Welfare Reform Bill

No, the figure of £2 billion applies to the total saving by the end of the period in 2015 of all the benefit changes, and the particular change here is £0.5 billion per annum on the social sector from 2013-14. Tackling housing benefit expenditure is vital to our combined efforts to reduce the economic deficit. The measures within Clause 68 will help to deliver significant savings affecting housing benefit claims for those living in both the private and social rented sector. Clause 11 will allow us to carry these measures through into universal credit. Starting with Amendment 36 from my noble friend Lord Kirkwood and the noble Lord, Lord Kennedy, I confess that it surprises me because it appears to call for a return to something akin to the local reference rent. This was a system that was difficult for claimants to understand, led to delays as individual rent officer determinations were sought, and it was expensive. It needed an army of rent officers to carry out these case-specific determinations. It is not a system that I would willingly go back to. This amendment would also maintain the status quo for housing benefit in the social rented sector, ignoring a property size in relation to the size of the household. As I have set out, we must take control of housing benefit expenditure across both sectors, but this amendment would do neither. In fact, it would increase costs. I turn to my noble friend’s point on CPI. We will discuss this in more detail in a later group. The CPI uprating will apply across the spending review period, and if it becomes apparent that LHA rates and rents are moving out of step, they can be reconsidered at that point. Amendments 38 and 79 would exclude anyone from this measure who is disabled and lives in adapted accommodation. Unlike Amendment 48 in the name of the noble Baroness, Lady Hollis, this exemption would apply regardless of the extent of the adaptations that have been made. It would also exempt anyone in accommodation who is ““particularly suited”” to the needs of that person. These are extremely broad categories. We have already heard in some detail the issues surrounding claimants living in adapted and specially suited accommodation. The terms of the exemption suggested in these amendments are simply too broad brush. However, as I said in relation to Amendment 48, I want to return to this matter once we have considered it further. Amendments 43 and 83 also touch on similar issues to those discussed in relation to Amendment 48. They would exempt claimants where there is no suitable alternative accommodation, which is classified in the amendment as social rented housing that is also within the claimant’s locality. We cannot contemplate such a wide-ranging exemption. It would be costly to administer and would no doubt apply to those who would, in fact, have paid the shortfall regardless. On Amendments 39 and 80, we estimate that around 200,000 claimants, where only they or their partner receive disability living allowance, will potentially be affected by the size criteria measure. However, this figure does not include other members of the household such as children and non-dependants. An exemption is simply not affordable and may well include many cases for whom an exemption would not be necessary, while missing out other hard cases. To provide a blanket exemption where claimants and partners receive DLA would lead to a reduction in savings of approximately between £130 million and £140 million in 2013-14, and this amendment goes further even than that. Amendment 48C and the peculiarly titled Amendment 86ZZZA would exclude all households where there is a disabled child and again reduce the savings significantly and provide too broad an exemption. In response to the point made by my noble friend Lord German about exemptions for people who require an extra room as a result of a medical condition, we are looking at ways to potentially limit the impact of these changes in a way that is effective and affordable. The most appropriate course of action for the tenant and landlord in such cases will vary, depending on the individual circumstances of the claimant and his or her household. They may choose, for example, to apply for a discretionary housing payment. As for the point raised by the noble Baroness, Lady Campbell, on fluctuating health conditions, local authorities can and do use discretionary housing payments for precisely that purpose. I can inform her that we have worked with the Department of Health on the extra room for a non-resident carer, which will cover that point in the guidance we issue to local authorities. Amendments 40, 41 and 81 are relevant to foster carers. Within universal credit, our intention is to ignore any fostering income and therefore not to include any foster children within the assessment unit. To do otherwise, by treating the child as a family member and the fostering allowance as income, could result in the family being considerably worse off, and as such act as a deterrent to fostering. We have looked at all these combinations very carefully, and have discussed this with the various fostering groups, and I think I am safe in saying that there is broad consensus that this approach is the right one. To pick up the point made by the noble Baroness, Lady Hayter, on whether there was a change in law to housing benefit, I must say that there was not. Rather, we were clarifying what has always been the policy intention of housing benefit—and indeed the policy under the previous Government as well—that housing benefit does not take account of the need for a bedroom for a foster child, and clearly, by the same token, fostering allowances are not treated as income. The fostering allowance comes in as an allowance and is ignored from the point of view of the system. To the extent that a fosterer wants to use part of that money for housing, for extra bedrooms, that is available. Since 2007-08, the Department for Education has produced figures that specify the minimum amount of any fostering allowance. However, there is an expectation that the level of the allowance will be dependent upon the individual circumstances of the fostering arrangement, and it would frequently be expected to be greater, and sometimes much greater, than that set out in the table. For London, for example, the minimum figures range from £129 for babies up to £197 per week for children who are aged between 16 and 17. It changes in different regions. The Government greatly value the work done by foster carers to look after children. My noble friend Lord German made a point about numbers. There are, as he observed, no precise numbers. I was very impressed by his deductions from various others. I think that, bluntly, our figures are probably in line with his. The Government’s position is that up to 5,000 foster carers are also in the benefit system, but, as I say, there are no firm data on this, and we can only speculate. We greatly value the work of fosterers, and the observations made today make me think very hard about the potential issues here. I will commit to looking very carefully at how this group might be affected and whether more needs to be done. The next set of amendments are loosely related. Amendments 85 and 86 relate to households waiting for children to return from care. I know that the noble Earl, Lord Listowel, was more relaxed about Amendment 86, which was about former care leavers, so I will concentrate on Amendment 85. Amendment 48D relates to those where a child of the household is subject to an emergency protection order or interim care order. As in the private rented sector, it is important to avoid the double provision of funding by government, with the needs of the child already being met by the local authority. However, if the arrangement is likely to be short term, this is precisely the type of situation where a discretionary housing payment can be considered by the local authority. As I have already pointed out, an additional £130 million has been made available for that over the spending review period. Amendments 42 and 82 are intended to exempt from the size criteria those in supported accommodation and sheltered housing. As noble Lords will know, we have just held a consultation on the treatment of supported accommodation within housing benefit, which closed on 9 October, and we are currently considering the responses. In the consultation, we proposed that the supported housing of registered providers and registered social landlords who are currently classed as exempt should continue to have their rents considered in the same way as mainstream properties. This means that, generally, rents will continue to be met in full, although we will look at the level of service charges in this sector. It will remain possible for local authorities to refer individual cases to a rent officer if the rent is considered to be unreasonably high. We envisage that people in this type of accommodation will not be affected by the size criteria. An exemption for those underoccupying by only one bedroom, as put forward in Amendments 44 and 84, would result in a reduction in the level of envisaged savings by a very substantial amount—an estimated £300 million annually. We do not automatically allow claimants one extra bedroom in the private rented sector. So there is a substantial affordability issue behind those amendments.