Welfare Reform Bill

Baroness Lister of Burtersett Excerpts

Wednesday 11th January 2012 Lords Chamber

[Baroness Lister of Burtersett]

My Lords, in Grand Committee the question of the assessment period got a bit lost because there were so many issues that the Minister had to deal with. I asked the Minister why the assessment period was not included but never got an answer.

We talk about the time limit kicking in after a year but it is a year minus 13 weeks because for those first 13 weeks people affected will be paid at JSA rate, which is lower. Quite a number of us were confused, but the upshot was that the Minister said:

“I have to admit that I am not particularly happy about the assessment phase of ESA and how it is working … I would like to look at it. It is difficult to have a set of principles around something that one is somewhat unhappy about”.—[Official Report, 8/11/11; col. GC 46.]

I hope that the Minister has looked at it in the interim and has perhaps realised that there is no principled reason for the clause as it now stands and there is every principled reason for supporting the amendment. I hope that the Minister will see reason and it will not be necessary to test the opinion of the House in the way that the noble Lord, Lord Kirkwood of Kirkhope, was suggesting.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, I shall leap straight in on the issue raised by the noble Baroness, Lady Lister, on the assessment phase. What I was really alluding to was the upcoming sickness absence review, which is an important review of how we treat sickness absence. One of the things it has looked at is the interrelationship between sickness absence periods and the ESA regime. Basically the review sees no real reason for the assessment phase. As we look at this we must ask: are we structuring ESA and sickness absence so that it is a vulnerable or difficult process? I am sympathetic to my noble friend when he says that there might be a way through this. I want noble Lords to be aware that huge weaknesses have been found. We are pushing people through a process that puts them in limbo for a long period of 92 days or more. The sickness absence review states that that is deeply unsatisfactory, and I suspect that a lot of noble Lords in this Chamber who understand the system also believe that. In that area, I am not sure that this is genuinely the direction in which I want to go because I am not sure that it is something we want to maintain.

Moving on from that, let me set out some of the technicalities of the assessment phase. It usually ends after 13 weeks unless by that point there has not yet been a WCA determination. If a WCA has not been carried out by the 14th week, the assessment phase ends when a determination about limited capability for work has been made. So if the claimant’s assessment phase lasts longer than 13 weeks and they are found to have limited capability for work or work-related activity, the payment of additional components is then backdated. That is the existing system, which I am not that happy with. The effect would be to exclude it in terms of counting to the 365 days, or at least the 730 days depending on where we are, but in practice it does not always happen within 13 weeks and we have a lot of disparity of treatment. Even if we were to stay with the regime, it would be a pretty messy system.

I know that noble Lords hate me when I go through figures, but let me give some—I shall do my best because these figures have been running around. Purely on this basis, there is a cost of an extra £430 million cumulative to 2016-17 over the five-year period. I shall try to make a quick off-the-cuff assessment of how much extra it is when we look at it on top of the two years, and it is not actually a hugely different sum. It is £200 million on the SR period and £400 million on the total period of five years. I know that noble Lords feel that hundreds of millions are easily obtainable, but it is not an insignificant amount of money.

Moving on to Amendment 40B, the effect of this amendment would be that for existing ESA claimants, the one-year time limit would be calculated from the date the clause is commenced, and none of the time already spent on ESA would count towards the 365-day total entitlement. I want to have a word about retrospection. The noble Lord, Lord McKenzie, used the word slightly freely and in fact slightly aggressively. I was upset but not ashamed. I can understand that noble Lords are unhappy that we are taking account of days before the clause is brought into account, but this is about the question of whether noble Lords feel that this is the right approach; it is not about retrospection. Retrospection involves interfering with a claimant’s past entitlement and we are not doing that with this measure.

It is worth explaining what retrospection of time limiting would involve if we were to do it, which we will not. It would involve interfering with past entitlement to ESA. An example would be: at the date we commence the time-limiting provisions, if a claimant who had been receiving contributory ESA in the WRAG for 18 months, it would be retrospective if we demanded repayment of the extra six months of benefit he had already received because that would interfere with the claimant’s past entitlement. We absolutely are not doing anything which is retrospective in that sense. We are redefining the terms on which claimants are entitled to ESA in the future.

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[Lord Freud]

My Lords, I do not want to reopen this matter at Third Reading on the basis of things that I will have no further information on at all. That does not make much sense. The noble Lord is absolutely right that if we were to get rid of the assessment phase—and clearly that is something on which, as those who know how government works will know, we would have to do some work—it would be a big change. It would tie in with a lot of other changes, with work that we are going to be doing this year. We are utterly committed to this sickness absence review, which has been a very important document for us. My noble friend said that there was some value in using this assessment phase in this way in the future. I am trying to say that I do not think there is, because I would not want to put any weight on it. There might be other things that we can do to get out of a hole—if we are in a hole—but I honestly do not think that this is a promising line. I do not want to have this debate again at Third Reading. I have said everything I can on it, but I hope that I have said enough.

[Baroness Lister of Burtersett]

I apologise, but I wonder whether the Minister could say one more thing now so that we do not have to come back to it at Third Reading. If the assessment phase is done away with, clearly there is no issue. Given that the Minister himself is clearly suggesting that he would like to see that, would it be possible for him then to say whether, in the event that the assessment phase is not abolished, he would accept the spirit of this amendment now?

[Lord Freud]

I am clearly not in a position, and it would take more than a couple of weeks to get into a position, to make that kind of assurance. I know how skilfully your Lordships ask me these questions, and I deeply appreciate it, but I cannot do that. All I can tell the noble Baroness is that we have had a very powerful report on sickness absence, which I am personally very closely associated with and have sponsored. It made this recommendation, and most people in this Chamber who understand these matters would say that that is the way to go—as I would. Noble Lords must take their conclusions from that, but I cannot go much further or make promises on hypotheticals, because that is not how the system works.

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Moved by

[Baroness Lister of Burtersett]

46: Clause 52, leave out Clause 52 and insert the following new Clause—
“Condition relating to youth
In paragraph 4 of Schedule 1 to the Welfare Reform Act 2007 (condition relating to youth), after sub-paragraph (1)(d) insert—“(e) after the assessment phase has ended, the claimant has limited capacity for work-related activity.””

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Moved by

[Baroness Lister of Burtersett]

50: Clause 69, page 54, line 8, at end insert “providing those amounts are ring-fenced for the purpose set out in that Act”

[Baroness Lister of Burtersett]

My Lords, I hope that this debate will be a bit more straightforward than what we have just been discussing. The amendment aims to protect the ultimate safety net in our social security system by ring-fencing the money devoted to it when responsibility is devolved to local authorities without any statutory duties attached.

Clause 69 abolishes the discretionary Social Fund, described by Barnardo’s as a lifeline for some of the poorest and most marginalised people in our society. Together with Family Action, to which I am indebted for its assistance, it is among many voluntary organisations looking to your Lordships' House to safeguard that lifeline. Indeed, 20 have this week written an open letter to the Minister. This is not the place to make the case against the abolition of the discretionary Social Fund; we rehearsed that in Grand Committee. Instead, it is up to us to ensure that when the discretionary Social Fund is abolished, the money allocated to local authorities and the devolved Administrations is used for the purpose intended.

The Social Fund was introduced in the late 1980s in place of a system of statutory payments to help some of the poorest members of society with one-off needs. At that time, the noble Lord, Lord Kirkwood of Kirkhope, and I were ranged against the noble Lord, Lord Newton of Braintree, who unfortunately cannot be with us this evening for health reasons. Today, we are trying to salvage something from the forthcoming wreckage of what we now acknowledge that the noble Lord, Lord Newton, achieved—one of life's ironies.

Through a system of community care grants and crisis loans, the discretionary Social Fund provides vital cash assistance to some of the most vulnerable members of the community. CCGs help people on out-of-work benefits to remain in or set up their own home, to retain their independence. We are talking, for instance, about young people leaving a children's home or foster care, people with chronic health conditions or disabilities who need aids and adaptations to allow them to live in the community—about one-third of recipients are estimated to be disabled—and women who have fled domestic violence. As one such woman said:

“The community care grant meant such a lot. I had been in a refuge. I had very few possessions as I had to leave them all behind ...The CCG helped me make my flat into a home”.

Crisis loans are interest-free loans payable where there is an immediate threat to health or safety—for instance fares when a child has to be taken to hospital or money to cover the cost of replacements following a flood or fire.

We accept that the discretionary Social Fund needs reform, but this is not reform, it is abolition with no guarantee that local authorities will pick up the pieces using the money allocated to them. The aim of the amendment is to write into the Bill just such a guarantee and thereby achieve the Government's aim of protecting the most vulnerable.

Experience suggests that without some form of statutory ring-fencing, there is no way to ensure that the money allocated to local authorities and devolved Administrations will be spent in the way that the Government and Parliament intend. That is not a criticism of local authorities but simple realism. Local authorities are already hard-pressed to meet all their statutory functions in the face of budget cuts. This pot of money could be very tempting.

In Grand Committee, the noble Lord, Lord Brooke of Sutton Mandeville, held us spellbound with a cautionary tale of what happened when he was a junior Minister of higher education, and money intended for Liverpool Polytechnic was purloined by Liverpool council for housing. It clearly impressed the Minister. More recent experience is that of Supporting People—a fund designed to help vulnerable groups. Since the ring-fence was removed from that, overall spending on Supporting People has been cut by more than 10 percentage points more than the settlement received by local authorities for the purpose. That is an existing budget; the pressure to cut a wholly new budget will surely be greater.

We should listen to what local authorities themselves have to say. Recently published DWP research with authorities addressed this issue. While admittedly some authorities were unenthusiastic about ring-fencing—perhaps seeing tying their hands in that way as being like turkeys voting for Christmas—a number were,

“concerned that without a ringfence ... funding would quickly become amalgamated into existing budgets and as a result its identity, visibility and purpose would be lost. A second concern was that Councillors or Directorate heads would redirect the funding to plug gaps in other budgets”.

It is just such fears that this amendment is designed to allay.

Both the present and previous Social Fund Commissioners have expressed similar anxieties. What will happen to the woman who has fled domestic violence and who needs to turn a house into a home for her family, or the disabled person anxious to remain in her home but without the means to do so, or the ex-prisoner who needs to set up home? The potential consequences have been spelt out by organisations such as Citizens Advice and Family Action: greater reliance on overstretched charities, on food banks and on high-cost lenders, as the Joint Committee on Human Rights also warned in its report on the Bill, or simply going without, with a potential risk to health or safety.

A child rights impact assessment of the Bill, just published by the office of the Children’s Commissioner, suggests that such consequences mean that the clauses in the Bill abolishing the Social Fund could be in breach of the UN Convention on the Rights of the Child on a number of counts. Can the Minister—wherever he is—please tell the House what account has been taken of the convention and what the Government’s response is to this advice? I am sure that your Lordships’ House would not want to agree to a breach of obligations under the convention.

The case for ring-fencing was made from all Benches in Grand Committee. In response, the Minister acknowledged the strength of feeling and indeed accepted the spirit of the amendment when he said:

“It is quite clear that we need to make sure, if we are putting money out for vulnerable people, that it goes to vulnerable people and is not diverted elsewhere”.—[Official Report, 10/11/11; col. GC 140.]

I could not have put it better myself.

On the other hand, he argued against ring-fencing. He contended that ring-fencing would restrict innovative thinking and limit local authorities’ ability to devise schemes that best address the specific needs in their respective areas. However, ring-fencing does not prevent innovative schemes; it simply prevents local authorities using the money for some other purpose entirely.

The Minister promised to reflect on the arguments put in Committee. I am sure that all noble Lords will be delighted if he has come up with a solution to the dilemma in which he found himself—that of accepting the spirit of ring-fencing but not the legislative means of achieving it. If your Lordships’ House should pass this amendment, it would not cost the Government an additional penny, which should be music to the ears of the government Benches. On the contrary, it would help to ensure that the money voted by Parliament was spent on safeguarding the health and well-being of the vulnerable people for whom it was intended. I beg to move.

[Baroness Turner of Camden]

My Lords, I support the amendment. When I first read the Bill, it had been my intention to put down an amendment to try to remove the clauses dealing with the Social Fund. Clauses 69 to 72 outline the abolition of the discretionary Social Fund, including community care grants and crisis loans. As we have heard from my noble friend Lady Lister, the Government expect these responsibilities to be undertaken by local authorities.

We are dealing here with quite desperate people. The funds provide assistance for people at the very end of their tether. They have no one to turn to and nowhere else to go. The problem is that local authorities are now under considerable pressure themselves. They are having to economise and there is no guarantee that the very poor people for whom the funds provided some form of immediate support will figure very high in the list of requirements so far as local authorities are concerned.

I did not process my amendment earlier but my fears are very well met in the amendment now before the House. As my noble friend indicated, it provides for ring-fencing to ensure that a local authority makes provision for the people already provided for by the Social Fund arrangements. There are many instances, as we are aware, of women facing domestic violence, which is rather horrifying. Much of it takes place within families, sometimes within immigrant families, and the women have absolutely nowhere to go. Some of the violence is unbelievably cruel and sometimes it surfaces in cases that eventually reach the courts. We have an obligation to ensure that people in such desperation have somewhere to turn.

There are other levels of deprivation and concern that have already been referred to, involving children, homeless people and those who have just been released from institutional care. They are people who have nowhere else to go and we have to provide that support for them. I very much hope that the Government will be persuaded to accept this amendment.

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[Lord De Mauley]

Historically it has been AME. The funding for the year 2012-13 will be the funding that is transferred in 2013-14. It will not increase by that amount. However, there are the budgeting loans to which I have referred as well.

The noble Baroness, Lady Hayter, raised a question over benefits. Short-term advances will replace crisis loans for alignment as part of a national payments on account scheme. These advances of benefit will cover those in financial need as a result of waiting for an increase in benefit or for a benefit claim to be dealt with.

On the question asked by the noble Baroness, Lady Sherlock, the policy is developed taking account of all relevant rights. We did not take specific legal advice.

I hope that what I have said will enable the noble Baroness to withdraw her amendment.

[Baroness Lister of Burtersett]

I am very grateful to all noble Lords who spoke in support of the amendment, in particular the noble Lord, Lord Blair, who waited patiently all day and has shown his commitment to the importance of this amendment in doing so. The noble Lord, Lord Kirkwood, is ever a supporter on the side of righteousness and rightly said that ring-fencing is the very least that noble Lords should expect.

I am grateful to the Minister for the spirit in which he responded to the amendment. It was very much the spirit in Grand Committee by the end—the recognition that we must ensure that the money is spent. As my noble friend Lady Sherlock said, it is not just on the people for whom it is intended but for the purpose for which it is intended. I am afraid that I am personally not convinced that a settlement letter is sufficient to ensure that. We have made some progress but not nearly enough. The Minister then half-answered the question that I was going to asked on how the Government would check that the settlement letter was followed. I think that he said that there would be a review in 2014-15 of a cross-section of local authorities. Perhaps I may suggest that perhaps he would like to consider Amendment 50ZA before we come back, as it would go further than that and require local authorities to report on how they use the money, because that is the only way in which to be sure that the settlement letter is adhered to.

I am afraid that I am not terribly convinced by the Minister’s response to the question asked by my noble friend Lady Sherlock about the UN convention on children’s rights. If the Government have not taken legal advice—and I believe that the Children’s Commissioner’s report is only just published—I would want to know specifically what the Government’s response is to that report and to what the Children’s Commissioner says. We have not heard that response tonight. However, I am aware that it is very late and it is not the time to test the opinion of the House, even though not one noble Lord has spoken in support of the Government and all noble Lords have spoken in support of the amendment. Nevertheless, I beg leave to withdraw the amendment.

Amendment 50 withdrawn.