Welfare Reform Bill
Public Bill Committee, 24 March 2011.
Michael Weir (Scottish National Party, Angus)
We will now hear oral evidence from the Social Security Advisory Committee. For the record, would witnesses please introduce themselves to the Committee?
Michael Weir (Scottish National Party, Angus)
Before calling the first Member to ask a question, I should like to remind all Members that questions should be limited to matters within the scope of the Bill and that we must stick strictly to the timings in the programme motion that the Committee has agreed. Obviously, we will try to be as free-flowing as possible, but I would ask for short questions and relatively short answers from the witnesses, so that we can get through everything.
Margaret Curran (Labour, Glasgow East)
I thank both of you very much for attending this morning. I know, Sir Richard, that you are moving on, so many thanks for your contribution, which has been much appreciated.
May I ask particularly about the assessment criteria that are associated with the changes proposed to the social fund? Will local authorities in England be required to adopt national criteria and national standards, so that we have a uniform system throughout England? Do you know what the situation is with the Welsh Assembly and the Scottish Parliament? What plans do they have to ensure that there is still an effective programme?
Margaret Curran (Labour, Glasgow East)
What would be the consequences of the proposal? Would people in dire need have no recourse to any kind of help?
Michael Weir (Scottish National Party, Angus)
Miss Patel has a question on that.
Priti Patel (Conservative, Witham)
My question is specific to local authorities. There have been many views about the remoteness of the social funds, and by giving money to the local authority, surely there is an opportunity to ensure that money and funds are targeted at those who are vulnerable and in need of support in the local community? Is this not an opportunity to concentrate on getting money to those who really need it?
Maria Miller (Conservative, Basingstoke)
Are there examples of local authorities already trying to make sure that they get support to people who really need it? Are there any examples that you think perhaps could be used to help local authorities improve the way they deliver that local support in future? Both the National Audit Office and Public Accounts Committee have publicly criticised the way targeting happens at the moment, so presumably a move to local level gives us the opportunity to ensure that money is better targeted. Are there examples of where people are doing that well at the moment that you would put forward as good case studies?
Kate Green (Labour, Stretford and Urmston)
May I first place on the record my personal appreciation of Sir Richard’s contribution as chair of the Social Security Advisory Committee? It has been really wise and valuable over a number of years.
I want to pick up the point you were both making about accountability, and I think you said, Professor Kempson, there would not be a right of independent review as you understood it. In that context, how do you suggest that safeguards to ensure the decision makers are held accountable could be designed and put in place?
Priti Patel (Conservative, Witham)
I should like to follow up on this point about accountability and people, because, currently, the language sounds incredibly bureaucratic. It is about process, yet we are talking about people who are vulnerable and need help and support. How do you suggest going forward, particularly with local authorities—I welcome your views on this, to be perfectly honest—so that there is real fairness in the system and people who are in need actually get the money and support that they need? It sounds quite mixed right now. From your comments about local authorities, Sir Richard, it seems that there is a patchwork.
Priti Patel (Conservative, Witham)
But does that not become subjective? It would then be about defining what is considered to be a decent service.
George Hollingbery (Conservative, Meon Valley)
I am slightly mystified by why you do not trust local authorities and local councillors. They are elected by local people to represent them, and are closest to their communities. Why is it that you have this visceral lack of trust in local councils to deal with this properly?
George Hollingbery (Conservative, Meon Valley)
I hate to cut across you, but I was an elected local councillor for 11 years, and I cannot imagine a higher priority.
Sarah Newton (Conservative, Truro and Falmouth)
I wonder whether you could describe how you feel the current arrangements work for elderly people. I am concerned about the specific needs of elderly people. There is a huge amount of pensioner poverty sadly in our country. Especially through the community grants, how well does the current system work for them?
Michael Weir (Scottish National Party, Angus)
Okay. I think we have to move on.
Paul Uppal (Conservative, Wolverhampton South West)
I will be very brief, as I know time is pressing. Historically on the social fund, I wanted to focus on distribution. How has that gone in the past? We have already touched on issues such as finite resources and that it can be demand led. I was interested in your experience of how it has been done historically, and specifically whether you think it has been fair.
Paul Uppal (Conservative, Wolverhampton South West)
Do you think that has been specifically demand, or the way it has been presented, or anything like that?
Jennifer Willott (Liberal Democrat, Cardiff Central)
You have already covered some of this. I want to ask about ring-fencing. As we know, the funds are not going to be ring-fenced. What could the Government do to ensure that the funds are used as intended? You mentioned social workers in some areas being better at supporting people and so on. Is there a way that they could be better utilised to ensure that basic minimum levels are provided everywhere? Is there a way for the Government to work with local authorities to do that?
Sheila Gilmore (Labour, Edinburgh East)
It is my experience of the social work department in my local authority that they increasingly only work with people when they hit certain criteria about substantial critical needs. My experience of that has been in terms of working with some families who perhaps have children with problems and so on, but until they reach a certain level, they are not even being picked up. From your experience, would social workers necessarily be in a position to take on that kind of role in an even bigger way?
Sarah Newton (Conservative, Truro and Falmouth)
It is quite interesting to hear the extent to which you talk about the first port of call for the most vulnerable people in society actually being the voluntary sector. Could you elaborate on how you feel that the voluntary sector could take a greater role in this process?
Sarah Newton (Conservative, Truro and Falmouth)
Representing a remote and rural part of the country as I do, there is a rich fabric of voluntary organisations. I work with my local organisation that is tackling domestic violence.
Michael Weir (Scottish National Party, Angus)
Order. I am afraid we have run out of time. We must move on. I thank the witnesses for their evidence. I ask the witness from Carers UK to come forward.
Michael Weir (Scottish National Party, Angus)
Would you introduce yourself to the Committee for the record please?
Michael Weir (Scottish National Party, Angus)
Thank you. The first question is from Sheila Gilmore.
Sheila Gilmore (Labour, Edinburgh East)
Carer’s allowance has been left out of the universal credit. Do you welcome that decision? How do you think it will work?
Paul Uppal (Conservative, Wolverhampton South West)
You have given quite a comprehensive answer, but I will broaden it out a little. It was quite a contentious thing and there was quite a bit of discussion about it. Do you think it was specifically about the carer’s allowance being left out? Do you feel in any sense that it was perhaps a missed opportunity for the Government in this respect?
Jane Ellison (Conservative, Battersea)
You touched on conditionality. The White Paper sets out a new conditionality and sanctions regime for universal credit. It would be interesting to hear your comments on that in general terms. With carers being excluded, how can they be identified for that purpose? Could you talk about some of the challenges around that?
Jane Ellison (Conservative, Battersea)
And the identification point.
Priti Patel (Conservative, Witham)
May I follow up on that point on the specific area of the definition of carers? What practical measures do you think can be brought forward to bring carers closer to the employment market? Obviously, there are opportunities out there, but it is about understanding their predicaments and situations—the facilitation of the closeness to their caring roles and responsibilities—to enable them to get into work.
Harriett Baldwin (Conservative, West Worcestershire)
You mentioned that carers have an earnings disregard of about £100 net a week, and there is a complete cliff edge after that. In a way, carers already experience the universal credit, because they have the allowance, then they have a disregard and then they have a 100% cliff edge. What do you observe in your population? Do you see people clustering around that £100 net a week? Would you welcome any examination of the potential of changing that cliff edge?
Harriett Baldwin (Conservative, West Worcestershire)
Do you lose carer’s allowance for the week you go over £100? How does that work in practice?
Julie Elliott (Labour, Sunderland Central)
As you know, disability living allowance is the underlying entitlement benefit for carer’s allowance, and DLA is being abolished. From the point of view of carers, do you agree with the reform proposals, and how do you see them working?
Michael Weir (Scottish National Party, Angus)
Thank you very much for coming to the Committee. We will move on to our next witness.
Michael Weir (Scottish National Party, Angus)
I remind Members that this sitting ends at 10.10 am. There are a lot of questions for the professors, so I urge you all to ask succinct questions and give answers. Could you introduce yourself to the Committee, Professor Gregg?
Sarah Newton (Conservative, Truro and Falmouth)
Thank you for joining us this morning. The universal credit provides a framework to help the poorest people back into work and make all hours of work pay. First, what do you think about that? Secondly, particularly for lone parents, who struggle to get back into work, how do you feel about the role of mini-jobs and the prospect of self-employment to help people get back into the workplace?
Sarah Newton (Conservative, Truro and Falmouth)
May I ask you to answer my particular question about your feelings? I accept what you say about the fact that it is creating a framework. At the moment, because of the financial constraints facing the country, the marginal rates of tax might not be as desirable as we would like. Hopefully, over time, they can come down to increase the incentive. However, my fundamental question was this: do you think that the fact that every extra pound earned will make a financial contribution to the family or individual is a beneficial feature of the system?
Michael Weir (Scottish National Party, Angus)
We will move on to the next issue.
Kate Green (Labour, Stretford and Urmston)
I want to ask Professor Gregg, in the light of what he has just said, what he thinks the overall impact on in-work poverty is likely to be.
Kate Green (Labour, Stretford and Urmston)
The other thing I want to ask about is the transitional protections. The Government have said that nobody will be worse off at the point of change as they migrate on to universal credit, but we are obviously unsure what might trigger a change in circumstances, and therefore remove that transitional protection. We understand that family circumstances change quite frequently, and I wonder whether you could give us some sense of your analysis of the likely impact of that.
George Hollingbery (Conservative, Meon Valley)
We have received a lot of evidence from around the world that financial incentives in these sorts of scheme are perhaps less important than might be imagined, and we certainly heard that on Tuesday. In your view, is it more important to get people back into work at all, or to worry about the fact that they might come down the income scale because of financial incentives?
George Hollingbery (Conservative, Meon Valley)
Is it right?
Michael Weir (Scottish National Party, Angus)
We shall move on to the next issue.
Stephen Timms (Labour, East Ham)
I want to ask you some questions about the 65% taper rate, which you have already commented on. The Institute for Fiscal Studies told us on Tuesday that it thought a neutral rate, compared with the current system, would be 60%. The Centre for Social Justice said it should not be set at more than 55%. Where would you be in that range of views?
Stephen Timms (Labour, East Ham)
Can you explain the distinction between net and gross?
Stephen Timms (Labour, East Ham)
As you know, council tax benefit will be excluded from the measure and devolved to local authorities. Given the concerns that the Government and others have expressed about work incentives and marginal deduction rates, do you think that local authority decisions on their own versions of council tax benefit ought to be constrained in some way? If so, how?
Stephen Timms (Labour, East Ham)
But what about if you were to fix the taper rate for local authorities at 65% or the same—
Harriett Baldwin (Conservative, West Worcestershire)
On the taper, we would all like to see it as low as possible, but I wonder whether, as a professor, you have seen any academic research on people’s behavioural reactions to different taper rates. Is there is a body of evidence we could look at?
Harriett Baldwin (Conservative, West Worcestershire)
How many more people would work more as a result of a lower taper rate?
Michael Weir (Scottish National Party, Angus)
We need to move on to the next one. Margaret Curran.
Margaret Curran (Labour, Glasgow East)
Professor, you mentioned earnings disregards. I want to explore with you the impact that that is likely to have on people’s willingness or incentives to go to work. I want to ask particularly about young people, but what is your view of the general role of earnings disregards and of the current proposals?
Margaret Curran (Labour, Glasgow East)
What would be the impact of that?
Margaret Curran (Labour, Glasgow East)
What do you think about the proposal to remove the earnings disregard for people under 25?
Margaret Curran (Labour, Glasgow East)
Let me ask, then, about the general policy of earnings disregard as it is proposed in the universal credit. As it stands, will this get people back to work?
Margaret Curran (Labour, Glasgow East)
Can we fix it to be more effective?
Michael Weir (Scottish National Party, Angus)
We are running out of time, so we shall move on.
John Glen (Conservative, Salisbury)
Consistent with the existing capital criteria and rules for means-tested benefits, the universal credit will not be payable to those with savings of £16,000. Will you comment on what impact you think there will be on incentives for saving for families and generally?
Michael Weir (Scottish National Party, Angus)
Order. I am afraid that we have run out of time for this sitting, so I have to bring it to an end. I thank the professor for coming and apologise to any members of the Committee who have not had their questions answered.
Michael Weir (Scottish National Party, Angus)
We will now hear evidence from the Child Poverty Action Group, Gingerbread, the Fatherhood Institute and Working Families. For the record, would witnesses please introduce themselves to the Committee?
Michael Weir (Scottish National Party, Angus)
I remind Members that questions should be limited to matters within the scope of the Bill and that we must stick strictly to the timings in the programme motion. Time is limited, so I encourage you to be brief when you ask questions. I remind witnesses that not all of you have to answer every question if one of you can answer for the rest and if that is what you want.
Stephen Timms (Labour, East Ham)
The Bill does not tell us anything as yet about how the Government propose to support the cost of child care in the future. What would you like to see in the regulations when they are introduced in terms of what proportion of costs will be covered and what the arrangements should be?
Stephen Timms (Labour, East Ham)
Clause 97 of the Bill gives the Secretary of State the power to split an award where a couple is receiving it. Do you think that that power will be enough to address the purse-to-wallet concerns that have been raised around the Bill?
Karen Buck (Labour, Westminster North)
May I ask about the implications of the move to bring lone parents whose children have reached age five into the system, building on what we know has been a gradual reduction in the child’s age at which lone parents are expected to go to work? First, what do you think the impact has been of the reduction so far, staged and proceeding? On the success rates of lone parent employment, what has been the mix been between conditionality and incentive? Finally, what are the child care implications of those changes?
Karen Buck (Labour, Westminster North)
That is very helpful. Can I just ask one quick question—I do not know who is best placed to answer it. Given the Bill’s incentive to enter work—there is a more powerful incentive to start work than to increase your hours—and the recognition of the role of mini-jobs in that context, is there any issue about the provision of child care, in particular the capacity of child care to provide cover for mini-jobs, and payment for mini-job cover, given that most child care providers will insist on sessional or full-day care?
Kate Green (Labour, Stretford and Urmston)
I will ask some questions about the social fund, which the Government are proposing to abolish and pass to local authorities. I would like your views on how the existing system has been functioning, and how well you think the Government’s proposals will serve to replace it. Perhaps Alison or Fiona might want to concentrate on that question.
Kate Green (Labour, Stretford and Urmston)
Are you suggesting that the potential exists for there not to be any cash help provided by local authorities?
Michael Weir (Scottish National Party, Angus)
I think Guto Bebb wants to come in.
Guto Bebb (Conservative, Aberconwy)
I am fascinated by the points that you are making in relation to the local authority situation, because the implication is that you have no trust in local authorities. Secondly, you made a point about there being no ring-fencing. Being a Welsh MP, I am aware of big complaints from local authorities in Wales that the Welsh Assembly insists on ring-fencing. As a result there is no real local variation that responds to local needs. Surely the potential for a response that is appropriate to local needs is very strong in a situation where local authorities are allowed to pursue their own policies.
Priti Patel (Conservative, Witham)
To build on that, there are clearly variations in the social fund and its impact. If awareness is low and applications and access to finance are patchy, surely going down to the grass roots and involving councils—I hear what you say about them not knowing about all the groups out there, but they will, of course, be working with the voluntary and third sectors in their community—will mean money is more targeted than is the case currently.
Priti Patel (Conservative, Witham)
On that point, it seems that fairness and access to funds are at the heart of the issue here. What is the solution that you propose?
Michael Weir (Scottish National Party, Angus)
We will move on to the next issue.
John Glen (Conservative, Salisbury)
One of the eye-catching aspects of the Bill has been the benefits cap—an overall benefits cap for both single claimants and couples. What are your reflections on the principle that benefit levels should not exceed what is available or affordable for working households?
John Glen (Conservative, Salisbury)
So, you disagree with the principle.
George Hollingbery (Conservative, Meon Valley)
What you are saying would be entirely understandable if the level had been set at something lower than the average, but what is proposed is that the cap be set at the average household income in the United Kingdom. How does that hold down people from getting the benefits that they should require? Would you agree that the biggest flexing figure in there is almost certain to be housing costs?
George Hollingbery (Conservative, Meon Valley)
Two families live next to each other in identical houses, both with the same housing need, in a slightly more expensive part of town, and the rent, to the same landlord, suddenly goes up. One family is in private employment and the other is on benefits. The family in private employment has to move because they can no longer afford the rent. Should the family on benefits be allowed to stay there, whatever?
George Hollingbery (Conservative, Meon Valley)
I see a situation in which someone on the average household income has to move, when they are working, and someone is protected because they are on benefits, and does not have to move. I am just trying to tease out what you mean by need.
George Hollingbery (Conservative, Meon Valley)
Or move to somewhere they can afford.
Jane Ellison (Conservative, Battersea)
On this important question about the principle, I just wondered if other panel members could be invited to comment.
Michael Weir (Scottish National Party, Angus)
Does any other member of the panel wish to comment?
Karen Buck (Labour, Westminster North)
I have a very quick question. To give a hypothetical example, would it not be more economic for a couple with, say, four children to split into two households and make two separate claims, which could end up costing the public purse more?
John Glen (Conservative, Salisbury)
Does anyone on the panel believe that a benefits cap in principle is right? Nobody. Thank you.
Anas Sarwar (Labour, Glasgow Central)
The Bill would introduce financial penalties for incorrect statements and failure to disclose information. I just wanted to hear your views on that proposal.
Anas Sarwar (Labour, Glasgow Central)
I notice you said in a previous answer that you used to be involved with citizens advice bureaux. I wondered what your thoughts are on the impact of less funding going to advice agencies, and whether that in itself could increase the number of people who make mistakes on forms and fail to disclose information because they do not get that advice.
Anas Sarwar (Labour, Glasgow Central)
You said there is a risk of losing up to half the advice that you currently supply. Can you quantify that in terms of the number of families that that could affect?
Priti Patel (Conservative, Witham)
To go back to the concept of civil penalties and people providing the wrong information, there are naturally concerns among members of the public that at the end of the day taxpayers’ money is involved. Do you feel that such penalties could bring some integrity to the system, and restore public confidence so that they know that money is being targeted at people who desperately need it?
Priti Patel (Conservative, Witham)
Could this go further to enhance it? At the end of the day, the public read a lot of stories in the press, and this is about ensuring that in these days when there is not enough taxpayers’ money to go around money goes to the right people.
Yvonne Fovargue (Labour, Makerfield)
There is an onus on the claimant with the civil penalties, but, in your opinion, are the majority of mistakes made by the claimant or are as many or more official error, which has no consequent penalty or redress?
Anas Sarwar (Labour, Glasgow Central)
To pick up where Yvonne left off, the majority of errors are by the DWP rather than by claimants. Would you support a proposal along the lines of an early-warning system giving claimants an opportunity to reverse the mistake and reclaim something rather than have a straight-off penalty? Have you had any representations with the DWP on that?
Paul Uppal (Conservative, Wolverhampton South West)
Sorry, Alison, we all seem to be picking on you. To pick up on one specific point, you mentioned that you saw a situation in which it is much more a case of official error rather than individual claimant fraud. Is that based on anecdotal evidence from your experience or is there hard evidence for that?
Paul Uppal (Conservative, Wolverhampton South West)
Specifically on fraud, how would the DWP pick up on the numbers? What would be an effective way of doing it?
Paul Uppal (Conservative, Wolverhampton South West)
For the sake of clarity for the whole panel and so there is no ambiguity on this, in terms of the benefit cap, is the general feeling that it should always be demand led in terms of individual claimants, rather than there being a limit on benefit claim?
Michael Weir (Scottish National Party, Angus)
We move on to the next question: child maintenance.
Julie Elliott (Labour, Sunderland Central)
I have two questions on the child maintenance part of the Bill. First, part 6 introduces procedural hurdles to assessing the statutory child maintenance system, with a view to encouraging more voluntary child maintenance arrangements. Do you welcome the new emphasis on voluntary arrangements and mediation?
Julie Elliott (Labour, Sunderland Central)
Would Adrienne, Sarah or anybody like to comment on that question?
Priti Patel (Conservative, Witham)
I would like to make a comment, and then ask a question of all members of the panel. One of the saddest aspects of the casework and constituency work of most Members of Parliament is when broken families come to you in need of support and state help.
On the point about seeking voluntary agreements, it is quite obvious that there are many system breakdowns somewhere out there—families split up and access to payments is highly problematic in many cases. I would welcome views from all panel members about practical steps to encourage parting couples to come together in a grown-up, adult way to find the right kind of voluntary agreement, as that will be in the interests of their child.
Priti Patel (Conservative, Witham)
On that point, is this all about after the event, or is it educational awareness much earlier on—not just when relationships are being formed at school and so on, but financial responsibility and personal responsibility?
Maria Miller (Conservative, Basingstoke)
It is easy to paint a picture that parents, especially fathers, do not want to take responsibility, but we know that more than half the people using the current statutory system would like to make their own financial arrangements, but do not think they can at the moment. Will panel members give us one example of how we might improve the current system so that those people who would like to stay outside the statutory system can do so?
Maria Miller (Conservative, Basingstoke)
Are there any other responses from other panel members?
Michael Weir (Scottish National Party, Angus)
We will have to draw things to a close as we have run slightly over time. Thank you very much for your evidence.
Michael Weir (Scottish National Party, Angus)
We come to our next set of witnesses: the Women’s Budget Group, the Centre for Separated Families and Family Action. I understand that Fran Bennett has been delayed on a train, but I hope that she will be with us shortly. I invite the two witnesses present to introduce themselves.
Stephen Timms (Labour, East Ham)
I would like to ask about provision for support for child care costs. We do not yet know how the Government propose child care costs will be supported in future. What do you think the arrangements should be? Should there be support for people who work less than 16 hours a week, as well as those who work more than that? How should child care payments be made and to whom? What proportion of costs should be covered?
Karen Buck (Labour, Westminster North)
On the same point about child care, the proposal is to reduce still further the age at which lone parents will be required to go into work, so their oldest child is five. What are your views on the effectiveness, advantages and disadvantages of the way in which conditionality has been introduced to date? What do you think about the balance between sanctions and incentives and its effectiveness? What might be the characteristics of parents of five-year-olds who might require particular treatment?
Karen Buck (Labour, Westminster North)
What do we know about the characteristics of the group of parents who might be losing the child care support that they would have been getting before the proposed reductions?
Karen Buck (Labour, Westminster North)
Do we know anything about their characteristics? Do we know that they are larger families? Do we know that they are geographically concentrated in particular areas? I am asking about the people who at the moment might be getting, for example, 97% of support because of disregards.
Karen Buck (Labour, Westminster North)
Lastly, this is a question that I asked CPAG. Do we think that the issue of encouraging people into mini-jobs might raise questions about child care support, in particular because child care tends to be paid for on a sessional or daily basis? Child care providers will perhaps require a top-up that might not be covered within the provisions of child care support.
Karen Buck (Labour, Westminster North)
Do you have any sense of how the sector and providers might be able to accommodate that? They have some difficulty with sessions as it is.
Margaret Curran (Labour, Glasgow East)
Can I just expand a little into a slightly different category? It is about your point, Sam, about the calculation of being better off. Do you have any insight to share with us on people’s calculations about free school meals, and on the current proposals about that and how they would impact on families?
Guto Bebb (Conservative, Aberconwy)
On the specific point about free school meals, we are aware that there is a potential for a cliff edge, but all that you have said is conjecture at this point in time, because there is nothing in the Bill that illustrates any of the points that you are making.
Guto Bebb (Conservative, Aberconwy)
But there are no actual figures that indicate when the cliff edge would be.
Guto Bebb (Conservative, Aberconwy)
Would you be in a situation to advise the Committee on what sorts of procedure you would put in place to avoid that?
Michael Weir (Scottish National Party, Angus)
We will move on. Kate Green.
Kate Green (Labour, Stretford and Urmston)
I am asking questions about the social fund, which the Welfare Reform Bill proposes to abolish and replace with a system of local authority support. Can I ask for your comments on how the current system has been functioning and your views of what the Government propose to replace it?
Michael Weir (Scottish National Party, Angus)
I encourage shorter answers, if possible.
John Glen (Conservative, Salisbury)
On that last point, what about the counter-balancing effect of local democratic capability? It might not be universally the same, but it delivers the principle that elected people are accountable for the allocation of those funds. If they see circumstances in which the fund is not being allocated properly, surely there is local democratic accountability to suit local needs.
John Glen (Conservative, Salisbury)
The point is that it is a risk; it is not an inevitable consequence.
Michael Weir (Scottish National Party, Angus)
Let us welcome Fran Bennett, who was unfortunately delayed by train problems.
Michael Weir (Scottish National Party, Angus)
Do not worry. The first question about universal credit will be of particular interest to you, so I will ask Mr Timms if he would like to pursue that.
Stephen Timms (Labour, East Ham)
I want to ask about clause 97. It amends the Social Security Administration Act 1992 to give the Secretary of State the power to decide which partner should receive a payment—or any part of that payment—in cases where benefit is awarded to a couple jointly. Are you confident that that provision addresses the concerns raised by you and a number of others about purse-to-wallet redistribution of income?
Stephen Timms (Labour, East Ham)
Do you think that the clause could provide a solution to those problems? What should the solution look like in your view?
Michael Weir (Scottish National Party, Angus)
Okay. We will move back to question 4, on the benefit cap.
John Glen (Conservative, Salisbury)
The benefit cap is probably one of the most reported aspects of the proposed legislation. The Bill introduces an overall benefit cap for single claimants and couples. Could I ask for your comments on the principle of introducing such a cap? If you have any concerns, could you explain what they are?
Harriett Baldwin (Conservative, West Worcestershire)
I believe that about 2 million couples described as “couples living apart” are currently on benefits in this country. I understand that universal credit will consider the whole family unit and create better incentives for those 2 million couples currently living apart to live together. In the light of what you were just saying, can you give us an idea of the number of couples that you think would fall into the category of having six children?
Harriett Baldwin (Conservative, West Worcestershire)
Currently, 2 million couples are estimated to be living apart, so I wonder about the number of couples that you were describing as being affected by the benefit cap. Do you think that it would be higher or lower than 2 million?
Harriett Baldwin (Conservative, West Worcestershire)
Do you think that it could be higher than 2 million people?
Harriett Baldwin (Conservative, West Worcestershire)
With couples with children, are there any benefits to the children if the couple live together, rather than apart?
Michael Weir (Scottish National Party, Angus)
I think that you have made your point on that one. We will move on to civil penalties.
Priti Patel (Conservative, Witham)
I think that we are all very mindful that the household circumstances of lone parents and separated families change frequently—far too frequently than they might like. I would therefore welcome the panel’s views on the whole concept of financial penalties for incorrect payments and failures to disclose information about changing circumstances.
Priti Patel (Conservative, Witham)
Obviously, the universal credit seeks to simplify the system in a significant way. Do you think that will go some way to reduce errors? Therefore, it will not feel as pressured as you suggest for individuals.
Jane Ellison (Conservative, Battersea)
It goes without saying that we all appreciate the difficult situation people often find when their circumstances change, they are under stress and all that. Allowing for all of those caveats, I am sure you would accept there are some people who perhaps are not making the best efforts to disclose the right information. It is fair to assume there must be some element of that. You both just said that you do not think there should be a financial penalty. Turning that statement around would be to say that there should be no financial penalty for telling an untruth.
Jane Ellison (Conservative, Battersea)
That is the implication of saying that you do not think there should be a new financial penalty; saying there should be no financial penalty.
Jane Ellison (Conservative, Battersea)
I have a follow-up point. From your point of view—I realise the organisations you represent—do you ever give consideration to the wider buy-in of the general public about how welfare works? How do you think things such as your opposition to that clause affect people’s confidence in the system?
Jane Ellison (Conservative, Battersea)
I was not.
Michael Weir (Scottish National Party, Angus)
We will move on to child maintenance.
Sheila Gilmore (Labour, Edinburgh East)
One of the provisions of the Bill is to introduce new arrangements, or new hurdles, for getting statutory child maintenance. One is about putting in an extra stage of trying to get people to go through mediation. There is also the question of financial hurdles if introducing charges for the applicant parent—the parent with care—as well as perhaps the other parent. It has been suggested that charges should be added to the collection process. What are your feelings about that? I appreciate that some of it is still out to consultation.
Sheila Gilmore (Labour, Edinburgh East)
From my experience as a family lawyer, in the vast majority of cases people made their own arrangements. I do not recognise the scenario that you are painting. Parents made such arrangements with assistance through a legal agreement, which would be binding. Certainly, in Scotland, such an agreement would be equally as enforceable as a court order, which you could no longer get. Clearly, however, in some situations there is a power imbalance or there has been a difficult relationship. Is that not very difficult for people?
Michael Weir (Scottish National Party, Angus)
I am afraid that we have run out of time for this session. I am sorry to cut you off mid-sentence, but we must move on. Thank you for giving evidence to the Committee this afternoon.
Michael Weir (Scottish National Party, Angus)
Councillor Reed, you represent the Local Government Association and London Councils. Could you introduce yourself briefly to the Committee?
Michael Weir (Scottish National Party, Angus)
The first question is from Stephen Timms.
Stephen Timms (Labour, East Ham)
I have two questions on the Government’s proposals on universal credit. First, we do not yet know how housing costs will be assessed under universal credit. How, in your view, should they be dealt with in a centralised system but still reflect the different rent levels across the country? Secondly, on council tax benefit, the Government have decided to go the opposite way, with the devolved scheme design and payment to local councils. Do local councils welcome this instance of localism? How would councils respond if some constraints were placed on how they would be able design their council tax benefit schemes to prevent undermining the work-incentive gains of universal credit?
Stephen Timms (Labour, East Ham)
It was on council tax benefit. Do local authorities welcome the fact that the Government are devolving the design and payment of council tax benefit to separate local authorities? How would councils feel if some constraints were imposed—for example, on taper rates—in order not to undermine the work-incentive benefits that universal credit is intended to provide?
Michael Weir (Scottish National Party, Angus)
We move on to the next section.
Jane Ellison (Conservative, Battersea)
At the moment, size criteria for housing applies to housing benefit recipients in the private rental sector, and the Bill makes provision to apply the same criteria to the social housing sector. We are interested to hear your views on the proposal in general, and also what your feeling is for the likely impact of that on mobility within the social housing sector.
Jane Ellison (Conservative, Battersea)
No, I mean rooms, under-occupation and so on.
Jane Ellison (Conservative, Battersea)
May I follow up on that? Do you have any sense in your authority, for example, or other London authorities that you are aware of, of how much of the housing needs list might be met if under-occupation were addressed? I have some sense about that for my local authority. I wondered whether you had looked at it in your authority or other authorities.
Maria Miller (Conservative, Basingstoke)
I welcome your support for this measure. Do you have any ideas about whether disabled people who may have had adaptations made to their houses are a significant issue that we need to cope with in terms of their ability to move from property to property? Can you give us any feelings that you might have on that?
Maria Miller (Conservative, Basingstoke)
Is it a sizeable problem?
Maria Miller (Conservative, Basingstoke)
I am sorry. Just to be clear, I am really focusing on the housing stock that you have.
Sheila Gilmore (Labour, Edinburgh East)
The proposal in the Bill about under-occupation in the social rented sector is to reduce the amount of benefit paid to people, regardless of whether they have moved or whether there is somewhere for them to move to. Do you think that that is a good way of trying to reshuffle the pack? As a councillor, my experience was that people often wanted to move, but the smaller house was not where they wanted to live or it was a high-rise flat that they did not want to move to. This is a specific proposal to reduce benefits.
Karen Buck (Labour, Westminster North)
On that same point, the reduction in housing benefit will, according to the Government’s impact assessment, impact on 670,000 households in two years’ time. Will local authorities have the capacity to downsize 750,000 households into appropriately sized accommodation in their localities by then?
Michael Weir (Scottish National Party, Angus)
We will move on to the next issue, which is the setting of local housing allowance rates.
George Hollingbery (Conservative, Meon Valley)
Clause 68 amends section 130A of the Social Security Contributions and Benefits Act 1992, and gives the Secretary of State the power to set LHAs at his or her discretion. It has been estimated that, by 2013-14, that would be done in line with the consumer prices index. Do you have any thoughts on that?
George Hollingbery (Conservative, Meon Valley)
On the Secretary of State’s taking powers away from rent officers to set local rents and instead setting a global rise in rents in line with CPI.
George Hollingbery (Conservative, Meon Valley)
Do you have any idea—in Lambeth, for example—how much the LHA is by proxy, if you see what I am saying? What proportion of privately rented properties in your borough comes under that funding stream?
George Hollingbery (Conservative, Meon Valley)
I just wondered whether you have any feel at all of how much downward pressure it might put on rents. That is a totally theoretical question.
George Hollingbery (Conservative, Meon Valley)
I wonder how you can know that. Given that you do not know the level of LHA rental in your borough, what evidence can you present for that?
George Hollingbery (Conservative, Meon Valley)
Do you take my point that it is difficult to be absolutely quantitative about it without knowing the level of LHA spend in your area?
George Hollingbery (Conservative, Meon Valley)
Indeed I might have said exactly the same thing when I was a private landlord, but I would have wanted to look at the market conditions. If you have any data on that, I would be very glad to receive it.
Paul Uppal (Conservative, Wolverhampton South West)
I am going to change the question I was going to ask you, Councillor Reed. I worked in the property business for about 20 years and I have a great deal of experience of private landlords. Sitting across a desk from landlords—just as you are sitting in front of me now—I have witnessed conversations between tenants and landlords that went along the lines of, “Well, what sort of rent are you looking for? What can we do in terms of what the local housing allowance is?” That conversation was relayed to me more than once. The vast majority of managing agents that I came across would say that it was common practice. In view of the 60% figure you have just quoted, it would be very interesting to hear your views on that.
Paul Uppal (Conservative, Wolverhampton South West)
I have a quick follow up to that. It is essentially anecdotal, but it was almost an open secret. It happened across the country, too—I know you have spoken about localities. If it was a perfect market and it followed that, I would completely buy into what you are saying, but I am incredibly dubious about it.
Michael Weir (Scottish National Party, Angus)
Okay. We will move on to the next section now.
Jennifer Willott (Liberal Democrat, Cardiff Central)
I have a couple of questions about the benefit cap, which has had quite a lot of publicity. What do you think or what evidence have you seen about the impact of the overall benefit cap on housing benefit?
Jennifer Willott (Liberal Democrat, Cardiff Central)
Yes, because all benefits will be included within the cap, including housing benefit, so there is a question about the amount that will be available for tenants.
Jennifer Willott (Liberal Democrat, Cardiff Central)
Have you looked at how much that is likely to cost?
Jennifer Willott (Liberal Democrat, Cardiff Central)
Have you done any research into the impact of the cap on housing markets locally?
Michael Weir (Scottish National Party, Angus)
We had better move on. We still have quite a few questions to get through.
Guto Bebb (Conservative, Aberconwy)
As you are aware, the Bill proposes to abolish the social fund, with some elements being devolved to local authorities. I have been quite surprised by the evidence that we received this morning and this afternoon and the lack of confidence shown by many in the ability of local government to deliver aspects of the social fund. Do you share that lack of confidence, or are you of the view that local authorities could play a part in delivering those services?
Guto Bebb (Conservative, Aberconwy)
To press you specifically on that issue, a comment was made about a postcode lottery being part of this, but I would argue that the point you have just made about the ability to respond to local needs is a strong point in terms of what the Bill is proposing.
Michael Weir (Scottish National Party, Angus)
We are fast running out of time, so we have to move on quickly to the next section.
Kate Green (Labour, Stretford and Urmston)
Also on the social fund, what if local authority decisions are challenged by individuals? How confident are you that you have robust and transparent decision-making processes to decide who gets a crisis loan for a cooker and who does not?
Kate Green (Labour, Stretford and Urmston)
And to your knowledge, does the DWP intend to share that information with you?
Stephen Timms (Labour, East Ham)
On that point, for council tax benefit presumably you will need to access the income information about applicants as well. Are you talking to the DWP about getting the real-time PAYE information?
Michael Weir (Scottish National Party, Angus)
We are really up against the clock now.
Margaret Curran (Labour, Glasgow East)
May I just clarify that you are referring to England specifically, and you do not have any responsibility for Scotland, Wales or Northern Ireland? There are huge implications for local government in those countries and I think that that needs to be brought to the attention of the Committee.
Margaret Curran (Labour, Glasgow East)
That is what I thought.
Margaret Curran (Labour, Glasgow East)
That is quite alright. It is more of a problem for us than it is for you. I will not blame you for that.
Margaret Curran (Labour, Glasgow East)
May I just ask whether you are looking at the distribution formulae you have for the fund. Are they being reviewed?
Margaret Curran (Labour, Glasgow East)
So yes, it could well be reviewed.
Michael Weir (Scottish National Party, Angus)
Order. I am afraid that is the end of our time for this session. Thank you very much, Councillor Reed, for your evidence to the Committee this afternoon.
Michael Weir (Scottish National Party, Angus)
The next set of witnesses represent Shelter, the National Housing Federation, the National Landlords Association and Crisis. Welcome, gentlemen, would you like to introduce yourselves, right to left, starting with Mr Harding?
Michael Weir (Scottish National Party, Angus)
Thank you.
Harriett Baldwin (Conservative, West Worcestershire)
Clause 11 of the Bill provides for an amount to be included in the universal credit in relation to housing costs. Those costs may take the form of rent payments, mortgage costs or other housing-related costs. What are your recommendations for how housing benefit can best be integrated into the universal credit to ensure that it reflects housing costs in the private and the social rented sector?
Harriett Baldwin (Conservative, West Worcestershire)
We are therefore asking you for your recommendations on what you would like to see in it.
Harriett Baldwin (Conservative, West Worcestershire)
Does anyone else want to come in on that one? Is your recommendation on how housing costs should be calculated under universal credit that we should not make any changes at all to how housing costs are calculated?
George Hollingbery (Conservative, Meon Valley)
We were pursuing a similar line with our previous witness. I am very interested in private sector rentals and would be much more comfortable with what you are saying if we were presented with empirical evidence—negative evidence—that Government subsidy has no effect on the private rental market. I want to be absolutely certain that we can demonstrate that what Government pay in LHA does not influence the march forward in private rental rates.
Harriett Baldwin (Conservative, West Worcestershire)
May I move on to how the Government should support those who need help with mortgage payments? Do you have any recommendations on that issue?
Harriett Baldwin (Conservative, West Worcestershire)
Does anyone else have a different view? My final question is on the arrangements for housing benefit to be paid. Do you want to express a view on the ongoing debate on whether it is better to pay it to the tenant or to the landlord, or to have some formal arrangement on when that may need to change?
Harriett Baldwin (Conservative, West Worcestershire)
Does your association have any evidence that it is better value for the taxpayer to pay the rent directly to the landlord?
Harriett Baldwin (Conservative, West Worcestershire)
But are the rents measurably lower for the taxpayer?
Harriett Baldwin (Conservative, West Worcestershire)
Is the landlord prepared to offer lower rent for the taxpayer in a situation where the rent is paid direct to the landlord than in a case where the rent is paid via the tenant?
Harriett Baldwin (Conservative, West Worcestershire)
Have you got any statistical evidence on that?
George Hollingbery (Conservative, Meon Valley)
To develop Mr Salusbury’s point very briefly, we are talking about the certainty of income for landlords to be able to borrow and buy more apartments. What about the same situation in social housing where there are huge assets out there that could be leveraged to borrow and build more social housing? Direct payments would facilitate an equitisation in the marketplace, perhaps to pension funds and others, so we could raise money on the markets against what we already had to build more social housing.
Paul Uppal (Conservative, Wolverhampton South West)
I want to pull back to the direct payment of housing benefit—there seemed to be uniform agreement among all of you about that—to the default position of the tenant at least having the choice. David, I think you said that—forgive me if I am paraphrasing—direct payment to the landlord is very much the preferred option. From what you were saying, it seems that from the landlord’s perspective it was previously a much more benign environment when they received housing benefit payments directly. Did the four of you notice any correlation between the change when housing benefit went to the tenant rather than to the landlord and fewer private tenants claimed housing benefit? Was there a correlation? Do you follow my logic?
Paul Uppal (Conservative, Wolverhampton South West)
As you said on behalf of your members, landlords would probably prefer the benefit to be paid directly to them. Therefore, in a less favourable environment, as the system changed from a direct payment to the money going directly to the tenant, was there a corresponding drop-off in the number of landlords taking up tenants who received housing benefit?
Paul Uppal (Conservative, Wolverhampton South West)
I buy into exactly what you are saying. I just wonder whether, in that investment environment—we are talking about hard-headed investors in the private sector—when things were more difficult, landlords would have preferred to have tenants from a private background.
Michael Weir (Scottish National Party, Angus)
Okay. We have put a lot of time into that. Let us move on to the next issue.
Jennifer Willott (Liberal Democrat, Cardiff Central)
I want to ask a couple of questions about the under-occupation of social housing. As I am sure you all know, the Bill introduces the same size-related criteria for social housing tenants as already apply to people on housing benefit or local housing allowance. What are your views on that proposal, and what do you think is likely to be the impact on mobility in the social housing sector?
Jennifer Willott (Liberal Democrat, Cardiff Central)
I want to ask about adapted housing. There are people who are now under-occupying where there has been a significant investment in that property to make it appropriate for disabilities and things like that. Do any of you have any figures on how many properties that might apply to where the adaptations are so costly that it is not worth moving that person?
Jennifer Willott (Liberal Democrat, Cardiff Central)
Thank you. That is very helpful.
Jane Ellison (Conservative, Battersea)
We asked the same question of our previous witness who is a leader of a London council, representing London Councils and the LGA. While acknowledging that this was by no means a complete solution, he felt that local councils would welcome the flexibility that such provisions would offer. He took a slightly more positive view of things than you have done. Why do you think that there is such a discrepancy in views?
Jane Ellison (Conservative, Battersea)
So let us take the situation that you presented. If somebody is offered a move to somewhere that is more suitable for their household size and they just say no, what would you do, bearing in mind the pressure on waiting lists and the number of people desperate for appropriate housing?
Jane Ellison (Conservative, Battersea)
But I am asking, what would you do?
Jane Ellison (Conservative, Battersea)
Can I push you—do you think taking someone to court is any less draconian than proposing a benefit cut?