Baroness Hanham
Main Page: Baroness Hanham (Conservative - Life peer)Local Government Finance Bill
Baroness Hanham Excerpts
Lord McKenzie of Luton
My Lords, this is a probing and, I hope, brief amendment. I apologise for the tardiness in laying it, but it was prompted by the statement of intent on information sharing and powers to tackle fraud —a statement which I found really useful. The problem with statements is that they answer lots of questions but sometimes throw up one that you had not thought of before, hence the amendment.
New Section 14B, inserted into the Local Government Finance Act 1992 by Clause 13, enables regulations to be made to describe a number of offences. It is proposed that they cover such matters as causing delay or obstruction, dishonest representations and false representations. The statement of intent explains the plan to introduce offences that are equivalent to those that currently exist in relation to council tax benefit and other benefits. However, paragraph 3.25 of the statement indicates that not all existing offences are to be replicated, only those that are deemed “necessary and proportionate”. Thus the probe is to ask which offences that currently apply are considered to be disproportionate and unnecessary in the new regime. I beg to move.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, my understanding was that this is a probing amendment, and I thank the noble Lord for confirming that it is. The effect of the amendment would be to remove the words “by a person” from new Section 14B(1) of the Local Government Finance Act.
Powers to investigate potential fraudulent claims for reductions in council tax liability and to prosecute and issue the appropriate penalties will be vital to local authorities to ensure the effective administration of schemes and the control of costs. As the Government made clear when they amended the Bill in the other place by introducing Clause 13 to insert new Sections 14A to 14D into the Local Government Finance Act 1992, we believe that it is important that existing investigatory powers in relation to local authorities offences and relevant penalties to tackle fraud under social security legislation are available to local authorities in relation to council tax.
In response to the consultation on localisation of council tax support last year, a majority of local authorities that responded said that they would need the same or similar powers for local schemes as they currently had to investigate and tackle fraud in council tax benefit claims. Therefore, it is necessary for the Government to provide authorities with the appropriate equivalent powers to be able to deal with fraudulent claims for a reduction in council tax liability.
New Section 14B specifically will allow the Secretary of State to create offences equivalent to those that currently apply. In particular, the Secretary of State may make regulations providing that it is an offence for a person to delay or obstruct an officer exercising his powers to require information or to refuse or fail to provide information when required.
Regulations may also create offences where, for instance, a false statement has been made in connection with a person’s council tax liability or a person has failed to notify a change in circumstances that affects their liability to pay council tax. This includes the ability to create equivalent offences both of dishonesty and of dishonestly and falsely making representations for council tax reductions. We will not be giving local authorities powers to enter premises, powers to conduct inquiries or to remove and copy documents from such premises. The powers we are giving requiring people to supply information and enter into arrangements under which access is permitted to relevant records will be sufficient for council tax purposes.
To be clear, we are not introducing new powers for local authorities through these provisions. We are simply ensuring that some of the powers they currently have in relation to council tax benefit are recreated for reduction schemes. Nor are we simply reintroducing all the existing powers for local authorities that they currently have to tackle council tax benefit fraud. Instead we have worked with local authorities to identify those powers and offences that will be needed for local schemes.
Regulations under new Sections 14A to 14D will be subject to affirmative procedures so that both Houses will be able to consider the appropriateness and proportionality of offences under the regulations. The noble Lord asked me specifically which current powers in relation to fraud we are not planning to recreate in these regulations. Perhaps I may go through the ones that we are not planning to reintroduce. The first is allowing the Secretary of State to authorise individuals to carry out investigations. Local authorities currently authorise the individuals carrying them out, and this power will remain. As for the Secretary of State’s power to require individuals to enter into agreements to supply electronic information, local authorities’ existing powers to require electronic information will be retained, so taking the Secretary of State out of those requirements. On powers of entry, we have made it clear that we will not reintroduce wide powers of entry. Local authorities will have powers to request relevant information which is proportionate to the needs of council tax reduction schemes. I hope that that answers the noble Lord’s question.
In the statement of intent, to which the noble Lord referred, published on 9 July, we set out exactly how we intend to use the powers under new Sections 14A to 14D to make regulations, making clear that these powers would relate only to reduction schemes. I am clear that the powers in the Bill are sensible measures to ensure that local authorities have the appropriate powers to investigate and prosecute fraud. I hope that the noble Lord will be reassured by what I have said.
Lord McKenzie of Luton
My Lords, I am grateful to the noble Baroness for that response. We support and accept that local authorities should have powers that are necessary and proportionate for them to carry out their duties in tackling fraud. The noble Baroness itemised the current arrangements which are not to be carried forward. Frankly, I would like to read the record on that, but I believe that it deals satisfactorily with the purpose of this probe. I beg leave to withdraw the amendment.
Lord McKenzie of Luton
My Lords, we speak in support of my noble friend’s amendment, which is a probing amendment, as she explained. I dug out some of the requirements for getting the benefit of the disabled band reduction scheme. It talks about,
“an additional bathroom or kitchen … a room (other than a bathroom, kitchen or toilet) required to meet the needs of the disabled person, and used predominantly by them … extra space inside the property to allow for the use of a wheelchair”.
It says:
“The room or the wheelchair must also be of major importance to the disabled person's well-being, due to the extent of their disability”.
I hope that that is still available in the system. Is there the potential for an inconsistency in government policy between supporting as we do the disabled band reduction scheme and the consequences of potential deemed under-occupation of social housing, which could lead to the withdrawal of housing benefit?
Baroness Hanham
My Lords, with regard to the very last point, the noble Lord has a very neat habit of putting one last question to which nobody has a clue about the answer—and I have to tell him that he has done it again. If I may, we will write, because it involves an interaction between two bits of legislation. I do not think that I am equipped, and my team behind me look a bit blank. So perhaps I could write on that particular aspect, but I hope to be reassuring on the rest.
Amendment 93A seeks to ensure that any changes made by the Bill will not impact upon the disabled band reduction scheme. The scheme offers a reduced council tax bill, where a disabled person lives in a larger house than they would have needed if not disabled or where the living area for normal use has been reduced. The Council Tax (Reductions for Disabilities) Regulations 1992 set out the qualifying criteria for a reduction under this scheme. No part of the Bill has an impact upon the scheme, nor will any of the subsequent regulations that will be made. The Government regard this scheme as an important form of support to disabled people and have absolutely no wish to make any changes to it. Given that there is no question of any change, I invite the noble Baroness to withdraw this amendment.
Baroness Hollis of Heigham
I thank the Minister and my noble friend. I am very glad to hear that, and I am grateful that the Minister was able to give us the reassurance that we sought. With the permission of the Committee, I beg leave to withdraw the amendment.
Lord McKenzie of Luton
My Lords, like my noble friends Lady Hollis and Lord Smith and the noble Lord, Lord Shipley, I am not an advocate or supporter of local income tax. My noble friend Lady Hollis has, as ever, made a challenging case for the introduction of a new band, although her case is, in a sense, seeking a process of consultation. My noble friend is aware that, from this Front Bench, we are not yet able formally to support that proposition, although I note that she has occasionally trail-blazed an opinion and the party—or otherwise—has caught up with her later. There is obviously a range of issues here and my noble friend Lord Smith instanced some of the wider ramifications, such as the redistribution of revenues that might come from this. However, I am interested in the Minister's response on this and we should recognise that there are growing discrepancies and inequities in the current system, if for no other reason than the passage of time. This amendment raises a serious issue.
Baroness Hanham
My Lords, I thank the noble Baroness for introducing this amendment and the others who have spoken. I do not think that she will be entirely surprised that I am not able to accept her amendment, but I will give the reasons.
Amendment 93B seeks to create an additional council tax band in England based on properties with a 1991 value above £420,000, as the noble Baroness explained, and with a 21 to nine multiplier based on the local band D amount. This Government, like the previous Government, have made no plans to change the banding structure on which the council tax system is based. We are absolutely clear that such a change would have major implications for local government finance, create additional bureaucracy and administrative costs and have significant distributional implications, to which I shall return. To create a new band, there would have to be a general revaluation, and the Government have been absolutely clear that there will be no revaluation in England during the lifetime of this Parliament. Indeed, the coalition Government—I nudge my noble friend Lord Shipley on this—made a clear pledge to Parliament not to undertake a council tax revaluation in this Parliament. A revaluation is unnecessary, expensive and time-consuming and will lead to higher council tax bills.
Baroness Hollis of Heigham
My Lords, I thank the Minister for her courteous reply and my noble friends and others for their support, qualified as it may be.
At the heart of this, which the Minister did not touch on, is that the current bands are based on 1991 valuations and that, since then, there has not been even growth. If there had been, nothing would have changed, because we would be in a zero-sum game, but because of uneven growth, in the south-east and London in particular, property values have raced away in comparison to others. There has been a huge increase in unearned wealth, including that of my house, compared to other places, which in no sense is making an appropriate and proper contribution to the local economy through the council tax levy. It is because of that growth of unevenness that the consensus around the Room—with the obvious exception of the Minister, who might agree in her heart that this is the right thing to do—is that council tax bands no longer fairly reflect property values in this country. The noble Lord, Lord Shipley, the noble Baroness, Lady Meacher, and others made this point, and they were absolutely right.
The Minister’s reply was twofold—Scylla and Charybdis, if you like—that on the one hand it is not possible to do a full revaluation; and on the other that you cannot possibly do a partial revaluation. I agree that the first, although desirable, is a major undertaking and would need a lot of preparation, but unless we are going to have 1991 valuations in 2091, at some point there will have to be a revaluation. The truth is that the more frequently you do it, the less acute are the losers and winners in the equation. My Government were equally to blame—no Government want to tackle it. But the point is that it is, bluntly, cowardice to walk away from this issue knowing that you could be bequeathing an even larger problem to the generation following you, as housing property values continue to develop in different proportions to their bands.
The Minister is worried about full revaluation. In an argument against full revaluation, she said that in Wales there were large movements with properties going up several bands. The point here is not the shock at properties going up several bands—is it not right that they should have done? Is that not right when the value of that property can be such that the owners of a property have enjoyed to some extent a more repressed contribution to council tax than they should have made if their property had been fully valued from day one? I believe that to be the case. If they are not paying their full share, other people have to pay more. It falls particularly on properties in the lower bands A and B; if you do not have enough higher band levies, it means that the band D reduces and properties below band D have to pay more to get the levy in.
The Minister went on to say that, given that a full revaluation is not possible, neither would it be possible to revalue only within band H. I agree that it is not the most desirable outcome, but I assure her that I have talked to three separate valuers on this, none of them as far as I know connected to each other, and they all assured me that it was entirely possible because they do it now. The point that I was trying to make was that, particularly if it was phased in over three years, the extra workload in reviewing band H properties would not be so great. We know where they are; there are only 60 in the entire city of Norwich. You could go round them in a week, so we are not talking about a major increment in workload here. If you spread the process over three years it would mean revaluing 20 properties a year in addition to the properties that are valued each year because they are new-build and those revalued each year to go up or down because of alterations made to them or to the environment. So as an addition to the workload it is relatively modest, though not insignificant. As a practical possibility they are doing this now with properties scattered across all the bands all the time. If they can do it to see whether a property in band D should go to band F or one in band F should go down to band E, and they can do it now with properties scattered across the full range of bands, they can certainly do it with the discrete number of band H properties that there are in most local authorities. So I simply do not accept the Minister’s statement that it could not be done.
Baroness Hanham
This is fine as regards revaluations, but it takes no account at all of the people in the properties. Can you just imagine the number of appeals that there would be against this form of rebanding? The noble Baroness speaks as if it is just a matter of getting a revaluer to come and say, “We charged that last year, and this will be all right this year”, and it will go up and down. You cannot do that, because people who live in the properties are not going to allow a movement to take place if they do not think it is satisfactory.
Baroness Hollis of Heigham
I perfectly accept that there may well be appeals to valuations. There are appeals now, which is often why individual properties are revalued. That is a perfectly proper element of the process. But the Minister cannot persuade me that people in band H properties, worth £22 million on average in Kensington Palace Gardens, and on average—with equal numbers below and above—worth around £800,000 in Virginia Water, and so on, are going to be financially so embarrassed by their council tax going up by an additional two-ninths over what they pay, given the valuation of those properties. We are not talking about pensioners who are eligible for council tax discount on band C possibly going up to band D. We are talking about the very top and about people who have property worth millions, who will have an income commensurate with it. I am arguing that they should pay their way fairly because otherwise to a degree they are free-riding on the council tax levies of those who live in lower banded property.
As for the Minister’s point about the money and where it would go, I do not have a view about that. It would be a matter for consultation. It could stay within the individual borough, if that was thought appropriate; it could be used for redistribution across London, going from the wealthier boroughs to the Hackneys or Tower Hamlets. Or it could, as I would prefer, be taken account of in the equivalent of the equalisation and revenue support grants that go to local government. That would be the fairest way; in that way, some of the gain would go to places like Wigan or Hartlepool, which are severely hit by the current system because they have to levy much higher increments on bands A and B as a result.
I will not take this any further now. However, in answer to the first argument which the noble Baroness raised—that we cannot have revaluation across the board—I think that at some point some Government will have to have the courage to have those discussions and engage with local government. The longer you put it off, the worse the problem will be. As for the noble Baroness’s second argument—that it cannot be done on a partial basis—that is simply untrue according to the evidence available to me, although the Minister will have been advised differently. Her third argument is that it will come as an unfair and unreasonable shock to those who are occupying properties worth £5 million, £10 million or £15 million that they might pay a further two-ninths a year on their band D council-tax bill of perhaps £600. I do not think that that is a valid argument. None the less, with the support of the Committee, and with my grateful thanks for the discussion that we have had, I beg leave to withdraw the amendment.
Lord McKenzie of Luton
My Lords, we support the amendment. It seems that our debate has had various strands to it, including the issue of governance for bailiffs. My noble friend Lord Stevenson talked about the three fundamentals that are missing—the balance of incentives, no independent oversight and no process for those in financial difficulties. Part of that theme is the need to support people who get into debt and to help them to make their payments, as well as the importance of effective advice being at hand. With regard to the challenges that are being felt now, my noble friend Lady Hollis instanced what is happening to the CAB in her area, and my noble friend Lady Sherlock asked the Minister about the assessment that is being made of available support.
However, one strong strand has been the importance of this issue, because it focuses on dealing with poverty. As the noble Lord, Lord Tope, said, everything that is going on—the economic situation that the country and much of the world faces, as well as specific policies, including those that we are debating in this Bill—has a cumulative effect on people. We heard from the noble Baroness, Lady Meacher, and the noble and right reverend Lord, Lord Harries, about financial hardship and why it is of increasing importance in the circumstances in which we find ourselves.
The noble Lord, Lord Best, made the point that in some ways local authorities are victims of the current circumstances. They have to deal with the effects of this Bill and other legislation, particularly cuts in council tax benefit or support. We know and have debated the consequences of that. I recognise the hand of the Reverend Paul Nicholson and the Zacchaeus 2000 Trust in all this, and he should be congratulated on his continued efforts. As a Minister, I always shuddered a bit when a briefing came through from the Reverend Nicholson; I still do.
This amendment focuses on the enforcement procedures, particularly the relationships between bailiffs and councils, and it calls on contractual arrangements between bailiff companies to allow—why not require?—the bailiffs to return a warrant to the council for reconsideration when certain circumstances arise. We support the thrust of the amendment. I do not know whether we need to unpick some legal issues here in order to differentiate between bailiffs appointed by the court and enforcement agents acting under contract to the local authority—that is, whether the return and possible amendment of the warrant is just an issue between the council and the agent. Doubtless the Minister will be able to help us on that.
We have all heard horror stories about the actions of some bailiffs towards vulnerable people, including the very poignant case explained by the noble Baroness, Lady Meacher. In the National Standards for Enforcement Agents there seems to be no problem in setting out who is considered to be vulnerable; perhaps the Lord Chancellor’s Department will be able to assist the DCLG in this regard. I am sure that we all find some of the instances we have heard about completely unacceptable. The amendment refers to the National Standards for Enforcement Agents, a document issued by the Ministry of Justice, but, as my noble friend said, it is really just a rerun of something that happened in 2002 and the problem is that it is not mandatory. I wonder whether we should at least require all local authorities to contract only with those who explicitly adhere to those standards, although they may not be binding.
The standards explicitly refer to vulnerable situations requiring enforcement agents and creditors—the councils —to recognise that they each have a role in ensuring that the vulnerable and socially excluded are protected and that the recovery process includes procedures agreed between the agent and the creditor about how such situations are dealt with. The document states:
“The appropriate use of discretion is essential in every case and no amount of guidance could cover every situation, therefore the agent has a duty to contact the creditor and report the circumstances in situations where there is … a potential cause for concern”.
That is the essence of what this amendment seeks to achieve, but there is also an issue about how councils play their part and this is also implicit in the amendment.
We have discussed council tax support schemes. In many cases, the cut in support for schemes, effectively of the order of 20%, will leave poor people having to pay council tax when they were previously exempt. Even a few pounds a week could push those existing at the margins over the edge, especially when coupled with the other cuts that they have to endure. Given the reminder that local authorities have had from central government about their responsibilities regarding equalities duties, homelessness provisions and the Child Poverty Act, this places a special onus on local authorities to ensure that life is not made even more intolerable by insensitive and inappropriate enforcement processes. We welcome the content of these amendments.
Baroness Hanham
My Lords, I thank the noble Baroness for introducing this amendment. There has been wide discussion, as I rather expected, and I acknowledge the part played by the trust of the Reverend Paul Nicolson and the work it does in support of people who end up in serious debt. I also note what has been said about many people in serious debt having mental health issues. I agree that these are all matters that ought to be taken into account by local authorities, and doing so is very much part of their work. As for the advice agencies, the noble Baroness, Lady Sherlock, will know that this is a matter for local authorities. The funding, apart from the Lord Chancellor’s funding, by and large comes from local authorities and therefore it is in their own interest to ensure that people have proper advice.
The discussion, as I would have expected, has gone widely into the problems that bring in bailiffs, but it is the bailiffs on whom we are concentrating today. That is what the amendment is about, although I understand that it has triggered much concern about the general situation. Unfortunately, it does not quite do the trick. The noble Baroness probably did not think that it did but that it was another opportunity to have this discussion and bring the matter to wider attention again. It does not work for local government because, essentially, it is not properly worded. It requires authorities to include procedures in their contracts with bailiff companies covering the enforcement of council tax. These would allow the bailiffs to refer the decision to take enforcement action to an authority for reconsideration where there are concerns about the debtor’s liability or their ability to pay. I agree with the noble Lord that that should just be part of the practice: that if bailiffs find something wrong, they should automatically take that into account.
I should explain that the amendment does not accurately reflect the way that bailiffs are authorised to take enforcement action in respect of council tax, because no warrant issued by the local authority is involved in the process. Under the Council Tax (Administration and Enforcement) Regulations 1992, bailiffs can be used to recover unpaid council tax—that is, levy distress—only where a magistrates’ court has made a liability order. That was the point made by my noble friend Lord Lucas.
The local authority is allowed to apply for only reasonable costs, and those are capped at £70. There will be further costs only after distress from the bailiffs is levied. I agree with the noble Lord, Lord Smith, that a great deal of work is involved before schedules are produced before the court—I used to deal with them frequently, and magistrates do not just wipe them through; a lot of questions are asked.
That was a slight diversion. I am keenly aware that the use of bailiffs to enforce unpaid council tax is an emotive and sensitive issue—we have heard about many of the reasons why today—particularly when used against vulnerable people. Many disquieting examples have been given this afternoon of where that is happening. The Government believe that the use of bailiffs should be a last resort. I think that most local authorities believe that and that everything else should be done before they say that it must go to the bailiffs. It follows that we do not believe that they should be commissioned disproportionately; they should be a last resort. Councils should take direct responsibility for ensuring that bailiffs abide by acceptable practices. No one can be content with people working on their or the courts’ behalf who do not act reasonably, courteously and sensitively.
However, whether enforcement action is justified is a matter for local authorities and, finally, the courts, having taken account of all the relevant information on a case-by-case basis. Of course it is the local authority’s responsibility to ensure that it is taken only after all the procedures and all efforts have been made to have the matter dealt with in another way.
Although the Government have no plans to make changes to the enforcement regime for council tax, which is what we are talking about in particular, as my noble friend Lord Lucas mentioned, we are looking at bailiff reform. There is a wide perception across the country and across government that it is not working absolutely brilliantly. I say to the noble Lord, Lord McKenzie, that we are talking about the bailiff service, not the enforcement service.
The Ministry of Justice consultation, Transforming Bailiff Action, which was mentioned by the noble Lord, Lord Stevenson, closed on 14 May. It looked at how the Government—that is, going across government —can provide more protection against aggressive bailiffs and encourage more flexibility in their use, including the need for more care in how the bailiffs go about their business. One reason why the amendment is not appropriate to this Bill is that the issue goes across government. The use of bailiffs is a responsibility of the Ministry of Justice; then we get to the Department for Work and Pensions, and then we come back to the DCLG. It is extremely important that this does not just get logged in one department; it must be addressed across the piece. The noble Baroness, Lady Meacher, knows that because she said so. She knows that the amendment is not appropriate, but I do not go over her will to see this matter debated—it is very sensible.
Baroness Hanham
“( ) In Schedule 11 to the LGFA 1988, in paragraph 8(3)(ea) (regulations about procedure before tribunals)—
(a) for sub-paragraph (iv) substitute—“(iv) paragraph 15A or 15B of Schedule 2 to the 1992 Act or regulations under that Schedule;”,(b) omit the “or” following that sub-paragraph, and(c) after “1996” insert “or of information supplied under section 131 of the Welfare Reform Act 2012 for purposes relating to council tax;”.”
Baroness Hanham
My Lords, the amendment will enable regulations to be made about how information supplied to billing authorities by Her Majesty’s Revenue and Customs and the Department for Work and Pensions may be used as evidence in an appeal to the Valuation Tribunal.
As noble Lords know, data-sharing will be an important way to maximise convenience and reduce complexity for applicants, while helping to reduce administrative costs. It will reduce the need for applicants to have repeatedly to provide the same information and evidence to various public sector bodies.
Section 131 of the Welfare Reform Act 2012 provides for the sharing of information relating to social security benefits and welfare services with a qualifying person for prescribed purposes relating to welfare services or council tax. That will enable data held by the Department for Work and Pensions about current benefits and, in future, universal credit, to be provided to English and Welsh billing authorities and Scottish local authorities for the administration of local council tax reduction schemes. With the move to universal credit and the sharing of real-time income information, an increasing amount of the information that the Department for Work and Pensions will use to calculate entitlement will originate with and be owned by Her Majesty’s Revenue and Customs. Amendments made in the other place introduced new paragraphs 15A and 15B to the Local Government Finance Act 1992. They will allow for information held by HMRC to be shared for prescribed purposes relating to council tax.
Amendment 96ZA makes an amendment to paragraph 8(3)(ea) of Schedule 11 to the Local Government Finance Act 1988. This currently provides that regulations may be made about the use of evidence at the valuation tribunal, including, in particular, the use as evidence of information supplied under specified legislation. This amendment adds to the list of specified legislation, to ensure that regulations may also be made about the use as evidence of information supplied by HM Revenue and Customs under new paragraphs 15A and 15B in Schedule 2 to the Local Government Finance Act 1992 and the Department for Work and Pensions under Section 131 of the Welfare Reform Act 2012 for purposes relating to council tax. The amendment is being made to allow regulations also to be made on how information supplied to a billing authority by HM Revenue and Customs and by the Department for Work and Pensions for council tax purposes may subsequently be used as evidence in any appeal in relation to an applicant’s council tax liability. With that explanation, I beg to move.
Baroness Hanham
“Power for HMRC to supply information for purposes of rates in Northern Ireland
(1) A Revenue and Customs official may supply information which is held by the Revenue and Customs in connection with a function of the Revenue and Customs to a qualifying person for prescribed purposes relating to rates.
(2) The following are qualifying persons—
(a) the Department of Finance and Personnel in Northern Ireland (“DFP”);(b) the Northern Ireland Housing Executive (“NIHE”);(c) a person authorised to exercise any function of DFP or NIHE relating to rates;(d) a person providing services to DFP or NIHE relating to rates.(3) Information supplied under this section may be used for another prescribed purpose relating to rates.
(4) Information supplied under this section may be supplied to another qualifying person for a prescribed purpose relating to rates (whether or not that is a purpose for which it was supplied).
(5) A person to whom subsection (6) applies is guilty of an offence if the person discloses without lawful authority any information—
(a) which comes to the person by virtue of this section, and(b) which relates to a particular person.(6) This subsection applies to—
(a) a qualifying person other than DFP;(b) a person who is or has been a director, member of the committee of management, manager, secretary or other similar officer of a qualifying person;(c) a person who is or has been an employee of a qualifying person.(7) A person guilty of an offence under this section is liable—
(a) on conviction on indictment, to imprisonment for a term not exceeding 2 years or a fine, or both;(b) on summary conviction, to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum, or both. (8) It is not an offence under this section—
(a) to disclose information in the form of a summary or collection of information so framed as not to enable information relating to any particular person to be identified from it;(b) to disclose information which has previously been disclosed to the public with lawful authority.(9) It is a defence for a person (“D”) charged with an offence under this section to prove that at the time of the alleged offence—
(a) D believed that D was making the disclosure in question with lawful authority and had no reasonable cause to believe otherwise, or(b) D believed that the information in question had previously been disclosed to the public with lawful authority and had no reasonable cause to believe otherwise.(10) For the purposes of this section, “lawful authority” has the meaning given by section 117 of the Social Security Administration (Northern Ireland) Act 1992.
(11) In this section—
“Revenue and Customs official”, “the Revenue and Customs” and “function of the Revenue and Customs” have the same meaning as in section 18 of the Commissioners for Revenue and Customs Act 2005;
“rates” has the same meaning as in the Rates (Northern Ireland) Order 1977 (S.I. 1977/2157 (N.I.28));
“prescribed” means prescribed by regulations made by DFP.
(12) Regulations under this section must not be made except with the consent of the Commissioners for Her Majesty’s Revenue and Customs.
(13) The power to make regulations under this section is exercisable by statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 (S.I. 1979/1573 (N.I.12)).
(14) Regulations under this section are to be the subject to negative resolution (within the meaning of section 41(6) of the Interpretation Act (Northern Ireland) 1954).
(15) This section comes into force at the end of the period of 2 months beginning with the day on which this Act is passed.”
Baroness Hanham
Amendments 96A, 98, 99, 100, 102 and 103 insert a new clause to allow Her Majesty’s Revenue and Customs to supply information for prescribed purposes relating to rates to the Department of Finance and Personnel in Northern Ireland and the Northern Ireland Housing Executive. They provide for offences relating to the misuse of that information and make consequential amendments to Clause 19 of the Bill. Amendments are also made to Clause 17 to provide that any consequential changes to an Act of the Scottish Parliament, an Act or measure of the National Assembly for Wales and Northern Ireland legislation will be subject to affirmative resolution procedure. Consequential amendments are also made to Clause 19 to provide that this new clause extends to Northern Ireland and Clause 17 extends to England and Wales, Scotland and Northern Ireland.
Data-sharing will be an important way of maximising convenience and reducing complexity for claimants, while also helping to minimise administrative costs. It will reduce the need for individuals to repeatedly have to provide the same information and evidence to various public sector bodies. From April next year, in a similar way to the council tax reduction schemes introduced by this Bill, the current system of supporting households with rates payments in Northern Ireland will be taken out of the social security system and become a relief funded from the Northern Ireland block grant. The primary purpose of the new clause is to allow the supply of HMRC information to the appropriate bodies to assess rates support for vulnerable households in Northern Ireland.
Proposed new subsection (1) of Amendment 96A will allow HMRC to supply information held for the purposes of its functions to a “qualifying person”. Proposed new subsection (2) in Amendment 96A defines qualifying persons as DFP and NIHE, as well as anyone authorised to exercise any function of those bodies, and to service providers for purposes relating to rates. I will find out what those abbreviations mean and come back to noble Lords.
Lord McKenzie of Luton
My Lords, this is totally clear to us and we are very happy to support the amendment.
Lord McKenzie of Luton
My Lords, we have just heard a compelling and comprehensive case from and on behalf of my noble friends, with which I wholly agree. As my noble friend Lady Sherlock said, it does not cost any money and it would provide some protection for some of the most vulnerable members of our community. If we could unite around this issue, it would be a good way in which to conclude our Committee deliberations.
The proposal concerning local connection rules is at the very least something that the Government should accept. They are prepared to give central direction to protect pensioners whom they see as vulnerable when it comes to council tax support schemes, so why do we not have some central guidance to protect those fleeing domestic violence, those leaving care, the homeless and those leaving institutional care? My noble friend Lady Sherlock quoted assurances received from Ministers during the passage of the Welfare Reform Bill to the effect that funding for what was the Social Fund, now transferred to local authorities will be part of a special revenue grant accompanied by a detailed settlement letter. Can the Minister deal specifically with the inquiry made by my noble friend on that point? We know that there will be a revenue support grant for the first couple of years of the business rate retention scheme, but the position after this is a little opaque. In any event, can the Minister confirm that the funding in question will be provided by central government in addition to the central share of the business rate, on top of the central share?
We know that councils will try to do the right thing for those who most need their support, but life has been made incredibly difficult for them by prior cuts, the cuts in this Bill and more cuts to come. In all the near impossible judgments that councils will have to make, we can provide just a small voice for those who might otherwise not be heard. I support my noble friend’s amendment.
Baroness Hanham
My Lords, this has been a short but interesting debate. I thank the noble Baroness for raising this on behalf of the noble Baroness, Lady Lister, and I should say how delighted we are about her honorary degree. I hope that it is in something associated with what we are doing here—but, if not, it is none the less a great achievement.
Amendment 97 relates to the Social Fund. As the noble Baroness said, this is provided for in the Welfare Reform Act, for which the Department for Work and Pensions is responsible. It states that:
“Any grant paid to local authorities under section 70 of the Welfare Reform Act 2012 … shall be expended by the local authority only for said purposes”,
and that:
“Any such grants will be made under the guidance of the Secretary of State with regard to the application of any ‘local connection rules’ … so that any such rule does not apply to”,
various categories of vulnerable people.
Proposed new subsection (1) of the amendment may be based on a confusion, as Section 70 of the Welfare Reform Act 2012 relates to the winding up of the Social Fund and transfer of money into the consolidated fund, rather than the transfer of money to local authorities. However, I believe that the intention behind the amendment is to guarantee that grants allocated to local authorities for local welfare provision, following the abolition of community care grants and crisis loans from April 2013, are used for the purpose intended.
I reassure the Committee that the settlement letter to which the noble Baroness referred will accompany that funding. I am not yet sure when that letter is due, but I will make inquiries and let her know. The settlement letter will set out what the funding is to be used for, the underlying principles and the outcome that must be achieved—although not the method that should be used to achieve it. It will state that the funding is to concentrate resources on those facing the greatest difficulty in managing their income and to enable a more flexible response to unavoidable need.
Baroness Hollis of Heigham
How will social workers who have never dealt with those families know? There may be a million people in the area. How will they know which of the 100, 200 or 300 families might need and be entitled to help under what used to be the Social Fund?
Baroness Hanham
My Lords, that is something that the settlement letter will make clear and local authorities will have to make clear to their social workers how they are to administer it. That comes with any legislation: people have to take up the baton and carry out what is asked of them.
Baroness Hollis of Heigham
So the Minister accepts that, in addition to child protection work, social care and all the rest of it, there is to be a new tranche of social work activity at a time when they are very hard pressed to do what they currently have to. They will have to be the gateway or the monitor of the cash handouts under the Social Fund.
Baroness Hanham
My Lords, the applications will be made to the local authority, which will presumably decide whether they are warranted or not.
The letter will make explicit that the funding is make new provision for when community care grants and general living expenses—crisis loans—are abolished. It will explain what community care grants are awarded for and why the crisis loans were awarded. Without curtailing the freedom of local authorities to tailor provision, the settlement letter will ensure that the money intended for vulnerable people goes to them. In addition, the Department for Work and Pensions plans to conduct a review in 2014-15 of a cross-section of local authorities to ask them to report on how they have used the funding for the new local provision. That will be aided by the fact that the funding is through a separate, identifiable grant.
I assure noble Lords that the Government are committed to ensuring that the funding goes to help the most vulnerable. That is why we have put the provisions in place. I therefore urge noble Lords to conclude that the amendment is not required to meet that aim.
Baroness Hanham
Directing local authorities to use funding in a particular way would go against one of the fundamental principles of this reform. The policy gives local authorities the freedom to deliver for the public rather than central government and to do what is right for people in their area. We think it important to resist any attempts to curtail those freedoms or dampen down local innovation, so I urge that the proposed new subsection (1) in the amendment be rejected.
I turn to proposed new subsection (2). It is intended to ensure that certain particularly vulnerable groups are not rendered ineligible for support on the basis of a test for local residence or connections. The Department for Work and Pensions has discussed that issue with local authorities—who, of course, are already familiar with it. It is not an issue limited to the Social Fund, as local authorities already deal with boundary issues in the delivery of other services, such as housing the homeless.
Baroness Hollis of Heigham
My Lords, that pertains to district councils. The Government are assuming that they are dealing with unitary authorities that therefore have a body of experience, but half the country is in a two-tier structure and they are asking social workers to do what they have never done, whereas all the expertise is at district level. It would be much more sensible if the money had been aligned and it was for district councils to allow for the discretionary housing payment.
Baroness Hanham
The noble Baroness makes her point. I cannot comment any further on that.
Local authorities already have many duties to provide assistance to vulnerable people under existing legislation and frequently co-operate with other local authorities in doing so. For example, there are differences in what they will be asked to do. A London local authority might be dealing with a large transient population, while a local authority on the south coast of England might be dealing with an older population. That is one of the reasons why each local authority will need to have flexibility to design its own scheme to meet its appropriate requirements.
Furthermore, we will encourage local authorities to link support across boundaries. This already happens in places such as Wandsworth, Hammersmith and Fulham, and Kensington and Chelsea, which already work together to provide joint services. This is done across the country where they may not link up in quite the same way as this group, but they are already working together. The groups referred to in proposed new subsection (2), including young homeless people, those fleeing domestic violence, young people leaving care and people returning to the community from institutional or residential care, already receive assistance from local authorities and central government. Local authorities have, for example, a number of existing responsibilities in relation to the provision of emergency and longer-term accommodation. They have particular responsibilities in respect of those with a priority need, such as those who are vulnerable because of age, mental illness or disability and those with dependent children.
Section 199 of the Housing Act 1996 sets out what constitutes a local connection in relation to people who are homeless. There is also statutory guidance for local authorities from the Department for Communities and Local Government to which local authorities must have regard. The effect is that people initially receive help from the local authority to which they apply whether or not they have a local connection. However, those with a local connection to another area may be referred there, unless they are at risk of violence if they return. A local authority which houses someone would be in a good position to provide help through the new local provision, for example, with furnishing the accommodation that it arranges. I gather that the noble Baroness, Lady Hollis, does not agree with that.
Baroness Hollis of Heigham
My Lords, the Minister makes my point for me. How much easier it would be if housing and social services were aligned.
Baroness Hanham
This is an example of how the new local provision will allow local authorities to deliver a more comprehensive service as they can use the new provision alongside already existing support. As regards young people leaving local authority care, local authorities have a duty to safeguard and promote the welfare of a child, and have duties until the child is 21. Local authorities also have duties to support disabled people or those who are destitute. They must make arrangements for promoting the welfare of those with a disability or mental disorder, including the welfare needs of people leaving hospital, having received in-patient care for a mental disorder.
The National Health Service and Community Care Act 1990 requires local authorities to prepare a plan for the provision of community care services in consultation with relevant bodies and to assess the needs of people who may be in need. Local authorities are therefore already required by multiple legislative duties to provide support to the most vulnerable. I think that one would accept that they have a moral duty to do so. They will be able to use this experience to deliver the new local provision, so there is no need for local connection eligibility rules to be published. They already have duties to the most vulnerable and are familiar with dealing with boundary issues. I also remind the Committee that the new local provision is not the only support that will be available. There will also be a national payments-on-account scheme to replace budgeting loans and crisis loans for alignment. This will cover need that arises as a result of the benefit system, such as a change in circumstances or a delay in receiving benefit. It will also enable those on the lowest incomes to access interest-free advances of their universal credit as budgeting advances.
In conclusion, the safeguards to which I have referred will ensure that money intended for vulnerable people goes to them. The most discretionary support will be better tailored so that they receive what they need when it is delivered locally. The new local provision and the national provision of payments on account will complement each other. Taken as a whole they will provide more effective and better targeted support. I hope that with that long explanation the noble Baroness will withdraw her amendment.
Baroness Sherlock
Before the noble Baroness sits down, may I ask two questions? I will respond to her points in a moment. First, is there any requirement that some or all of this provision by local authorities should be in cash? Secondly, I understood her to be saying that the letter of settlement would specify the purpose to which the money should be applied and the outcomes to be expected.
During the passage of the Welfare Reform Bill there was a detailed debate in the Chamber in which the late and much lamented Lord Newton of Braintree asked the Minister what would happen if the local authority were to take the money and spend it on something totally different, such as a road or a swimming pool. This became a matter of some debate. In the end I finally got up and pressed the noble Lord, Lord De Mauley, myself and asked, what would happen if a local authority spent the money on a swimming pool? His response was:
“My Lords, the local authority will not spend the money on a swimming pool”.—[Official Report, 17/1/12; col. 475.]
So I put the question now to the Minister: what would happen, what action would the Government take, if a local authority spent the money on a swimming pool or a road?
Baroness Hanham
If the noble Lord, Lord De Mauley, said that it was not going to happen, it will not happen.
Baroness Sherlock
A very nice try on the Minister’s part and stylishly done, but one of the reasons I am so glad that she is here is that, during that point we were very conscious that this is a matter of what local authorities do themselves and how they make a choice is a matter in which the DCLG has particular expertise. I would not expect the noble Lord, Lord De Mauley, to have the level of expertise in local authority behaviour that I know the Minister has. Surely, she can do better than that.
Baroness Hanham
The noble Lady is not going to get better than that. I have had a huge number of detailed questions about the Social Fund. They are all the responsibility of the Department for Work and Pensions, by and large, until those things are formally announced and we can see how they are going to work. We will ensure that noble Lords and the noble Baroness receive any further information that there is.
Lord Beecham
My Lords, I am sorry to intervene, but there is an aspect of this which I do not think has been touched on and that is that there is a new burdens aspect, not in respect of the transfer of the money, but in the cost of administering delivery of the scheme. Presumably, the cost at the moment is borne by the DWP. That cost will have to be met, in one way or another, by the local authorities now actually administering the scheme. Have the DWP or the Department for Communities and Local Government costed that aspect, and will it provide the resources for local authorities under the new burdens doctrine?
Baroness Hanham
The answer to the noble Lord’s question is yes. The Government have said that any new burdens will be funded and the amount of the new burden will be based on what the Department for Work and Pensions currently spends to administer these parts of the Social Fund.
Lord McKenzie of Luton
Will the noble Baroness say a little more about this settlement letter? I am trying to envisage the settlement letter in the context of business rate retention schemes and revenue support grants, but will she say whether the funding stream for this purpose is going to be additional and will not come from the central share of business rates, which accrue to Government and then go back? Is it going to be funding on top of that?
Baroness Hanham
This is funding being moved from one area to another, so is it additional? I suppose the answer is probably yes, because it is coming from the Department for Work and Pensions into the Department for Communities and Local Government. Is it additional in terms of revenue support grant? I think the answer is probably yes, because it is within the funding of the local authority but expected to be used for the Social Fund purpose. As for the settlement letter, it will include the detail. I do not know, I am afraid, what the settlement letter will be. I suspect that there are a lot of people in the DWP who do not know either, but I have told noble Lords that as soon as we know when it is being issued and what it contains, we will let them know.
Baroness Sherlock
I thank the Minister for the information she has given me today. I confess that I am disappointed, partly by her belief that I was asking questions of enormous detail. I really only asked two questions at the end. One was, will somebody have to give money out in cash? The second was, what will the Government do if they do not spend it in the way that they are asked to spend it?
They do not seem to be matters of detail: they are important matters about how the scheme will work and whether the Government will be able to do what the Minister, as well as the noble Lords, Lord De Mauley and Lord Freud, have pledged, which is to make sure that the money goes to the purposes to which Parliament intended.
I also do not find the case persuasive that local authorities have a range of other statutory duties already relating to vulnerable people. They already have all those duties and yet successive Governments of different persuasions have found it necessary none the less to have a Social Fund that people could go to, as a last resort, to get some cash for crisis situations. I see nothing in what the Minister said to suggest that that need has somehow disappeared. I therefore find it impossible to understand why the existence of those duties in other areas precludes the need for access to a last resort scheme of cash in the way that successive Governments have seen the need for.
The kinds of things that are bought in requirement at the moment will not all be picked up in the way that the Minister described through budgeting schemes or in dealing with late benefit payments. Those are specifically to deal with particular circumstances in cash. The fact that CPAG found that, so far, no London authorities were intending to give cash suggests grave cause for concern about what will happen to those vulnerable people when that happens.
I now have some information. I would be grateful if the Minister could write to me before the next stage because this is something that we will have to consider carefully at Report. I will go back and look carefully at her remarks, but Lord Newton of Braintree made it clear during the passage of the Welfare Reform Bill that he intended to come back at Report. I so wish that he were here to do that. However, the noble Baroness, Lady Lister, whose work has gone on behind all of this and I will do all that we can on his behalf. Given that this is Grand Committee, I beg leave to withdraw the amendment.
Baroness Hanham
Baroness Hanham
Baroness Hanham