Baroness Sherlock
Main Page: Baroness Sherlock (Labour - Life peer)Local Government Finance Bill
Baroness Sherlock Excerpts
Baroness Sherlock
My Lords, I want to take this opportunity to ask the Minister a question. I do not want to add to the very important issues outlined by the noble Lords, but I am prompted by the speech of the noble Lord, Lord Stevenson, to ask what is happening to ensure that advice agencies are able to give the appropriate advice to people who may find themselves in the kind of debt described in this amendment to make sure that they avoid having enforcement action taken against them, or to get advice in dealing with it if it does happen. I am very conscious that there have been cuts to advice agencies nationally and locally and that social welfare law has been taken out of the scope of legal aid in its entirety. Given that and the speed with which this change is being introduced at the same time that the entire benefit system for working-age people is facing a revolution, what steps has the department taken to satisfy itself that advice agencies will be up to speed in time and will be sufficiently resourced to enable them to advise clients to make sure either that they do not face enforcement action or that they have somewhere to go for advice if it is applied to them wrongly?
Baroness Hollis of Heigham
To reinforce my noble friend’s point about advice agencies, my local Norwich CAB, whose income for the current year will be £1 million, will find a fall of £400,000, down to £600,000 next year, because every penny of the £400,000 it gets from the Lord Chancellor’s department is being withdrawn. As a result, people are not going to be able to use its services, staff will be laid off and the very issues that my noble friend has raised will impact on those who most need help.
Baroness Sherlock
“Grants paid under section 70 of the Welfare Reform Act 2012
(1) Any grant paid to local authorities under section 70 of the Welfare Reform Act 2012 (social fund) shall be expended by the local authority only for said purposes.
(2) Any such grants will be made under the guidance of the Secretary of State with regard to the application of any “local connection rules” including so that any such rule does not apply to—
(a) people who have fled domestic violence; (b) young people who have left local authority care;(c) people who are homeless, or who have been homeless within the last 12 months;(d) people who have left institutional or residential care, including a hospital, prison or young offenders’ institution.”
Baroness Sherlock
My Lords, I can hardly hope to match that performance, but I shall do my humble best. I rise to move Amendment 97 in the name of my noble friend Lady Lister of Burtersett, to which my name is also attached. My noble friend apologises to the Committee for her absence today. She is receiving an honorary degree, which could not be readily rearranged, so, disappointed as she is—particularly, I think, to have missed that last amendment—she has asked me to do my best to share with the Committee the points she would have wished to make. I acknowledge her considerable expertise and any errors that creep in are entirely my own.
In April 2013, local authorities will have to deal with the transfer of responsibility not just for council tax benefit but also for the discretionary Social Fund, described by charities as a lifeline for some of the poorest and most marginalised people in society. Through a system of community care grants and crisis loans, as noble Lords will know, the discretionary Social Fund provides vital cash assistance to some of the most vulnerable members of the community. Community care grants help people on out-of-work benefits to remain in or set up their own home and to retain their independence. These may be, for example, young people leaving a children’s home or foster care; people with chronic health conditions or disabilities who need aids or adaptations in order to allow them to live in the community; or women who have fled domestic violence. Crisis loans are interest-free loans payable when they are the only way of preventing serious damage or serious risk to health or safety as a consequence of an emergency or a disaster.
The Welfare Reform Act 2012 abolishes these provisions with no guarantee that local authorities will pick up the pieces using the money allocated to them. The first part of Amendment 97 is designed to ensure that the money transferred to local authorities is used for the purposes intended. Experience suggests that without a clear legal obligation, there is no way of ensuring that the money allocated to local authorities will be spent in the way that the Government and Parliament intend. This is not a criticism of local authorities, but simply a realistic appraisal that, in the current climate, many local authorities are struggling to meet their statutory functions in the face of budget cuts to which the Bill adds. Research by the Joseph Rowntree Foundation indicates that:
“It cannot be assumed that the needs of disadvantaged residents and communities will inevitably be to the fore as councils manage budget reductions”.
This pot of money, transferred to local authorities to meet the needs of some of the most disadvantaged residents, could be very tempting.
The experience of Supporting People, a fund designed to help vulnerable groups, is not very encouraging. Since the ring fence was removed, overall spending on Supporting People has been cut by over 10 percentage points more than the settlement received by local authorities for that purpose would require; and that is an existing budget—how much greater will the temptation be with a new budget? The fieldwork done by the Department for Work and Pensions with local authorities shows some interesting things. While some authorities were unenthusiastic about any ring-fencing, 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”—
none present, I am sure—
“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 the previous Social Fund Commissioner have expressed similar anxieties. The potential consequences have been spelt out by organisations such as Citizens Advice and Family Action: greater reliance on over-stretched charities, on food banks and on high-cost lenders, as the Joint Committee on Human Rights also warned in its report on the Welfare Reform Bill. Otherwise, people must simply go without, with potential risk to health or safety. I am sure that other noble Lords have similar experiences but I know that the food bank in Durham, which my church supports, is seeing demand rise faster than we could ever have imagined, and that is before the Social Fund is abolished. Therefore, I dread to think what is coming down the track towards us next.
During the passage of the Welfare Reform Bill, the noble Lords, Lord Freud and Lord de Mauley, made clear their commitment to ensuring that the money is spent on and reaches the vulnerable people for whom it is intended. I know that they have gone to some length to try to make sure that this happens by stipulating that the money will be part of a special revenue grant, accompanied by a detailed settlement letter, the details of which we eagerly await. When can we expect that settlement letter?
Ministers may wish to resist this attempt to underwrite the Government’s own objectives in law, perhaps on the grounds that it might stifle innovation or that councils might prefer to invest the money in existing services for vulnerable people. I would never want to stifle innovation, but there is no reason why the amendment should do so. However, investing in existing services, even where these support vulnerable people, may well not be enough.
In his latest annual report, the Social Fund Commissioner warned that the fund’s casework experience suggests that many social fund applicants are not known at all to other agencies such as social services. Citizens Advice has advised its bureaux that entitlement to social services is often set at a very high threshold, which could exclude many of those currently eligible for help under the Social Fund. In other words, they are not necessarily the same people. It believes that it is crucial that there continues to be a last resort source of cash for people who currently apply for crisis loans to meet basic needs, such as fuel, following a disaster or emergency. A recent study from the Child Poverty Action Group of how London local authorities are preparing to deliver the new responsibilities found no authority planning to provide any cash support, although some had not entirely ruled it out.
Proposed new subsection (2) in Amendment 97 addresses a concern raised by a number of charities that local authorities might be tempted to impose a local or residence condition as a way of rationing assistance—in other words, that they might confine help to people who already have a local connection. However, many people who currently qualify for help from the Social Fund are just the people who are least likely to have an existing local connection—for example, women who have fled domestic violence, young people who have left care and others who have left institutional care, or homeless people. Again, this issue has been highlighted by the London authorities study by the CPAG. Its report notes:
“A key issue emerged around local connection rules. Charities ... expressed fears that if applicants to local schemes are asked to prove a local connection, families who have had to move, such as those who have experienced domestic violence, or those leaving prison, may find themselves with no way of accessing support”.
Authorities,
“emphasised the need for an integrated approach”.
The report pointed out that,
“the issue of local connection presents collective action problems; if one local authority chooses to apply local connection rules and others do not, those who do not are likely to see an unsustainable increase in demand for their schemes'”.
The report expresses a preference for no local connection tests so that those who cross authority boundaries can access support, and it calls for a strategic steer from government. This amendment would go slightly further than a strategic steer but not as far as preventing any local connection rules at all. It would simply require local authorities to make grants in accordance with guidance about such rules, and that such guidance should ensure that local connection rules are not applied to the vulnerable groups listed in the amendment.
In the House of Commons, when questioned on this matter, the Secretary of State for Work and Pensions assured Members that local authorities had a “moral duty” in this area. I welcome this recognition of a moral duty, but I encourage the Minister cosndier how which she can make sure that that moral duty is fulfilled. The CPAG study picked up concern among local authorities that the reduction in funding for crisis loans to 2005-06 levels will leave them unable to meet considerable amounts of need, so the temptation to use local connection rules as a rationing device could be overwhelming for some of them. Clear guidance on this issue would also be in line with the Social Fund Commissioner’s emphasis on the need for guidelines that,
“set parameters for local discretion”,
so as to,
“achieve some broad consistency of purpose and approach”.
If the Minister cannot accept the amendment, can she at least reassure the Committee that she will consider the case for guidance on local connection in the settlement letter in the way that I described? However, I hope that that will not be necessary and that the Government will accept the amendment. It would cost no money but would provide some protection for some of the most vulnerable members of the community and ensure that the money voted by Parliament was used for the purposes intended.
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 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.
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.