, which is to make sure that the money goes to the purposes to which Parliament intended.
I also do not find the case persuasive that local authorities have a range of other statutory duties already relating to vulnerable people. They already have all those duties and yet successive Governments of different persuasions have found it necessary none the less to have a Social Fund that people could go to, as a last resort, to get some cash for crisis situations. I see nothing in what the Minister said to suggest that that need has somehow disappeared. I therefore find it impossible to understand why the existence of those duties in other areas precludes the need for access to a last resort scheme of cash in the way that successive Governments have seen the need for.
The kinds of things that are bought in requirement at the moment will not all be picked up in the way that the Minister described through budgeting schemes or in dealing with late benefit payments. Those are specifically to deal with particular circumstances in cash. The fact that CPAG found that, so far, no London authorities were intending to give cash suggests grave cause for concern about what will happen to those vulnerable people when that happens.
I now have some information. I would be grateful if the Minister could write to me before the next stage because this is something that we will have to consider carefully at Report. I will go back and look carefully at her remarks, but Lord Newton of Braintree made it clear during the passage of the Welfare Reform Bill that he intended to come back at Report. I so wish that he were here to do that. However, the noble Baroness, Lady Lister, whose work has gone on behind all of this and I will do all that we can on his behalf. Given that this is Grand Committee, I beg leave to withdraw the amendment.
Local Government Finance Bill
Debate between Baroness Hanham and Baroness Sherlock(11 years, 10 months ago)
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Baroness Hanham
But even so, local authorities have been waiting for and expecting these regulations, and they have started off. Also, on consultation, they are now entitled to do less than the 12 weeks—that is in the Bill—so they can curtail or tailor their consultation to different timescales. Moreover, local authorities are far better equipped and far further on than noble Lords opposite are giving them credit for. I have spoken to quite a lot of local authorities, and if they do not already have their scheme in embryo they are all just about there and about to undertake the consultation. While I do not mean any discourtesy to this Committee about the regulations, the most important aspect of this now is that local authorities are getting on with what they are doing and while some may find some difficulties, most are making a good fist of it.
The noble Lord referred to my noble friend Lord Freud. He will appreciate that up until now it has not been entirely in our gift to have discussions since the regulations were published. I do not know the timing for this Bill when we come back but perhaps I can give the noble Lord an undertaking that if it is not considered in the first week, we will make arrangements to have the discussions he has asked for before we get to Report. We may find that helpful and even if there is a day, we will make sure that we do it on that day. I hope that is all right.
I have clarified to the noble Baroness that we were referring to childcare costs; she was quite right to say that. While I am picking up on her questions, before I read my reply, I should say that the universal credit rates are indeed last year’s and will be updated in November, which is in line with the normal uprating procedure in the Department for Work and Pensions for this year.
Baroness Sherlock
I want to be really sure that I understood that. Separate from the uprating, is it the intention that the rates will be the same as those that apply at the time? For example, if it were starting this year it would be the 2012-13 rates and if it were for next year it would be the 2013-14 rates, which is slightly separate from the uprating point.
Baroness Hanham
My understanding is that the rate will be this year’s, uprated. I hope that covers that point. I think the other question that the noble Baroness asked me was whether the very poor will still get the most. The answer is yes, because their income will still be very low, so this should work.
Baroness Sherlock
I am terribly grateful to the Minister for indulging me in this. These are the kinds of questions that I am wrestling with and that I therefore suspect others who read the record will be. It is not just about whether the very poorest will get the most but whether somebody on the equivalent of income support, for example, will get maximum council tax support under the default scheme. Will they get 100%?
Baroness Hanham
My Lords, I am not sure whether the noble Lord would expect me to answer his last point, which was about modelling, today. That has largely been done by the DWP, and it would be more effective if I wrote to the noble Lord giving details of that and did not try to muddle my way through today. We ought to do it properly.
On the question of consultation and the scheme that local authorities are working on, I said very clearly that the current council tax benefit scheme is almost transferable into the one that they will have to operate from January. People who are already receiving council tax benefits and those in the pipeline will automatically be put in, so they will not require any more work done on that. As far as consultation is concerned, I have also dealt with this. The consultation does not have to be 12 weeks. Equally, say if you just have one consultation going out for your scheme, that will be back before the 12 weeks are up. Where there is a precepting authority involved, this is going to have to be a joint scheme and one would expect discussions to take place, or to have taken place, before the scheme was put out for consultation. It should be something that goes smoothly and seamlessly between the two.
We are satisfied that the work that has been done, the way this has been translated and transferred, and the amount of information that is available is absolutely sufficient for local authorities to be working up their schemes now.
Baroness Sherlock
At the risk of prolonging this, I wish to respond briefly. Although it is true that if a local authority were to implement the default scheme as it is now and to find the saving elsewhere then, on the basis of the assurances the noble Baroness has given the Committee today, individuals at the bottom would find themselves unaffected, but that will only be the case if the authority is able to find the money. A number of authorities clearly may decide not to do that, and they will have to make changes. Therefore, nobody can be assured from today that they will be protected from changes. I do not think the Minister is in a position to give that assurance. If she is, I invite her to intervene on me now and give it. I am delighted to pause.
Baroness Hanham
We are able to give that assurance because means-testing will be carried out so that people who have already been means-tested are going to transfer without any hitch or halt.
Baroness Sherlock
I am so sorry; this really is not false modesty on my part. If the authority I live in—and this is just for the sake of argument—decided it could not afford the default scheme and it took on another scheme then obviously the Minister is not in a position to give that assurance, is she? Or is she, even in those circumstances?
Baroness Hanham
If it takes on the default scheme, it takes it on exactly. If it has to use a completely different scheme, it would have to consult on it and indeed it might not be able to give exactly the same benefits.
Baroness Hanham
I understand that the situation is as it would have been had the council not been changing. The default scheme is the current scheme—the current council tax benefit scheme. That will simply transfer and people will be treated the same way for a year unless it is reset the following year. If it is the local scheme, it does that itself; then it can make decisions about the amount that is reduced for council tax benefit.
Baroness Sherlock
My Lords, I am glad that we have cleared that up. My understanding, therefore, so that we are all clear, is that local authorities have two choices. They either adopt or have imposed on them the default scheme or they create a scheme of their own devising, which may or may not bear some relationship to the structure of the default scheme.
The amendment is actually targeted at the second group of authorities. I have probably confused things by asking some questions so that I could better understand the default scheme, but in fact the amendment is targeted at those authorities that either do not choose to adopt the default scheme or on which it is not imposed. This amendment is aimed at those authorities that devise their own schemes and it was intending to say that they should be required to take universal credit income into account in any means test that they go on to apply to determine entitlement on the basis of income.
The case for that is very strong. Nothing that has been said today in any way diminishes it. It is in fact strengthened, if anything, by the intervention of the noble Lord, Lord Greaves. There is a real danger that in attempting to square the kind of circles that have been described, an authority will devise a scheme without having a full understanding of the consequences on either individual incomes for universal credit or of the national position in terms of what the Government want to do. That is problematic.
The Minister’s argument, finally, that it would not be practical to name universal credit because one could name lots of other benefits simply does not hold water. In fact, the purpose of this is not about the individuals who are on it: it is about the national policy conference. The reason I am asking this specifically is to enable the Government to make judgments about universal credit—a single integrated benefit for people of working age—to be able to do the things that, at some considerable length during the passage of the Welfare Reform Bill, we were told universal credit would do. The amendment simply seeks to enable that policy aim to be realised. The case is very strong.
Local Government Finance Bill
Debate between Baroness Hanham and Baroness Sherlock(11 years, 10 months ago)
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Baroness Hanham
My Lords, I refer to the comments just made by the noble Lord, Lord Beecham, and by one or two other Members of the Committee about the present situation. The noble Lord has defined people in poverty and children in poverty and what is happening now under a national scheme. It is not a scheme that is operated by local authorities but one that is operated nationally. I am sure that the noble Lord will have known of many people who have looked for disability allowance and carers’ allowance, who have not been granted them. Do not start by thinking that the current scheme is brilliant because it is not. There are certainly disparities across the country where there are different needs. There may be different needs in cities or in rural areas for children in poverty and children in need. It is for local authorities to decide where those vulnerable people are. There will be more disabled people and pensioners in one local authority than there will be in another. Would it not be right for that local authority to have the right to make the decisions on what is required and make a scheme according to what it knows and who lives in the area? We have had a long dissertation today on vulnerability but it actually turned out to be yet another go at the scheme itself.
The fact of the matter is that the council benefit scheme was removed entirely from universal credit and there is therefore not the slightest point in trying to equate the two and include the scheme again. We are dealing with a situation where localism and local authorities are going to deal with council tax benefit, otherwise there would not be any such benefit—or else there would have to be some form of top slicing to enable the money to be raised. Let us get real about this. Let us be absolutely clear what we are talking about. We are talking about putting the scheme locally because we believe—I accept that the Opposition does not—that local authorities can be trusted to develop schemes that are relevant to people in their areas.
The noble Baroness and one or two others talked about the dividing line between what happens regarding those schemes in Hammersmith and Fulham, Kensington and Chelsea, Rotherham and Preston. Local authorities are already administering schemes. They make decisions daily on criteria regarding who is eligible for one scheme or another. They do that in relation to children, old people, health and public health. They are making decisions all the time. Why say that they cannot make decisions on this? Of course they can and they consider what schemes they should put together.
The noble Lord, Lord Beecham, produced 20 options. If I was putting together a scheme such as this, I would expect at least 50% of the options to be totally unacceptable. I would know that they were totally unacceptable and that they would never get further than the discussion stage. However, you have to look at those options and take them into account. We need to shift this discussion on to the basis of looking at what local authorities are doing and what they need to do. The council tax benefit scheme is already there with its criteria and all its ramifications. Local authorities know what the current scheme involves.
I simply do not accept the arguments that have been put. I very much thank my noble friend Lord Deben for one of his rare but gallant performances, and for providing some sparkling entertainment between him and the noble Baroness who moved the amendment. The whole discussion turned into an interesting event.
I have screeds of notes that I can tell you all about. Let us start with the setting of guidance on vulnerability, which the noble Baroness, Lady Browning, asked to be included in the Bill. I do not know of any guidance in a Bill, but I know that guidance can be positively directed. The guidance is out today and people can look at it to see what it involves. There is no definition of vulnerability, which needs to be dealt with at a local level. Local authorities are already working within the definitions and they know what they are. Noble Lords look sceptically at me, but if local authorities do not do that, they are not very good local authorities and it is time that someone took a decision about having them changed. Local authorities are well aware of their responsibilities and the guidance will help practitioners to understand the statutory framework in relation to vulnerable people because that is already there. We discussed that earlier when my noble friend Lord Attlee was answering from the Front Bench.
The guidance will remind local authorities of the statutory framework in which they operate and their existing responsibility in relation to people who are vulnerable. Those responsibilities are also included in the statutory duty. Local authorities will have to take account of the equality duty; that is very relevant to the point made by the noble Baroness, Lady Lister, about disabled people. They have a statutory responsibility to look at that in making local schemes and to have due regard to the need to advance equality of opportunity between people who share the relevant protected characteristics. That is there and they will have to look at it.
I am sure that everybody here knows the relevant characteristics covered by the equality duty. They are age, disability, gender reassignment, pregnancy and maternity, race, religion or belief, and sex and sexual orientation. The disabled fall very clearly within those criteria. The equality duty is not prescriptive about the approach a public authority should take in order to comply with its legal obligation. However, authorities do have to think consciously about the need to do the things set out in the aims of that duty. I am sure that local authorities will not want to be found wanting under those circumstances. Carers are already covered under the legislation—I think it is this legislation. They will have to be taken into consideration in the same way as part of this.
Baroness Sherlock
Under what legislation are carers to be taken into account? I am not sure what the noble Baroness is referring to.
Baroness Hanham
Oh crumbs, I will stop swinging from the lights. The council tax benefit regulations take carers into account and I am sure that local authorities would want to do that.
Local Government Finance Bill
Debate between Baroness Hanham and Baroness Sherlock(11 years, 10 months ago)
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Baroness Hanham
My Lords, the answer to the noble Lord’s point is that it will be part of the consultation in the summer. Consideration is still being given to the position on reliefs and the consultation will produce an answer. I hope that by Report we will know for certain what the answer is. But I take the noble Lord point’s completely about something that you have to do and how that will be shared. Discretionary seems to be more something that is within the ability of the council to decide. But I do not want to dig myself any deeper into a hole here. I will leave it and write to the noble Lord. I understand that the noble Lord is happy about due diligence.
Baroness Sherlock
When the Minister is writing, will she help us to understand not just the impact on local authorities but the consequences for those bodies to which they might have contracted? Also, what impact do the Minister and the Government think that that might have on localism and the big society, for example?
Baroness Hanham
That is a little wider than the amendment, but we will look at Hansard and see.