Separated Families Initiative

Debate between Yvonne Fovargue and Sheila Gilmore

Tuesday 21st October 2014 Westminster Hall

[Sheila Gilmore (Edinburgh East) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Streeter. I understand that the Minister for Pensions, who normally leads for the Government on this area, is unable to be here today, but I am sure we can have a helpful and productive debate. I welcome the Minister for Employment in his place.

Within the past year, the Government have made significant changes to child maintenance policy, implementing the legislation that went through as part of the Welfare Reform Act 2012. First, the Child Support Agency has been wound down. Pre-existing child maintenance arrangements, which are used by nearly 2 million parents, are being terminated over the next three years. Secondly, all would-be applicants to its statutory replacement, the child maintenance service, must first talk to the child maintenance options service, where they are encouraged to make their own arrangements instead. Finally, for those parents who choose to use the CMS, a £20 application charge has been introduced, along with collection charges if parents fail to pay maintenance.

The clear policy intent is to encourage parents to sort out their own arrangements following relationship breakdown. The Government’s argument has been—and, I presume, remains—that family-based arrangements, as they are being called, will be better, because payers will be happier to pay if they have made the arrangements themselves. Further to that, the Government have asserted that the statutory system that has been in place for some years makes relationships between separated parties worse, because it creates bad feeling and anger. They think that the system might reduce willingness to pay, and encourage payers to look for a way to avoid payment.

Throughout, I have been a sceptic about that line of argument. In my experience, the circumstances of separation generate considerable anger and distress, and it is those feelings that often have to be worked with and worked through. As the period of separation continues, a failure to pay maintenance causes ongoing bad feeling. We know that parents with care suffer considerable financial detriment after separation. Indeed, generally both parties to a divorce suffer financial detriment, but the parent with care, whatever their gender, is the one who, in all the research, suffers the most. If proper payment arrangements are not in place, considerable resentment and anger can build up.

Given the Government’s approach, and that the reform is partly about trying to get people to change their behaviour, it is hugely important to ensure that parents get the sort of practical help and support they need to enable them to come to workable arrangements, especially given the changes to legal aid, which mean that people might not be getting the level of legal assistance they once had. That is where the £20 million Help and Support for Separated Families programme is supposed to come in. I will henceforth refer to it as HSSF, rather than saying the entire mouthful. I know it is not always terribly friendly to use abbreviations, but not using this one would become cumbersome and clumsy. I am afraid that the research I have undertaken shows that the programme of support for separating and separated families is piecemeal and inadequate.

There are four main initiatives that come under the HSSF programme, and I will set out my concerns on each in turn. The first is the Sorting out Separation service, which is a key online information and support resource for separated parents, signposting them to relevant help. Between November 2012 and January 2014, only 9,132 users clicked on a signpost to an external organisation, compared with the original target of 260,000. More people visited the front page, but the important thing is whether people are following through to get the more detailed help they need, because the initial information on the website is not sufficient to allow people to enter into arrangements. Given that the website cost more than £400,000 to set up—that was the figure by January, at least—it has cost more than £45 for every user signposted. I emphasise that the figures for this year come after an attempted redesign, which has clearly had a limited effect.

An evaluation commissioned by the Department for Work and Pensions and carried out between February and June last year reported that users were often unclear about the purpose of the site and the range of information it offered. They were frustrated by the low level of detail supplied prior to signposting. Videos on the site were felt to be “unreal”, with unrealistically positive endings, and a potentially useful action planning tool was criticised for offering only general signposting and not tailored information. Of particular concern, given that existing formal statutory arrangements are coming to an end, was the finding that the site was “less relevant and useful” for longer-term separated parents. Some 70% of the parents who will have their CSA cases closed have been separated for five years or longer, 40% have no contact with the other parent and 14% describe relations as “not at all friendly”. The inadequacy of the Sorting out Separation service might mean that they will find it unhelpful, and if they find it unhelpful, they will not be able to enter into new informal arrangements and will find themselves back in the formal system through the new CMS.

In April, the Minister for Pensions said that the Department was

“in the process of considering the future direction of the Sorting out Separation web app and will shortly be taking steps to improve the profile of the app through search engine optimisation.”—[Official Report, 8 April 2014; Vol. 579, c. 214W.]

Can the Minister for Employment tell us what the future of the service is, whether usage beyond the home page has risen and what steps have been taken to improve the content so that long-term separated parents are catered for?

The second arm of the HSSF programme funding is the co-ordinated telephone network. It is a telephone service provided by four organisations: Relate, Family Lives, the National Youth Advocacy Service, and Wikivorce. The service began full operation in March 2014 at a cost of £344,000. While I respect all the organisations concerned and the work they do, it is questionable whether they can provide the scale of support necessary for separating and separated parents across the country. Can the Minister tell us more about how the network is working in practice and how many parents have used it?

The third initiative of the HSSF programme is what the Government’s original White Paper referred to as a “quality mark”. It was to

“become a mark that parents can recognise and trust, so they know the service they are accessing is of a consistently high quality and will be able to help them to work together with the other parent.”

It was developed at a cost of £136,500, and 35 organisations have so far been awarded what is now called the HSSF mark. My concern is that the mark is not well understood or even recognised by parents. My impression is that the organisations that put a lot of work into applying for and being awarded the mark have seen little in return. I am unaware of any promotion of the mark to parents by the Department, so I hope that the Minister will be able to tell us what steps are being taken in that regard.

The fourth and most significant element of the HSSF initiative is the innovation fund, which accounted for £14 million of the total £20 million to be spent in the current spending review period up to March 2015. According to the White Paper that preceded the legislation, the fund was set up

“to learn what works best in helping separating and separated parents to collaborate and resolve conflict in order to support their children”.

In the first round of funding in April 2013, £6.5 million was awarded to seven projects across the country over a two-year period. Between them, they anticipated reaching just over 280,000 parents. A second round of funding worth £3.4 million came on stream in April 2014 and was awarded to 10 further projects aiming to reach some 12,800 parents. For the first time, projects aimed at longer-term separated parents were also included. I accept that this is relatively small-scale innovation funding; bearing in mind that nearly 2 million parents who have arrangements through the CSA are being taken off that following the new legislation, innovation projects coming in that will reach only perhaps 8,000 or 10,000 parents will not make much of an impression on the large number of parents affected by this major change.

Since starting in Scotland on 14 March, the family decision making service—one of this year’s funded projects that provides internet and telephone advice from Children 1st, One Parent Families Scotland and the Scottish Child Law Centre—has seen more families making informal arrangements. A particularly innovative aspect of its work has been designing publicity material to appeal more to fathers, which has led to more men using the service than would typically be expected. However, only 13 months’ funding was made available, which is a very short time in which to judge the success of any project.

Moving beyond anecdotal evidence of performance is difficult. In the 18 months since the first tranche of money was awarded, we have received little in the way of objective information. In March, we learned in a parliamentary answer that, as at 31 January 2014, 3,724 parents had participated in the seven first-round projects. Although it was early days—I know that the Relate project started late—that does seem low nearly halfway through the two-year funding period compared with the expected figure of over 280,000 parents by the end of the round-one projects. Unless there has been substantial take-up since then, we will fall far short of what is still a modest number of parents coming into contact with such help and advice. Will the Minister give us an update on the numbers of parents who have participated in the seven round-one projects so far and how that compares with expected levels at this stage?

Evaluation has also been significantly delayed, partly due to Department concerns around data protection. That is particularly problematic given that many projects are coming to an end and closing, and staff are likely to move into new employment, meaning that any evaluation that does take place will happen while the projects are winding down, which seems unsatisfactory. Earlier this year, the Minister for Pensions confirmed that the Government were in the process of appointing an external specialist to lead on the evaluation work. Is the Minister who is present today in a position to tell us whether an external evaluator has been appointed, who they will be and what the time scale of the evaluation will be?

This is about not just getting the evaluation started, but what the criteria will be. It was disappointing to hear the Minister for Pensions state in January that the evaluation criteria for the 17 projects would be published with the final results. We therefore do not know the criteria, and will not know them until the evaluation has been carried out, so people have not had the opportunity to comment on whether the evaluation is appropriate. The difficulty that that presents is that, as far as I can establish, the evaluation will not include receipt of child maintenance as one of the criteria by which the success of the projects aimed at improving parental collaboration will be judged. That is despite the fact that the innovation fund projects flow directly from the child maintenance reforms, and despite the White Paper stating that the initiatives would

“seek to support parents to reach their own arrangements, therefore avoiding both the statutory child maintenance system”.

It seems odd that that particular aspect is not to be evaluated in the process. We will not necessarily know, even at the end, whether there has been any significant success in getting people to not only meet and talk, but enter into family-based arrangements, and in getting maintenance flowing.

The HSSF funding ends in March 2015. My final questions concern what future funding will be made available to support the initiative.

[Yvonne Fovargue (Makerfield) (Lab)]

My hon. Friend is making an excellent speech on an important subject, and I congratulate her on securing this debate. She mentioned the schemes that have gone ahead, but is she as concerned as I am about the parts that did not go ahead—the local and face-to-face support that people were to be get in places where they felt comfortable? I know from personal experience how difficult separation is when one has a young child. There are many new agencies to contact, but is it not important that people can access advice from places where they feel comfortable?

[Sheila Gilmore]

I thank my hon. Friend for her intervention. That is a hugely important part of the process. It is all very well to have information available through modern methods of dissemination—being able to get basic information online cannot be a bad thing—but signposting to other places appears to be lacking.

The process is personal and can lead to difficult periods in most people’s lives, and people do not necessarily get the best information from word of mouth. Family and friends can offer emotional support, but they do not always give people the best advice in such situations. As a family lawyer, I met people who had been told weird and wonderful things about what they could or could not get. Such sources can also be out of date, because people will talk about things that happened to them in the past. However useful such advice can be as a starting point, it is crucial that those who want to get more personal advice—many will—can do so, whether one-to-one, or in a group setting where people feel comfortable and can ask the silly questions that it takes confidence to ask. We do not appear to have reached the stage of even looking at that, but it is important that we do.

On the March 2015 date, and the innovation projects set up to test what worked and what did not, it would be helpful to know how much information we will have, because there has been little evaluation so far. What guarantees do we have that what has been found to work will be scaled up to the numbers necessary? Even beyond 2015, more than 1 million parents will have arrangements with the CSA that have yet to be closed down. In addition, all the people with new separations, whose relationships are only beginning to break down, will want to come forward for help. What system will be in place to help those families sort out their child maintenance collaboratively? If the Government are serious about wanting people to make such arrangements so that maintenance is paid for the benefit of the children, we have to ensure that proper support and advice is in place.

Under-Occupancy Penalty (North-West)

Debate between Yvonne Fovargue and Sheila Gilmore

Tuesday 25th March 2014 Westminster Hall

[Yvonne Fovargue (Makerfield) (Lab)]

Thank you, Ms Dorries, for calling me to speak. It is a pleasure to serve under your chairmanship.

We are fast approaching the first anniversary of the bedroom tax, as I prefer to call it. Anniversaries are usually pleasant occasions, a time to celebrate and congratulate, but not this one. The legacy of the new tax is not benign; it is cruel and unfair. The tax has heaped hardship and misery on families already struggling with the rising cost of living and the increased personal indebtedness that have characterised the past few years. This is not the building-up of debt to pay for luxury items, as some would have it. Instead, increasing numbers of people are getting into arrears on basic household essentials such as food, rent and fuel.

Clearly, many of those people are turning to payday loans to get themselves through the week—borrowing to pay borrowing. The situation is all the more worrying because people are not only struggling to pay their everyday bills, which are increased by this cruel and unfair tax, but using high-cost credit to make ends meet. That results only in a downward spiral into further and further debt, with potentially catastrophic results. As Stepchange said in its response to the Work and Pensions Committee inquiry:

“Households struggling to meet rental payments are far more likely to have high-cost credit—33 percent of tenants with rent arrears have payday loans, a two-thirds increase on those without rent arrears…Because of the urgent and regular nature of rental payments, we are particularly concerned about people facing payment difficulties turning to payday loans. Analysis of our clients shows that those with rent arrears are far more likely to have at least one payday loan.”

The bedroom tax simply adds another layer to the problems that people face.

Many social housing landlords work to help their tenants to improve their income, but they are faced with an impossible situation. Many housing associations have invested millions of pounds to mitigate the effects of the bedroom tax, or spare room subsidy. Housing associations with tenants who have been affected spent on average £73,250, including on welfare and financial advice services, before April 2013 to help their residents to prepare and cope. Wigan and Leigh Housing, in my constituency, manages 22,500 properties on behalf of Wigan council. Recently, it had to deal with a tenant in arrears who also had more than 15 concurrent payday loans and no visible income other than benefits.

The fact is that the extra charge has tipped many households who were struggling but just coping into an unmanageable situation. Now many of those people are at risk of being evicted because they simply cannot find the extra money to pay their rent. Why has that happened? It has happened because people in social housing have been given a false choice, or rather no choice at all. They are told to move to a smaller property, or else pay the difference. Well, they cannot do so. There simply are not enough smaller homes to go around.

In Wigan in my constituency, we have a shortage of one and two-bedroom properties, so people who have had their housing benefit slashed have nowhere to go to. That is true of much of the north-west and indeed the north-east. It is not often that I agree with Lord Tebbit, but he said that spare rooms are “vital”. He said on the tax:

“I think we introduced that rather without thinking it through very well”.

Many social landlords in the north-west would agree with that .

In my constituency, 3,300 tenants are affected, with the reductions in housing benefit ranging from £517 a year to £1,273 a year. If those sums are to be found from somewhere, it is most likely they will be found by cutting down on essentials such as heating and food, because after all people must have a roof over their head. Often, the sums cannot be found, so arrears are rising.

Last month, a survey of the English housing associations carried out for the National Housing Federation by Ipsos MORI found that more than two thirds of their residents who have been hit by the bedroom tax are in rent arrears. That is the national average; the figure is higher in the north-west. In fact, the north-west has been the hardest hit part of the country, with 83,000 people seeing a cut in their housing benefit last year, according to the Department for Work and Pensions’ own figures. In fact, that could be a serious underestimate; the figure could be as high as 110,000 people.

The DWP’s figures also show that Manchester is the hardest hit city, with more than 11,300 households affected and an average shortfall of a whopping £724 per year. Other cities such as Liverpool are not far behind. More than 10,700 families in Liverpool are coping with a housing benefit reduction. Data collected from 15 social landlords operating in Merseyside, including the Halton Housing Trust, Liverpool Mutual Homes and Riverside, found that arrears rose from £21.2 million at the end of December 2012 to £22.9 million at the end of December 2013, a rise of £1.7 million.

I will now cite some findings from the excellent Real Life Reform report. Statistics are often used to prove and disprove policies, but it is worth remembering that this change and all the other welfare policy changes impact on people’s homes and their lives. These reports give social housing tenants the chance to be heard and I am grateful for this opportunity to share tenants’ views and experiences.

Perhaps it is worth noting a comment from the facilitator of the report. She is a communications officer, not a front-line housing officer, and she was profoundly moved by the stories. She says that the people who contribute to such reports do not match the stereotypes of social housing tenants on benefits. They do not drink or smoke. They all work. They run voluntary groups. They have children doing well at school or university, or children bringing up their own families. They are dignified and private people who want to make meaningful contributions to their families and communities. However, they are desperately worried about how they will pay their basic bills. They are concerned about how their families are being affected. They are choosing between eating or heating and, most tellingly of all, they have given up hope of being happy. In total, 76% of the people surveyed in the report said that they were rarely optimistic and 55% said that they were never optimistic.

What of discretionary housing payments, a limited emergency fund provided for the most vulnerable households? Yes, they have helped some households to manage their situation better. However, there is simply not enough money going round and the stress of continually applying for a fund that is discretionary cannot be underestimated. It is no wonder that 83% of participants in the Real Life Reform report felt that their health, particularly their mental health, was being negatively affected.

Wigan and Leigh Housing has used discretionary housing payments to help to reduce the number of people facing debt from the bedroom tax, but it has only managed a reduction from 73% to 63%. During the past year, applications for such payments have risen by 302% on average in the north-west, but the overall arrears keep rising and with them the threat of eviction.

Housing associations and councils are doing all they can to avoid evicting residents, but they cannot simply write off unpaid rent. Many of them have to spend huge sums in legal fees to recover unpaid rents. There are other costs, too. What is not fully appreciated is the increase in tenancies ending through a notice or people simply abandoning their properties and walking away. Each vacant property costs an average of £3,000 to repair prior to re-letting. In my area, many are being left empty because we simply cannot let the four-bedroom properties. People do not want to take four-bedroom properties, particularly those in the one block of maisonettes that we have.

[Sheila Gilmore (Edinburgh East) (Lab)]

In talking about her own region, my hon. Friend is surely illustrating exactly why this tax was poorly planned and poorly thought out. There was talk about 1 million spare bedrooms, but the mix of housing and the size of housing are distributed so differently across the country. In my area, we have a shortage of large houses as well as a shortage of small houses. We cannot have a one-size-fits-all policy in this way.

[Yvonne Fovargue]

I agree. People are not chess pieces. They have lives, families and communities and simply will not move from Wigan to London or London to Wigan; it is not as easy as that. For example, some people, including a constituent of mine, have family support networks, but she is being asked to move, although her mother lives down the road and looks after her daughter daily, sometimes overnight while she works. If she has to move away because she cannot afford the spare room subsidy, she will be penalised and may have to give up her job.

There are lots of other costs as well. Many people live in adapted properties with a spare room. My constituent, Clare, is paraplegic and blind. She has two carers, 24 hours a day, but under the rules was only allowed a bedroom for one of them. Her property had significant adaptations and, should she move to a smaller property, the cost to adapt it would run into tens of thousands. She is depending on discretionary payments to stay in her current property and has to reapply every 13 weeks, with the stress that that brings. This penalty affects the sick and disabled and it makes no moral or financial sense.

I just want to make a quick aside about fairness. It is often said that the policy brings parity with the private rented sector. However, the penalty was introduced retrospectively, when local housing allowance was introduced for new tenancies. People could then make a choice when choosing a home. This tax affects people who have lived among friends and family for years, have built their lives in a community and are forced to pay to stay there or look elsewhere—in my constituency, that is often in the more expensive private sector, due to the shortage of one and two-bedroom properties.

We in the Opposition have been clear that we will scrap the bedroom tax because it is cruel and unfair. The chief executive of the National Housing Federation described the policy as

“an unfair, ill-planned disaster that is hurting our poorest families.”

I agree, but we will not scrap it just because of that. It does not work on any level. There is now a risk that the bedroom tax will cost more money than it saves. The National Housing Federation has said that the savings claimed by the Government are “highly questionable”, partly because those forced to move to the private rented sector will end up costing more in housing benefit. Nor does the policy deal with the problem of under-occupation. In fact, the Government’s costings on the yield raised from the under-occupation subsidy explicitly assume that people do not move into smaller properties. The DWP’s own impact assessment states:

“In many areas”—

as my hon. Friend the hon. Member for Edinburgh East (Sheila Gilmore) said—

“this mismatch could mean that there are insufficient properties to enable tenants to move to accommodation of an appropriate size even if tenants wished to move and landlords were able to facilitate this movement.”

In Wigan, it would take more than seven years, at current vacancy levels, to re-house even the 30% of people affected who might wish to downsize.

It is clear that this policy, and any savings predicated on it, depend on people choosing to pay to stay in their communities, near friends and families. It affects those with disabilities, those struggling to get by and it is having a negative impact on their mental health. It is putting additional costs and pressures on social housing providers and, perversely, it is likely to increase the housing benefit bill by forcing people into the more expensive private sector. One year on, it is time to think again and repeal this unfair and unworkable policy.

Council Tax Benefit Localisation

Debate between Yvonne Fovargue and Sheila Gilmore

Wednesday 27th June 2012 Westminster Hall

[Yvonne Fovargue]

My right hon. Friend must have read my notes, because I am coming to the Institute for Fiscal Studies. It warned that limiting spending will give councils an incentive to discourage low-income families from living in the area. As in the past, they will be left to chase desperately poor people through the courts for small amounts of unpaid tax. During the 1990s, I worked in an advice agency; I can honestly say that I do not want a repeat of the poll tax debacle. That policy, like the current one, involved the poorest people paying the most in the most deprived boroughs.

When I look at the options being considered by Wigan council, I despair. Wigan has an excellent council with an enviable track record of working with employers, and a very active local chamber of commerce that provides new employment opportunities and supports existing businesses. However, given the difficult economic climate, and despite active promotion of employment and growth, Morrisons recently announced the closure of Rathbones bakery, with 160 job losses. Any closure or relocation of a major employer places an increased burden on already hard-pressed councils, and insisting that they collect a small amount of council tax from people adds to that burden and puts them in an impossible position.

The issue is compounded by the fact that the grant is predicated on the amount of benefit in the previous year, so any large influx of people into the council tax benefit system will have a destabilising effect on the council’s budget. Indeed, there may be a perverse incentive to encourage such people to leave the borough—a return to the poll tax scenario.

Wigan and similar local authorities have stark choices. They could abolish backdating for working-age customers, but savings would be minimal. They could abolish the second adult rebate, but the savings would also be minimal. They could establish a weekly minimum payment of £1 upwards, but again the savings would be minimal. They could change the capital disregards on a sliding scale, penalising people who save, but, once more, the savings would be minimal. They could disregard income from child benefit, maintenance payments and disability benefits, but that would hit the most vulnerable the hardest and could be open to challenge on grounds of discrimination.

Such a move would certainly save money, albeit with the greatest cost falling on the most vulnerable. Awards could be capped at a percentage of liability, which could deliver savings, but, as my right hon. Friend the Member for East Ham (Stephen Timms) said, given the huge increase in the number of council tax bills, collection would be very difficult because some people would be paying council tax for the first time. That would lead to an increase in collection costs. Again, there are echoes of the poll tax.

The new scheme would have to be in place by January 2013 with the IT changes completed and ready to go online. Is the Minister confident that the IT systems will be in place in time for an introduction in 2013? My local authority certainly has worries about that. It wants to know how progress of the IT systems will be monitored, and how they will be supported in their introduction.

Another issue that localisation of council tax benefit raises is its relationship, or not, with the universal credit. The credit is supposed to simplify the benefits system, reducing the number of different benefits and means tests. Keeping council tax support separate and allowing it to vary throughout the country surely undermines that simplification. Universal credit was supposed to rationalise work incentives by replacing the jumble of overlapping benefits with one single means test. That may vary throughout the country, so how will people judge how well work will pay, if it does, in different areas? Will the Minister explain how work will always pay, given that a localised scheme will be introduced prior to the universal credit? How will the two line up and interrelate?

That is not the only change that will affect working families in April 2013. For those who also claim housing benefit—let us not forget that seven out of eight housing benefit claimants are in low-paid employment—the outlook is even more bleak. The under-occupation penalty or bedroom tax will also come into effect. Wigan has a shortage of one-bedroom properties, and more than 8,000 residents are under-occupying. They will be unable to move, because we simply do not have one-bedroom properties, so they will face a minimum 15% reduction in housing benefit—approximately £12 a week.

The increase in deductions for non-dependants is already increasing by approximately 30% a year. In 2013, the deductions will be almost double what they were in 2010.

[Sheila Gilmore (Edinburgh East) (Lab)]

It is interesting that my hon. Friend mentions the non-dependant deduction in relation to housing benefit. Was she as surprised as I was that the Prime Minister said in a speech on Monday that it was dreadful that housing benefit was lost if an adult child went into work? He did not seem to realise that his own Government had just substantially increased the deduction.

[Yvonne Fovargue]

Yes, that was somewhat surprising.

This is a difficult period in which to be a young person. The single room rent changes for the under-35s looking to rent privately are coming in, limiting housing benefit to £57.73, when a one-bedroom flat in Wigan costs approximately £90 a week.

Singly, any one of the changes will affect people on a low wage in a way that is extremely hard to cope with; cumulatively, they could well deliver a fatal blow. It is well reported that only a small decrease in income will push a struggling family from the position of just about managing to pay their bills to that of not coping, and sinking into unmanageable debt.

Mr Howarth, you would not expect me to miss an opportunity to remind hon. Members that the advice agencies that were hitherto there to help people and rescue them from that struggle are also struggling, and that the removal from the scope of legal aid welfare benefits and most debt work will have a significant impact on those agencies. That is coupled with the local authority reductions in funding, which could be even larger given the measure under discussion and the cuts that local authorities may have to make. There may be little or no support for people who could face the loss of their liberty due to council tax arrears.

As the Select Committee on Communities and Local Government stated:

“The proposals for the localisation of council tax support seem to us to provide an illusion of delegation with a minimum of real discretion, virtually guaranteeing that the funds available to support working-age…people will be squeezed.”

These hard-working families are already squeezed; councils are squeezed; and it is inevitable that, yet again, the poor and the vulnerable will suffer.

Disability Benefits and Social Care

Debate between Yvonne Fovargue and Sheila Gilmore

Wednesday 20th June 2012 Commons Chamber

[Sheila Gilmore (Edinburgh East) (Lab)]

A lot of strange things have been said by Government Members: they say that the Labour Government did nothing to reform benefits, yet say, “You invented the work capability assessment, so you’re responsible for it.” It cannot be both. As a new Member in 2010, I came here intent on criticising the implementation, not the principle, of WCA, regardless of who formed the Government. I made that clear in one of my first speeches. The fact that someone might think it a good thing, in principle, to carry out an assessment does not mean that the specific form of assessment we have been using has worked.

I want to talk, in particular, about how the change from disability living allowance to personal independent payments is likely to take place. I draw attention to a report published in Scotland and based on work by the Learning Disability Alliance Scotland, which took the proposed test, as published, and ran workshops with about 135 people with learning disabilities to see how the test would work in practice. It found that 12% of DLA recipients would not be awarded PIP. Given that there are 24,500 people with learning disabilities in Scotland, nearly 3,000 could be at risk of losing their entitlement.

The report refers to one case study involving a woman with Down’s syndrome living in the Gorgie area of Edinburgh. At the moment, she receives the low level of the care and mobility components of DLA, which makes a huge difference to her life. The care component means that she can cook meals with fresh food, which is particularly important to people with Down’s syndrome, and the mobility component allows her to get reliably to and from her part-time job in a local supermarket. She can afford the bus fares and can get a taxi if she makes a mistake or gets lost. The awards also help her to cover additional costs. For example, a learning disability means that sometimes she leaves the heating on by mistake and so has higher heating bills. Her DLA means that she can pay these bills without too much worry and difficulty. Under the proposed test, however, she scored only four points, which would mean her losing £41 a week, or £2,000 a year.

The report found that 30% of those in receipt of the mobility component and 40% of those in receipt of the care component would receive less under PIP. For example, Frankie, who lives in a small town in a small group home run by a voluntary organisation, receives nine hours of support a week from paid staff as part of his living accommodation. He has a learning disability, cannot read, has a long-term health condition that requires periods in hospital and has mobility problems. At the moment, he receives the medium rate care component and higher rate mobility component of DLA. Under the PIP assessment, he scored some points in some areas, such as living needs—he needs help using appliances and understanding written communications—but that amounted to only seven points. That means he would not get those benefits and would be £85 a week worse off—£4,400 a year.

[Yvonne Fovargue (Makerfield) (Lab)]

Does my hon. Friend agree that the changes to the legal aid system whereby access to welfare benefits advice will either be severely curtailed or not available at all will severely affect people’s attempts to appeal against these decisions, which appear perverse?

[Sheila Gilmore]

As my hon. Friend says, there are considerable problems with people being able to access legal advice on making appeals, but it is extremely difficult to access advice generally, given the cuts. We are certainly seeing that in my city, where the advice shop—one of the main advice centres—cannot see people for two weeks. Consequently, appointments are made two weeks in advance. Following an assessment result, people sometimes get a letter telling them that they have three weeks in which to appeal, yet it is difficult for them to get even basic advice in order to make an appeal. That is the reality that people are facing on the ground, so we need to look hard at the proposed tests.

Another important aspect of this debate—the Select Committee on Work and Pensions draw attention to this, and I hope that the Minister will consider it seriously—is that if we follow the pattern used with the employment and support allowance, people will be tested and re-tested, even though nothing in their circumstances has changed. One of the Select Committee’s recommendations was that limits should be placed on the number of re-tests under the new PIP. That is not to say that people should not be tested, but if they are re-tested constantly we may run into the problem of people having their next test virtually before they have finished their last test or their last appeal. That is not helpful, particularly for people with mental health problems, for example.

Basic Bank Accounts (Scotland)

Debate between Yvonne Fovargue and Sheila Gilmore

Wednesday 19th January 2011 Westminster Hall

[Sheila Gilmore]

I very much do. At present, only two of the mainstream banks allow undischarged bankrupts to open a basic bank account, and that creates a difficulty in Scotland in particular. One is the Co-operative bank, but it has few branches in Scotland, even with the merger with Britannia; the other is Barclays, which does not operate in many places in Scotland. In Edinburgh, there are only two Barclays branches. They are near each other in the centre of the city, so it is difficult for people to access any bank in Edinburgh that would enable them to have a basic bank account if they are an undischarged bankrupt.

There are also issues around high bank charges, which can lead people to abandon their bank accounts. For instance, a direct debit comes in at a time when there is no money in the account. They are unaware of that, and a bank charge is levied. Ironically, some people found that doorstep lenders who would be more expensive in the long term were more sympathetic and easier to use. They would allow a payment to be missed occasionally. We know that that is an expensive way of working, but the inflexibility of banks and an automatic bank charge when one is on a marginal income anyway put people off.

[Yvonne Fovargue (Makerfield) (Lab)]

Recent research has found that 60% of people go to the high-cost pay-day lenders to consolidate their borrowing. Does my hon. Friend agree that access to a bank account may prevent some of that from happening?

[Sheila Gilmore]

I agree that we need to stop that happening, and bank accounts are one way of doing so, although we must also take other measures.

How can we make further progress? My submission is that banks should be legally required to offer a basic bank account when an application for a current account has been refused. That was proposed in the March 2010 Budget and was a commitment in Labour’s 2010 election manifesto.

The Government also have a role in encouraging mainstream banks to use all the best practice and not to introduce obstacles such as those that several of my hon. Friends and I have discussed. That includes ensuring that undischarged bankrupts are allowed to open bank accounts and that people with no credit history are given access. Banks should market such basic accounts fully, and staff should be trained and encouraged to do so. The ID requirement should be reviewed and, again, staff should be clear about what is necessary; they should not over-ask, which puts people off. If, even with such changes, banks have to or feel that they have to refuse an application, they should at least be obliged to give people information about alternatives.

The Government need to support alternative providers for people on low incomes, including credit unions and community development financial institutions such as Scotcash in Glasgow, which not only offers loans but has been giving people assistance with basic bank accounts. In its second year of operation, Scotcash assisted 553 individuals to open a basic bank account. However, such organisations depend on a relatively high degree of public support, and it is important to consider ways of helping those institutions to grow further. Many were able to get started because of the previous Government’s £100 million growth fund. If that fund does not continue, many will have to reduce their operations in future years. Reforming community interest tax relief would assist them, as would keeping mainstream banks to their previous commitment to help such community financial institutions—most have not kept that commitment. The debate is not primarily about savings or credit, but such points illustrate how all the issues are linked and how the Government need to have an overall financial inclusion strategy and to act upon it.

I have some specific questions for the Minister. First, will the Government commit to establishing a universal right to a basic bank account? Secondly, will they continue the work of the Treasury’s Financial Inclusion Taskforce after the end of the current financial year, because it has been behind so many measures? Thirdly, how will they encourage banks to remove current obstacles to securing a basic bank account, as outlined? Fourthly, how will they support alternative mechanisms for those for whom a bank account may still be impossible or undesirable?

I have a couple of specific proposals for the Minister. What practical and financial support can be given to enable post offices and credit unions to enter partnerships? In the short time that I have been in the House, there has been much discussion but no specific action allowing that to happen. If post offices do that, there is a cost, which the post office network perhaps feels is difficult to meet at this stage in its operations, but the Government could assist.