Housing Benefit (Amendment) Regulations 2012

Debate between Lord Shipley and Baroness Lister of Burtersett

Monday 15th October 2012 Grand Committee

[Baroness Lister of Burtersett]

I do not think that either the noble Lord, Lord Shipley, or I want to follow the very powerful case made by my noble friend Lady Hollis. We have rightly focused on the bedroom tax but first I want to refer to the CPI uprating, following a point that was raised with us by Crisis. During the passage of the Welfare Reform Bill the noble Lord, Lord Freud, said that,

“if local housing allowance rates are clearly out of step with rents, they can be reconsidered”.—[Official Report, 14/12/2011; col. 1323.]

That was a welcome statement. I understand that there have been discussions between the department and Crisis, and perhaps other groups, in which it has been suggested that in 2014-15 the Government intend to review the method of uprating used. It would be helpful if the Minister could tell us how this review will take place. Will it be a formal review? Will it be part of the more general review of what is happening to housing benefit? What sort of discrepancy between local housing allowance rates and local rent would be deemed out of step? It would be helpful if the Minister could give us that information.

I turn to the bedroom tax, about which much has already been said by noble Lords. Like the noble Lord, Lord Kirkwood, I had not quite taken on board the extent to which disabled people are disproportionately hit by this measure. In our general discussion, we perhaps lost sight of that at the time. My noble friend Lord McKenzie asked the question, which I hope the Minister can answer: are disabled people expected to use their disability benefits to meet any rent that will not be covered? The briefing we were sent talked about a judgment, Burnip, which I admit I had not heard of before. One of the judges made clear that we should not expect tenants to use disability benefits to meet part of their rent.

The Minister started by saying that the regulations are compatible with convention rights but, as a member of the Joint Committee on Human Rights—I am now but was not then—I refer back to its report on the Welfare Reform Bill in which the committee raised concerns about whether there was a problem here for disabled people. The report said that if such tenants were forced to move into properties unsuited to their needs, this might risk breaching their Article 8 rights—respect for privacy or family life—and potentially be discriminatory. Since then, we have had the announcement, welcome as far as it went, of the discretionary housing payment. However, the noble Lord, Lord Best, has already raised major questions about that payment. During consideration of the Bill, I dubbed it the “loaves and fishes of income maintenance”. It feels as though these loaves and fishes are being stretched ever further, even if there is an extra £30 million there.

As the Secondary Legislation Scrutiny Committee points out, the money is not ring-fenced, and once again we cannot be absolutely sure that it is to be used for the purposes intended. The noble Lord, Lord Best, talked about how the money will be stretched and will help only those whose houses have been adapted, but there may be other disabled people for whom there may be good reasons for why they should not have to move, use other income, take a lodger or go into paid work. The situation is not terribly satisfactory.

The noble Lord, Lord Best, said that this money would last indefinitely. I had not realised that that was the case. It would be helpful if the Minister could confirm that this is an indefinite payment. Can he give a government commitment that that money will definitely be there for the current spending review period and that it will be at the very least inflation-proof, or go up in line with rents? Can he give that kind of assurance? I will be delighted if he can but there is a big question mark over the long-term viability of a policy based on a discretionary payment. Will the individual be able to receive it forever, or will they have to keep re-proving their deservingness in order to continue to receive it? All these questions remain unclear.

I do not think that the Minister will be able to put our minds at rest because of our strong case. We are all very unhappy about the regulations themselves but perhaps he can at least give some assurances that the discretionary housing payment will genuinely go some way to meeting the real problems raised by other noble Lords.

[Lord Shipley]

My Lords, I refer to the Secondary Legislation Scrutiny Committee’s comments at paragraph 13, in which it is pointed out, rightly, that the reduction will apply to,

“the total eligible rent for the dwelling, including any eligible service charges”.

Can the Minister confirm which service charge items will be eligible for universal credit? In consultation, these were different from those covered by the current housing benefit regulations, which provide a list of items that are not eligible. Will the revised regulations prescribe the range of eligible service charges and, in practice, reduce the numbers that may previously have existed? In particular, will the Minister clarify which service charges will be included in the definition of,

“services necessary to maintain the fabric of the accommodation”?

Specifically, will the maintenance of fire safety equipment, lifts, door entry schemes and other communal services be deemed necessary to maintain the fabric of the building and therefore be eligible?

Further, will the service charge currently associated with a furnished tenancy be eligible for housing benefit, as it is now? Finally, on concierge services, which include portering, security, caretaking, CCTV coverage and the cleaning of communal areas, will the service charges for these continue to be eligible? I hope they will because, if they become optional, many tenants will not be able to afford to pay and there will be reduced standards, impacting negatively on communal facilities and health and safety.

Local Government Finance Bill

Debate between Lord Shipley and Baroness Lister of Burtersett

Thursday 19th July 2012 Grand Committee

[Baroness Lister of Burtersett]

My Lords, in moving Amendment 80, I will speak also to Amendment 81 as they are linked in terms of their objectives.

The Government’s recent report on the 2010 child poverty targets noted that one reason why the child poverty target was not met was that,

“not enough families got the support that they were entitled to”.

It cited the 2009 Child Poverty Unit report that estimated that,

“there were 400,000 children living in relative income poverty as a result of their families not receiving all the benefits and tax credits to which they were entitled. Improving take-up and support for families with children was identified as an important element of the agenda to tackle child poverty”.

However, the report continues:

“DWP take-up statistics show a downward trend in the take-up of most major benefits among families with children since 1998”.

Amendment 80 is drafted to address this concern, although it is not confined to families with children. Whereas in the past increasing take-up has always been a win-win situation for local authorities, improving living standards for their residents and helping the local economy, under the new cash-limited council tax reduction schemes, it is a zero-sum game, in which improved take-up for one group, particularly pensioners, means less money available for others. We have already had a preliminary skirmish around this issue involving in particular my noble friend Lady Hollis, who cannot be in her place today, and the noble Lord, Lord Greaves.

For the first time ever, we have an incentive to depress take-up written into the template of a statutory income maintenance scheme. That cannot be right. Take-up of means-tested benefits is a perennial problem and take-up of council tax benefit is among the lowest. The latest government statistics show that between 31% and 38% of those entitled did not claim council tax benefit, although that may be a slight overestimate of non-take-up. In other words, it is possible that as many as nearly two-fifths of those eligible are not claiming. Take-up is particularly low among pensioners, of whom between 39% and 46% are not claiming, and among couples with children, of whom between 41% and 48%, nearly half, are not claiming. Overall, the trend in take-up of council tax benefit has been downward. Since 1993-94, take-up has fallen by at least 6 percentage points for pensioners, by around 7 percentage points for non-pensioners, and by a massive 15 percentage points for couples with children. However, all those figures are approximate.

In its 2009 report, Take Up the Challenge, the Child Poverty Unit set out what it called,

“a strong argument for local authorities and partners to focus on increasing take up of benefits and tax credits by poor families with large unclaimed amounts”.

It explained that take-up can contribute to tackling child poverty and related issues such as social exclusion and health inequalities. There are also benefits for the local economy with money claimed in benefits and tax credits being spent in local communities. It continued:

“Furthermore, improving take up will help local authorities and partners to ensure that hard to reach and vulnerable families are receiving support, and are in contact with services”.

It pointed out that:

“A significant amount of benefits go unclaimed by people who are working”,

so that the:

“Lack of awareness of in-work financial support available through benefits and tax credits can be a barrier to parents entering and sustaining employment”.

To the extent to which the new localised schemes will still cover working people, improving take-up will reinforce the Government’s aim of tackling poverty through paid work.

The report concludes that,

“spending on increasing take up can provide good value for money”.

Given that, it was disappointing and surprising that in a Written Answer to my noble friend Lord Beecham, to which he referred in an earlier session, the noble Lord, Lord Freud, stated that the Department for Work and Pensions,

“does not promote benefits … The department has not spent money in the 2011-12 financial year on promoting the take-up of welfare benefits, and we have no planned expenditure to promote take-up of welfare benefits for the next financial year”.—[Official Report, 23/4/12; col. WA 302.]

It was even more disappointing and surprising to learn the other day that the DWP proposes to cease publishing estimates of take-up of means-tested benefits. I found that out by accident. I did not find it out as a Member of this House; I found it out as a social policy academic. I also found that my colleagues here were unaware of that really rather serious step.

Can the Minister tell the Committee what the Government’s position is on improving benefit take-up? Do they still believe that take-up is an issue? It would appear that they are content for people on low incomes not to receive the money to which they are entitled, despite the arguments put by the Child Poverty Unit, and now it would appear that they want to bury the evidence of such non-receipt.

As the Government are, in effect, washing their hands of the issue of take-up, it is therefore left to local authorities and voluntary organisations to do what they can to improve take-up. Local authorities have an honourable history in this area. They played a key role in countering the impact of benefit cuts in the 1980s by instigating often very successful take-up campaigns. The Child Poverty Unit report and an earlier DWP best practice guide give examples of the kind of take-up work that local authorities still do, including improving take-up of council tax benefit. Indeed, under the Social Security Contributions and Benefits Act 1992, local authorities now have a statutory responsibility for council tax benefit take-up. Each billing and levying authority,

“shall take such steps as appear to it appropriate for the purpose of ensuring that any person who may be entitled to council tax benefit in respect of council tax payable to the authority becomes aware that he may be entitled to it”.

Amendment 80 builds on this and would write a similar, if differently worded, responsibility into this legislation.

It has been suggested that the change of name from a benefit to a reduction or discount could in itself improve take-up, especially among pensioners. The noble Lords, Lord Tope and Lord Shipley, suggested that in an earlier discussion. I have no objection to the change of name, which could be helpful, but at the same time I return to the fundamental point that the cash-limited nature of the scheme will, as many organisations have pointed out, create a disincentive to local authorities to encourage take-up. This is particularly with regard to take-up among pensioners, whose entitlement, as we have already discussed, is protected by law. As many noble Lords have warned, the more money is paid to pensioners the less there is for other so-called vulnerable groups and for low-income working people.

In the face of this dilemma, it will be very tempting for local authorities to keep quiet about council tax reduction schemes and it is therefore crucial that there continues to be some form of statutory responsibility placed upon them to encourage take-up, hence Amendment 80. Another element in the dilemma is that even lower take-up could exacerbate another problem identified by organisations such as Citizens Advice and the IFS, which is of more people not meeting their council tax demands and there being extra work for local authorities trying to collect the arrears. Already, according to a recent report in the Guardian, the Consumer Credit Counselling Service has seen a 27% increase in the number of people contacting it for help with council tax arrears between 2010 and 2011.

As long as local authority council tax reduction schemes are funded by central government on a cash-limited basis, the traditional presumption that it is in the interests of both authorities and those eligible for assistance that take-up is maximised will, as I have said, no longer hold. Personally, I believe it is unethical to establish an income maintenance scheme for people on low incomes on this basis and I hope that the Government will think again. If they are not willing to do so, however, there is one step that they can take to mitigate the double-edged sword that improving take-up would now become. The money transferred to local authorities, whether or not they are subjected to a 10% cut—it goes without saying that I am opposed to such a cut—should be based on estimates of the numbers currently entitled to council tax benefit, rather than on the numbers actually claiming. The difference is considerable. In 2009-10, between £1.7 billion and £2.42 billion was unclaimed in council tax benefit. This should be included in the money devolved to local authorities, whether or not they are subjected to a 10% cut.

Amendment 81 is designed to address this issue in a different way by requiring the Secretary of State to ensure that there is sufficient funding available to meet the council tax reduction for all eligible claimants, so that if take-up improves it does not pose the dilemma that I have outlined for local authorities. In the absence of such a provision, can the Minister tell the Committee what the Government’s advice to local authorities will be as to how they should deal with the take-up dilemma created by the cash-limiting of the grant they will receive to run council tax reduction schemes? I hope that in the interests of maximising take-up the Government will be minded to accept Amendment 80, or to introduce their own amendment to retain a local authority responsibility to promote take-up, but that in doing so they will also address the perverse incentive they have created to depress take-up through an amendment on the lines of Amendment 81. I beg to move.

[Lord Shipley]

My Lords, I support Amendment 80, so ably moved by the noble Baroness. I will also speak on Amendment 81, which is slightly more problematic. It perhaps does not cover all of the issues quite as it might. First, there is an issue with the non-claiming of council tax benefit. There is a whole set of numbers; the noble Baroness mentioned £2.4 billion. These things are notoriously difficult to be certain about, but we can all agree that it is a very big number. A large number of people who are eligible to do so are not claiming council tax benefit. That gives rise to a conflict of interest for local authorities. That is a serious and important issue. That must be addressed. It may be in the financial interest of a local council not to promote or advertise the council tax support scheme. That cannot be right.

Local Government Finance Bill

Debate between Lord Shipley and Baroness Lister of Burtersett

Monday 16th July 2012 Grand Committee

[Baroness Lister of Burtersett]

My Lords, it is always a pleasure to follow the noble Baroness, Lady Browning. What I have to say follows on very well from what she said. My noble friend Lady Sherlock asked some searching questions of the Minister. I want to pick up on the one about cumulative impact. Ringing in my ears are the words of the late Lord Newton, who reminded us in proceedings on several Bills that we have to look at these pieces of legislation together, not separately—yet we always look at them separately.

I have just been reading two relevant reports, which I would like to bring to noble Lords’ attention and which emphasise the question of cumulative impact. One is from Demos and Scope, and says:

“Disabled households are not benefits recipients—they are parents, employees, students, home owners, older people and citizens. They rely on the same diverse range of services as everyone else, but the Government’s failure to grasp the whole picture beyond the welfare reform agenda can lead to an underestimation of the cumulative impact these hundreds of individual cuts can have on each multi-service-using household”.

We are now potentially adding to those cuts, which is why it is so important that there is a proper impact assessment that takes the cumulative impact into account.

The other report, by Citizens Advice and the Children’s Society, says:

“We are very concerned that the scale of the cuts in support for some groups of disabled people has not yet been properly understood, because the changes have been viewed in isolation”.

Again, the danger is that we view the changes here in isolation.

The other point that I want to make refers to carers, who tend to get overlooked constantly. I was slightly bemused because the impact assessment referred to carers as one of the vulnerable groups that local authorities need to take into account, yet the DCLG document, Localising Support for Council Tax Vulnerable people—Key Local Authority Duties, does not seem to mention carers as a group whose needs need to be taken into account. Could the Minister explain which of the two documents local authorities are supposed to take account of, and why there is this inconsistency in the reference to carers as a vulnerable group?

[Lord Shipley]

I will make three very brief points on these two amendments. The first is simply to acknowledge that, given that council tax support is to be localised, it should therefore follow that local councils have the responsibility for deciding what their schemes entail. That seems a very important principle. We will debate later the role of the Secretary of State in defining any exclusions at all.

Secondly, a scheme agreed by a local authority would be inappropriate if it did not have regard to disabled people and carers, not least for the reason that it would not meet the need of an equality impact assessment if due regard had not been given. However, the list is not exclusive, and we shall shortly go further into the definition of vulnerability. One weakness of the Bill at the moment is that it does not actually define vulnerability adequately.

I agree absolutely with the noble Baroness, Lady Lister, on the cumulative impact and the Government’s understanding—and this is not a particular criticism of this Government, because it has always been the case. Governments are not very good at seeing the cumulative impact of their legislation and the whole picture. A number of us have become very reliant upon the Institute for Fiscal Studies and the Joseph Rowntree Foundation for pointing out some of these things to us, sometimes one would hope before the event but occasionally after the event as well. Governments should be smarter at understanding the cumulative impact of what they are doing.

However, in all this there is another option for local councils, which is to maintain their current schemes effectively and to make the cost of that a general charge on council tax. I might come back to that when we talk about vulnerability, because, where council tax will be localised, vulnerable people will have to be protected. How nice it would be if we had more than one additional band in the council tax banding—not just band I but maybe some further ones—because there is a real risk of redistribution occurring from those who are less well off to those who are better off, as the IFS and the Joseph Rowntree Foundation keep pointing out to us.

--- Later in debate ---

[Baroness Lister of Burtersett]

I certainly do not want to be rude about local authorities. Some things should be locally determined, but this is not one of them. I am sure that my noble friend Lady Hollis will return to that much better than I could.

I want to raise one point that I know will cut absolutely no mustard with the noble Lord: the position of people who move between local authorities, which some government policies encourage them to do. If there is no national guidance on vulnerability, they will not know how they will be treated when they move from one authority to another. The researchers in the report that I quoted earlier by Demos and Scope, said that they were struck by an “oppressive sense of uncertainty” that many disabled people were living with which,

“clearly jeopardised their emotional wellbeing”.

Without clear guidance, that uncertainty will be aggravated.

It is not only disabled people who feel uncertainty; it is part of living in poverty. There is a sense of insecurity and uncertainty. At least national guidance would allow people to know how they would be treated when they moved from one authority to another.

[Lord Shipley]

Perhaps I may raise one issue that we have not pinned down yet: whether the failure to define “vulnerability” may prove to be a legal issue that could be challenged through judicial review? I would appreciate the Minister's guidance in reply as to whether the Government are really happy that the failure to define “vulnerability” may actually prove to be a difficulty.

I think that vulnerability includes the working poor. They may not immediately be regarded as a vulnerable group, but in terms of all the benefit changes in welfare reform that are being implemented, they may prove to be seriously vulnerable. The Secretary of State should issue guidance on what “vulnerable” means. I think back to several long debates in the Localism Bill about what “sustainable development” meant. It actually mattered that we reached a common understanding. Without a common understanding between different local authorities acting in the spirit of localism, which I applaud, I fear that you may end up with judicial review from organisations that believe that their council has not properly considered the definition of “vulnerability”. It would therefore be much better if the Secretary of State issued guidance. That guidance could be advisory as opposed to statutory, but there needs to be a government view about this. Otherwise, we will head for some difficulty in the months ahead.