Public Bodies (Child Maintenance and Enforcement Commission: Abolition and Transfer of Functions) Order 2012
Baroness Sherlock Excerpts(12 years, 4 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Sherlock
My Lords, first, I apologise to the Minister for having missed the beginning of his opening remarks. I am afraid that I misjudged the timings somewhat. In speaking to these regulations, I remind the Committee of my registered interests. In particular, although the Child Maintenance Enforcement Commission had a brief life, I managed for two of its years to be a member of its board, serving as a non-executive director until 2010, shortly after I entered the House. I also declare that I am a former chief executive of One Parent Families, now Gingerbread, to which I am grateful for the briefing.
These are small regulations to effect a major reorganisation. I want to ask the Minister a couple of questions, picking up some points made by my noble friend Lord McKenzie. When CMEC was set up by the Child Maintenance and Other Payments Act 2008, its primary objective was,
“to maximise the number of those children who live apart from one or both of their parents for whom effective maintenance arrangements are in place”.
The wording is significant. As the Minister knows, this does not refer simply to maximising the number of maintenance arrangements made through the statutory system but to maximising the number of arrangements in total. In other words, CMEC had a duty, which it took very seriously, to maximise the number of private maintenance arrangements alongside those undertaken using the statutory system. Given that, what assurance can the Minister give us that this objective will be taken on by the Secretary of State, to whom CMEC’s functions are being transferred? How will that be discharged? The noble Lord, Lord German, suggested that perhaps a report to Parliament might work.
Before CMEC was created, when the Secretary of State had responsibility for child maintenance, the Secretary of State actually issued targets and then reported publicly to Parliament on the extent to which those targets had been met—or not. That might be something that the Minister might like to take on board. Can he tell us if the Secretary of State would be willing to do that, and if not, what other mechanism is there for reporting to Parliament and for ensuring that Parliament can have some criteria for judging the report that is thus made?
The Minister, I am sure, will have read the report on CMEC by the National Audit Office of 29 February 2012, as well as the report of the Public Accounts Committee from April. In relation to the decision to charge parents for using the statutory maintenance service, the PAC report noted:
“A successful fee regime will depend on the Commission being able to deliver reasonable standards of service”.
However, it also said that because of problems with the service, there was a danger that parents would not want to use it. The committee noted:
“The risk is that parents who cannot agree private arrangements and do not trust the statutory system are left without effective child maintenance arrangements and that could impact on child poverty. The Commission should work with stakeholders to monitor whether more separated families agree their own arrangements and understand any service-related reasons for lower than expected applications”.
It also suggests that:
“The first monitoring report should be carried out six months after the introduction of fees”.
What is the Government’s response to that recommendation from the PAC? I apologise if the Minister mentioned that in the first five minutes of his opening remarks. Will the Government accept that recommendation and the timetable, and if not, by what other means are they going to address the concerns raised by the PAC?
Can the Minister give the Committee some assurances about the readiness of all involved for this transfer? The PAC report also noted that the commission’s plans to deliver the £117 million of cost reductions imposed on it by 2014-15 were “high risk”. It said:
“There is a £16 million funding gap for 2014-15 which could widen by some £3 million for every month the new IT system is delayed. A further shortfall of up to £30 million could arise in 2014-15 if projected fee income does not materialise”.
What assurances can the Minister give the Committee that the statutory service has adequate funding to deliver the service promised when the Welfare Reform Act was passing through this House?
Finally, I know that the Welfare Reform Act has made the decision to transfer this but can the Minister tell us what lessons the Government have learnt from history? The department has had the opportunity to see the CSA operating both inside and outside government. In bringing it back in, what lessons has the department learnt and how does it hope to avoid some of the very considerable problems the CSA had in the early 1990s?
Lord Kirkwood of Kirkhope
My Lords, I am delighted to follow the noble Baroness, Lady Sherlock, because she said just about everything I had in mind to say. I concur with the important points that she made.
I am very pleased that the noble Lord, Lord Freud, offered us a meeting later in the year. That is part of his unique way of doing business and it is very helpful to the rest of us as we try to understand what is going on. I understand that he and his colleague in the other place are putting a great deal of work in to this important area.
I will stress—because it is easily forgotten—that the client group with whom we are dealing may be disproportionately affected by the impact of the austerity measures that the country faces. I am sure that the Minister and his advisers are already aware of this. As a board member of the Institute for Fiscal Studies, perhaps I could draw his attention to the analysis by James Browne that was published by the IFS for the Family and Parenting Institute in January 2012. It predicted an 8% net loss of income for working single parents and a 12% loss for non-working single parents. We are dealing with a particularly vulnerable client group here, and we all know that. The IFS analysis is useful as a reminder of the importance of getting it right. I know how concerned the noble Lord, Lord Freud, is about these vulnerable groups because he is doing a lot of work on universal credit to try to make sure that these issues are addressed.
In addition to the points addressed to the Committee by the noble Baroness, I will say that other NAO and PAC reports that came out earlier this year—particularly on client fund accounts and on CMEC’s plans to reduce its own spending, which was in an NAO report on 12 February this year—raised matters about which we should all be concerned, including the ability of CMEC to achieve its estimated £117 million savings between now and the fiscal year 2014-15. That is something I would like to put on the agenda for the meeting later in the year, which I would be very pleased to attend—if I get an invitation after this speech.
The NAO was also concerned about the plans to levy charges. I do not need to repeat the point that there is some disjunction between the early planning and the work that the NAO did in highlighting some of the gaps. This will have been worked on and I hope that there will be further and better particulars available. At any future meeting I would like to try to understand how much risk there is in the levying charges policy that is currently being publicly promoted, at least by CMEC.
I agree with the NAO analysis about planning for a 71% take-up of the new statutory system. I have no way of knowing the metrics, systems or processes that CMEC has for measuring that 71%. It is relying very heavily on that as an income stream from which it hopes to move forward. The Comptroller and Auditor-General, the NAO and the PAC were interested to learn more about that, and again expressed concerns. I will also reinforce the point about maximising payments. That is an important duty that will be lost. Any system, whether or not it involves annual reports, should underpin efforts to win back as much of that as we can in the circumstances. That would be useful.
Finally, we still expect a consultation on charging mechanisms. That is a very important piece of outstanding work in which the community, pressure groups and others to whom this area of public policy applies are particularly interested. Perhaps we could add that to the agenda of what now looks like quite a busy meeting some time in the autumn.
This is an important area. I am very ambivalent about this change but I can understand that the costs have to be reduced in a sensible way. I just hope that we are able to do that in a way that does not disproportionately affect the client group we are seeking to serve here. But I have trust that my noble friend Lord Freud is aware and alive to all these things. I hope that the Committee can look to him to give us reassurance, whether privately or publicly, going forward.
Lord Freud
Actually, I would like to turn that around on the noble Baroness; I will accept a letter from her on the lessons from history, and I will pass it on and make sure that they are applied. I look forward to receiving that.
On my noble friend Lord Kirkwood’s question about how we will achieve the savings, we are talking about securing ministerial accountability—this is not about driving savings. The amount of savings from this measure is pretty modest: direct savings are probably running at about £500,000 a year, and that is due to changes to IT systems and one-off costs. We would hope to see longer-term savings from integrating services more deeply into the department. I think, and this point was raised by my noble friend Lord German, that there are some real opportunities here to get holistic support. The longer that I have been in this job, the more I have realised that bringing support together for people and families in trouble is the way to go. There is an opportunity for us to pull the services together in this context as well as in other contexts.
I am tempted to offer to write to the noble Lord, Lord McKenzie. I always feel that it is a triumph if I can get out without offering him a letter because I can answer all his very clever questions. I think that I am down to the one on adverse tax consequences. Although it is always difficult to prove a negative, I cannot imagine how there can be adverse tax consequences because we do something in the middle of the year, when they are both effectively Crown bodies. If that is a wrong tentative statement, I will commit to write, but I hope that I will have avoided any need to put pen to paper for him on this occasion; that would be one of my personal targets. This is about making sure that Ministers are fully accountable to Parliament.
Child Poverty
Baroness Sherlock Excerpts(12 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
Yes, my Lords, this is an important point. We have a different approach from many of our continental peers. Looking at the figures, we do not seem to be doing well enough in some of these areas. When there are people who need real support, we need to look more closely at the education of the workforce.
Baroness Sherlock
If the UK is second in transferring money to help children, I personally am rather proud of that. If the Minister does not want to focus on income transfers, will he take this opportunity to reassure the House that when his universal credit comes in he will carry on supplying free school meals to children?
Lord Freud
Let me make clear why I do not think it is good enough. We are second as regards the number of income transfers—that comes out in the UNICEF report—but we are 22nd out of 35 countries as regards relative child poverty. That shows that we are just not getting value for our money. I can say that we are making arrangements to ensure that school meals continue in basically the same way, although longer term I am looking to try to incorporate that in the universal credit even more tightly and to make some improvements.
Youth Unemployment
Baroness Sherlock Excerpts(12 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Sherlock
My Lords, I commend the noble Lord, Lord Adonis, on an incredibly impressive start to the debate. In case there is a noble Lord present whom I have not bored on the subject, I should declare that I serve as a member of the small, cross-party Riots Communities and Victims Panel, which published its final report in March 2012. We are still awaiting the promised government response, which will be any day now, I am sure.
In touring riot-hit spots around the country, we asked people why they thought the riots happened. Lack of opportunities for young people came up everywhere we went. I do not for a moment posit any simplistic causal link between youth unemployment and rioting, but the issue was raised so often that we felt as a panel that we had to look into youth unemployment alongside other issues, so we looked at the various steps that are being taken and the schemes that are being used to help young people into work, and made a series of recommendations.
With regard to the Government’s Work Programme, the panel questioned whether the payment structure built in enough incentive to those providing it to work with the most difficult cases. We were concerned that, for example, if someone was an entrenched NEET, to use that term, and the provider had not managed to get them into work after a significant period, there was not much incentive to carry on working with or investing resources in them. That suggested that targeted intervention was needed. The panel recommended that there should be a joint central and local government intervention after someone was unemployed for a year and that any claimant still unemployed after two years on the Work Programme should be offered a guaranteed job and additional support. There was a clear feeling that people should not be parked on the Work Programme and not moved on. My view is that we should intervene far earlier than that, but that was the shared view.
There are various ways to guarantee someone a job. The most common ones that we hear about are wage subsidies or incentives for employers, but I also want to highlight the use of intermediate labour markets. During my time as an adviser in the Treasury, I spent many happy hours discussing the cost/benefits of intermediate labour markets with officials, and I suspect that the Minister may have had similar experiences. I have always been rather a fan of ILMs, but as I am sure the Treasury has pointed out to the Minister, they are expensive and times are tough.
However, if we look at both sides of the account book, as my noble friend Lord Wood showed us so eloquently we begin to see the extent of the economic problem caused by having so many young people not in education, training or employment. For example, it is estimated that the cohort of 2008 NEETs will cost the UK economy £22 billion and the taxpayer £13 billion over their lifetimes. In three local authority areas alone, the estimated direct cost to support just 1,989 NEETs for one year is £14.8 million: almost £7,500 each. The extra costs to the public purse—for example, through benefit claims, crime or mental health-related issues—were estimated at another £40 million.
In other words, the costs of inaction are extremely high. ILMs have been shown to work well. Research from the Joseph Rowntree Foundation found that, properly managed, ILM programmes can deliver more sustained progression from welfare to work than other programmes for the long-term unemployed. More than 90% who get a job are still in work after six months, compared with just 40% in other programmes, and their longer-term earnings tend to be higher. An evaluation of ILMs in Australia found that the benefits consistently outweighed the programme costs.
My second point is the regional dimension touched on by the noble Lords, Lord Roberts and Lord Bates. The touching optimism and commendable positivity of the noble Lord, Lord Bates, notwithstanding, my experience in my home town of Durham is that there is considerable unemployment among young people and considerable fear about the future. There is a growing challenge: as young people still in school look at their older brothers and sisters leaving school and not getting jobs, it becomes even harder to persuade them to stay on and work through to their full potential.
Has the Minister seen the latest edition of the Northern Economic Summary from IPPR North, which showed that the number of NEETs is highest in the north of England, at 19%, compared with just 16% in England on average. Furthermore, the amount of time people are spending on JSA is increasing. Almost half those claiming JSA in the north have been doing so for more than six months, with the average length of time for which people are claiming benefits more than double what it was during the 2008-09 recession. That goes to the points made by the noble Lord, Lord Wood, about the risks of the depth of unemployment this time around and the consequences for the economy as well as the individual.
IPPR North suggested that unless targeted measures are introduced to help young people urgently, the gap between the north and other regions in the number of NEETs is likely to carry on growing. Interestingly, its solution was not dissimilar to that reached by the riots panel. It concluded that the Government should offer a guaranteed job paid at the minimum wage or above to anyone who has been unemployed and claiming JSA for more than 12 consecutive months. It proposed that the guarantee should be matched by an obligation to take up the job or to find an alternative that does not involve claiming JSA. It suggested introducing that on a targeted basis: for example, for people living in areas where the job density ratio is twice the national average.
Many noble Lords have commented that there is potential cross-party agreement in this area. Certainly we can agree on one thing about youth unemployment—we are all against it, but we would like a step beyond that from the Minister. I want to hear a sense of urgency in tackling the problem. There is always the risk that we feel that unemployment is always there, but the noble Lord, Lord Wood, made the case that it has not always been here on this scale. If we go back to the situation of the 1980s, as described by the noble Lord, Lord Adonis, the country as a whole will suffer considerably.
The economic case for action has been made. I also agree with the right reverend Prelate the Bishop of Chester that there is a moral case. For me, it is simple; the core job of government is to so order society as to enable its citizens to flourish. I spend too much time going around the country meeting young people who, by the age of 19 or 20, already feel that they have no choice, that their life course is set and that they will never achieve the kind of things that other people took for granted. It is up to us today, and I want the Minister to take a lead. What steps will the Government take to ensure that those young people have hope and that we as a country can live with the consequences of our policies?
Employment: Work Programme
Baroness Sherlock Excerpts(12 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
My Lords, we monitor very closely what is happening within each of the prime provider contracts, and we have introduced—I think for the first time by any Government, in this country certainly—a process where the prime providers look after their supply chains, which we call the Merlin Standard. That is the main protection for subcontractors to make sure they are treated appropriately.
Baroness Sherlock
My Lords, when travelling the country with the Riots Communities and Victims Panel, a frequent complaint was that the Work Programme did not have any subregional targets. For example, if you had a couple of wards with very bad unemployment, which could potentially be a reason for future disturbances, a contractor could actually meet all its targets by cherry picking people from other areas who were easier to move into work, and leaving that area untouched. Can the Minister tell the House what the Government are doing about that?
Lord Freud
My Lords, the way that we are trying to reduce the cherry picking, which has been natural in all of the programmes that have been introduced, is to try to fine-tune the financing so that providers are incentivised to help the hardest to help. That is why providers can earn up to £14,000 to help the very hardest to help. If we see problems developing, in that we have not priced accurately, we will need to look at pricing structures, because that is the way to solve the problem.
Welfare Reform Bill
Baroness Sherlock Excerpts(12 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Boswell of Aynho
My Lords, having listened to this debate and many of the discussions in Committee on the Bill, I commend the amendment of the noble Lord, Lord Best. I hope that the Minister will accept it, first, because the noble Lord has performed a considerable service in bringing his expertise to bear on the issue. I need not go on about that, other than to say that as someone who has no claim to expertise in housing policy I have increasingly come to the view that in many areas of social policy and social advance housing policy is cardinally important because it impacts on all the other areas. Therefore, by extension, the review that the noble Lord proposes will begin to consider some of the ripple effects of these changes on other situations or aspects.
Secondly, perhaps the most relevant analogy that I can make is that we never quite know when we embark on a major element of social change how it will end up. We all have political positions, we ground them in advance, and we then have to sit back and wait for the consequences. Generally, it is unwise to go for the big bang, although Ministers have to do that. I give as an example the changes made in industrial relations policy unsuccessfully in the 1970s. They were then brought in successfully and seriatim in the 1980s rather than in one big advance. We are not in that situation today and I can understand where the Minister finds himself.
We need a process and I shall pick up just two points from the debate. One is from my noble friend Lord German who stressed in his very happy analogy of the Harrington report the importance of independence. The amendment specifically states as a rubric that the review should be independent. As a government supporter, I am entirely relaxed about that; we should follow where the argument goes, look at the consequences and amend them.
I also pick up a point made by my noble friend Lord Kirkwood. He talks about in-flight corrections. We have two stages to this process—the regulations to come, which might be called pre-take-off corrections, and the review following the experience of the initial running of the system, which we should look at carefully. The Minister should do that with a measure of flexibility. We know that resources are very limited. The noble Lord conceded that when moving his amendment, but we should be ready. It is very much in the spirit of the discussion that we have had throughout this long saga, in which the Minister and other noble Lords have played a commendable part. We have done our best in limited circumstances. We sort of launch in hope without certain knowledge of where we will go but, given the noble Lord’s amendment, with a determination to keep our eyes open as to what is happening and to make such corrections as may be appropriate and just.
Baroness Sherlock
My Lords, I shall say just a brief word. Barristers always say that you should never ask a question in open court unless you know what the answer will be. I fear that Ministers often take a similar attitude to research: do not ask a question unless you know what the answer will be and you know that you will like it. I commend the Minister, because I have had the impression throughout the passage of the Bill that he is not that kind of Minister but is genuinely interested in information. Because of that, I hope that he will feel able to give a generous response to the encouragement of many Members of the House to look for information.
I have two things for the Minister to think about. One is to follow up the point made by the noble Lord, Lord Kirkwood, which is that if the Minister is right and rents change as a result, we will all be interested to learn that. If they do not, we will have learnt something about the market. If that is the case, that creates a question rather than just answering one: what is happening with the state of the housing market and what other levers are available to the state? It would be extraordinarily helpful to the country as a whole if the Minister would use his position in government to commend that set of questions to his colleagues, rather than stopping at that point.
My second point is in response to the comments made by the right reverend Prelate the Bishop of Ripon and Leeds, which concerned the broader effects, particularly on families with children. Many noble Lords will be aware that when the United States engaged in significant welfare reform, one fear expressed at the time was that many people would simply disappear from the system altogether. Research was undertaken and that proved to be the case. I have expressed concern at different points during the Bill's passage about what happens to vulnerable children, in particular, and, more broadly, to vulnerable families. Perhaps the Minister can take this opportunity to reassure the House that the Government will do all that they can to track what is happening to individuals so that they do not fall out of the notice of the authorities.
Baroness Grey-Thompson
My Lords, briefly, I commend the noble Lord, Lord Best, on his determination with the amendment and offer him my support. I will not repeat the words of the noble Lord, Lord Kirkwood of Kirkhope, but he is absolutely right when he talks about reassurance. It is so unfortunate at this stage of the Bill that many people who may find themselves in really difficult situations, perhaps through being in the wrong place, will be extremely disappointed that we cannot take this further. As we have read in the press yet again today, many disabled people are being portrayed as benefit scroungers. That causes me great concern as we make some of these changes. The review is vital if we are to ensure that our worst fears are not realised.
Welfare Reform Bill
Baroness Sherlock Excerpts(12 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Sherlock
My Lords, I remind the House of my interests—which are in the Register—as a former non-executive director of the Child Maintenance and Enforcement Commission and a former chief executive of One Parent Families. I feel that I need to place on the record, irrespective of what the amendments’ movers decide to do, a response to the argument that the Minister has made today.
This House voted decisively in favour of a previous Motion; indeed, as we left the Chamber that day, I heard a Conservative Peer express a complaint to the noble and learned Lord, Lord Mackay of Clashfern, that he just had stolen his record for the biggest ever defeat inflicted on the Government. It was a very big defeat indeed. So what has changed? The Minister has told us, first, that single parents get a lot of money from the state so it is not unreasonable to expect them to pay to use the CSA; secondly, that when the CSA was introduced, all the money went to the Treasury, whereas it now goes to the children, so the situation is different and parents should pay for it; and, finally, that charging is needed to deter parents from using the CSA when they can perfectly well make their own arrangements.
Allow me briefly to pick off each of those arguments. In the first case, yes, it is true that many lone parents get lots of money from the state. However, could the Minister tell the House what proportion of those lone parents who use the CSA are on out-of-work benefits? The briefing that I received from Gingerbread told me that the figure is 30 per cent, so 70 per cent of lone parents using the CSA are in fact in work. How does the distribution of that work? Are some people getting most of the money from the state and another in-work, poor, low-paid, low-income group making the payments? They may be a large group, but they may not be the same people.
Secondly, it is worth saying that when the CSA was introduced, the Government of the day made a decision that if somebody was on benefit, all the money would go directly to the state. However, it is my understanding that child maintenance has always been ignored for tax credits purposes and that a similar rule was introduced for out-of-work benefits in 2008. So there is a very clear, established principle that out-of-work benefit should not be treated in the same way, and the very good reason for that was that it was a dual measure to tackle poverty and encourage work.
Finally, it is argued that charging is needed to deter lone parents from using the CSA when they could perfectly well make their own arrangements. The problem is that the amendment tabled by the noble and learned Baroness, Lady Butler-Sloss, is targeted specifically at those lone parents who cannot make those arrangements because their former partner will not co-operate. It is designed precisely for those people who are not able to do the very thing that the Minister wants them to do. That leaves a position of rather rough justice. Those people must pay the price to enable the Minister to encourage other people to make their own arrangements when they can.
I am a new girl around here and do not even pretend to understand how financial privilege works—having listened to some of today’s debate, I am frankly none the wiser. But the one thing that I do know about is the amount of money involved. The Minister has said that he would expect to save only between £50 million and £100 million over a period which I am afraid I did not write down quickly enough. I would be grateful if he could explain to us what he thinks he will bring in on a recurrent basis in a year. Will he also tell us what savings the Government expect to make in their running costs as a result of deterring parents from the system in the first place? This is very important, because there is a nasty suspicion out there, as I seem to recall mentioning in Committee, that the Government’s main objective is not to raise revenue from parents but to save money by driving people out of the system. Let us suppose that that were to work; let us suppose that the effect were that far fewer people used the CSA. If a significant number of those make no arrangements at all, is there not a broader cost to society? Is there not a moral hazard question? Have we not moved into a position which the CSA was designed to address? Are we saying to people, “I’m sorry, you may leave your partner, but you may not leave your children and the state expects you to pay up”? Is there not a price to that, too?
Baroness Anelay of St Johns
My Lords, I hesitate to interrupt at this point and it is extremely unusual to do so. I do so with no hostile intent. There has been extremely generous use of time today on the important subject of the Welfare Reform Bill, on which some progress has been made. The generous time taken by the House on this matter, when we knew that the Scotland Bill had been programmed to start after it, has put those who have been waiting some time for the Scotland Bill in some difficulty. I know that the whole House will apologise to colleagues who have been waiting.
I have had a discussion in usual channels and it has been thought a better way of treating those who are awaiting the Scotland Bill to announce now that it would be better if the business on Scotland did not proceed this evening but continued as scheduled on Tuesday 28 February. Therefore, once the business on the Welfare Reform Bill has concluded, the House will rise. I know that, with the help of the Clerk of Parliaments, that information will be put on the annunciator. I apologise again for intervening at this stage.
Welfare Reform Bill
Baroness Sherlock Excerpts(12 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord De Mauley
My Lords, I shall speak also to government Amendments 62BM and 62CA. In doing so, I wish to put these amendments in the context of the reforms they relate to.
The Government are committed to supporting lone parents. We spend over £6.5 billion on income-related benefits for some of the poorest lone parents alone. Significant financial support is also offered through the tax credit system and child benefit. Our reforms to child maintenance build on this support that the Government already provide directly to lone parents. Our key aim when reforming child maintenance is to ensure that both parents take responsibility. That includes taking responsibility for paying maintenance and for making the right choices about maintenance. This should be seen in the context of our wider ambition to make it the norm that parents work together in the interests of their children, especially when they no longer live together.
Every family is different and the child maintenance system in Great Britain should reflect this. The truth is that the statutory scheme cannot be so detailed and individualised as to be able to deal with every possible circumstance. For too long, parents have been implicitly or explicitly told that the Child Support Agency is the default option. That approach has entrenched conflict and led to an overreliance on the Government providing enforcement action.
The CSA-based system has failed, with the statutory schemes costing around £450 million each year. That could be seen against funding for relationship support for separating parents of £30 million over four years. Furthermore, taxpayers support costs of up to £25,000 for some typical CSA cases and up to £40,000 where we need to take substantial enforcement action. That is money spent by the state chasing maintenance from one parent to give to another. This has led to a system where, overall, it costs about 40p to move £1 between parents. The system must change because it is not working properly for parents or children. It does not represent value for money for the taxpayer.
The reformed system of child maintenance will be based on the principle that collaboration between parents is best for children. We firmly believe that collaborative child maintenance agreements are longer lasting and parents are more likely to be happy with them. Furthermore, we know wider collaboration between parents is clearly associated with better outcomes for children.
I hope that noble Lords will also acknowledge that we cannot be overly simplistic as to where fault lies when it comes to problems establishing maintenance arrangements. In reality, one-third of parents in the CSA identified that they had a friendly relationship with their ex-partners and said there was frequent contact by non-resident parents with their children. Furthermore, these parents reported that their maintenance arrangements were not really a source of tension. The CSA said that it was fairly easy for these parents to discuss financial matters. Our reforms also reflect the fact that over 50 per cent of parents using the CSA told us that, with the right support, they were likely to be able to make a collaborative agreement. Groups working with parents also tell us this. Karen Woodall, director of the Centre for Separated Families, said that,
“the campaign around the proposed changes to the child maintenance system has been largely based on outdated stereotypes around parental behaviour. By offering support to both parents and to the wider family, we believe that the changes will bring about much better outcomes for children”.
However, it is surely not the state’s role to intervene and arbitrate in personal relationships between two adults. Instead we wish to support parents to make an informed decision. That was always the intention of the gateway we provide for under Clause 134. It has become apparent that Clause 134 as drafted, referring to reasonable steps, has been interpreted more stringently than we intended. We do not wish to require parents to take multiple steps determined by us before being able to make an application. That would risk establishing a new quasi-judicial function. It would require us to decide whether a parent had taken reasonable steps and is an impediment to making a collaborative agreement. This would be akin to the complex and intrusive bureaucracy that dogged the early days of the CSA. That is the antithesis of our approach and why we have brought forward Amendments 62BL and 62BM. I hope this clarifies our intentions.
The amendments make clear that our role is to inform the parent approaching us and invite them to consider whether they can make a collaborative arrangement outside the state scheme. This will normally take place when the parent telephones to discuss their options. Where parents wish to pursue it, we will direct them towards wider sources of support. To further make sure support is available for parents, we have announced today £20 million of additional funding. This will be spent working with voluntary and community groups on streamlining existing support and looking at what additional help is needed. This amounts to doubling government spending on relationship support in 2012-13. I hope that, on that basis, noble Lords will be prepared to support Amendments 62BL and 62BM.
Organisations as diverse as the Centre for Separated Families, Families Need Fathers and Relate have all welcomed this announcement. Sarah Caulkin, interim chief executive of Relate, has said that her organisation hopes that,
“this funding will not only allow parents to access support before problems become serious, but also enable as many parents as possible to make their own arrangements to become effective co-parents, which in turn will benefit the whole family”.
I can confirm to the House that this is indeed the Government’s ambition.
These reforms to support parents in collaborating are coupled with reforms to the state-run CSA system. Perhaps I should make it clear that under our reforms the system will still continue to be heavily state-subsidised. However, we want the state-run system to be smaller, enabling us to free up these resources to help separating families who really need that help.
We absolutely recognise that some parents will need to continue to use the state-run service, and we need to do better for them as well. Our starting point for reform is the review by Sir David Henshaw, which was commissioned by the last Government in 2006. The key reform is based around a new scheme recommended by Sir David to replace the Child Support Agency scheme. At the heart of the new scheme will be tough enforcement and collection measures when parents fail to pay maintenance. The Government have developed new processes for identifying those who might not pay and addressing non-payment when it first occurs. The new scheme will also ensure that non-resident parents cannot escape their true responsibilities by refusing to provide us with details on their income. Instead, we will generally access this information from HMRC, which will enable a smoother and faster flow of maintenance to parents with care.
The Government are also committed to ensuring that the most vulnerable parents continue to benefit fully from child maintenance. To this end, we are ensuring that child maintenance payments remain tax-free. In addition, we will guarantee that parents keep all the maintenance, even when they are on universal credit. When money is in payment, child maintenance averages around £32 per week, tax-free, under the CSA. This is a significant financial benefit to the most vulnerable mothers.
Sir David Henshaw also recommended that,
“charging is introduced for users of the administrative system”.
He went on to say that charging would,
“contribute to the objectives of the new system by incentivising private arrangements which can be more successful”.
We agree with Sir David’s findings. The then Secretary of State—now the noble Lord, Lord Hutton—told the Work and Pensions Select Committee at the time of the report that he thought that,
“in general and in principle”,
charging should form part and parcel of the commission’s approach. Subsequently, the then Government took a wide-ranging power to charge as part of the Child Maintenance and Other Payments Act 2008. It is Amendment 62C to that Act from my noble and learned friend Lord Mackay that we will deal with in the next debate. Let me not prejudge that debate, but I shall say something on the principle of charging before flagging an amendment that we propose to make to our powers.
As I said earlier, the Government cannot fairly and should not try to apportion blame between parents. Therefore we firmly believe that, to reform the system and maximise the number of effective child maintenance arrangements, we need to have an affordable but clear financial incentive on both parents to collaborate. With such high numbers of parents who use the CSA saying that it is likely they could collaborate, an affordable financial incentive for both parents is a necessity. The application charge and collection charges proposed by the Government meet these criteria. However, noble Lords will remember that when an application is made and maintenance payments are subsequently made directly, no collection charges are applied. This is the option to pay that is often called often called maintenance direct and is dealt with under Clause 135.
The Government are convinced this approach to charging is the right one and wish to formalise a requirement for us to review based on an evaluation. This would be achieved through Amendment 62CA. We will review charging within 30 months of its introduction. Thirty months will allow a proper sample to be evaluated, including the impacts of collection charges. Within that timescale we will lay a report on the review and the Government’s conclusions on charging before Parliament. I ask noble Lords to support this amendment and the commitment to review.
Child maintenance needs major reform. Fifty per cent of children of separated families have no maintenance arrangement in place at all. We will provide improved statutory child maintenance for those who really need it, and we will of course continue to support lone parents directly through benefits and tax credits. However, we need a fundamental change so that wherever possible parents think twice, take responsibility and do not depend on the state. I beg to move.
Baroness Sherlock
My Lords, I will speak briefly to Amendments 62BL and 62BM, and in doing so I draw the attention of the House to my interests, which are in the register. I am a former non-executive director of the Child Maintenance and Enforcement Commission and a former chief executive of the National Council for One Parent Families.
I want to ask a specific point about these government amendments, which seem to be producing a new formulation that would require an applicant wanting to apply for child maintenance through the CSA to consider with the commission whether it is possible for them to make a private arrangement before being allowed to make such an application. Can the Minister please make it clear to the House just what the applicant would have to do? If I am making an application and I simply say, “I wish to make an application”, and the agency says, “Have you considered making a private application?”, and I say, “Yes, but there is no way that he is ever going to agree to it”, is that enough? Am I then allowed to proceed, or is it intended to be a bigger hurdle than that?
Baroness Tyler of Enfield
My Lords, I welcome the announcement of the additional £20 million for family support services for separating families, which is part of this package of reforms, and in doing so I must of course immediately declare a very direct interest as departing chief executive—this week—of the charity Relate. We provide help and support to separating families, to mothers, fathers and children and to wider family members. I recognise also that this is less contentious than the issues surrounding the reform of the statutory system, which we will be debating a little later, but it is worth a quick comment—not least because of the fact that each year around 350,000 children are directly affected by parental separation.
I am sure that all noble Lords across the House will agree that it is better, wherever possible, to encourage separating parents to make voluntary maintenance arrangements and to provide them with all the necessary practical help and support to do so. I am equally sure that all noble Lords recognise that this avenue will never be possible or appropriate, or even desirable, for all parents, particularly when issues of domestic violence are involved. That is what the statutory service is there to do, quite rightly, but it must be in everyone's interest that as many separating families as possible are encouraged and actively supported to make their own arrangement, not least so as not to clog up the statutory system for those who really need it most. The fact that some 50 per cent of children living in separated families have no effective child maintenance arrangements in place is surely evidence that the current system needs an overhaul. It is self-evident that any new system should be based as far as possible on reducing conflict and encouraging collaboration.
The fact that the funding announced today will allow parents to access more consistent support services as soon as possible across the country, and that it responds very directly to concerns raised by the DWP Select Committee a number of months ago, will be in everyone's interests, particularly those of children. This form of earlier intervention must be a wiser use of resources than waiting for problems to become so intractable, and for conflict to become so entrenched, that voluntary-based arrangements, frankly, become quite impossible.
As a former chair of the Kids in the Middle coalition of charities, I know that high levels of conflict in family relationships are bad for the well-being of everyone involved, particularly the children. Research makes it clear that the two most damaging issues for children when parents separate, which often make effective and enduring co-parenting far more difficult, are high levels of conflict and a lack of contact between both parents after separation. It will hardly be a surprise that the two often go hand in hand and, crucially to the debate today, that where there is contact between the child and the non-resident parent then often financial support arrangements flow as well. There is good evidence for the impact that co-ordinated services can have in this area, addressing financial, legal, housing and practical advice but also emotional support, mediation and a range of other things. I will not detain the House any longer by going through the research evidence that exists in this area, but I find it persuasive.
I stress, as I did in Committee, how detrimental it is to any child to grow up not simply without enough income and financial support but without any role model of a father—as generally the non-resident parent is—as a key figure in that child’s life, providing practical, emotional and financial support.
Baroness Sherlock
I came across a quotation from the Committee stage:
“For even though marriages may break down, parenthood is for life. Legislation can't make irresponsible parents responsible. But it can and must ensure that absent parents pay maintenance for their children”.
That was said by the noble Baroness, Lady Thatcher, in 1990. She went on to talk about setting up the CSA. We have heard a lot about the failings of the CSA, but more than £1 billion changed hands last year through it. Before it was set up, lone parents had only the option of going to the courts to try to enforce maintenance, and in the vast majority of cases, they could not afford to go and could not afford to enforce it if it happened.
There are two very simple reasons for backing this amendment, which is why my name is on it. The first is simple compassion. There is no good reason why a single parent should have to hand over to the state not only £100 up front but up to 12 per cent of the money that is currently going to her children simply to have what is owed to her in law paid.
The second is a question of justice. If the Government’s intention is to change behaviour and to make sure that the absent parent pays up, they should charge him. What can the lone parent possibly do, other than ask, to make him pay up? Yet she will be penalised for his failure to pay. There is no behaviour change that she could possibly undertake, other than to ask nicely. She cannot do anything. That is why she has gone to the state in the first place. She has come to the state to ask for the help that the noble Baroness, Lady Thatcher, recognised all those years ago and set up an agency to give. We must not fail her today.
The Lord Bishop of Manchester
My Lords, many of my parish priests would endorse the kind of things that we have heard of this afternoon, the many cases where single parents—97 per cent of them mothers—are placed in a most cruel and unfair position. It is only recently, I think, that the Prime Minister said that our society must do more to make fathers understand and take responsibility for their paternal aspects which they have taken on by becoming fathers. What I do not think he said but, unfortunately, what this Bill does is that the mother who is left on her own without any financial backing from that father should therefore pay this huge penalty. That is what this Bill is requiring at the moment. It seems to me that what the noble and learned Lord, Lord Mackay, is putting before this House is a very sensible and compassionate way of undoing an injustice which I do not believe the Government really intended in the beginning. I hope that the Minister will see his way forward to recognising the great power of opinion that he must surely have heard this afternoon in this House.
Welfare Reform Bill
Baroness Sherlock Excerpts(12 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Lord Bishop of Ripon and Leeds
Thank you very much. The answer to that question is £113 million, which is a minute proportion of the total cost of welfare benefit addressed in the Bill.
This cap is not simply targeted at wealthy families living in large houses. It will damage those who have to pay high rents, because often that rent has increased substantially in the course of occupancy of that house. An out-of-work couple with four children between five and 12 and with £250 a week rent, which is nothing out of the ordinary in many parts of the country, and £20 council tax, currently has an income under present arrangements of some £373 a week after housing costs are deducted. After the cap, that drops from £373 to £230, or £5.50 per person per day—not the £500 of the headlines that we have been seeing. That is much less than 40 per cent of median household income, and I do not understand what a family in those circumstances is meant to do. I do not believe that a child can have a good childhood in circumstances such as that.
I had a letter the other day from someone who disagreed fairly strongly with me and said that surely £500 a week should be enough to bring up a family in normal circumstances. I would not disagree if we were talking about £500 rather than £230. But those whose benefits are capped are not in normal circumstances; they have particular reasons for being in need. Often that will be a substantial rent, and sometimes there will be several children who may not be their own and who may have been taken into the family to avoid their costs falling on the state.
Child benefit is a non-means-tested benefit paid to both working and non-working families. In setting the cap, it has been ignored by the Government. It should also be ignored in calculating benefit income against the cap. Those who are suffering from the cap should be allowed to retain their child benefit. I know that, from 2013, higher taxpayers will not be entitled to child benefit—that is a different issue—but anyone taking home £26,000 will be entitled to it, as will many of those earning a good deal more than that. The intention of the benefit cap is to promote fairness between working families and those who, however hard they try, cannot find a job.
I admire and salute those who bring up families on low pay. I am very aware of poverty in working families and see it through my own working life. We need to defend the interests of those who are poorly paid, but we do not do so by refusing child benefit to those who are out of work. This amendment declares the importance of child benefit both for working families and for the unemployed. Both should receive state support in bringing up their children. Child benefit is paid for the needs not of adults but of children. It has a massively high take-up rate and is used to benefit children whatever their situation. We are rightly proud of its effect in helping the next generation.
This amendment is a compromise between the present situation and the cap as proposed in the Bill. Child benefit is paid at a rate of £20.30 for the first child and £13.40 for every subsequent child. At present, a child born into a family with benefit income of over £500 a week—that is, income over the cap—will receive £62.40 in benefit support through child benefit and child tax credits. Under the benefit cap as proposed, there is no support for that child at all. This amendment restores only £13.40 of the £62.40. In that sense it is an extremely modest amendment, but it does mean that there will be some money coming in for children in this pressurised and often suffering environment, as we discussed in the previous debate. It means that there is some help for children while maintaining the principle of the cap. All of us who have used child benefit or family allowance know just how crucial it has been in our own lives to bringing up our children. It is entirely inappropriate that the only people not allowed to receive child benefit should be those who are out of work and whose benefits are capped.
Quite a number of people have asked, especially over the past few days, why Members on this Bench have been particularly concerned about the needs of children in these welfare debates. Christianity, along with other faiths and beliefs, requires us to think most about those who have no voice of their own. Children who are in most need are one of the most evident examples of that, and the New Testament shows that Jesus had a very special concern for children. Children have no vote in our society; they probably do not answer YouGov questions.
This amendment goes some way towards protecting children by helping two groups especially. First, for children in families that are struggling to pay rent, it will mean fewer face homelessness—especially but not only in London. Secondly, it will help those in larger families. Children do not choose to be in large families and many are so because parents have taken in, and provided love for, those who would otherwise be a burden on the taxpayer. It cannot be right for someone who becomes unemployed not only to lose their job and have their assessed benefit cut but to be told that their children no longer have a right to child benefit.
This amendment declares our support for children, families and the next generation, and I beg to move.
Baroness Sherlock
My Lords, I speak in support of this amendment, to which my name is attached. I am grateful to the right reverend Prelate the Bishop of Ripon and Leeds for tabling it, and I pay tribute to both his and the Children's Society's long-standing work in support of children. My concern about this amendment is that the measure has some very poor consequences, whether intended or unintended. Perhaps the Minister can tell us which they are.
I want to suggest three ways in which this cap, as the Government have put it together, is particularly badly constructed and three problems that it will cause. First, as we have heard, this measure will seriously and disproportionately affect children. A new DWP impact assessment came out today, which significantly changed the figures that we were working with previously. I have been able only to skim read it but I see from the headlines that the official impact assessment says that 220,000 children will be affected, and the losses in income those families will face are not small amounts. Initially, 67,000 households will lose an average of £83 a week, while 17 per cent of those affected will lose more than £150 a week. Those are very significant sums, so the behavioural impacts which the Minister wants to see happen will have to be very big indeed to address losses of that size, and I wonder what we can do about them.
I am not clear what steps those parents are meant to take to be able to avert those losses. That impact assessment says that 44 per cent of households affected are already living in social housing—in other words, in the cheapest accommodation available in their area. These are not families who are living it up in Kensington mansions, sipping cocktails by the pool before dinner. Forty-four per cent of them are already in social housing and most of the rest are in the kind of private housing that the noble Baroness, Lady Hussein-Ece, described earlier. As anyone who has had cause to go knocking on doors in London will know, there is housing out there which is astonishingly expensive but of astonishingly poor quality. The nature of the private sector market in London and other very high-cost areas is such that it is depressingly easy to rack up rents of £350 a week if you have two or three children.
What will happen and what are those families to do? In Committee, I put down an amendment which sought to exempt from the cap specific groups of vulnerable children who, for example, had been the subject of child protection orders, and I asked the Minister what those families could do to avoid being forced to move. He gave me three ways in which families could avoid that. The first was that they could negotiate a reduced rent with their landlord, although he had the good grace to acknowledge that may not succeed. The second way that the Minister suggested was that they could move into work, but when we look at the figures, we find that some 60 per cent of the families affected—a majority—are not required to work, either because they have small children or because they are sick or disabled and have limited capacity to work. In fact the Government's own policy of not trying to push sick people or the parents of young children out into work is now suggesting that they do that, which does not seem like a great idea either.
The final suggestion which the Minister made was that families could use their savings to pay the shortfall. I believe that one of your Lordships mentioned in the previous debate that the average family in Britain had just £300-worth of savings. That would not go very far in paying shortfalls of this nature, and one has to suspect that these families are likely to have less than the average amount of savings. We therefore have to accept that what will happen is that these families will be forced to move.
Many children's charities have made representations to me, as I am sure to many noble Lords, saying that they fear that families would be forced to move not just once but repeatedly. If they move to a cheaper area and rents rise faster than the cap, they have to move again. What are the consequences of that for the children? Again, I looked into this in Committee. The initial DWP impact assessment highlighted the possible damage to children forced to move school repeatedly, and the evidence is quite clear of the impact—the negative impact, obviously—which that has on children's academic achievement. As I also pointed out in Committee, forced moves reduce the ability of child protection professionals to keep track of families where children are at risk of abuse. I asked the Minister to write to me on how the Government would address those particular categories, and he did. I am afraid that it was with no very satisfactory encouragement and, again, I hope to give him the opportunity to be more specific when he responds to this.
In research that looks into the case reviews that follow the serious events that happen to children who have faced abuse and sometimes death, certain themes come out again and again. One of them, and I have heard this said by Members of this House, is that when everyone gathers around the table for a serious case review, someone always says, “Do you know, I wish we’d all talked before. Maybe, if we’d all talked to each other, this wouldn’t have happened”. One of the things that make it less likely that that communication will happen regularly is if the families in question move house repeatedly. Are we really going to force more families to do so? I am very concerned about what will happen in that regard, but I can see no way around it. What else can we do? We have to press on.
Welfare Reform Bill
Baroness Sherlock Excerpts(12 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Boswell of Aynho
My Lords, I wish to raise briefly the question of whether to centralise payments to people in extreme difficulty or whether to leave that to the discretion of local authorities or, as was originally suggested prior to the First World War, friendly societies, or others. That idea has subsisted for at least 100 years and I think it will continue. I am generally supportive of the localism agenda and I can see material benefits in devolving this opportunity to local authorities. However, the amendments raise two issues that need a little reflection.
The wider question, which has been touched on by a number of noble Lords, is whether this money, which was intended for people in severe difficulties, will continue, albeit with local administration, to be applied to such people in general. I think that on the whole the Government are facing in the right direction here, but I look forward to the Minister’s assurances on it.
The specific twist that I want to add was prompted by something that the noble Baroness, Lady Lister, said about whether there should be a local connection. Clearly there is the subtext that there could be some discrimination in favour of the local boy or girl against someone from outside, someone who was felt to be in some sense the architect of their own distress or someone in some way morally unworthy. I do not want to go on about that now, but we can see the argument developing.
I should like the Minister to consider—and it may be helpful to him to do so—the fact that since the passage of the Housing Act some 16 years ago, we have had all the equality duties, including the public sector equality duty. Certainly local authorities, in exercising the discretion being offered them, will have to operate within the framework of that duty. I wonder whether that is indeed helpful in obtaining the assurances that I think we want with regard to making sure not only that the money goes where it is intended to go but that it goes to the people who need it most within that category of difficulty, rather than being siphoned off to people who are more acceptable or who come more within the interest of the local authority concerned.
Baroness Sherlock
My Lords, I want to speak in favour of all these amendments and to ask a question about Amendment 50ZB. When we discussed the Social Fund on our previous day on Report, I raised the fact that the Office of the Children’s Commissioner had published the Child Rights Impact Assessment of the Welfare Reform Bill. I understand that at that point the Minister had not had the opportunity to read the assessment in any detail, but I wonder whether he has had the chance to read it since then and, if so, whether he can assure the House about the line that says:
“In failing to guarantee that crisis support is available for children fleeing an abusive home with their parent/carer, the clauses abolishing the Social Fund fail to take all appropriate legislative measures to protect children from domestic abuse and we therefore believe they are in breach of Article 19”,
of the UN Convention on the Rights of the Child. That goes to the heart of the point which the noble Lord, Lord Boswell, has just raised. People might have a very good reason to cross boundaries. If one were fleeing domestic violence, that would be a good reason not to move to the neighbouring street, as I am sure the noble Lord would accept. How can the Government guarantee that local authorities will give appropriate support to children and families in that circumstance, and how can they prove that the UK will discharge its responsibilities under this convention?
Lord Newton of Braintree
My Lords, I speak as a heretic who is even now probably having his burning at the stake prepared by the Secretary of State for Local Government, my right honourable friend Eric Pickles, because I believe in ring-fencing. I have always thought it daft that Governments make available for a specific purpose money that is then spent by other people on something else. The Government get the blame for not having provided the money and everyone else gets the credit when anything good happens. I do not think that is sensible. However, it is a brick wall against which I do not propose to bang my head this afternoon.
The suggestion of the noble Baroness, Lady Lister—that if local authorities are going to have this money, they should at least be required to account for it—is a good one. I am slightly scarred by my experience as chairman—although I am no longer—of Help the Hospices; the previous Government allegedly made £50 million available but no one ever found it. It disappeared into thin air. I do not want to see that happen here. I do not want to see it spent on swimming pools, or campaigns, or many other good causes, when it is intended for people with severe disabilities.
Lord De Mauley
My Lords, I hoped that I had emphasised that point. A great deal of work has been done with local authorities explaining the proposal and the intentions behind it. We have encountered considerable enthusiasm for the principle. We have put a lot of effort into helping and educating local authorities which will be making the decisions. I hoped that I had emphasised the importance of that point. I am agreeing with the noble Baroness but I do not think that I can go very much further than I have gone.
Baroness Sherlock
I am obviously being very slow. What will the Government do if a local authority spends the money on a swimming pool?
Lord De Mauley
My Lords, the local authority will not spend the money on a swimming pool.
Welfare Reform Bill
Baroness Sherlock Excerpts(12 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Sherlock
My Lords, I have two specific questions for the Minister. Following on from my noble friend Lady Hollis, even if the money were to be spent on the same people, how can the Government guarantee that it is spent for the purposes for which the Social Fund was originally created?
Looking at the local authority fieldwork summary report mentioned by my noble friend Lady Lister, the fear is clearly out there in local authorities that the money will be sucked up by social care budgets. For example, even if it was spent on child protection, that would simply be displacing other money and there would not then be money available to enable local authorities to give cash to vulnerable families. How will the Minister ensure that it gets to the right people and for the right purpose?
My second question follows on from what the noble Baroness, Lady Lister, said about the Office of the Children’s Commissioner, which believes that the Government are in breach of Article 9 of the UN Convention on the Rights of the Child. Has the Minister taken advice on this matter and, if so, will he share it with the House?
Baroness Meacher
My Lords, I rise to speak to Amendment 50ZC and I will try to speak extremely briefly in view of the hour. This amendment seeks to ensure that the Social Fund remains in place—
Baroness Sherlock
I asked specifically whether the Government had sought or received any legal advice about whether or not this proposal was compliant with the UN Convention on the Rights of the Child. Can the Minister answer that question?
Lord De Mauley
My noble friend Lord Kirkwood asked about the structure of what is being transferred. The current Social Fund AME allocation of £178 million will fund the new local provision. It will be distributed based on spend at the point of transfer nationally between England, Scotland and Wales. In England, the funding will be devolved to upper-tier local authorities. Again this will be based on Social Fund expenditure. The AME funding splits £141 million to replace community care grants and £36 million for emergency provision. The first year of the new system will be 2013-14 and the funding will be the same as the amounts in 2012-13.
My noble friend asked about the Social Fund Commissioner. The Independent Review Service changed 20,886 decisions in 2010-11. The number of crisis loans, budgeting loans and community care grant decisions made was 5,595,000. The IRS makes decisions on cases that can go one way or another depending on the discretion of the decision-maker. All decisions on the discretionary Social Fund are also first subject to an internal review in Jobcentre Plus.
My noble friend asked about the possible substitution for cash and white goods and indicated that he thought it might not meet the needs. There will of course still be national provision of advances of benefit through the new payments-on-account scheme that will replace budgeting loans and crisis loans for alignment.
The noble Baroness, Lady Hollis, asked how the mixture of AME and DEL will be managed. All the money is AME. There will be, of course, additional admin funding on top to cover the cost of the new burdens.