Welfare Reform Bill

My Lords, noble Lords of a certain age and with long memories—particularly the noble Lord, Lord Newton of Braintree, who unfortunately cannot be in his place this afternoon, but who has very kindly said that I can tell the Committee that he is in sympathy with what I am about to say—will appreciate the irony of me rising to defend the Social Fund. Back in the mid-1980s, when I was at the Child Poverty Action Group, I was trying to convince your Lordships’ House to reject the introduction of the discretionary Social Fund in place of single payments made as a right to help people with one-off needs they were unable to meet out of their weekly benefit. Although I am defending the Social Fund today, I am not claiming that it does not need reform. Clearly there is a consensus that there are problems. However, nothing the Government have said has convinced me and many of those closer to the ground than I am that Clause 69 is the solution to those problems. The clause abolishes discretionary community care grants and crisis loans. In their place, local authorities in England will have the power, but not the duty, to provide assistance using money transferred from the DWP without ring-fencing. The devolved Administrations in Scotland and Wales will decide their own arrangements. I will focus my remarks on England, but I hope that other noble Lords will be able to provide a perspective for the other nations. The noble Lord, Lord Wigley, has apologised as unfortunately he has had to return to Wales this afternoon. The Social Fund provides vital cash assistance. It is, in effect, the ultimate safety net. CCGs are intended to help vulnerable adults establish themselves or remain in the community. As well as their emphasis on helping people live independently in the community, they are also available to people on benefit who face exceptional pressure, such as family breakdown and long-term illness. Interest-free crisis loans are normally payable when an applicant can show that they are the only way to avoid serious damage or risk to health and safety, although the qualifying conditions have been tightened up recently. According to research by Crisis, 94 per cent of housing advisers working in private rented sector access schemes which help vulnerable people into private accommodation say that crisis loans and CCGs are vital or important to their work. Local authorities are not being asked to administer a locally provided social fund. The discretionary Social Fund is being abolished. There will be no requirement on local authorities to provide cash assistance or, indeed, any assistance. All the signs are that most local authorities will provide any help in kind, rather than in cash. This has raised fears of stigmatisation, lack of choice and the undermining of financial independence. Moreover, the Parliamentary Under-Secretary of State, Maria Miller, told the Public Bill Committee in the other place that the new service may not necessarily be an application-based service. If I were writing the Minister’s brief, I would cite the recent Communities and Local Government Committee report, Localisation issues in welfare reform, which supports the proposal to devolve responsibility for the discretionary Social Fund, so I will get in first and point out that the report also acknowledges that there is legitimate debate about whether localisation will in itself be an adequate remedy for the long-standing problems of the Social Fund. It expresses some reservations to which I will return in relation to the amendments before us. Having read the oral evidence and some of the written evidence to the CLG Committee, it does not seem to me that the main conclusions of the report reflect the balance of that evidence, and I have to say that I place more store on the views of, for example, Citizens Advice and the Social Fund Commissioner than those of the committee itself. The commissioner warns that: "““With over 150 local authorities in England, there is a high risk that a scheme providing unbounded discretion in each of those areas could result in geographical inequities that do not correlate with local needs … in the absence of any guidelines or criteria that set parameters for local discretion, it will be difficult to achieve some broad consistency of purpose and approach””." In other words, localisation could aggravate rather than address one of the Social Fund’s current problems. The commissioner concluded that: "““There must continue to be a safety net for poor and vulnerable people because their needs will not disappear””." As I will argue in a moment, without a ring-fenced budget, there can be no assurance that there will continue to be any sort of safety net. Alan Barton, the social policy officer for Citizens Advice, in his oral evidence disputed the DWP’s characterisation of CCGs as delivering a social care package. He explained that: "““To a large extent, we are talking about items with which people furnish their properties””." Many of those needing such items will not be in touch with local authorities. An analysis of 500 applications to the discretionary Social Fund by the Social Fund Commissioner found that: "““A significant number of vulnerable people trying to create or re-establish or remain in a secure home, who have ‘slipped through the net’ and receive no support””," from other support services. With regard to crisis loans, Mr Barton acknowledged that, "““schemes for second-hand furniture, white goods, food banks and credit unions … are helpful to low-income people””," but added that, "““we see considerable numbers who are in desperate need of cash to buy food and top up their electricity or gas cards when they do not have any light or heating in the house. It seems that there will be no provision for them under the new arrangements. They will have to go to charities that are already under huge pressure; credit unions, which are very patchy and charge quite high interest rates; high-cost lenders—a survey that we did with our advisers showed that 67% of them had seen people go to high-cost lenders when they had not got money from the social fund—or I suppose they might just go hungry or cold””." That is the view of Citizens Advice. Growing numbers are already turning to food banks. As Shelter argues, food banks should be seen as a last resort and, "““not become an established part of the welfare state. Shelter’s services staff observe that where clients have resorted to food banks many feel embarrassed and demeaned””." Family Action, which together with a wide range of charities is supporting these amendments, warns that charities such as it will not be able to cope. It fears that in the worst case scenario, there will be greater resort to loan sharks—a fear that I have already expressed with regard to the move to monthly payments. One of the main arguments put forward to justify this change is that local authorities are better placed to provide this kind of help. In his oral evidence to the Public Bill Committee, the Secretary of State painted a picture of a, "““person sitting or standing in front of a local authority””." That is contrasted with the remote decision-making under the present scheme. However, there is no guarantee that a transfer to local authorities will necessarily mean localised face-to-face decision making. Some authorities might choose to contract out any service, and there is nothing to stop them processing claims remotely or by phone. I am advised by Family Action that Westminster council recently announced that its emergency response team, covering social services activity involving children’s and adult social services, emergency repairs, homelessness and emergency lifeline calls will be moving to Dingwall in Scotland. As Family Action observed, it is unclear how staff based 850 miles away could be expected to deliver a more local service. This clause is about the abolition of the discretionary Social Fund, not its better targeting, as has been claimed. I believe that the case for localisation has not been made convincingly, and on this basis, I oppose that the clause stand part of the Bill. The arguments I have put so far also support Amendments 86ZZZB to 86ZZZF, to which I now turn. The most important of these is Amendment 86ZZZB, which requires ring-fencing of the money devolved to local authorities in lieu of the Social Fund, for without it we have no way of ensuring that this money will be spent on meeting the needs that CCGs and crisis loans would previously have met. If I express scepticism that local authorities will carefully set aside this money for the purposes for which it was intended, that is not intended as a criticism of local authorities. However, let us be realistic: local authorities are under tremendous pressure at present to meet even their statutory duties, as funding is cut back. Sir Richard Tilt, the then chair of SSAC and a former Social Fund commissioner—a highly respected one—told the Public Bill Committee that it did not seem, "““very likely that local authorities””," would provide the kind of ““final safety net””, provided by the Social Fund, "““for the poorest and most vulnerable””." He observed that, in his experience, local authority ““provision is patchy””. The precedent created by the removal of ring-fencing from supporting people funds, also designed to help vulnerable groups, does not inspire optimism. Research by Homeless Link indicates that two in five local authorities are making disproportionate cuts in this budget, relative to the settlement received, while, according to Crisis, authorities are in practice cutting 13 per cent on average, although the overall cut in the supporting people budget is only 2.7 per cent. The amount allocated to each local authority is likely to be pretty small. Sir Richard Tilt expressed particular concern about the implications for CCGs, telling the Public Bill Committee in the other place: "““By the time you … have dished that out to 100 plus local authorities, there will not be a great amount of money at local level, and I think, as it is not ring-fenced, it is likely to disappear into other things””." His concerns were echoed by Professor Elaine Kempson, a member of SSAC, who argued that without ring-fencing, "““will find even less fairness than the Public Accounts Committee found when it inquired into the current social fund””." In her view, ring-fencing, "““is the very least that is needed””.—[Official Report, Commons, Welfare Reform Bill Committee, 24/3/11; cols. 82-83]" —a view reflected in many responses to the DWP’s call for evidence. I acknowledge that the CLG Committee did not endorse this position because it believed that it is desirable that local authorities have autonomy to use the resource in innovative ways. However, ring-fencing a resource does not deprive a local authority of such autonomy; it simply prevents it using it for some other purpose entirely. I hope therefore that the Minister will be willing to give serious consideration to this amendment in order to preserve a vital safety net. Amendment 86ZZZC addresses the fears voiced by voluntary organisations such as Family Action, Women’s Aid and Platform 51 that local authorities might impose a local or residence condition as a way of rationing assistance. Local authorities can apply such a condition when allocating social housing, other than when they are prohibited from doing so by law in the case of priority need groups. In the Public Bill Committee, Karen Buck MP raised this issue, citing an earlier exchange with the Secretary of State, whom she had asked: "““And we can protect against local authorities saying that this is not their duty with particular individuals?””." He replied, ““It is their duty””. When she then asked, "““Whose duty would it be?””," he responded: "““It is a moral duty””.—[Official Report, Commons, Welfare Reform Bill Committee, 24/3/11; col. 164]" A moral duty is fine, but I doubt whether quoting the Secretary of State to that effect would cut much ice with a local authority. If the Government believe that there is a moral duty, they should make it a statutory duty. The amendment reflects in particular fears that a local connection rule could be used against groups such as homeless people, ex-prisoners or women fleeing domestic violence. Amendment 86ZZZD reinforces a previous amendment by ensuring that provision will be made for those fleeing domestic violence. Women’s Aid surveys of residents suggest that significant numbers of domestic violence survivors set up new homes following their stay in a refuge. Many rely on the Social Fund to provide basic furniture, beds, cookers and white goods. In the view of Women’s Aid, the fund provides a lifeline for these families. Moreover, it warns that in its experience, failure to obtain financial support with help to move and furnish new homes may be one factor leading women to return to their violent partners, and the fear that they will be unable to obtain such financial help may prevent women leaving their violent partners. What kind of choice does that leave women? Either they risk exposing their children to significant deprivation or they continue to face the prospect of domestic violence. Maria Miller assured the Public Bill Committee that the Government would take, "““extreme care to ensure that individuals who are subject to domestic violence continue to receive the sort of support that they need””." As well as referring to budgeting loans, she said that she imagined that women fleeing domestic violence would be a high priority for local authorities. However, that does not constitute the Government taking ““extreme care””. The amendment would enable them to make good on their commitment and thereby underpin their domestic violence strategy. Amendment 86ZZZE is essentially an attempt to write into the Bill a degree of accountability once the discretionary Social Fund has been localised. Public money is being devolved with no strings attached to local authorities to provide the ultimate safety net for some of the poorest and most vulnerable people in their areas, yet there is no plan for post-implementation review on the grounds that policy responsibility for local welfare assistance will sit with the Scottish and Welsh Governments and local authorities in England. This strikes me as central government washing its hands of all responsibility for this important area of social policy. As far as I can see, there is not even a commitment to a good practice guide such as that issued for discretionary housing payments. In response to concerns voiced about this, the Government argued that it will be sufficient to set out the purpose of the funding in a settlement letter, although they now say that this may be supplemented by a requirement to report on how the funding has been used, and that this will be discussed with local authorities and others. This is progress of a sort, although as the CLG Committee observes, it falls some way short of the accountability mechanisms suggested by some stakeholders. The Minister, Steve Webb, told the CLG Committee that the Government sees accountability as being local. He said that, "““we would expect local people would know the money had come down and the kinds of needs to be met and would challenge the local authority and hold it to account. We think that is the best mechanism for accountability””." The committee interpreted that as the Government relying principally on, "““the ballot box as the means of holding local authorities to account for their use of the Social Fund monies””." Surely the idea that voters will hold local authorities accountable through the ballot box is fanciful. The people who are most likely to need this assistance are the same people who are least likely to vote. I simply do not see this being an issue in local elections for the rest of the electorate. Nor should it be up to local organisations to prise the information out of local authorities. The CLG Committee recommended that central government identify clearly the amounts that are allocated to local authorities and collect information about their use until the new arrangements are bedded in. It suggested a period of five years. Amendment 86ZZZE goes rather further than this by seeking a review of the impact on those who previously would have been eligible for help. I suggest that we need to monitor both the use of the moneys and the impact of the localisation of this help. Even if the Minister does not accept that this should be written into the legislation— I quite see why he might not—I hope that he might be able to make a commitment to the Committee on this matter. Finally, Amendment 86ZZZF seeks to postpone the abolition of the discretionary Social Fund until the migration to universal credit is complete and specified performance targets have been achieved. Despite the immense care clearly being put into the issue of delivery, we cannot be sure that things will not go wrong during the transition to what the Government described as the most fundamental reform of social security for 60 years. Would it not be prudent to maintain the ultimate safety net provided by the Social Fund until the Government are satisfied that universal credit is working well? There is a real danger that the absence of the ultimate safety net could impact negatively on universal credit itself during its implementation phase in a period when unemployment is still likely to be high and living standards remain under serious pressure. My preference would be that Clause 69 does not stand part of the Bill. So long as it does, I believe that amendments such as these and the amendment in the name of my noble friends are vital to ensure that the needs of some of the most vulnerable members of our society continue to be met. I beg to move.