Welfare Reform and Work Bill

Baroness Evans of Bowes Park Excerpts

Monday 21st December 2015 Lords Chamber

[Baroness Evans of Bowes Park (Con)]

My Lords, Amendment 70, tabled by the noble Baroness, Lady Sherlock, and the noble Lord, Lord McKenzie, seeks to require the Government to report on the adequacy of the funds provided to local authorities to support troubled families. We believe that the best way to judge the adequacy of the funding will be in the outcomes that the programme achieves. Our report will ensure that the Government remain transparent in publishing the progress made by families supported by the programme. This amendment, therefore, is not necessary.

The Government have committed to funding the new, expanded troubled families programme. In the spending review 2015, funding of £720 million was allocated for the remaining four years. Of course, the new programme also aims to incentivise local authorities to reprioritise existing resources to achieve better outcomes for families with multiple problems. These families are known to local services and money is already spent on them.

As the noble Lord, Lord Beecham, said, there is pressure on funding for children’s services, but we have actually seen local authorities maintaining relatively stable funding in these areas. However, we completely understand that there is pressure, and that is why we are also providing additional resources to change the way services respond to these families to achieve better outcomes.

As a number of noble Lords have said, funding for the new troubled families programme is available to local authorities in three ways. They are provided with a service transformation grant to transform their services and collect evidence for the national evaluation; they receive attachment fees of £1,000, as mentioned, for each family that they agree to work with; and they are able to claim an £800 results payment once one of these families achieves significant and sustained progress.

Of course, noble Lords will be well aware that the real financial prize, as a number of noble Lords have said, is the long-term change that we make to these families’ lives. It is not the money provided by central government, but the cost savings that can be delivered through redesigning their services to deliver better results for complex families with multiple problems and to see those families take control of their lives and move forward. We would certainly expect, as the noble Baroness suggested, local authorities to work together when a family moves from one area to another. It is both in the local authorities’ interest and in the family’s interest, so we would expect the sharing of information.

The programme has been designed to incentivise local services to reprioritise their money and front-line resources away from reactive services towards more integrated, targeted interventions to offer better outcomes for families with high-cost, multiple problems. By responding more effectively to the issues that these families face, the burden placed on local services can be reduced for the long term.

It is also important to remember that we are talking about a programme that has a track record of success. As the noble Baroness said, the original programme achieved success with about 116,000 families struggling with a multitude of problems. This could not have been achieved if the right services had not been in place. As with the original programme, the Government have asked local authorities to provide information that will enable us to assess its impact. This includes understanding what is being spent on families and the savings that are being achieved through local cost-benefit analysis. The noble Baroness, Lady Sherlock, asked whether this would increase the burden on local authorities. We do not believe that it will, because local authorities have already agreed to supply this information as part of the national evaluation of the expanded programme. Furthermore, they themselves receive valuable analyses of the programmes to help them drive improvement to their services.

Amendment 71, tabled by the noble Baroness, Lady Manzoor, seeks to require the report of the Secretary of State for Communities and Local Government to include information on the types of interventions families receive and whether they are successful. DCLG has always recommended that families should be supported through a whole-family approach to achieve positive outcomes, but it does not mandate a specific type of intervention. This is because we believe that, to work effectively, local authorities need the flexibility to adapt their approach to their local area and to each family they work with. There are no set or standard interventions that are universally applied by or across local authorities: each intervention is specific to each family. Given this necessary flexibility, the effectiveness of the programme will be measured through the outcomes it achieves with families rather than the individual intervention that it uses.

The duty to report, as it stands, already ensures that the Government are held to account on the effectiveness of the programme through publishing annual information on the progress made by families. To make progress, families will have received effective support from local authorities and their partners. The report will include information on this.

It may also be worth noble Lords noting that the report Parliament will receive annually on the troubled families programme will be based on the national evaluation of the expanded programme and the payment by results achieved by local authorities. The national evaluation will provide information about the progress of families against the six headline problems that the programme seeks to address.

The noble Baroness, Lady Manzoor, asked about data matching, which was used by local authorities in the original programme in relation to outcomes. They used data sets to track and monitor the progress of families. However, the fact that they used data in this way should not imply a lack of support for families. Every family that it was claimed had been turned around made real progress following support from local services. This is checked through the councils’ internal audit process before they can claim a results payment.

On the Guardian report that the noble Baroness mentioned, that was based on something of a misunderstanding of the programme. The programme certainly encourages services to join up and offer better support for families with multiple problems through redesigning their approach to providing support, and we advocated a family-style intervention approach, but that is not the only approach. The Guardian looked only at a certain subsection of families who achieved support through the programme in this particular way, rather than the large number of families helped through a whole variety of different approaches.

On the basis of the information I have provided, I ask noble Lords to withdraw Amendment 70 and not move Amendment 71.

[Lord Beecham]

Could the noble Baroness indicate whether it is intended to have longitudinal studies of the programme and, if so, what kind of period we might look at? Secondly, are the Government encouraging—perhaps they are; I ask out of ignorance—peer review between different authorities carrying out projects of this kind? That would seem particularly helpful given the range of problems faced.

[Baroness Evans of Bowes Park]

I believe that the full scope of the reports has yet to be decided. I am certainly happy to take back those two suggestions to the department.

[Baroness Sherlock]

My Lords, I thank all noble Lords who contributed to this short debate. I thank the noble Baroness, Lady Manzoor, the noble Lord, Lord Kirkwood, and my noble friend Lord Beecham for their support.

We heard a lot of emphasis on evaluation. When the Minister takes this back to the department, I urge her to reflect a bit more carefully on that. I was a little concerned that, towards the end of her remarks, she seemed to imply that we do not need to assess either quality or funding because if the outcomes work it must have been okay. The question I would raise is that of causality. We are dealing here with very complex situations. Essentially, a family that is already engaged with lots of agencies and that may have multiple problems is an organic and dynamic unit—coming in and going out all the time. To assume, because it started at X and ended at Y, that what happened must have been the right thing is a very central government assumption and a slightly risky one in the circumstances.

I ask her to take that back, along with the suggestion of my noble friend Lord Beecham about longitudinal studies and peer review, to try to think very carefully about how we can capture the learning. With respect to the noble Lord, Lord Farmer, the point of these programmes is that what one authority does may not be the best thing for another authority. It depends on the circumstances, as my noble friend Lord Beecham described.

I also take the point made by the noble Lord, Lord Kirkwood, about terminology. Certainly, when I was on the riots panel I talked to a number of families who felt that being stigmatised got in the way of their trying to deal with things. It was not that they did not know they had problems; it was just that everybody constantly telling them that they had problems did not help. They wanted help to get themselves out of those problems, not to be branded. We need to find a way to ensure that that does not happen. I encourage the Government to think some more on that.

I am also grateful to my noble friend Lord Beecham for pointing out to the noble Lord, Lord Farmer—whose interest in this subject I recognise—how many local authorities are struggling with funding, especially in the poorest areas where so many of these families will be. We need to be aware of that. I am grateful for the subject having been aired in this debate and I hope that the Government will come back to us on this on a regular basis. Given that, I beg leave to withdraw this amendment.

--- Later in debate ---

[The Lord Bishop of Durham]

My Lords, I support these three amendments. I do not wish to repeat what has already been said but the passion of the noble Lord, Lord Kirkwood, echoes in my heart because I, too, am deeply concerned by the impact these freezes will have on the poorest.

Most of us were delighted when the Chancellor of the Exchequer decided in the spending review that the national economic situation meant that we could, after all, as a nation afford not to make the previously determined cuts in tax credits. If this House had not voted the way it did, I presume he would not necessarily have been given the opportunity so to reassess in the light of the national economic situation. If the Bill is passed as it stands, the Chancellor has no option but to enact a freeze for the next four years.

While accepting that welfare spending must be controlled, we need to look very seriously at the impact on the poorest. I do not want to see the Chancellor’s hands tied to a freeze if the national economic situation continues to improve as forecast, or perhaps even more significantly. Suppose it does: who should be the beneficiaries? Surely, it should be the poorest. If the economic situation improves in 2017 and the Chancellor realises that actually, the nation could afford a slightly higher rate of child benefit or other benefits, that is what he should allow—not give it to people already perfectly well off because we earn enough. As the noble Lord, Lord Kirkwood, said, austerity, frankly, is not hitting large numbers of us. Surely, then, the Chancellor should value the freedom to once again say, “Well, we didn’t think we would be able to afford this but the national economic situation is better than expected so we are delighted to be able to offer a small—or perhaps large—amount of extra support for the well-being of children and the most needy in our country”. Does the Minister not think that would be a good position for the Chancellor to be in, rather than having to stick with a freeze without exception?

[Baroness Evans of Bowes Park]

My Lords, I thank the noble Baronesses, Lady Sherlock and Lady Lister, and the noble Lord, Lord McKenzie, for these amendments. I will first set out why we believe a four-year freeze of certain social security benefits, child benefit and elements of working tax and child tax credits is necessary.

In total, measures to freeze benefits and tax credits are projected to contribute £3.5 billion of the £12 billion welfare savings the Government are committed to by 2019-20. The Government need to make these savings to reduce the deficit and to manage welfare spending. Spending on welfare increased by 54% in real terms between 1999 and 2010, and tax credit expenditure more than trebled over the same period. Despite the progress made in the last Parliament to increase incentives to work and reduce reliance on benefits, there is still more to do.

Some 7% of global expenditure on social protection is spent in the UK, despite the fact that the UK has only 1% of the world’s population. Between 2008 and 2015, average earnings rose by 12%, and the minimum wage increased by 17%. At the same time, benefits such as jobseekers’ allowance increased by 21% and the individual element of child tax credit rose by 33%. The benefit freeze will begin to reverse this trend. However, we are clear that we must continue to protect the most vulnerable. That is why we ensured that certain benefits are exempted from the freeze, such as pensioner benefits, benefits which contribute to the additional costs of disability and care, and statutory payments.

Concerns have been raised about the level of benefit rates after three years of 1% rises, to now be followed by four years of the freeze. Successive Governments have always sought to strike a balance between the needs of claimants and affordability, and I can reassure noble Lords that when introducing this freeze we have had due regard to these issues, but we believe we have struck a balance that protects certain key benefits and generates the savings I have set out.

There are no cash losers with this policy, and the continued growth in wages will help to mitigate the impact of the freeze for working families. The OBR expects wage growth to reach 3.9% by 2020. Around 30% of households will face a notional loss but, as I have said, the other things we are doing in the broader economy should go some way to mitigate it, and I will go through a couple of them in a second. We have also fully assessed the Bill’s impacts on equality and the wider budget meeting our obligations, as set out in the public sector equality duty.

The purpose of the amendments is to replace the freeze with a duty on the Secretary of State to review those benefits, having regard to inflation and the national economic situation. This Government’s overall approach is to give a level of certainty to taxpayers, employees and benefit claimants. As well as setting out the four-year freeze, we have also set out a clear plan to raise the national living wage to £9 an hour by 2020, to increase the tax-free personal allowance to £12,500 by the end of the decade and to double the free childcare available for working parents of 3 year-olds and 4 year-olds to 30 hours a week, which is worth £5,000 a year. The amendments would take away the certainty that we are attempting to implement, and for that reason we cannot support them.

The noble Baroness asked what happens after the four-year period.

[Baroness Hollis of Heigham]

The Minister has said that this is very helpful to benefit recipients because they now have certainty that their benefit will fall in real terms, as opposed to the possibility that it might keep pace with the cost of living. Would she care to correct her statement?

[Baroness Evans of Bowes Park]

I have said that we have had to make some difficult decisions.

[Baroness Hollis of Heigham]

Difficult for whom? To use the phrase used by the noble Lord, Lord Kirkwood, I suspect that every Member of this House is protected from the difficult decisions. The difficult decisions will fall on those people who will have to choose whether to turn off their heating or pay their rent.

[Baroness Evans of Bowes Park]

As I said, by being upfront about the freeze, we are trying to ensure that people in receipt of these benefits understand that that will be the situation over the next four years. We are taking numerous other measures, including the national living wage and the childcare changes, to try to help these families in other ways. That is what we are doing with this freeze, and I urge the noble Baroness to withdraw her amendment.

[Baroness Sherlock]

My Lords, I thank all noble Lords who have spoken in this short debate. I thank my noble friend Lady Lister and the noble Lord, Lord Kirkwood, for highlighting the difficulties that the Government must have in understanding the implications of their decisions, since looking forward four years they have no way of knowing what economic conditions will prevail and what will happen to inflation.

I particularly want to thank the right reverend Prelate the Bishop of Durham for making a very obvious point: that when this House voted on tax credits, the Chancellor was in position to make a difference. The reason why he was able to overturn that decision was that he found £27 billion down the back of the sofa. It is not impossible that there might be some more money down the sofa, if he shakes it hard enough. It is not impossible that, if all the boasts the Government make about the marvellous things happening to the economy come to pass, a couple of years down the line he may find the economic situation is looking good. If the economy is growing again, he may want to reconsider his decision not to share the proceeds of that growth with the poorest in our country. Why on earth would he want to tie his hands?

I would put money on it that if I asked the poorest people affected by this whether they would rather have the certainty of benefits falling in real terms year on year, or keep open the possibility that they will rise if the economy improves, most would be willing to take a chance—unless the Government are suggesting they would in fact cut them. All this amendment does is to allow the Government, if they wish to do so, to have exactly the same savings in four years’ time, but it would make them do two things. Every year, they would have to come back and look the country in the face, via this House, look at what people have to live on and explain their decision, and they would have to account for it. All they would have to do is to put it to both Houses of Parliament every year. What are they afraid of? People out there have suffered enough. The very least the Government can do is stand up for themselves. Given that we are in Committee, I beg leave to withdraw the amendment.