Oral Answers to Questions

Anne Begg Excerpts

Monday 9th March 2015 Commons Chamber

[Mr Duncan Smith]

We have indeed. From what I have read of the reports my hon. Friend mentions, every single point made in them is wrong and misleading. We will be making our position clear on that. The analysis that he asks for has shown that the benefits of universal credit are statistically significant. Findings now show that, compared with similar claimants on jobseeker’s allowance, universal credit claimants spend more time looking for work, enter work more quickly and spend more time in work. They also end up earning more.

[Dame Anne Begg (Aberdeen South) (Lab)]

The roll-out so far has been to specific groups of people with particular characteristics. That is partly because, to put it uncharitably, the original IT system does not work. If I were being charitable, I would say that it worked but with greatly reduced functionality compared with what was originally planned. However, the Department is piloting a digital solution in Sutton, Surrey, and I wonder whether the Secretary of State could tell us how that is going. When are we likely to get the results of that pilot? Can he tell us when the digital solution is going to be rolled out, given that it was meant to be the great white hope for saving universal credit?

[Mr Duncan Smith]

The IT system is exactly the same system, and it works in all categories. The difference is that we have rightly decided, in accordance with the Public Accounts Committee’s request, to roll this out stage by stage—we have been told that this is the correct way to do it—rather than trying to rush it, as was done with the tax credit system, which crashed. The hon. Lady mentioned the digital solution. Digital development and the online service are merging together, because the live service has many elements that will be used by the digital service anyway. This is a merging of the two services, and we will be reporting on that as we go along. It is successfully rolling out at the moment and expanding at the same time. I would be very happy if the hon. Lady wanted to go and visit it.

Housing Costs (Reformed Welfare System)

Anne Begg Excerpts

Tuesday 3rd March 2015 Commons Chamber

[Dame Anne Begg (Aberdeen South) (Lab)]

I shall continue the theme of housing: we have had a statement and a ten-minute rule Bill on housing, and this debate is about the Work and Pensions Select Committee’s report on support for housing costs in the reformed welfare system. There are two important debates scheduled for this afternoon, but given that we have had two urgent questions and two statements, our deliberations might have to be somewhat curtailed.

Our report dealt with the series of reforms to housing benefit and other support to meet housing costs that the Government have introduced since 2010. The report was published in April last year, and strangely we have been granted a debate on the Floor of the House today without having received the Government’s response to it. Normally, we would expect a Government response to a Select Committee report to be published before any such debate is granted. We have been waiting for almost a year to receive the Government response.

As I have said, our report was published in April 2014. We have still not received the Government response almost a year later, but that is not for want of trying. In September last year, the Minister for Welfare Reform, Lord Freud, wrote to me to apologise for the delay, saying that although the response had been prepared, the Department for Work and Pensions was still in the process of seeking “cross-government clearance” for it. I do not know whether that means there is a major split in the coalition over the report; perhaps the Minister could fill us in on why the Government’s response has still not made it out of the DWP and into the light of day.

As we still had not received a response by December, I wrote, with the Committee’s agreement, to the same Minister to ask that a response be submitted as a matter of urgency, but I have still not received a reply to that letter. As you know, Madam Deputy Speaker, effective Select Committee scrutiny is hampered if the Government fail to abide by the agreed process. I appreciate that today’s Minister is not the one I have been writing to, but I hope he will engage fully with the detailed and specific recommendations in our report—the Government have failed to do that for nearly a year. The recommendations are important and we hope the Government are taking them seriously.

The report covered a wide range of issues relating to housing costs and the welfare system, but perhaps the most controversial was “social sector size criteria”. We called it that to try to make it sound more neutral; any other form of words can be emotive, because it is called the bedroom tax, the removal of the spare room subsidy or the under-occupancy penalty, depending on one’s political view. However, it is the charge that has meant that social tenants deemed to have more bedrooms than they need have had their housing benefit reduced. The Government said that the aims of the reform were to reduce benefit expenditure, make use of the social housing stock and incentivise people to enter work. We actually agreed that using housing stock more effectively and reducing overcrowding were understandable goals. The question was: were the Government achieving them?

Although it is true that some reduction in housing benefit has resulted, it is not because people have moved house and are now more appropriately housed; it is because many people caught by the bedroom tax—the social sector size criteria—have merely had to subsidise their housing costs from other benefit or other income, and so of course it has saved the Government some money. However, we found that many people whom we genuinely believe the Government did not want to be caught by the bedroom tax were being affected by it, and many of them are vulnerable people. As many as 60% to 70% of households in England affected by the bedroom tax contain somebody with a disability.

The whole idea was that tenants would move to smaller houses, but we found that not enough smaller houses were available across the country. Some people might have been able to move into the private rented sector, which might have been more expensive for them, but even in that sector not enough suitable accommodation was available. Others of the vulnerable group were not able to respond by finding work, because of their illness and their disabilities. We also found that a significant number of people caught by the bedroom tax had specifically adapted homes, which means that it is difficult and expensive for them to move to smaller accommodation. Whoever came up with the idea that they could do so clearly has not been through the process, as I have, of trying to find a home that is easily adapted or has been adapted.

The only option for many people was to remain in their homes and so have their housing benefit reduced. All they could do was make up the shortfall. DWP research has shown that that often meant cutting down on household essentials or borrowing money from family and friends. The reduction in housing benefit was not insignificant for those who had no choice but to pay up—a 14% cut where the tenant was deemed to be under-occupying by one bedroom and a 25% cut where under-occupation was deemed to be by two or more bedrooms. In addition, the deduction is made on the basis of the total rent paid, without regard to the level of housing benefit actually received. Therefore, those in partial receipt of housing benefit would have to pay more proportionately.

The Government’s statistics show that by the end of November 2014 the reduction had been applied to nearly half a million claimants and that the average reduction was nearly £15 per week. We found that this reform was having a particular impact on people with disabilities, including those I have mentioned already: those who have adapted homes; and people who need a room to hold medical equipment or to accommodate a carer—often a family carer. We recommended that anybody living in a home that has been significantly adapted for them should be exempt from having their benefit reduced. We also called on the Government to exempt all households that contain a person in receipt of higher level disability benefits—disability living allowance or the new personal independence payment.

Hon. Members should note our use of the word “exempt”; we wanted those groups of people to be exempt. The Government’s response is to say, “Oh, but they don’t have to pay in any case because they have access to discretionary housing payments.” Given the number of people who are reliant on DHPs, there must be something wrong with the original policy if so many people have to rely on some kind of “transitional” arrangement. But it is not transitional, simply because there are not the houses for these people to move to or they cannot move because of the kind of accommodation they require which does not fit the criteria set down by the Government.

The Government say, as they have been saying for the whole year we have been waiting on their response, that the protection is available through the DHPs. It is true that the Government have substantially increased the funding for DHPs, but those payments are awarded by local authorities to people facing hardship in paying their rent, including tenants affected by the bedroom tax and by the benefit cap, and they are still discretionary. Of course, they are also not meant to be long term, as this is a transitional protection. The other problem is that DHPs are awarded on the basis of eligibility criteria, which each local authority can set itself. That can create a postcode lottery, and we felt it was important that the granting of a DHP should be based on access to the help needed, rather than being dependent on where a claimant lived. As we often say, any benefit or award should be based on need, not on somebody’s postcode.

We were also concerned that some local authorities are taking income from disability benefits into account in the means tests they apply for determining eligibility for DHPs. It may be that individual households would qualify normally for a DHP based on just the raw criteria, but when the means test is taken into account they do not get it. Members in this House have said that it did not matter whether an individual or a family was subject to the bedroom tax because they would always get the money reimbursed or they would be helped out by a DHP, but for a large number of families that did not happen because of the application of this second means test. The benefits that were being taken into account were things such as disability living allowance and personal independence payments, but they are paid to people who are long-term sick and to disabled people to help them meet the extra costs of their disability. They are not meant to subsidise their housing costs. Those extra costs do not go away just because someone has to contribute something towards their rent because their housing benefit no longer covers the full amount.

We recommended that the Government should issue revised guidance to local authorities, making it clear that disability benefits should be disregarded in any means tests for DHPs. As yet, we do not know whether that has happened, and I hope that the Minister can tell us whether that sensible and modest request by my Select Committee has been put in place.

There is also the problem that DHPs were meant to be temporary and transitional. They were never intended to provide a long-term solution, which is why we hoped that certain categories of claimants would be exempt. That makes far more sense than having claimants apply every six months, or every year, for a DHP, or for help towards their housing costs. We are talking about long-term problems. If a claimant cannot move house or find work, why is it that they still have to apply for a DHP?

Local authorities seem unwilling to make longer term awards, so claimants often end up having to re-apply every six or 12 months. Each time a family has to apply for a DHP, they go through anxiety and uncertainty, and they never know whether they will get the award this time round.

We concluded that if DHPs are to continue to be used as the main way of mitigating the hardship that the reforms are causing, substantial levels of funding will be needed for the foreseeable future. Claimants need to be given certainty that long-term awards are available. During our inquiry, we visited some people who were caught in that particular Catch-22 situation and they really were worried about the future.

There is also the question whether there is sufficient funding for DHPs. Although central funding was increased to £165 million in 2014-15, it will go down again to £125 million in the next financial year—a drop of £40 million. During our inquiry, the Government argued that DHPs were sufficient because local authorities had not bid for the full amount of funding that was available, but we believed—this has been borne out by later evidence—that that was because the reforms were at an early stage. Local authorities were still trying to adjust to the changes, and claimants were often not aware that DHPs were available. The DWP’s own research found that 56% of people who had not applied for DHPs were not aware that they existed, but they were as likely as other claimants to report difficulty in paying the rent or being in arrears.

We recommended that the Government should review the whole DHP provision when more detail was available, which it must be by now, and increase the funding, but we now know that that will be reduced. Obviously, there has not been a proper review and, as a result, it will be harder and harder for local authorities to continue to meet the costs of the DHPs that their own criteria say they should be paying out.

I would be interested to hear from the Minister what the evidential basis is for reducing DHP funding next year. Does the funding level take account of actual assessed levels of hardship arising from reduced housing benefit, or is it based only on the amount of DHP that local authorities have been able to distribute so far? What steps are the Government and local authorities taking to inform vulnerable claimants that they can apply for DHPs to help them make up their rent shortfalls?

Another aspect that has arisen as a result of the changes to housing benefit is the introduction of a cap on the total amount of benefits that a household can receive. The current limit is £26,000 a year. It is relevant to housing costs because it is the claimant’s housing benefit that is reduced when they hit the cap.

It is worth noting that almost everybody affected by the cap either lives in an area of the country with expensive rented accommodation, such as London, or are being placed in temporary accommodation because they are homeless. Local authorities often have no option other than to put homeless people in temporary accommodation because of the lack of other rented housing in the area. That problem is getting more and more acute in a number of areas, but temporary housing is normally more expensive than permanent accommodation and claimants can then fall within the scope of the benefit cap.

Local authorities often end up paying the shortfall between rent levels and housing benefit for those affected by the cap through DHPs, so there is in fact no overall saving to public funds. We recommended that the Government should exempt all households in temporary accommodation from the benefit cap, because it seems particularly unjust for those claimants to be affected when they had no choice over where they were housed. We also found that the benefit cap was having an adverse impact on disabled persons and their carers, and that is a particular problem when the carer lives with the disabled person—usually as the parent of a child, but it could be as the adult child of a disabled parent—but they are not considered, for benefit reasons, to be part of the same household. We recommended that the Government should exempt from the benefit cap all recipients of carers allowance in that situation. The Government said that the benefit cap was not intended to push carers into work, but that may well be the effect unless the recipients of carer’s allowance are exempted from the cap. I do not think that the Government anticipated that carers would be caught by the bedroom tax.

We also looked at the local housing allowance, which is the former housing benefit for tenants in the private rented sector. The Government announced reforms to the LHA in the June 2010 Budget, and the Committee published a report that year highlighting our concerns about the implication of the changes. Our 2014 report assessed the impact of the reforms. We concluded that there was a growing discrepancy between average rents and the amount of local housing allowance that households can claim. We found that, as a result, private sector landlords are increasingly reluctant to rent to LHA recipients. Evictions and non-renewals of tenancies are increasing, and the properties that do remain available to claimants are increasingly of poor quality and there are fewer and fewer of them.

We also looked at the impact on homelessness. We noted that, despite homeless statistics being down overall, rises are occurring in areas where demand for housing is high, and that homelessness among those not deemed to be “in priority need” had increased by 9% between 2012 and 2013. In order to qualify as priority need, households need to be vulnerable in some way. We are talking about single mothers or victims of special circumstances, such as a fire or flood, so many homeless people are excluded from the definition. It is therefore not surprising that many people who are homeless are not necessarily showing up in the figures.

We were also concerned about younger people affected by the changes to the shared accommodation rate, which is the housing benefit paid to claimants without dependants who live in private rented accommodation. Basically, it means that they cannot rent a complete flat or house of their own; they can afford to rent only a room. The benefit had previously applied to claimants under 25, but from April 2012, as part of the LHA reforms, the Government extended the SAR to any single claimant under the age of 35 without dependent children. We found that in many areas insufficient accommodation at this level of rent was available. We heard evidence of possible adverse impacts on people with mental health problems and on parents with non-resident children, who would no longer have room to accommodate their children when they came to stay.

We concluded that the extension of the shared accommodation rate to single claimants up to the age of 35 might well have reduced the availability of safe, appropriate accommodation for younger people, some of whom may be vulnerable. We recommended that the Government should assess the impact of this change to the shared accommodation rate. If there was evidence that the change was resulting in some vulnerable young people having to live in situations which were inappropriate or put them at risk, we thought that the Government should consider introducing exemptions for vulnerable people and doing more to increase the provision of appropriate accommodation.

On the face of it, the introduction of universal credit may seem unlikely to affect housing costs, but housing benefit is one of the six benefits that will form part of universal credit. The biggest change in respect of housing benefit is that it will be administered by the DWP directly as part of universal credit, rather than by local authorities, as is the case at present. Universal credit, including the housing costs element, will generally be paid direct to claimants once a month, although exceptions can be made.

For some time now most claimants in the private rented sector have received their housing benefit direct and paid rent to their landlords. However, for social housing tenants, this represents a huge change, as their housing benefit has always previously been paid to their landlords and they have not been faced with handling the significant sums that housing benefit sometimes involves, especially when it is paid once a month.

In a report that we published in 2012 we looked at how universal credit would affect vulnerable claimants. One of the key issues that we considered was the challenge that some vulnerable people would face in coping with direct monthly payments of UC which included their housing costs. To test the impact of direct payment of housing costs on social sector tenants, the Government set up direct payment demonstration projects in six local authority areas in 2012. The findings from the research showed a distinct and significant drop in rent payment rates when tenants first migrated to direct payment. As a result, rent arrears increased, as did the number of tenants falling into arrears. Although tenants adjusted to the new system over time, much of the arrears that had built up in the early stages were not repaid, so total arrears continued to rise. Overall, tenants who went on to direct payment paid 95.5% of all the rent owed, compared with 99.1% who were not on direct payment.

The Public Accounts Committee last week published a report on universal credit that concluded that these findings show that the DWP needs to reflect on how it will tackle the potential problems of paying the housing benefit element of universal credit directly to claimants. As we said about universal credit in 2012, it may work well for the majority of claimants, but it is the vulnerable minority who need special attention and extra support. This is particularly the case when it comes to housing costs because they often represent the largest proportion of a household’s benefit payments. If people fall into arrears and lose their homes, there can be all sorts of dire consequences, particularly for children.

What I have said so far applies predominantly to England and Wales. Since we published our report there has been a referendum in Scotland and the setting up of the Smith commission to look into further devolved powers. My Select Committee has not had time to look at the implications of the Smith agreement and how that might impact on the way in which housing benefit is administered and paid in Scotland. Nevertheless, our report was wide ranging. I have not touched on all the important issues that it covered, but colleagues from the Committee are in the Chamber and they may do so.

In conclusion, we continue to be disappointed that the Government have not been able to provide a response to the very important matters that we raised nearly a year ago. Many of the issues that we identified in April 2014 still exist in the system and some have been exacerbated with the passage of time. I look forward to the Minister’s update on the progress that has been made in addressing some of the concerns that I have raised.

[John Hemming (Birmingham, Yardley) (LD)]

I am pleased to follow the hon. Member for Aberdeen South (Dame Anne Begg), the Chair of the Select Committee. She raises a number of interesting points that were debated in the private Member’s Bill introduced by my hon. Friend the Member for St Ives (Andrew George), the Affordable Homes Bill, which proposed a number of changes to the social sector criteria—the bedroom tax, spare room rent or whatever one wants to call it. One of those changes would, under certain circumstances, automatically exempt people with disabilities from being required to pay for a spare room.

In law as it currently stands, under article 14 of the European convention on human rights, there is a legally enforceable right to get hold of discretionary housing payments. I have achieved that in Birmingham in a couple of cases, by using the threat of it rather than making the application to court. My constituency experience is that in the cases in which we should get DHP, in general we have got it. I agree that we should have an automatic exemption from paying for spare rooms for those people who need them because they have a disability, which is obvious, and those whose homes have been adapted. However, we have managed to get DHP in those cases, and we are getting longer DHP awards following the changes that defined the budget for two-year periods, so some progress is being made.

The other change proposed in the Affordable Homes Bill was that people who said that they wanted to move would not have to pay. Of course, that is between 10% and 20% of people. In fact, I think that the figures for Birmingham show that roughly half those who were originally having to pay for spare rooms no longer have to, although obviously people are flowing in and out of the system. I find it rather sad—perhaps the Minister will take note of this point—that although the Department gets monthly statistics from all local authorities on what is going on with awards of DHP and the like, spare room rent and so on, we do not get up-to-date figures on the situation.

One of the changes introduced in April 2013 was to enable people in the social rented sector to benefit in the same way as those who own their own homes if they want to let out a spare room to a lodger or boarder. Not only would they not have to pay for the spare room, but they could keep up to £20 a week of the additional money. Given that the applicable amount for a 25-year-old is currently around £71.70, £20 a week is quite a lot of money. I believe that only a handful of people in Birmingham have taken that up, but I think that is because people do not know that they can benefit.

I had a meeting last night with care leavers, during which we discussed housing, because it is absolutely critical for them. We discussed how tight their budgets are when they have to live on means-tested benefits, because they have to pay water, gas and electricity bills, so there are great merits in people sharing property in certain circumstances. I advise young people to consider sharing, rather than trying to live alone. They raised a concern that even though they got some priority as care leavers, they were still given only one choice of property—take it or leave it. I think that varies from local authority to local authority, but perhaps more could be done in that regard.

In my constituency advice bureau I get people who are very upset. The last person who was in tears was a constituent who was in overcrowded accommodation; they could not live comfortably in the two-bedroom flat they had. I find it sad that we are still not managing to deal with those who are under-occupying and those who are over-occupying in such a way that councils can resolve the issue. I recently had a case in which a pensioner wanted to downsize from a house but the council was being exceedingly difficult about it, saying, “When you took the house, certain adaptations were made, so we want you to reinstate them before we move you.” Obviously he is not paying the spare room rent, but he is still occupying a house that could be occupied by a family. I do not think that there is the urgency that there should be in local authorities to try to deal with overcrowding.

[Dame Anne Begg]

Actually, there is a need to ensure that people are appropriately housed and that they move, but very little of that responsibility lies with local authorities. The wrong way to go about it is just to take money from people who are over-occupying and would love to move but are not in a position to do so.

[John Hemming]

I personally think that it would be harsh to go around evicting everybody who is under-occupying, although that happens when people try to succeed to a tenancy; they are told that they cannot do so because the property is too big. I do not think that overcrowding is taken sufficiently seriously. Malcolm Wicks highlighted in his memoirs how he argued, when a Labour Housing Minister, for the need to bring in something akin to the current situation.

--- Later in debate ---

[The Minister for Disabled People (Mr Mark Harper)]

I will try to respond to the points raised in the debate but I will also endeavour to observe your strictures, Madam Deputy Speaker, to keep my remarks relatively brief so that the House also has time for the second important debate today. I will do my best to balance the two competing tensions.

First, I will respond to the point made by the Committee Chairman, the hon. Member for Aberdeen South (Dame Anne Begg), about the lack of a response. The Government have the greatest respect for the parliamentary process and engage with the Select Committee. She will know that, with the exception of this report, no response by my Department has taken longer than six months, but I fear that there is a very simple and straightforward answer as to the reason for the delay and I am afraid it will not mean an early response. The Committee report spends quite a bit of time talking about the removal of the spare room subsidy—as we have done today—and the Government response responds to the various points made. As the hon. Lady will know, we have a coalition Government—something I hope will not be necessary after the election—and that, despite our coalition partners having agreed on this policy all the way through the Parliament, they now towards the end of it do not agree. Unfortunately therefore, despite the fact that the response is broadly ready to go, we have not been able to secure agreement across the Government. I am afraid harmony has not broken out and, until it does, the Government will not be able to respond to the Committee. I am probably just as disappointed about that as the hon. Member for Erith and Thamesmead (Teresa Pearce).

[Dame Anne Begg]

While I can appreciate there may be problems on the bedroom tax, would it be possible for the Government to publish a partial response to our proposals, addressing all the other points on which there presumably is agreement across Government? Our Committee had a lot of very interesting things to say on a whole range of other issues.

[Mr Harper]

That is an interesting point. Let me take it away and see whether it is possible to do that in the time remaining. I have explained the reason for the lack of response to the Committee and, as I have said, it is the only report from the Select Committee that the Department has not responded to within six months. I am sorry about that, but the blame does not lie with the Conservatives in the Government; it lies elsewhere. [Laughter.] I am just being honest here at the Dispatch Box.

Compulsory Jobs Guarantee

Anne Begg Excerpts

Wednesday 11th February 2015 Commons Chamber

[Dame Anne Begg (Aberdeen South) (Lab)]

Interestingly, the very first inquiry undertaken by the Work and Pensions Committee when I took over as Chair after the election was on the Government’s plans to abolish the future jobs fund. It feels as though we have come full circle since then. At that time, the Government promised to bring in something a lot better, but their Work programme was not better and was certainly not as targeted as the future jobs fund.

There is no doubt that the future jobs fund was extremely successful. The fact that it was not allowed to run its course means that on paper it seemed a bit more expensive than an alternative, but that is because it included all the start-up costs. It worked because it was about real jobs for real people paying a real wage. It was not the same as work experience, valuable though that is, because it was much more disciplined in making sure that people were in the world of work. Many young people got a job as a result of the future jobs fund.

I think Members from both sides of the Chamber agree that the best way to tackle welfare spending is to get more people into work. People should not just get into work, but into well-paid work so that they are not still dependent on welfare payments while in work, as is now happening. There has been an increase in in-work poverty, with people in work but still depending on one benefit or another. For example, more than 50% of those in receipt of housing benefit have someone in their household in work, which cannot be right. Hand in hand with getting people into work must be getting them into well-paid work.

This debate is timely for me as an Aberdeen MP. While almost everyone in the rest of the country is welcoming the low oil price, which they think will help their local economy, in Aberdeen it is the very opposite. We do not yet know the numbers involved, but the low oil price means that thousands of my constituents and people from across the north-east of Scotland have become unemployed or are about to lose their jobs. There has been a slight time lag, but a lot is now happening, with Talisman and BP announcing that 600 jobs are going in just one week. Most of the oil majors have announced 200 to 300 job losses, and the supply chain is also shedding jobs fast.

There is nothing to replace those jobs, and when unemployment goes up and an area finds itself in such a situation, the young and unemployed suffer the most, whether those who have left school and cannot get a job or those who are shed first, as often happens, in any kind of downturn. Although the downturn may seem to affect high-level jobs in the oil and gas industry, it will eventually filter down to hotels, shops and nightclubs and all the other jobs in services in Aberdeen.

I was very complacent as the local MP—other Members who also represent the north-east of Scotland were quite pleased—about the fact that we had such low unemployment. Unemployment was coming down—in fact, it was less than 1% in my constituency, which by anyone’s measure is full employment—and there was a labour shortage, so we were looking for more people, but that has now been overturned.

The compulsory jobs guarantee would help to create jobs. The economy of Aberdeen will need new jobs, and we must ensure that the remaining jobs are not completely lost to the economy. I hope that the oil price will pick up, and that such jobs can be recreated. The promise is that we will look after people when times get hard—as they will for many people in the area, particularly the young who cannot get on the first rung of the ladder—and that is where the really important compulsory jobs guarantee will come into its own. I am glad that my party is going into the next election promising to make sure that young people will have the opportunity of jobs being created for them.

Employment and Support Allowance and Work Capability Assessments

Anne Begg Excerpts

Thursday 5th February 2015 Westminster Hall

[Dame Anne Begg (Aberdeen South) (Lab)]

I am delighted to be given the opportunity to discuss one of the more recent reports of the Work and Pensions Committee, on the operation of employment and support allowance and the work capability assessment.

Many people going through the ESA claims process are unhappy with the way they are treated and the decisions made about their fitness for work. Atos, the current provider of the WCA, became a lightning rod for all the negativity about the ESA process and is exiting its contract at the end of the month. Our report concluded that the flaws in the ESA system are so grave that simply rebranding the assessment used to determine eligibility for ESA—the WCA—by appointing a new contractor would not solve the problems we identified.

We called on the Government to undertake a fundamental redesign of the whole ESA process from end to end to ensure that the benefit’s main purpose—helping claimants with health conditions and disabilities to move into employment where that is possible for them—is achieved. We acknowledged that a redesign could not happen overnight, but the current system needs to be improved now, because it is causing claimants considerable distress and anxiety.

During our inquiry, the Department for Work and Pensions announced that the contract with Atos to carry out the WCA would end and that a new private contractor would be found. We believed that that provided an ideal opportunity to make shorter-term improvements to the process. We recommended a number of changes to help claimants receive an improved service and to make the decision-making process and the outcomes for claimants more accurate and appropriate.

The DWP announced that the new private contractor—Maximus—will take over the WCA contract from 1 March. We hope that the DWP and Maximus will use this new start to address the problems our report identified. However, it is important to remember that the DWP makes the decision about a claimant’s eligibility for ESA—it is not Atos, and nor will it be Maximus. The face-to-face assessment is only one part of the process. On its own, putting a new private provider in place will not address the problems with ESA and the WCA.

In response to our report, the Government said they were already doing some of the things we said were necessary. They rejected some recommendations altogether, including our call for a fundamental redesign. However, since our report was published, Dr Litchfield has published his independent review of year 5 of the WCA, and he clearly shares many of our concerns, as Professor Harrington did in the first three reviews.

One key issue our report identified is that ESA is not achieving its purpose of helping people who could work in the short-to-medium term to move back into employment. Our recommendations for the ESA redesign therefore focused on ensuring that the process properly identifies claimants’ health barriers to employment and the particular support they need so that the conditionality they are subject to, and the employment support they receive, can be tailored more closely to their circumstances.

Linked to that is our finding that the outcomes of the ESA claims process are too simplistic. Claimants can be found fit for work, in which case they are not eligible to claim ESA. They might be able to claim jobseeker’s allowance, but many are reluctant to do that, because they know they will not be able to meet the job search commitments required as a result of being on JSA. The DWP has repeatedly said that jobcentre staff can tailor conditionality to the needs of individuals with a health condition or disability, but the extent to which that happens in practice is very patchy.

Claimants found to have such limited functionality that they cannot undertake work-related activity are placed in the support group, where they are subject to no work-related conditionality. The numbers placed in the support group have increased steadily since ESA was introduced, because the Department has now realised that, surprisingly enough, many people who were claiming incapacity benefit had serious long-term conditions that meant they were unable to look for work—that is why they were on incapacity benefit in the first place. Such people should be not only not expected, but not mandated, to look for work.

We therefore have two extremes: people are either fit for work or not fit for any work. In the middle, however, there is a huge group that has become known as the work-related activity group, and everyone else is placed in it. These people are not yet fit for work, and they may even have a deteriorating condition, but they are required none the less to undertake work-related activity. Our report concluded that the WRAG covers too wide a spectrum of claimants with very different prognoses. Their employment support needs are not being properly assessed in the WCA or by the employment support providers they are referred to, so they are not getting the help they need to return to work. Proper account needs to be taken of where a claimant in the WRAG is on the spectrum of readiness for work, given the wide range of conditions and disabilities this group of claimants encompasses and the different impacts the same condition or disability can have on an individual claimant’s functional capacity.

To improve the process of assessing health-related barriers to employment, we recommended that a separate assessment of those barriers be reintroduced. The original design of ESA included a work-focused health-related assessment, which the Government suspended in 2010, and such an assessment, or something similar, should be introduced.

We were also concerned about the descriptors used in the WCA process, because they are a very blunt instrument for assessing the functional impact a particular condition or disability has on an individual. That is particularly true of mental health problems, cognitive problems and fluctuating conditions. The descriptors, including their effectiveness and the way they are applied, should be re-evaluated as part of the redesign.

The Government turned down our request for a major redesign, but there are things we thought they could do in the short term, so let me list some of the changes we would like to see. The DWP acknowledged that the contract with Maximus will cost more money, but that is justified if the service to claimants is better. To ensure that it is, the DWP needs rigorously to monitor Maximus’s service. If the service to claimants falls short, the DWP must take immediate action, including imposing contractual penalties on Maximus. Such careful monitoring by the DWP of service standards did not always happen with the Atos contract.

We recommended that, where possible, paper-based assessments are used to place people in the support group, where a person’s health condition or disability clearly has a severe impact on their capability to work, and that people are not required to go through a WCA. Unnecessary and too frequent reassessments should also be avoided, especially for people with deteriorating conditions and for claimants who have just been successful in an appeal. That will be quite important in the new contract, because Atos has effectively given up on doing those reassessments as it exits the contract, and Maximus will have to address the issue. There is still a problem with too frequent and inappropriate reassessments for people with deteriorating conditions.

The DWP should improve the way it communicates with claimants. The letters sent to claimants are too technical and complex. They need to be in plain English and to avoid using jargon. We wanted to ban the terms “limited capability for work” and “limited capability for work-related activity”. Mr Walker, if you can tell which one puts somebody in the support group, the WRAG or the JSA fit-for-work group, you probably understand these letters better than most claimants, and certainly better than some members of the Committee. I think that having “limited capability for work” means someone is in the WRAG, and that “limited capability for work-related activity”, means that they are in the support group; but who knows? It is part of the confusion. We want the DWP to make changes to the language in the letters to claimants.

In response to our report, the Government said that they are reviewing all ESA communications and that they plan to introduce a new version of the ESA50 form that claimants complete to apply for the benefit. It would be helpful if the Minister would tell us whether the new form is now being used and what progress has been made in reviewing the ESA letters and other communications.

The aim of some of our recommendations was that the DWP should take greater responsibility for the end-to-end ESA claims process. Atos became the target for claimants’ anger at the way the process was carried out, as if somehow the Department for Work and Pensions was not involved. We believe that the DWP rather than Maximus should decide whether claimants need a face-to-face assessment. Again, the Government did not seem to be persuaded by our arguments for that change, and it would be helpful if the Minister would explain why.

We also recommended that the DWP should proactively seek “supporting evidence” for the impact of a claimant’s condition or disability on their functional capacity, rather than, as is the current arrangement, leaving it primarily to claimants, who often have to pay. We also believe that the DWP should stop relying so heavily on GPs for supporting evidence, because they are often not best placed to provide the most useful information. Other professionals, including social workers and occupational therapists, often have a better idea of the impact that a condition has on a person, as opposed to knowing about the medical condition.

Paul Gray made similar recommendations about seeking supporting evidence from professionals other than GPs in his review of the personal independence payment assessment. He also made the very sensible point that the DWP should take steps to share information from the different assessments that many disabled and sick people go through in rapid succession—particularly in the WCA and PIP processes, but also for social care assessments—rather than persisting with the current duplication and repetition. That happens again and again, and claimants feel angry when they have already given information once or twice. Sharing information is important. It would be helpful if the Minister could tell us whether he envisages the DWP acting on Paul Gray’s proposal.

Our report also dealt with the issue of putting claimants in the WRAG when their prognosis is that they are unlikely to experience a change in their functional abilities in the longer term. Perhaps the problem is that the WRAG encompasses such a wide range of conditions. Some people’s prognosis is that they will get better, while others’ is that they will get worse. Yet they tend at the moment to be treated as a homogeneous group. The WRAG serves as a default group, and because there is no work-focused health-related assessment those in it are not properly assessed to see what would help them back to work.

We were particularly concerned about people with progressive conditions such as Parkinson’s disease. If they are not expected to be able to work within a reasonable time scale, because their condition is getting worse, they should be placed in the support group, so that work-related conditions that they cannot fulfil will not be imposed on them. The Minister said in oral evidence to the Committee last week that he would respond to that point more fully today, and I hope he is now in a position to do that.

We made recommendations about the mandatory reconsideration and appeals processes, but time is moving on and perhaps other hon. Members will raise those important matters.

Providing financial support to people who are too ill or disabled to work is a fundamental part of the benefits system. Of course it is right that people should be encouraged and supported to return to work when their condition allows them to, but the help that they need through that process must be properly assessed and tailored to their personal circumstances. The Committee does not believe, on the basis of the evidence from our inquiry, that the current ESA process has been shown to be effective in fulfilling those functions. We stand by our call for a fundamental redesign of the ESA and the WCA. I look forward to hearing the Minister’s views on why the Government do not agree with us.

--- Later in debate ---

[Dame Anne Begg]

I thank the Minister for his reply, and he has been thoughtful in his interpretation of some of our recommendations. It goes without saying that we would always like him to go further, but there has been some movement since the publication of our report.

The new contract, as the Minister has just said, kicks in on 1 March, when will see whether Maximus makes a difference. We are saying that the whole system is flawed, however, particularly the WRAG. Even if the WCA is improved, there is still a problem if the majority of people—a wide range—end up in that group by default. It is impossible to reconcile the preparation required by people who are moving towards work with the needs of those alongside them who are moving away from work. There is a wider context, because we live in a society that treats disabled people in a particular way, so the fact that someone is ready and able to work does not necessarily mean that they can get a job. That depends on a whole range of other things, from access to prejudice or discrimination by employers.

I pay tribute to the members of my Committee; I think I must have the hardest working Committee of any in the House. We have quite a wide range of political views and personalities, but when we are dealing with an important issue and we want to get it right for our constituents, we often bring very specific knowledge from our own constituency casework, which informs the work that we do in the Committee. We think that the subject is very important, and we are always grateful when the Government listen, but sometimes they need to listen a wee bit more.

Question put and agreed to.

Work-related Activity Group

Anne Begg Excerpts

Tuesday 3rd February 2015 Westminster Hall

[Dame Anne Begg (Aberdeen South) (Lab)]

One of the conclusions that my hon. Friend and I reached as part of the Select Committee on Work and Pensions inquiry was that the work-related activity group was too wide and trying to do two contradictory things: to give support to people who are not fit for work without being in the support group; and at the same time to move those who might be fit for work closer to work. Those two different aspects of the WRAG meant that it became the default for everyone who either was now not fit for work, or definitely could not work in future. The group is too wide and too unwieldy.

[Sheila Gilmore]

I thank my hon. Friend, the Chair of the Select Committee, for that contribution. I will come on to this in more detail later, time permitting, because the situation we are in now is important. If we end up with a default group and people in it for a long time, one of the questions that has to be asked is, how much further have we progressed from where we started?

One of the problems seems to be that different rules or practices from those for people previously on incapacity benefit are being applied to new claimants. The new claimants who go into the support group may be placed there without a face-to-face assessment. In some situations people are having a paper-based assessment and, if people go into the support group, that might seem acceptable. The WRAG, however, has a detrimental effect on income and circumstances, which I will come on to, so if people go into that group because of a paper-based assessment, they will not have had the opportunity to explain more fully their particular circumstances. That might seem a rather strange thing to say, given the debate about there being too many assessments—I have been part of that myself in my Adjournment debates—but it is important that we get things right.

The Select Committee called for the rules to be aligned, so that no claimants could be placed into the WRAG without having an opportunity to explain their particular conditions and their impact to an assessor, but the Government in their response of November last year refused to accept that recommendation. I hope that the Minister has had further thought and might want to reconsider.

Between 2008 and 2014 about 30% of new claimants with Parkinson’s or multiple sclerosis were placed in the WRAG. Of those, some 5,000 were given the prognosis that they were unlikely to return to work in the longer term. The Select Committee recommended that all claimants with such a prognosis be allocated to the support group, not the WRAG, but the Government’s response was disappointing, stating that “with the right support”—which I will go on to say is not there—

“that person might be able to return to…work”.

The Government also consider that individuals might be able to adapt to their condition or that advances in treatment might become available. If someone goes into the support group, however, regular reassessments are carried out, so even if claimants were able to adapt successfully or treatments became available, that would be picked up. On its own, therefore, that is not a good enough reason for placing people in the WRAG.

That leads me on to the quality of support. When ESA was first introduced, the intention was that Jobcentre Plus would provide the support, but since 2010 the number of disability employment advisers has declined, meaning many ESA claimants receive no more than two face-to-face interviews per year or, in the experience of some of my constituents, sometimes fewer. Many are now referred to the Work programme, with numbers increasing significantly following the October 2012 decision to expand the range of people referred from those thought able to return to work within three months to those thought able to return within 12 months. Concerns about the Work programme are well documented, but it is particularly inappropriate for those incorrectly placed in the WRAG.

A constituent of mine was placed in the WRAG and referred to Work programme contractor A4E, but her only activity was to search for jobs on the internet, despite the fact that she has complex regional pain syndrome and would have been unable to take up any job offered. She was given little help with how her particular condition might be alleviated or supported, or about what contact she would require with employers to make that happen. Rather, the result was that her treatment was disrupted and her condition exacerbated. Indeed, recent analysis, quoted in the Select Committee report, found that only 5% of claimants from the WRAG who were placed in the Work programme have moved into sustained work since 2011, against a target of 16.5%.

A few months ago, an evidence-based review of the work capability assessment, the test for deciding whether people are eligible for benefit and which group they go into, examined whether different descriptors would work. Part of the process was to ask expert panels to look at the WCA outcomes. Interestingly, they identified that, of the claimants who were found fit for work, 83% would require, on average, two or three adjustments to be able to undertake employment, 50% would require flexible working hours, and 24% would require a support worker. That was a review of fit-for-work assessments; those requirements are likely to be even more necessary for those in the work-related activity group. Such support just is not happening through the Work programme.

I do not have a particular view on whether support should be provided through Jobcentre Plus or a contractor or other provider, but in addressing these concerns it is important that provision is not forced upon people who cannot benefit from it, and that those who can receive it get it in a form that is applicable to their needs and local circumstances. In that respect, I strongly support the devolution of responsibility and finance for the Work programme to local authorities, as many specialist local providers offer a much more effective and personalised service to those with health problems or disabilities.

As my hon. Friend the Chair of the Select Committee pointed out, there is a major flaw at the heart of the system, which explains some of the problems. The work capability assessment is trying to be a test of both eligibility for financial support and how close people are to being able to work. At the outset, there was in fact a further assessment called the work-focused health-related assessment, which was intended to explore the difficulties and obstacles that people would face in returning to work—that is, after eligibility for benefit had been determined, issues such as the obstacles to and distance from employment would be looked at.

In July 2010, the work-focused health-related assessment was suspended for two years on the grounds that it had not delivered the intended outcomes, although it seemed somewhat early to make that judgment as it was barely 18 months since the introduction of the benefit as a whole. In 2013, it was suspended for a further three years to await evaluation of the Work programme and universal credit.

[Dame Anne Begg]

The WFHRA, as it came to be known, was actually suspended before any existing incapacity benefit claimants had even been migrated on to ESA. It was that group in particular that would have benefited from some kind of assessment of their current and future barriers to work.

[Sheila Gilmore]

My hon. Friend is correct. There is no sign whatever that any evaluation was made that showed that it was not working. Do we need something better than the WCA to measure the obstacles and propose support measures? The answer must be yes. Does that necessarily mean two tests? I do not know—perhaps, or perhaps not—but it should be looked into properly so that we can decide how to deal with the issue. Scope, a leading charity in this field, has suggested replacing the WCA as a whole with a distance-from-work assessment to assess support needs rather than medical capacity.

The third issue that I want to address is the fact that the Government have both reduced the value of ESA payments to those in the WRAG and placed restrictions on its receipt that have significantly changed the character of the benefit. Although the value of payments to people in the support group has been uprated by inflation in both 2014-15 and 2015-16, payments to those in the WRAG have been subject to uprating by only 1%. Those in the WRAG are subject to the overall household benefit cap, whereas those in the support group are not. The Government justifies those differences on the basis that people in the WRAG are better placed to move towards the labour market, but I do not think that that is how the original architects of ESA would have envisioned the WRAG working. Under incapacity benefit, most of these people would have been given unconditional support, so it is wrong that the fact that they now receive some level of support with a view to an eventual return to work is being used as a stick to push them to get a job sooner than they are able.

The sorts of changes I have described have fed into the media perception that people in the WRAG are in reality fit for work. For example, on 1 April 2013, the Daily Mail ran a story under the headline “Just one in eight on sickness benefit is truly too ill to work”. It reported that of nearly 1.5 million new claims assessed for ESA since 2008, 837,000 were found fit for work and 232,000 were

“deemed by doctors to be too unwell to do any sort of work”—

that is, they were in the support group. It then said that

“a further 367,300 were judged able to do some level of work”,

which was clearly a reference to the WRAG and implied that such claimants were not truly too ill to work. Actually, the whole point of the test is to say that at this point in time they are deemed unfit for work.

A related change was the decision to time-limit the receipt of contributory ESA to one year for those in the WRAG, on the basis that they are likely to get better anyway and so will be in less need of the benefit than people in the support group. However, in contrast to incapacity benefit, ESA was designed with regular reassessments in mind, so were there to be any improvement and therefore lost of entitlement, that should be determined through the process of reassessment, rather than an arbitrary one-year time limit. Such a limit particularly affects people who have been in work for much of their life and therefore made their contributions, but who may, for example, have a working partner—possibly earning only part-time wages—and so reach a position in which they receive no payments whatever.

Another issue is that the letters that people receive to tell them about changes in their circumstances are very unclear. One former incapacity benefit claimant came to my surgery last year after he had received a cryptic letter from the DWP. He understood it as saying that he would continue to receive benefit, but became concerned several months later when he learned that his benefits were due to stop in a few months’ time. It turned out that he had been placed in the WRAG but was time-barred from appealing the decision. I hope that the Government’s proposed review of all ESA-related communications will address such issues. My experience is that people are still receiving letters that are hard to interpret. They tell them that there has been a change in circumstances and perhaps that there will be a slight change in the amount of money that they will receive, but they do not make it clear why, which of the ESA groups they are in, and the overall implications. It is important that people are given the information that they need in order to take the appropriate action.

In conclusion, it is worth quoting the Select Committee again, which concluded:

“The WRAG is by far the most problematic of the three ESA outcome groups.”

I know that it is likely that many of the policy changes that I have mentioned have been driven by financial considerations, and I do not necessarily expect the Government to change all their positions in the remaining few months of the Parliament. Nevertheless, I would like to think that these matters are under consideration and that there is a real attempt to overcome some of the problems and issues that I have mentioned. For example, good communication should not be beyond the bounds of possibility, even in the dying days of this Parliament. That could save money in the end, because if people understood what they were being told they would be much more likely to take the appropriate steps.

It is profoundly unfair that people in the WRAG seem to be shouldering a disproportionate burden in reducing the deficit, and I hope that whichever party or parties are in government after the election take a different approach. No claimants should be placed in the WRAG without a face-to-face assessment, and only those able to benefit should be referred to the Work programme, if it continues—I hope that it can be improved considerably, or devolved so that we can use the specialist providers with which we have all had contact and that do such a good job. Ministers must acknowledge that those in the WRAG are currently too ill or disabled to work.

--- Later in debate ---

[Mr Harper]

I accept that point, but employers vary in their ability to deal with people with health conditions and disabilities. Some are better than others. For example, we know that some employers retain almost everyone in their organisation who develops a mental health problem, because the employers can deal with that effectively. Some employers, however, are not good at dealing with that. The only point I was making was that the diagnosis of a progressive condition should not mean that we automatically assume that the person will go into the support group. The other thing is that there are many conditions in which the symptoms fluctuate. It may be that someone has to have a more flexible work regime—sometimes they can work and sometimes they cannot. All I am saying is that it can be a little more complex, and a progressive condition should not automatically trigger a diagnosis-based referral to the support group.

[Dame Anne Begg]

There will be people in the support group who are or can be in work. The ability to work is not the correct definition for who should be in the support group and who should be in the WRAG group.

[Mr Harper]

I accept that point. There are of course people in the support group who do permitted work. I think that the hon. Member for Edinburgh East was arguing that it was somehow inappropriate for those diagnosed with progressive conditions to be put in the work-related activity group and expected to undertake some form of work-related activity. I was simply making the point that it does not follow that putting someone with a progressive condition in the WRAG is inappropriate, and that they should automatically be in the support group. That was the only point I was trying to make.

The hon. Member for Edinburgh East made a good and sensible point—she raised this at my Select Committee appearance last week, and I promised that I would respond to her—on some of the communication. Letters that say to people that they are not expected to return to work—I cannot remember whether it said “indefinitely” or “ever”—are not very well worded. We are looking at all our communication. We have a freeze on IT changes until we do the cutover from Atos to Maximus, but once that is out of the way, we will change the wording on the assessor recommendation. The hon. Lady made a good and reasonable point in the Select Committee session last week; the wording as set out does not accurately reflect the position.

The hon. Lady also raised the point about the work capability assessment generally. We will respond to Dr Litchfield’s report in due course, but he said that the WCA was not a perfect assessment, and I would not pretend that it was. He also made the point, however, that there is not a magic alternative assessment that can be pulled off the shelf. As the hon. Lady knows—I think she remarked on this in her speech—a number of experts looked at whether there was an alternative way of assessing people’s need for benefits and for support to move into the workplace, and there was not a magic solution there either. That demonstrated that the WCA is a pretty good assessment. I would not pretend that it is perfect, but it is probably the best that there is. One thing Dr Litchfield suggested is that we give the WCA a period of stability, so that it can settle down, rather than continuing to make changes to it on a permanent revolution basis.

The hon. Lady also discussed whether we should be able to refer people to the work-related activity group without a face-to-face assessment. As we said in our response to the report—I think this blends the two slightly contradictory points that she made—we should not have unnecessary face-to-face assessments. Decisions are made on the basis of the papers without a face-to-face assessment only if the decision maker believes that the information in front of them is clear and provides sufficient evidence to make a decision. The person about whom that decision is being made will not always agree with the outcome, which is why they can apply for a mandatory reconsideration, and if they do not agree with that, they can appeal.

In cases where the decision maker is clear that there is sufficient evidence to make a decision, having an unnecessary face-to-face assessment—an assessment that, in other cases, the hon. Lady is not a fan of—is not an enormous step forward. She will know from the statistics we publish that the average length of time to complete a mandatory reconsideration is 13 days, and we complete three quarters of them in 30 days; that is not an enormous barrier put in the way of someone having their case looked at again and then being able to appeal the decision if they think they need to.

Housing Benefit (Abolition of Social Sector Size Criteria)

Anne Begg Excerpts

Wednesday 17th December 2014 Commons Chamber

[Dame Anne Begg (Aberdeen South) (Lab)]

I am delighted that we have the opportunity for this debate. I would actually have preferred another debate, though; on 2 April, the Select Committee on Work and Pensions published a report entitled “Support for housing costs in the reformed welfare system”. As yet, however, we have not had the Government response.

It was interesting to hear the Minister say that various things had recently been published, given that we are still waiting for that response. You will know, Madam Deputy Speaker, that the Government are normally given two months to respond to a Select Committee report, and it has been a lot more than two months in this case. Every time the Government’s response has been chased up, we have been told that it is lost somewhere in government—I am not quite sure where. Of course, a Select Committee cannot apply to the Liaison Committee for a debate if it does not have the Government response. However, today’s debate gives me an opportunity to raise some of the points that the Work and Pensions Committee made.

The Committee did not call for the scrapping of the bedroom tax, although personally I would like it to be scrapped as soon as possible, and we called it the “social sector size criteria” to try to depoliticise the matter. However, we made important recommendations about how the worst effects of that pernicious policy could be mitigated. A lot of them were about exempting particular groups that have already been mentioned in the debate—such as carers, disabled people who need extra room and anyone living in a property that has had adjustments made to it, who would probably find it impossible to move.

The Minister gave the game away when he talked about discretionary housing payments. Groups of people such as I have mentioned were clearly not meant to be included in the bedroom tax when the policy was designed; the fact that they were to get discretionary housing payments indicates that they were not meant to be caught by it. However, discretionary housing payments are what they say they are—discretionary. They are not long-term.

In reply to my hon. Friend the shadow Secretary of State, the Minister said that they had been extended to give families time to adjust, but the family that my hon. Friend mentioned cannot adjust—they need a house the size of the one they are in. A woman who has had a refuge built cannot adjust and move, because it has been specifically built for her. I cannot see why the Government persist in turning their face against sensible proposals for exemptions. They keep arguing that it is all right because people get discretionary housing payments, but those payments are not permanent. People need permanent provision for their adjustment.

The number of people across the country caught by the bedroom tax is quite staggering. In my constituency, where unemployment is really low, there are still 419 people affected by the bedroom tax. Across Aberdeen, where most people are in work—there is almost full employment —more than 1,600 are affected. The irony in such a place is that people are being forced out of a two or three-bedroom council house because of the bedroom tax, but the Government seem willing to pay even more through housing benefit in the private rented sector, because the rent on a one-bedroom house in that sector is higher than that on a three-bedroom council house.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

I am sure that all Members will recognise that people are being driven out of the social rented sector into the arms of private landlords. I trust the figures given by my hon. Friend and her Committee more than the ones that the Government give. Has she seen a figure for the number of people who have been driven from the public rented sector into the private rented sector?

[Dame Anne Begg]

I am afraid I do not have that figure.

[Mr Harper]

rose—

[Dame Anne Begg]

I suspect that the Minister is seeking to intervene on me to tell me the figure, and I will give way to him in a moment. I suspect that across the country, if the situation is anything like in Aberdeen, the houses with fewer bedrooms are in the private rented sector. However, many people cannot afford to go into that sector, because the cap that the Government have introduced on the local housing allowance means that they cannot find anywhere that they can rent. That is despite the fact that the cap is higher than the rent they were paying when they were living in a two-bedroom council house.

[Mr Harper]

I apologise if the House did not spot this when I mentioned it in my speech, but moves from the social sector to the private rented sector have actually fallen. The English housing survey—I admit that this is not in Scotland—shows that they are down by 20,000 since 2010-11. The number has fallen, so people are not being driven from the social sector to the private sector. It is actually the other way round.

[Dame Anne Begg]

That fits with what is happening in Aberdeen. People are not going into the private rented sector, because it is too expensive. Rents are above the cap that the Government have set. The irony is that the Government are prepared to pay money up to a cap that is higher than the amount that people would be paying in rent if they were not subject to the bedroom tax. That is the important point.

It is not much good for the Minister to give the number of one-bedroom properties across the whole country, because when the Housing Minister, the hon. Member for Great Yarmouth (Brandon Lewis), appeared before the Work and Pensions Committee and was asked where the spare capacity was, he said that it was in Grimsby. That is not much good to people in Aberdeen who cannot find a house to move to.

I assure Ministers that there are no places in Aberdeen for people to move to. In fact, there is a labour shortage because there are not enough properties to allow people to come and work and live in Aberdeen. That is a real problem, and the bedroom tax does nothing to mitigate it. If anything, it makes the situation worse, because it makes people feel insecure in what should be a secure tenancy. They are often in houses that they have lived in all their lives and seen their families grow up in, but now they are either being forced to pay extra or being forced out of their houses and finding that there is nowhere else for them to go. That is why the policy is pernicious and should be scrapped.

[Kwasi Kwarteng (Spelthorne) (Con)]

I am pleased to follow the Chair of the Work and Pensions Committee. However, one cannot on the one hand say that people are being driven from the social sector to the private sector, and on the other argue the opposite case by saying that the number of people moving to the private sector is falling because rental prices are going up. Those are contradictory points. Members have to choose one line of attack.

[Dame Anne Begg]

The only choice that a person has is to stay where they are and pay the bedroom tax. That is the problem.

[Kwasi Kwarteng]

I am glad that that has completely cleared up how Members can argue two entirely different things.

Let us put the matter in context. There is a lot of scaremongering, wild words and passion from Opposition Members, but very little attention to the facts. The Government removed the spare room subsidy simply to equalise the situation with what was going on in the private sector. I find it absolutely extraordinary that Labour Members are saying that it is all very well to have a discrepancy between social housing and private rented housing. Let us look at some more facts. Currently, 1.4 million households are on social housing waiting lists in England alone, and nearly 250,000 families are living in overcrowded accommodation. On what planet does it make sense not to have some degree of equity or fairness between people who rent in the private sector and those in social housing?

--- Later in debate ---

[Steve Webb]

I give way.

[Dame Anne Begg]

Will the Minister tell my Select Committee when we can expect the Government’s response to our report on housing costs, which was published in April?

[Steve Webb]

Even as we speak, officials are working on it and the hon. Lady will have it shortly.

The hon. Member for Edinburgh East (Sheila Gilmore) suggested that the comparison with the private rented sector was something of an afterthought. Uncharacteristically for her, she had not read the impact assessment we published in 2012, in which we made that very point.

We heard from some of my hon. Friends about how their local authorities have been very proactive in this area. We heard how, in Henley and in South Derbyshire, local authorities had substantially reduced the number of people affected by working with tenants. That is exactly the sort of thing that we want to see.

My hon. Friend the Member for St Ives (Andrew George), to whom I pay tribute on this issue, raised whether further mitigations were needed. Let me come to that point. We have a second motion before us, the Government’s amendment, which sets out the areas on which we agree. The areas where we agree are clear: we agree that it is unfair to say to private tenants and low-paid workers not on benefit that they have to pay for a spare room, but that for social tenants there should be a blanket exemption. The coalition parties also agree that the blanket application of the policy would not have been fair. That is why we have exempted pensioners, foster families, serving personnel living at home and disabled children who cannot share a room. In addition, we accepted that further mitigation would be needed. That is why large amounts of discretionary housing payments have been found. That is why an additional fund to bid for was found in 2013-14, and why additional money was found for rural areas. There is agreement between us on that.

In the light of the summer report that indicated the impact of the policy, the Liberal Democrats took the view that further mitigation was needed. Our view is that mitigation is needed for disabled people, adults who cannot share a bedroom, and those who do not have an alternative offer of accommodation. That point is made very clearly in the amendment. I hope my hon. Friends will support the amendment.

It is very easy to put down a simple motion saying, “Let’s have some free money. Let’s spend half a billion pounds reversing a policy, with no idea where the money will come from. Let’s not address the issue of overcrowding. Let’s not address the issue of the welfare budget. Let’s simply promise the voters more money and hope that they will buy it.” Evidence shows that they will not buy it. I therefore urge the House to accept our amendment.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.

Post Office Card Account

Anne Begg Excerpts

Tuesday 16th December 2014 Commons Chamber

[Steve Webb]

Yes, my hon. Friend is right. The front office counter framework was competitively tendered. The Post Office won because of its unrivalled network and what it was offering, and that meant that the contract could be awarded much more straightforwardly. Using the framework, we have already been able to award other contracts for DVLA counter services, for example, and the Post Office will be able to bid for other Government contracts as they arise.

[Dame Anne Begg (Aberdeen South) (Lab)]

In his statement and his reply to my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont), the Minister made it clear that the POCA will not become a transactional account, and it is therefore less likely to be suitable for people who have been moved on to universal credit. The Government promised that jam jar accounts would be developed. Clearly, the POCA is not going to be a jam jar account, as some people had hoped. What are the Government doing about this? Who is going to provide these jam jar accounts, because as yet we do not know of any?

[Steve Webb]

I am grateful to the Chair of the Work and Pensions Committee. We have not added features to the Post Office card account because, for example, adding direct debit means that the credit check threshold suddenly gets much more serious. Instinctively, I am with the hon. Lady on this. My approach would have been that the POCA is a good thing, so why should we not add nice things to it? We have not upgraded it, however, because one of its attractions is that people who have poor credit histories or who would struggle with some of the identity checks can be enabled to access it. In developing universal credit, my right hon. Friend the Work and Pensions Secretary is working with local authorities and the banking industry to look at different sorts of accounts, including, as the hon. Lady suggests, budgeting accounts. The basic bank accounts that were improved yesterday will be part of a suite. We intend that there should be the right sort of accounts for the right people.

Oral Answers to Questions

Anne Begg Excerpts

Monday 8th December 2014 Commons Chamber

[Mr Harper]

We have seen a significant reduction in the number of appeals. The mandatory reconsideration process is helpful, because it means that we can make sure that the right decision is made more quickly rather than having to force someone to go through a very lengthy appeals process within the tribunals service.

[Dame Anne Begg (Aberdeen South) (Lab)]

I am surprised by the Minister’s answer, because my Select Committee made exactly this recommendation and the Government have turned it down. The situation has got worse for people who are reapplying for employment and support allowance, because they think that their ill health has got worse. In future, they are to be denied getting ESA at the assessment rate. Why does the Minister think that is the right approach rather than allowing people to claim an out-of-work benefit because they are too ill to work?

[Mr Harper]

The hon. Lady, notwithstanding her position as Chairman of the Work and Pensions Committee, has not outlined the change correctly. If someone’s condition has significantly worsened or if they are claiming for a new condition, of course they can claim employment and support allowance. What they cannot do is to keep reclaiming employment and support allowance for the same condition when they have already been found to be fit for work.

Benefit Sanctioning

Anne Begg Excerpts

Tuesday 2nd December 2014 Westminster Hall

[Paul Blomfield]

I thank my hon. Friend for that important clarification. Although hardship payments are available to some vulnerable groups—as I said in response to the hon. Member for Wycombe (Steve Baker), there is a problem even there, and communication is breaking down—there are many groups to whom payments are not available. One recommendation, which the Minister should address, is that access to hardship payments should be given to all householders, not just those in certain defined groups.

Sanctioning is not only ineffective in many circumstances, but deeply damaging. That is particularly the case when it has a knock-on effect on housing benefit and council tax support for those on the lowest incomes. A claimant and their family can soon find that they face rent arrears and that they are unable to pay basic bills. In the case of council tax, non-payment is punishable by imprisonment.

Often, people find themselves in that situation without adequate warning, so they have no time to plan for the shortfall. Emma, another Citizens Advice client mentioned in the report, came very close to losing her home as a result of the knock-on impact of a JSA sanction. Sadly, she is not alone. When margins are tight, the slightest change in income can trigger a downward spiral into deep money problems. The system is not designed for that, and rightly so—how would someone in such dire straits be able to find a job?

The DWP agreed to change its IT software and amend the notification sent to local authorities when a sanction has been applied to allow housing benefit to continue without interruption. Action on that was promised by the autumn, but it is now December. Can the Minister assure us today that that relatively minor change, with the potential to make a substantial difference to the lives of some of the poorest people in our communities, is happening or is imminent?

Will the Minister respond to the report’s proposal that all households, as I said a moment ago, have immediate access to hardship payments to avoid the situations I have talked about? Will financial redress be considered where a sanction is found to have been incorrectly applied, resulting in significant consequences and distress for those involved?

There is much more to be said on the issue, and I have asked the Minister a number of specific questions. I want to end with one point.

[Dame Anne Begg (Aberdeen South) (Lab)]

Before my hon. Friend finishes, will he tell us whether the research found evidence of people having to resort to payday lenders or loan sharks to get over the immediate problem of a lack of cash? Did that then create problems for them further down the road because they had lost a lot of their ability to pay back those loans, even when they had been wrongly sanctioned?

[Paul Blomfield]

I thank my hon. Friend for that intervention and for the great work she has done as Chair of the Work and Pensions Committee, along with the other members of the Committee. She is right to highlight the link between benefits sanctioning and payday lending. As she will know, payday lending is a concern to me. With colleagues from all parties in the House, I introduced a private Member’s Bill on high-cost credit.

I have subsequently worked with colleagues on the all-party group on debt and personal finance to push the Financial Conduct Authority to introduce effective regulation of payday lenders, and I am delighted that we have made some progress on that. However, that is only part of the solution. We are dealing with the consequences of poverty—people resorting to payday lenders—but not the causes, and one of the most significant causes is benefit sanctioning. I am therefore pleased that my hon. Friend raised that point.

Universal Credit

Anne Begg Excerpts

Tuesday 25th November 2014 Commons Chamber

[Mr Duncan Smith]

I thank my hon. Friend; he is exactly right. We have worked on this together. As he knows very well, taking the early decisions to ensure that the programme rolls out safely and securely is far more important than, as the hon. Member for Leeds West (Rachel Reeves) seems to suggest, rattling ahead regardless of the consequences. That is exactly what happened with tax credits, where, on day one, 400,000-plus people did not receive any benefits. The disaster of tax credits has stayed with us ever since.

[Dame Anne Begg (Aberdeen South) (Lab)]

Will the Secretary of State confirm that the reason the volumes are so low is that only the simplest cases in the simplest groups are covered? Although it has been rolled out to families, they will still be only the simplest and easiest-to-deal-with families. Given that 250,000 jobseeker’s allowance claims are usually made every month, I wonder how he thinks we are going to get from today’s position of having had 20,000 claims in over a year to having 250,000 in a month. It seems quite a task to get the volumes up to that level and to be able to roll it out across the whole country.

[Mr Duncan Smith]

As the hon. Lady knows, we started with single people, but whenever somebody’s circumstances changed—they may have become a couple or had a family—they stayed in the system and have been dealt with. It is not correct, in any way, to say that these are the simplest cases. The roll-out to families introduces further complications, but we are doing this in way that makes sure that we get it right. By the end of this year, the north-west will have universal credit, so if someone falls unemployed and then goes into work, they will do so on universal credit. That is the key point. All the complications will be dealt with within the existing system.