Funeral Poverty

Justin Tomlinson Excerpts

Tuesday 13th October 2015 Westminster Hall

[The Parliamentary Under-Secretary of State for Disabled People (Justin Tomlinson)]

It is a pleasure to serve under your chairmanship, Sir David. I congratulate the hon. Member for Torfaen (Nick Thomas-Symonds). I have enjoyed debating with him on previous occasions, and I thought that his suggestions and his decision to focus on a strategic approach were sensible and practical. It was a helpful contribution.

The debate was secured by my excellent colleague, my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), whose proactive, thoughtful and knowledgeable work in this area highlights what an important issue funeral poverty is. The debate has raised important questions today. I also pay tribute to the hon. Member for South Shields (Mrs Lewell-Buck) and her work on the ten-minute rule Bill. I am interested in her point about a national conversation, and I will come back to that. I will have to whizz through some of my points, but I will do my best to cover as much as I can in the limited time available.

Before I focus particularly on the comments of my hon. Friend the Member for Blackpool North and Cleveleys, I want to say to my hon. Friends the Members for Rugby (Mark Pawsey) and for Newark (Robert Jenrick), who both raised constructive ideas about overall costs and planning for costs in the future, that we will need to look carefully at those points. The question from the hon. Member for Strangford (Jim Shannon), who has left the debate, is relatively easy for me to answer because the powers have already been devolved to the Northern Ireland Assembly; he will need to relay his questions there. In answer to the hon. Members for Coatbridge, Chryston and Bellshill (Philip Boswell) and for North Ayrshire and Arran (Patricia Gibson), the powers will be devolved. I will take a particular interest in what new innovative ideas Scotland will try. If there are areas that work well, we will have to look closely at them. I wish them the best of luck. As policies are developed, my teams will continue to be supportive through sharing information on what we have learnt in the past.

Losing a loved one is one of the most difficult things that any of us will experience. My hon. Friend the Member for Blackpool North and Cleveleys is right to highlight the fact that, in addition to the significant emotional cost, dealing with a bereavement brings practical challenges. Although the Government have never taken responsibility for meeting the full cost of funeral arrangements, they provide support to help the most vulnerable people with funeral costs, and rightly so.

For people in receipt of universal credit, income-related benefits and tax credits, the social fund funeral expenses payments provide a significant contribution towards the cost of a simple, respectful, low-cost funeral. The scheme meets the full costs of a cremation or burial, including: the purchase of a grave; necessary burial or cremation fees; for cremations, the cost of any medical references or removal of active implanted medical devices, such as pacemakers; reasonable costs if the body has to be moved more than 50 miles; and the cost of a journey for the applicant to arrange or go to the funeral. A funeral payment is paid in about 7% of deaths in Great Britain.

In 2014-15, 32,000 funeral payments were awarded, worth about £44 million. Other costs, such as the coffin, church and funeral director fees, are limited to a maximum payment of £700. Members questioned whether that is the appropriate level. The majority of claims exceed the £700 limit, which is why in May 2012 we made interest-free social fund budgeting loans available for funeral costs, in addition to the funeral payment. The average budgeting loan award in 2014-15, for all purposes, was £413. Applicants can claim up to a maximum of £348 to £812, depending on their circumstances. Crucially, the introduction of budgeting loans is a vital part of removing the need for bereaved families to turn to high-cost lenders or credit cards, and removes the worry of meeting the funeral director’s bill. The National Association of Funeral Directors welcomed that move, and we need to promote it further.

I will try to answer as many points as I can in the remaining time. What steps can the Government take to improve Department for Work and Pensions data collection to help improve transparency? What figures on the use of budgeting loans for funerals can the Department share? The shadow Minister also raised that point. The Department collects and publishes, via the social fund annual report, comprehensive data on applicants, application and award volumes, expenditure and processing times. That allows the Department to monitor the operation of the scheme. Extra data beyond that could be collected, but we must consider the costs of doing so; the scheme costs about £2.6 million to administer for a £44 million benefit to the most vulnerable, so we must strike a balance. We will continue to look at the situation. The Department does not currently collect data on the take-up of budgeting loans for funeral costs, but we are exploring options to produce those data, so I welcome hon. Members’ comments.

Will the Government look again at index-linking the cap? It is a balancing act. It is important that the scheme does not influence or inflate the prices charged by the funeral industry for a simple funeral. I know my hon. Friend said that he struggled to get his head round that point. The cap for funeral director fees means that we can continue to ensure that the system remains both sustainable and fair to the taxpayer, and to help a large number of benefit recipients with funeral expenses. Although the £700 cap is not index-linked, there is no cap on the necessary costs category. On the points about inflation and funeral costs exceeding people’s rise in wages, the year-on-year rise in average payment amounts reflected that. The average award increased by 27% between 2006 and 2014-15. We will continue to work on that. I am conscious that I do not have much time left in the debate, so I will whizz through the points.

Ensuring better understanding of eligibility pre-application is probably the most important point. When I looked at the figures, I was concerned about the number of people applying, because of the time that it takes to go through the applications, and the people who do not get an award. I have asked whether there can be pre-eligibility checks. It is complex. We are looking at it, but at the moment, we do not feel confident that we can do it because we do not want to give somebody a 100% assurance and then not approve the application. There is a lot more work to do, but we have made progress. The proportion of successful applications has increased from 55% to 63% over the past five years.

Baroness Altmann is the Minister responsible for the policy. I will suggest a round table discussion with me and Baroness Altmann for hon. Members who have spoken today to explore the issue further, because it is crucial. We are committed to getting to 16 days. We have made progress and want to go further. The round table discussion will explore that as well.

The “tell us once” scheme was promoted in the coalition Government by the former Minister. We want to ensure that the service communicates well. If Members have specific examples of where it has not worked, please raise them.

The debate has been practical, proactive and constructive. I am conscious of the time constraints. I look forward to the round table discussion with those who are interested.