Social Fund Funeral Payments

Caroline Nokes Excerpts

Wednesday 14th September 2016 Westminster Hall

[The Parliamentary Under-Secretary of State for Welfare Delivery (Caroline Nokes)]

It is, of course, a pleasure to serve under your chairmanship today, Sir David.

I add my congratulations to those that have already been offered to the hon. Member for Belfast East (Gavin Robinson), not only on securing this important debate but on the sincere and thoughtful way that he has addressed a really difficult and emotional subject. Many Members have already paid tribute to him for how he has tackled this issue, but I also thank him for the particular way that he has addressed it.

Of course, a period of bereavement is a very difficult time; bereavement is one of the toughest experiences that any individual or family will ever face. This debate has raised many very important issues and asked important questions about how the Government can best support the bereaved and vulnerable people who are going through that experience, including the practical challenges that bereavement causes.

I fully understand the importance of providing the right support at the right time. The hon. Member for Belfast East has caused me to consider the real cultural differences in different parts of the United Kingdom. His example from Northern Ireland, where a funeral will usually be conducted within just a few days, highlights that the issue is about ensuring that the support is there in a timely fashion. There is a big contrast with other parts of the UK, such as England, where the period before the funeral might be as long as three weeks. I thank him for making me think about that this morning.

An awful lot of work has been taking place on funeral payments and support for the bereaved. I pay tribute to the hon. Member for South Shields (Mrs Lewell-Buck), even if she asked me some challenging questions this morning. She has been most robust in how she has tackled my Department on this matter. She had a private Member’s Bill last year, and my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) raised the matter in a Westminster Hall debate last year.

The hon. Member for North Ayrshire and Arran (Patricia Gibson) mentioned that debate, and I thank the hon. Member for Strangford (Jim Shannon) for mentioning the fact that I raised this issue in a Westminster Hall debate, albeit at somewhat of a tangent to this morning’s debate; I think that was two years ago. Perhaps this is an annual occasion in Westminster Hall, where we have the opportunity to raise these serious issues and to discuss—for me, from a very different position—the challenges that remain within bereavement services and how the Government and the funeral industry can help. If I remember correctly, when I raised the issue, I was particularly tackling the relationship between funeral directors and hospitals.

More recently, members of the Work and Pensions Committee—I thank them for their work; they are not here today because they are serving on the Committee—have looked in detail at the support the Government provide for the bereaved. I thank them for their insight and recommendations. In particular, I thank the Chairman for the correspondence we have shared since I came into this post.

Quite rightly, the debate has focused on the costs of funerals and on the application process for funeral expenses payments. I will respond to those points and to many of the other points that have been raised, but first, it is important to set on the record the support that the Department provides for vulnerable people at a difficult time. We continue to make a significant contribution towards the cost of a simple, respectful funeral for applicants on qualifying income-related benefits. We meet the full necessary costs of a burial or cremation, which we know can vary. Before I came to this place, I was the cabinet member in my local authority with responsibility for cemeteries and graveyards. I can remember that we constantly reviewed the costs of burial plots and compared how they varied across even one county. Those costs vary enormously across an entire country.

The cost of any medical references or the removal of active implanted medical devices will be covered for cremations, as well as reasonable costs if a body has to be moved more than 50 miles. Travel costs are covered for the applicant to arrange and attend the funeral. In addition, as many Members have said, the Department also meets other costs up to a maximum of £700. In 2014-15, funeral expenses payments were paid for around 6% of deaths in Great Britain. The average payment made has increased in value over the past 10 years by about 27%—from £1,081 in 2005-06 to £1,375 in 2014-15 —as necessary costs have increased.

Despite the current economic uncertainty and pressures for savings, we have protected the £700 limit for other costs people face. However, we know that in the majority of claims the other funeral costs exceed the £700 limit. In 2012, we made interest-free social fund budgeting loans available for funeral costs in addition to the funeral expenses payment. Last year the average award for budgeting loans was £413.

The loans can be crucial in supporting people at a difficult time by ensuring that they do not face financial pressures caused by turning to high-cost lenders or credit cards. We have heard from Members about payday loans and the use of credit cards for paying funeral costs. It is important to emphasise that we made those payments available in 2012 and that they are interest-free. It is worth noting that this country provides the most generous support, after Norway, for funeral expenses compared with other European countries. However, we know that there is more we can do, and I want to turn to the specific issues raised during the debate.

The hon. Member for Belfast East spoke eloquently and with a great amount of detail, much of which pertained specifically to Northern Ireland. He will know that the Northern Ireland Executive are responsible for the funeral expenses payment scheme in Northern Ireland. He raised a very specific matter about bereavement benefits and cohabiting couples. He mentioned the recent court case, which indicated that the Northern Ireland Executive would have to treat cohabiting couples the same as married couples. I am aware that the Executive are appealing the case, and we understand that a date for the appeal hearing has been set for 24 October this year. The Government are watching that matter closely and will consider the implications of the outcome of that appeal.

The hon. Gentleman and many other Members have mentioned the issue of eligibility checkers. We have considered the merits of an online checker, but that can cause additional confusion to bereaved people. The research we have done with service users indicates that the bereaved often prefer to talk to someone in person. That was something I discovered when talking to the banking industry.

When the next of kin has to report a bereavement to the bank, they often prefer to do it in person or by talking to someone, rather than doing it online. That is why we have a dedicated bereavement telephony service, where staff are incredibly highly trained. They are specialists in what they do. At the end of the day, we are determined to provide the best service and the service that people want in their time of need.

We are investigating other solutions, including giving claimants an earlier decision on eligibility before they commit to funeral arrangements, but we want to test that with users. Via the social fund, the Department collects and publishes comprehensive data on applicants, application and award volumes, expenditure and processing time. That allows the Department to monitor the operation of the scheme. Extra data could be generated, but that would come at a significant cost, both in money and time. Although the £700 is not index-linked, there is no cap on the necessary costs category, which is where we have seen much of the inflationary pressure. Inflation in funeral costs has been reflected in the year-on-year rise in average payment amounts. As I said earlier, the average payment has increased in value by about 27%.

In the short time I have left, I pay particular tribute to the hon. Member for Sheffield, Brightside and Hillsborough (Gill Furniss). She adds a very personal dimension to this issue, and I thank her for sharing her experiences with us. We are considering a systematic review with the industry on the causes of funeral cost inflation. The hon. Member for South Shields talked about round tables and discussions with the industry and stakeholders. I assure her that if Twitter is anything to go by, there is absolutely no reluctance on their part to meet me and discuss these important issues. I have meetings scheduled for next month, when we return after the conference recess.

The hon. Member for North Ayrshire and Arran mentioned the consultation with the Scottish Government. As she might expect, we are watching that closely. We are having ongoing discussions with the funeral industry, academics and bereavement services to ensure that we continue to look at this important issue. We believe that the best approach is to work with the industry, rather than dictating a cap on costs, but we want to see absolute transparency on costs and the provision of price lists that people can take away from funeral directors. Through that, the bereaved will have greater knowledge of what they are paying for and how much things will cost them.

When considering the level of support for funeral costs, a balance needs to be struck. We do not want to see the funeral expenses scheme influence or inflate the prices charged by the industry for a simple funeral. The scheme cannot undermine personal and family responsibility for meeting funeral costs. I take on board the point that the hon. Lady made about payment schemes. If nothing else, the debate has caused me to think carefully about how we can best encourage people to find responsible schemes, should they wish to take out some sort of insurance policy.

I am conscious that I am very tight on time. I will draw my speech to a close simply by thanking Members for a very constructive and informative debate. The points made will certainly help my discussions with the industry.

Question put and agreed to.

Resolved,

That this House has considered Social Fund funeral payments.