Welfare Reform Bill

Lord German Excerpts

Tuesday 18th October 2011 Grand Committee

[Baroness Wilkins]

My Lords, as my noble friend Lord Wigley suggested, I will leave the arguments about disabled people until our debate on the next group of amendments, and talk first about people who are not able to move because of a lack of supply. The Riverside housing association says that for those who stay put, the loss of benefit,

“will have a very significant impact on household income at a time when tenants face huge pressures from rising fuel and food prices”.

Social landlords house,

“some of the poorest households in the country … Such losses would enforce difficult choices between subsistence items such as eating well, clothing the children and, of course, paying the rent”.

Riverside points out that two-thirds of its tenants have,

“a net household income … of less than £10,200 per annum”.

This will cause devastating hardship.

[Lord German]

My Lords, I support my noble friend Lord Stoneham in his case for transition. My argument is that if we are going to introduce a policy of this sort, we have to ensure that the social and public housing sector is capable of meeting the changes that are being demanded by the policies of this Bill. Three policy ambitions underpin these clauses. The first relates to the inefficiencies in our social housing sector at the moment and the need to make better and more efficient use of our housing stock, bearing in mind that 7 per cent of homes in the social housing sector are overcrowded and 11 per cent are underoccupied. Already, there is a big mismatch. The second is that we want to increase mobility and strengthen the incentives to ensure that people can move within social housing in order to transfer into work. The third is the ambition to reduce the cost pressures on an ever increasing housing budget. We should remember that in today’s terms the budget has, over the past decade, increased from £14 billion to £22 billion a year, at the equivalent rate today.

My question for the Minister is: how prepared is the social housing sector to meet these changes in policy? If we follow the logic through, we see that there are only three choices that a tenant can make. The first is to pay the increased rent, which we know will on average be £13 a week for a one-bedroom overoccupier. The second is to occupy the spare room, which means either taking in a lodger or having the children back. I guess that some people would not mind having their children back but that others would not want them back at any cost. Whatever the circumstances, is that a realistic choice for many people?

The third choice that people will have is that they can move. In those three choices, what modelling has been done on how many people will make choice one, two or three? The only modelling I have seen has been from the National Housing Federation survey, which is only for part of the country, and they surveyed only 452 people. Clearly, if you are going to have a policy of this sort, the Government must be able to say that they have sought these solutions to ensure that their policy will work.

[Lord Foulkes of Cumnock]

Can I ask the noble Lord a number of questions since he is asking the Minister a lot of questions? He seems to accept the policy in the Bill but only wants it postponed, so what is his attitude to the amendment proposed by the noble Baroness, Lady Hollis? What is his response, particularly to the point made by my noble friend Lady Turner that this should be done by agreement and not be forced on people?

[Lord German]

I think if the noble Lord would wait a few moments, he will see what I am proposing. It is on this piece of card, which I can pass to him, but if he just bears with me, I will give him three things which I think are essential in order to make this section of the Bill work. That is why I am posing the questions, because it seems to me that the solutions are not given in any of the documents.

The document from the DWP about what these choices will be and the three questions that people will have to answer says:

“it is unclear how this”—

the policy—

“will affect the choices of claimants that are likely to be affected by the measure”.

In other words, the Government do not know; or do they? If they do know, we need to ensure that we have those figures in front of us. If we are to avoid unintended consequences, we are going to have to look at the levers that ensure that the housing stock is accurate, and if the housing stock can, over time, match the needs of this particular policy.

As we know, there are 670,000 claimants, presumably of working age, which means that a third of a million non-working age claimants are underoccupying—the noble Lords, Lord Stoneham and Lord Wigley, have talked about elderly people underoccupying. Maybe there is an answer to that which the Minister and the Government have already thought about. There are no figures that I have seen in any of the documentation that indicate how we are going to manage to create a housing stock to match the changes. First, we need to know how many of the 670,000 are going to move and the modelling figure behind it. Until we have the answer to that, we cannot answer the question about how many houses we are going to need.

[Baroness Hollis of Heigham]

The Government’s own impact assessment says:

“Estimates of Housing Benefit savings are based upon the current profile of tenants in the social rented sector, with little tenant mobility assumed”.

[Lord German]

I am grateful for that quotation, which of course goes against the other one that I gave from further on in the document, which says that we do not know what claimants’ choices are likely to be. The noble Baroness’s quotation has the word “little” in it. We have often reached the point where we have quoted from different sections of the same document, and that is why we need answers. We need to know which of the three choices people are going to make so that we can determine whether the homes are available for them. There are three solutions, which I put to the Minister and which we need answers about, at the very least after his answer to the fundamental question of whether we have the housing stock.

I ask the Minister, when replying, to talk not about the DCLG but about the three government departments that are responsible for these matters in this country, because three levers have to be pulled for the DWP to be able to answer that single question. What is the solution? I would like to know what the three government departments feel about how they can match housing demand. I must say that I am not particularly encouraged because, for many of us, moving house is probably the worst thing in the world that you could probably do. In fact, my noble friend Lord Kirkwood told me this morning that we ought to exchange our rubbish with our neighbour’s because our neighbour’s rubbish is much more interesting than our own. I have found moving house to be a very uncomfortable exercise, and I am sure we have to be careful of this. The Government say that they are working in England to develop a team of advisers who will work to help people to make better use of our housing stock, which is a laudable aim, but they also say that they will work with the devolved Administrations to see what can be done in Scotland and Wales. What can be done about the housing stock across the whole of the country where this policy impacts?

It seems to me that there are three potential solutions when we have the answers to the figures, one of which is that we must have housing money—discretionary housing money, or whatever—to ensure that the money reaches the particular groups that will need it in order to be able to make the adjustment. The second is about exceptions. We will come to that in the next set of amendments, but where the cost to the public purse can be demonstrated to be larger—and many of the amendments coming up now will demonstrate that—we must ensure that we have exceptions. The final point that has been made by many noble Lords here today is that we must have transition time for the social housing sector in all three parts of the country where this Bill applies to make the changes in order that this policy works. We cannot achieve the original purposes of these measures, all of which I think are right, without achieving those three things and without ensuring that we have a sector that can—

[Lord Foulkes of Cumnock]

I have listened very carefully, and the noble Lord’s Welsh eloquence—what do you call it, hwyl?—is impressive, but he has still not made it clear to me whether his speech is in support of the amendment by my noble friend Baroness Hollis.

[Lord German]

My speech, my Lords, is in favour of the policy proposals that are behind this measure, but in order to achieve that this amendment has given us an opportunity to explore the issues that need to be satisfied in order that we can proceed. And hwyl, by the way, is spelt H-W-Y-L, for the record.

[Baroness Hollis of Heigham]

Does that mean, therefore, that the noble Lord supports the DWP definition of underoccupancy in which there can be, except for special groups, no spare bedroom, as opposed to the DCLG one, which I outlined, which allowed at least one bedroom more—and in the latest Parliamentary Answer from Grant Shapps is two bedrooms more? Is that what the noble Lord was saying? We need to be clear where he is coming from on this.

[Lord German]

I cannot answer that question until such time as we have the answer to what our housing stock is, how many are going to move, and for those who are going to move whether there is available housing for them. That was the answer to the question, and the one I will give if the noble Baroness asks me again.

[Baroness Hollis of Heigham]

This is an “in principle” question: what definition of overcrowding or underoccupying is the noble Lord assuming such that the transitional arrangements must seek to meet and adapt to?

[Lord German]

I will repeat the answer that I gave the noble Baroness just now.

[Lord Foulkes of Cumnock]

I have still not had the answer to my question. I do not want him to repeat it, just to clarify it. It was the pronunciation of hwyl I had problems with, not the spelling.

For all his bluster and eloquence, I think the noble Lord has confirmed that he still supports the coalition Government’s dreadful proposals in the Bill. All his questions to the Minister are really just to cover up that fact.

[Baroness Thomas of Winchester]

The noble Lord, Lord Foulkes, is bullying my noble friend, which is outrageous. My noble friend is exploring the issues around this question, which is perfectly valid in Committee.

[Lord German]

If the noble Lord wants me to answer the question, I can answer it, and will answer it in this way; I believe that the three underpinning policies behind this section of this measure are correct, but in order to achieve those we have to answer some of the fundamental questions, which the noble Baroness, Lady Hollis of Heigham, raised earlier on today. I have also tried to seek answers to those questions, because I have not found them. That is what we are here to do, and that is what the Committee stage of a Bill is about, it seems to me, but I am new to this particular Parliament. In the one I have come from, that is what we would do: explore these issues.

[Lord Kirkwood of Kirkhope]

My Lords, I am provoked into joining this discussion, which I was going to leave until the next group of amendments.

First, underoccupation is one of the most serious concerns in this Bill, and I think that those concerns are shared across the Committee. I do not think that it helps to start picking away at the positions of individual members of the Committee at this time. What I think we are trying to do is to make it clear to the Government that the current proposals are unacceptable. They are unacceptable to me for two reasons. One is process—and we touched on the discussion about transition. On 1 April 2013, between 5 per cent and 10 per cent of the case load, which is arguably 67,000 working-age families, will be tipped into debt. It is a brick wall that they cannot avoid. It is very unusual for a social policy change of this magnitude not to have built in a transitional provision.

With a little bit of application and consideration, we might be able to address the issue of overoccupation, which it would be sensible to do in the long term. Speaking for myself, I think that Amendment 44 is close to doing that, although Amendment 40 is not far away. I got a very interesting note from Moat housing the other day, which suggested that:

“Two bedroom properties or below should never be regarded as ‘under-occupied’”.

It is as simple as that. That is another way of expressing it. I do not know what it would cost, but the Committee is right to explore some of these circumstances, which have ramifications for social landlords as well as everyone else. What worries me more than anything else is that on 1 April—that may be an appropriate date—in 2013, that change will be made, and people have very little protection or room for manoeuvre.

The other very interesting suggestion that Moat housing made to me, which I had never heard before, was that a “soft start” could be adopted when people were demonstrating that they were taking steps to address the underoccupation that they were allegedly facing at the time. They could continue to get the full support until they had made the appropriate arrangements. It would probably take 18 months or two years to work out in the wash; that may be too tight a period—it might take longer than that to do safely. As a Committee, we are looking for a safe transition process and a way of limiting the brick wall of debt that 670,000 of our social tenants in the United Kingdom will face on 1 April 2013. That is a matter of concern across the Committee, which I think we should represent to the Government in a way that will occasion constructive change on Report.

--- Later in debate ---

[The Earl of Listowel]

My Lords, before I speak to my amendment in this group, perhaps I may follow the noble Lord, Lord Best, in his concerns about the impact of this move to an underoccupation penalty, particularly on families. It was encouraging to hear from the Minister the results of his survey and some positive outcomes to the changes whereby people will look for work, or think of getting a lodger. However, what concerned me about his comments were the large numbers who might go into arrears. I have observed from my experience of young people leaving care and of other families that people leading chaotic lives tend to think from day to day.

Therefore, given the example given by the noble Baroness, Lady Hollis, if a family in bed and breakfast accommodation were offered a three-bedroom house that seems to suit them but may be too large, they may say, “We will take it and deal with the arrears when they come. We will not think of the future”. Then they end up in arrears and in serious difficulty because they are not able to cope with the worry of being in debt and they do not know what to do. I am grateful to the noble Lord, Lord Best, for highlighting the fact that this issue needs close attention from the Government, and I look forward to learning more about it. He has a good point. This is a serious worry with the underoccupation penalty.

The noble Lord also raised the question of foster carers. Under the current absurd arrangement, foster caring and providing a room to a foster child would not count as a room and in this scenario would count against one. I am not expressing that very clearly, but I think your Lordships understand what I mean. I suppose it might be argued that this will be an incentive for some people to foster if they have a spare room. If the Bill is changed to be made sane, they would not be caught by this part of the legislation.

However, I have two further thoughts. First, there is a real question as to how far one should professionalise foster caring. People should go into foster caring because they love children and want to provide a good home to a child. I know that there is a debate about the professionalisation of foster care but, in principle at least, people should be motivated by caring for children, not making a bit of extra money or saving some money. Secondly, the harms that may arise from this proposal by far outweigh any potential benefits of that kind. If such families get into arrears there is perhaps the cost to the mental health service as the family breaks down under stress. There is the cost to the education system as their children fail. One needs to look at the bigger picture rather than just think about short-term savings.

Perhaps I may sum up. I apologise for using my laptop on this occasion; however, I cannot get internet access today and I was unable to download my notes and print them out. My Amendment 85 is modelled on the previous amendments of the noble Lord, Lord Kirkwood, and I apologise to the Committee because I drafted my amendment rather poorly. I should have referred to children looked after by local authorities rather than those cared for by them. My intention is to gain an assurance from the Minister that families who have their children looked after by a local authority may retain a room for that child to return to when he is ready. While a few children are adopted from care, most return home sooner or later, and it is right that they should have a room when that happens. It is important for the parents to retain a sense that their child remains their child and that they remain the parents. That is important because their children will normally still love their parents, however they have been treated, and will need to feel there is a place for them in their parents’ home. It is important also because the child will eventually return. Generally, we should strongly encourage these parents to retain their sense of responsibility for their own children. An experienced child and family social worker has reminded me that it will also be important for the child to know that his parents will be keeping a room for him. He will need to feel that he is still wanted and there is still a home for him with his parents.

In the year ending 31 March 2011, 3,050 children were adopted out of a population at that time of 65,520 children who were being looked after. Very few children, then, were adopted. Children who are subject to residence orders, or are being cared for informally by the Ryder family, are all the more likely to return to their families. Barnado’s has expressed concern about these children. This matter was also raised by the noble Baroness, Lady Tyler of Enfield, at Second Reading. There is a separate amendment in this group, which I support, on those particular groups of children.

I would be most grateful if the Minister could reassure me that families whose children are looked after by a local authority would not normally be subject to the underoccupation penalty. I apologise if the problem with my drafting has made it more difficult for him to reply. I would certainly find a letter acceptable if that seemed more appropriate in the circumstances.

I will not speak to my Amendment 86 because my understanding is that the benefit arrangements for care leavers are such that the concern I had is not an issue. I look forward to the Minister’s response.

[Lord German]

My Lords, I speak to Amendments 48C, 48D and 86ZZZA in my name. It is appropriate that I should speak after the noble Earl, Lord Listowel, because the issue he raised about care and children coming back from care is crucial. The three amendments in my name all relate to children and are intended to make sure that the suite of amendments here, which I have looked at very carefully, does not miss out one or two crucial groups relating to children.

Amendment 48C and Amendment 86ZZZA relate to disabled children. Amendment 48D relates to families with children in temporary care—and I echo much of what the noble Earl has just said about that matter. First, I turn to Amendment 48C and Amendment 86ZZZA. Families with a disabled child may have an adapted property that has a spare bedroom, but that spare bedroom may be needed for a carer to stay the night, or for a time when it is too disruptive for another child to share a room—that is a very crucial group of children. Disability comes in many forms. It is important that we reflect upon the nature of disability and how that might impact upon particular groups of children. I ask my noble friend the Minister to look at the issue of what having disabled children actually means in terms of the nature of their disability. It could mean not just that a family needs a carer, or equipment or a spare bedroom; it could be that the nature of the disability is such that disruption affects another child in the family in a way that they require a separate room.

The impact assessment carried out by the DWP says that for claimants themselves, or their partners, a bedroom for a carer who provides overnight support will,

“be taken into account in determining the relevant size criteria”.

I wonder whether there has been an error, because it seems very strange to me that the same provision does not apply to claimants’ children. I hope that the Minister can reflect that it is not just the claimants, but claimants’ children, who are important when it comes to disability. Many families with disabled children will have expensive adaptations to their homes. Forcing families with a disabled child to move from an adapted property—as we have already heard—in any field could be extremely expensive. As we know, disabled facilities grants often take a long time to organise. Forcing families with a disabled child to move could be very disruptive for both the child and their family.

The issue that the noble Earl talked about, which is the subject of another amendment in my name, Amendment 48D, is that of children in care for a short period. The noble Earl reflected carefully on an important group for whom the children’s home—that family connection—is still important. We need to avoid their home being taken away from underneath their feet. Parents whose children are in care for a short period will need to retain that spare bedroom to prevent additional barriers to their children being returned to them when the care period ends, for whatever reason. Where children are in short-term care, their parents will have that spare room as soon as their children are put into care when their children will not be living with them, but the room may be vacant for only a short period. It is impossible for anyone in the housing sector to second-guess when the child will be returned home, because the reason for them returning home will remain with the other agencies. It is important that we should not block that out and that it should not be treated as underoccupancy, because that will impact on those vulnerable children and their families who live in social housing at a time when they need intensive support to ensure that we do not encourage family breakdown.

Again, I wonder whether that is an unintended consequence of the Bill: that it will prevent families from having their children returned to them after they have been in care for a short period. It is not in the amendments, but the noble Earl talked about the fact that many children in longer-term care will also return home. The average length of time for longer-term care for children is only just over two years, so there is a wider group who are not reflected in this pair of amendments.

I also wanted to say a few words about foster carers. The danger is that this policy shift may force some foster carers to give up their roles, as well as discourage new foster carers from coming into the system. It will make it very difficult for social workers to place children in an emergency, which is what we need for many children. We have a national shortage of foster carers. About 10,000 are needed across the whole of the UK, and we need spare capacity in the system because many foster carers are short-term carers looking after some of the most vulnerable children, who are often children who have been abused.

I know that the Government do not collect data on the number of foster carers who live in social housing and that there is no breakdown of the number of foster carers claiming welfare benefits, but I am concerned that, because they do not have the figures, the Government do not understand the impact that this change may have on that group. If the Government have the figures, it would be useful to know them. I understand that they do not. The estimate is that about 2,000 foster carers will be affected. When we consider that we are short of 10,000 foster carers, we should not affect 2,000 in this way.

--- Later in debate ---

[Lord German]

My Lords, I was talking just before the break about the number of foster carers who will be affected by the proposal. We do not have the figures because the Government do not collect the right data, but the 2010 survey commissioned by the Fostering Network found that 6 per cent of all families lived in private or social housing. We know that the split between private and social is 32 per cent to 68 per cent. As there are roughly 45,000 foster families in the UK, if we take that figure, there would be approximately 2,700 fostering families in private and social housing and 1,836 in social housing, but those are extrapolation figures. I would be grateful if the Minister could assist us in that matter.

What is critical in this suite of amendments about children is that the Government do not jeopardise our caring for children with disabilities, and particularly our fostering system, by introducing measures that would penalise those groups of children. I hope that the Minister will be able to tell me that that is an unintended consequence, if people believe that we will impact on such groups of children. I hope that the Minister can assure us that those particularly vulnerable groups of children will not be affected by the Bill.

[Baroness Hayter of Kentish Town]

My Lords, I, too, shall speak briefly to Amendment 40 and Amendment 41, which stands in my name and that of my noble friend Lord McKenzie. As has been said, Amendment 40 seeks to ensure that the restrictions on the size criteria for social housing cannot leave a foster carer unable to meet their rent. As has been suggested, as currently drafted, the social sector size criteria and related benefit cuts would hit foster carers who claim benefit. As has been said by the noble Lord, Lord Best, that is because foster children are not counted as part of the household. Therefore, any bedroom that they sleep in is defined as being empty and underoccupied. The Fostering Network has warned that the failure to exempt foster carers from the penalty could lead to a number of them leaving fostering altogether.

As was suggested by my noble friend Lady Hollis in her earlier question, it is indeed a necessity that to be accepted for fostering, carers are required to have spare rooms in their homes for such children. Indeed, if you look at any advertisements for foster parents, they say that a spare room to foster is necessary. In addition, it cannot just be any old room; it is expected that most foster children will have a room to themselves from the age of three upwards, as specified by the minimum standards issued by the Department for Education and Skills. That age is well below the underoccupation rules for birth children who live with their parents.

We all know that social housing can provide a stable, high-quality environment in which to care for children who, for whatever reason, cannot live with their birth families. I am sure that none of us would want to exclude the occupants of social housing from acting as foster carers. I cannot believe that the Government intend that foster carers should face the underoccupation penalty. It is fairly obvious what impact that that would have.

Foster carers can claim housing benefit for the housing needs of their families, but the ones that they look after are not taken into account, which would mean that, just as with any other family, the rooms would count as being underoccupied, despite the fact that children sleep in them, and the foster carers’ benefit could be reduced by 23 per cent for the use of two rooms or 13 per cent for the use of one room used by a foster child. Many foster carers look after two or more children, especially those carers who deal with emergency needs, when a whole family can arrive together, and the availability of not just one but two spare rooms is crucial.

Most foster carers do not receive financial compensation for housing costs at present. They receive allowances towards the care, which include household running costs but not housing per se. Last year, the Government changed the law to exclude foster children from housing benefit claims. The Minister will recall that he wrote that this is because fostering allowances are intended to cover all the costs of looking after a foster child, including housing them. However, that statement is inconsistent with official information about the purpose of fostering allowance. The minimum fostering allowances set by the Governments in Northern Ireland, Wales and England do not include housing costs. In any case, the levels for recommended minimum allowances are far too low to provide realistic compensation for housing costs.

In case it is thought that discretionary housing payments may be available, it is true that foster carers are entitled to apply, but even if this concession was awarded it would be only to a small minority. As other noble Lords have said, there is already a significant shortage of foster carers. If there was a penalty for keeping a room in order to foster, some experienced carers might have to quit altogether. This could have a significant impact, especially in major towns and cities and other areas where rents are particularly high. Accommodation is in short supply, yet the demand for such carers is great. As the noble Lord, Lord German, said, there are about 2,700 fostering families claiming housing benefit. One thing being asked for through the amendments is that the cost of permitting it would be more than offset by the cost involved in losing foster carers, with children therefore having to be kept in care.

It is very hard to overemphasise the value of the work done by foster carers. I should like to take a moment to talk about two families I know, who between them have had more than 120 children through their doors. They have mostly been children who either have difficulties or disabilities themselves, or whose birth families are, for whatever reason, unable to provide a home for them. They do not always arrive in a nice planned way. They can come in the middle of the night, after the death or illness of their only parent, as the result of an assault or, as in one case that one of these families dealt with, when one of the child’s parents had been murdered by the other. The need for a home in the middle of the night and a room for those children cannot be stressed too much. These families are ready to take someone in, often very distressed small children. It is something of which we all need to be aware.

The Local Government Association is particularly concerned that if the proposal should remain unamended, and therefore reduces the likelihood of fostering, as carers are forced to give it up to avoid the penalty, it will be local authorities who pick up the cost, at a time when we are already short of foster families. It is fairly obvious that particularly vulnerable children make up a large proportion of those who are placed in emergency or short-term care. Therefore, we hope that the amendment will get a very warm response.

Amendment 41, in my name and that of my noble friend Lord McKenzie, is there to assist the Minister. It would make an exemption for foster parents to prevent their being subject to any accusations of abuse. I do not believe that there is such abuse, but certain papers like to run scaremongering stories about benefit claimants living in mansions, while there are blogs that talk about people living in enormous eight-bedroom houses in Chelsea, paid for by housing benefit. I have yet to find one. Amendment 41 seeks to protect foster carers from any such accusation. It includes defining,

“the type of property reasonably required for a household which is providing or routinely provides foster care placements”.

So it is to try and help the noble Lord in a very simple way.

The guidelines for good fostering are that there must be a spare room, and that no child over the age of three should be asked to share a bedroom. That is what we would call a suitably sized property, so I very much hope that the Minister can respond positively on the issue of foster care.