Social Fund Funeral Payments

Alan Brown Excerpts

Wednesday 14th September 2016 Westminster Hall

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Sir David. Like others, I congratulate the hon. Member for Belfast East (Gavin Robinson) on securing a debate on this delicate and emotive subject.

It appears that even the dead are subject to austerity. Real-terms spending from the funeral fund has decreased over the years whereas, as we have heard, the cost of funerals has increased and a £700 cap on particular costs has remained in place since 2003—that has been a failure of successive Governments. We have heard that the average payment covers only 40% of the average cost of a funeral.

The House has had wider debates about dignity in dying. It seems that the poorest in our society might not get the chance of dignity in death, but the reality is that they are not the ones who suffer. It is their dependants who have the stress of trying to find the money and the stress, and possibly even the feeling of shame, of not being able to send off their loved one as they see fit. Under the current system, dependants also have to live with the stress of signing up for funeral costs, then applying for a grant and then waiting to see what money they might get back.

The processing timescales can also be an issue. Earlier this year I was contacted by a distressed constituent who was advised that the average processing time was five to six weeks. In 2015-16 some 30% of applications took longer to process than the 15-day turnaround target. Such performance is almost commendable given that answers to my written questions have confirmed that the number of staff working in the social fund section of the DWP has halved from 798 in 2013-14 to 349 in 2015-16, which is shocking.

Even after the award of a grant, a family might have to suffer the Secretary of State for Work and Pensions trying to recover the costs from the deceased’s estate. With a static budget of £40 million, I question the value of pursuing estates, which last year returned a yield of only £200,000, or just 0.5%. Will the Minister advise us on the merits of pursuing such estates? What costs are associated with the recovery? The administration probably outweighs the costs recovered.

The only thing worse for families than the stress of waiting to hear how much they might be awarded is the stress of outright rejection. In 2014-15, the rejection rate was 37%, despite a massive decrease in the number of applications since 2010-11. Coincidentally, 2010-11 was the year that budget loans became eligible for funeral expenses, too—that is something else on which the Government hold no data. The Government clearly need to streamline the system to make eligibility easier to understand.

Changing tack slightly, Oxfam’s recent report found that the richest 10% of the UK population own more than half of the country’s total wealth. The top 1% own nearly a quarter, whereas the poorest 20% share just 0.8%. What have the Government done about the widening inequality in both life and death? In their most recent Budget, the Tories introduced a measure to help the families of the deceased: inheritance tax relief of some £2.6 billion. There was also a reduction in capital gains tax of some £3.4 billion. That is £6 billion of giveaways to the rich, yet the funeral payment fund stays static at £40 million. The Government could easily double funeral payments to cover 100% of average funeral costs without materially affecting the UK budget. For me, that would be the real face of compassionate conservatism.

I am glad that the transfer of powers means that the Scottish Government have already stated that they plan a 10-day turnaround for applications and a more streamlined and dignified system—they are currently consulting on such matters—but the reality is that they have to manage that within an ever-tightening budget. As we have heard, the UK Government have no real data to give the Scottish Government a good starting point.

This issue is about doing the right thing, even though many people will not know the importance of such payments until they reach this point in life. The Scottish Government’s attitude in their consultation exercise is to do the right thing, and hopefully the UK Government will learn from that. We certainly do not want to see the return of paupers’ graves. We can afford greater dignity for families suffering bereavement.