Welfare Reform Bill

Lord Bishop of Bath and Wells Excerpts

Wednesday 11th January 2012 Lords Chamber

[Baroness Howe of Idlicote]

My Lords, I remember there being considerable concern in this area upstairs in Committee. Having listened to what the noble Baronesses, Lady Lister and Lady Turner, said, in particular about the plan in the amendment tabled by the noble Baroness, Lady Lister, I think that there is a way of dealing with the situation. Some of the problems of exactly how it will be spread out and all the rest of it might need a little more administrative attention, but I think this is a satisfactory answer about what to do with this sum of money. I would back it like that. Let us end the argument.

[The Lord Bishop of Bath and Wells]

My Lords, it is often said that we read the world from the position we occupy in it. In particular, users of the Social Fund are unlikely to be very visible and able to hold local councils to account. Recent analysis of some 500 discretionary Social Fund applications has revealed that 12 per cent involved someone leaving institutional or residential care, 20 per cent involved someone who had experienced a period of homelessness and 8 per cent involved someone leaving prison. These groups are much less likely than others to be able to demonstrate local connections, and without crucial assistance from community care grants to buy essential items such as cooking equipment and bedding, they may struggle to sustain and maintain a home. That puts those who have been offenders at risk of reoffending or of moving back into temporary or institutional accommodation, which is far more costly and means they lose their newly found independence. The issue of vulnerable groups and local connection is recognised in housing legislation where people with no local connection must be assisted by the local authority to which they originally applied. I believe that similar provision should apply to protect such groups in the absence of a standard national Social Fund, especially as the Welfare Reform Bill also abolishes the independent review service that reviews refused Social Fund applications. I hope that we can take note of this amendment.

[Baroness Hollis of Heigham]

My Lords, I, too, support my noble friend’s amendment. The whole point about the Social Fund is that all the other elements in the social security system are nationally determined and demand-led—AME-led. The Social Fund has always represented an element of flexibility, of discretionary judgment, for those who do not fit tidily into categories and need only income. When, for example, people needed a modest amount of capital for a fridge, an oven or whatever, they could go to the Social Fund. If they needed to set up after a flood or a fire, they could go to the Social Fund in ways that you cannot cover within a national framework, except by a discretionary local grant.

That is fine, but the problem with the Government’s current proposal to send it to local government is threefold. First, there will be no necessary standards across local government so that similar circumstances are met in similar ways by different local authorities. For good and for bad, there will be a postcode lottery, and we know that demand will almost certainly be greatest in some of the inner cities and least, perhaps, in some of the more prosperous suburbs. There will be no consistency of standards.

Secondly, when that happens, and in the absence of identified funds, people who need that money will go not just to payday loan companies, because they do not have the security, or to pawn shops but to the forms of debt that we are all appalled by. One of the very good things about the Social Fund is that repayment, with no more than £5 or £10 per week of your income going out, is effectively interest-free. By pulling the Social Fund away from people who are most in need of some element of credit to get them from here to there, we are sending them into much more costly spirals of debt and very real problems of repayment. The third problem associated with this proposal is the guarantees we need to have that the money will be spent on the people for whom it is ordained.

The Minister can help us in this if he makes it very clear that local authorities will have no wriggle room to spend the money on anything other than the groups of people whom we are identifying. The firmer he can be in making clear to the House the statutory nature of that guidance, the more he will ease some of our concerns. He also needs to make it clear to the House what elements of the Social Fund will remain AME-demand-led and how much of it will be recycled and capped within a cash grant, what the situation will be in a local emergency—a factory explosion, a major flooding disaster or the like—and whether the local authority, as opposed to central government, has the capacity to respond to that in its social fund.

Therefore, can the Minister tell us first, how he can absolutely guarantee—short of ring-fencing, if that is not where he is prepared to go—that that is reported back to Parliament? Secondly, how he will manage the mixture of AME and DEL expenditure that currently goes into the Social Fund to ensure that local need is properly met?