Local Government Finance Bill

Baroness Lister of Burtersett Excerpts

Monday 22nd October 2012 Lords Chamber

[Baroness Hollis of Heigham]

My Lords, I take pleasure in supporting the amendment so ably moved by my noble friend. In Committee, we asked for guidance as to who were vulnerable and what council tax benefit protection for them was appropriate. The Minister replied, correctly of course, that although there was a power under the Act for the Secretary of State to issue guidance to that effect, he did not propose to do so.

In the past week, we have had the welcome news of the £100 million transitional grant for those on benefit but, as my noble friend emphasised, it lasts for one year only. While reducing the cuts for many vulnerable people for one year, it creates the poll tax mark 2 problem of trying to collect small sums from 2 million people. The following year, vulnerable people will again be fully exposed to the cuts. This is simply not fair to local authorities or to the vulnerable people living in them, who may be facing three different schemes in each of three years—full protection this year, up to 8.5% next year, and the full cut the year after. The Government’s transitional grant reflects the fact that they now see just what localism can mean in practice, and they do not like what they see.

I am glad of the real decency that the Minister has shown, and we expect nothing less of her, but vulnerable people will still have to deal with the fallout when the transitional grant has expired unless, as the amendment argues, funding is provided on a sustainable basis. Let me take Norfolk as an example. I declare an interest as Deputy Lieutenant and a former city councillor and county councillor. There are seven district councils and these are their proposals so far: Norwich is struggling to retain the existing national default scheme and is making cuts to do so, and there is therefore no minimum contribution for people on benefit. Great Yarmouth is proposing a minimum contribution from benefit claimants of 20%. King’s Lynn proposes a figure of 25%. Breckland, Broadland and North Norfolk propose a straight 30%, even though North Norfolk and Broadland have high numbers of second homes, which one would have thought would have given them some head space to protect people against the cuts. South Norfolk proposes to compress bands down to band D and then drop below D to bands C, B and A, and then levy 20%. That means a 28% minimum contribution for benefit claimants in band A properties and potentially up to 60% for the high bands. I am very happy to share my workings with anyone who queries that.

Therefore, there are five schemes among seven neighbouring authorities in one county with different minimum payments for vulnerable people on benefit ranging from 0% to potentially 60%, to say nothing about different rules for savings, income, backdating and the second adult rebate. It is quite likely that many of these councils will take up the transitional grant—I hope that they do—but in the year after that they will be back up there with these awful cuts.

Yet we are still told, although less stridently, that this is all about appropriate local decision-making—for example, that local authorities are uniquely placed to decide that they should permit backdating, because presumably the individual local authority knows its patch and has a high proportion of people with fallible memories and slow response times, so it keeps backdating, while a neighbouring authority is scrapping backdating because it is confident that its residents are much sharper than those of the authority next door and will be quick to claim. For one to have backdating and the other not on some reading of the mentality of the residents is presumably an unusual assessment of local need. Or it may be that one authority knows that its residents need savings of up to £6,000 in total because its unique insight into local need tells it that its residents will not face divorce or disability, which makes such savings necessary, while the authority next door is less sanguine about its capacity to foretell the future needs of its residents, so it allows them £16,000 in savings. Do your Lordships really believe that all this is about unique local insight into unique local needs in the name of unique localism?

Alternatively, let us take income. Every scheme that I have seen regards disabled people as vulnerable, but some include DLA as income and others do not. As DLA—if you take the middle-rate care and higher-rate mobility components—can be nearly £100, if it is counted as income that household will make a significant contribution to council tax benefit and to council tax; if it is not so counted, it will probably be exempt. Therefore, there could be two blind people in identical circumstances but one would be made deliberately poorer than the other because, unluckily, he lives in the “wrong” authority and the value of his DLA awarded nationally is cut by local discretion. Is that what we intended when we awarded DLA? What is the point of a national benefit funded by taxpayers if it is vulnerable to local cuts made by local councillors? That is what is going to happen.

All my life I have fought for and believed in local government. Assessing and meeting housing need, for example, is a proper duty of local authorities and a proper subject for local discretion. However, what is not a proper local decision is for local authorities to determine what income vulnerable people should receive. That is and should continue to be a matter of individual entitlement, national criteria and common responsibility and not a matter for local discretion and local handouts.

Disabled people and their carers are scattered across the country. Although they may happen to live in a particular locality, their disability is in no sense local. Therefore, their income support—and council tax benefit is part of their income support—should not be a local responsibility and it is not up to the locality to meet it. Whether there are 2,000 disabled people in Merthyr Tydfil or 200 in west Oxfordshire, they are the responsibility of us all.

I do not believe for a moment that local councillors want to treat disabled people unfairly or more harshly than their next-door neighbours. They do not want to add more financial distress to the lone parent with a five year-old child, desperately searching for work. They do not want to undermine the support that a carer seeks to give to an elderly parent. However, as my noble friend has argued, without sustainable funding for their vulnerable residents, that is what they are going to be doing in 18 months’ time.

The Government have given themselves and local councils a breathing space of a year. They and we should use that year to come up with fairer, better and stable arrangements for meeting the financial need of the most vulnerable people in our society. I support the amendment.

[Baroness Lister of Burtersett]

My Lords, I will intervene very briefly. We have heard two very powerful speeches from my noble friends in support of this amendment. The more I have listened to the debate during the passage of this Bill, the more I have come to the conclusion that all the talk about protecting vulnerable groups is simply a fig leaf. The Government say that they want to protect vulnerable groups but they do nothing to ensure that local authorities do so. Indeed, there is not even any mention of vulnerable groups in the eligibility criteria for the transitional funding. They know full well, while also saying that local authorities should have regard to work incentives, that they are putting local authorities between a rock and hard place.

My own authority, Nottingham, is not going to protect vulnerable groups because it is going to spread the pain out among all working-age people. My noble friend Lord McKenzie has suggested that this is probably what many authorities are going to do. The Government can then turn around and blame the local authorities by saying that it is the local authorities that are refusing to protect vulnerable groups, having set up a scheme but not having given them enough money to ensure that they protect vulnerable groups. It really is not on. What are the Government going to do to monitor the impact of the new scheme on local groups? If this monitoring produces the evidence that vulnerable groups are not being protected, what action will the Government take? Ultimately the buck should stop with the Government, not with the local authorities, in terms of ensuring that vulnerable groups are protected.

[Baroness Hanham]

My Lords, I thank the noble Lord for introducing this amendment and for his explanation, as well as the other speakers. Amendment 3 is quite a tight amendment—although we have rather waltzed away from it—that would require the Secretary of State to issue guidance setting out who is considered vulnerable for the purposes of local schemes.

As noble Lords are aware, the Government have made it clear that local authorities should make good provision for vulnerable people in their communities. However, we do not believe it would be helpful to create a new definition of vulnerability, particularly when local authorities already operate within a framework of responsibilities in relation to vulnerable groups. The Department for Communities and Local Government is at the moment working with the Department for Work and Pensions to ensure that local authorities will continue to receive appropriate data on current benefits and universal credit for those who would be considered vulnerable. This could include data that would help local authorities identify individuals they considered to be vulnerable, such as those who have a disability, so that they are able to provide that support in future.

As I said before, local authorities are well aware of their responsibilities and their own priorities and do not need further hand-holding by central government. I am satisfied that local authorities are already alive to the need to protect the vulnerable and to draft schemes, which many are considering, on how to support those they consider to be vulnerable. A number of councils, including Arun, South Tyneside, North East Lincolnshire, Portsmouth and Daventry, to name just a few, are all proposing schemes that make some special provision for people who the council consider particularly vulnerable, whether disabled people or families with young children.

As we have discussed previously, we have already published guidance that reminds local authorities of the statutory framework in which they operate and of their existing responsibilities in relation to people who are considered to be vulnerable. I am pleased to have had the opportunity, throughout our discussions at various stages of this Bill, to draw attention to these important responsibilities. As I indicated to the noble Baroness, Lady Lister, on Report, I am content and happy to bring this guidance to the attention of local authorities again, while alerting them to potential future legislative changes relating to carers, as set out in the draft care and support Bill, which they will also want to be aware of. However, given that local authorities already have an established and understood framework of statutory responsibilities in relation to promoting equality of treatment for individuals who are vulnerable through the design of their schemes, I do not believe that there is any value in creating new guidance.

I am aware, however, that a number of draft schemes propose a significant increase in the tax burden on those currently paying no council tax. It is disappointing that a number of councils have not felt able, in the light of their responsibilities towards vulnerable groups, to design schemes that avoid placing very great financial pressures on those least able to pay. That is why we have introduced the transition grant, to help those authorities which undertake to avoid significant cuts to awards in the first year, to find other more sustainable ways of managing the reduction in the future.

To be compliant with the grant criteria, an authority must develop a scheme that ensures that no one who would be eligible for 100% support based on current criteria can be asked to pay more than 8.5%. We have discussed that previously at length, so I do not need to go through the whole system again. I have the guidance here and I give a commitment to the House that it can be put forward again to local authorities to remind them of their duties.