Health: Atos

Lord Freud Excerpts

Monday 26th November 2012 Lords Chamber

[Lord McAvoy]

To ask Her Majesty’s Government what instructions they have given to Atos regarding its employment of outside personnel to carry out medical assessments.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, the department has clear contractual requirements for contractors in relation to the recruitment and training of health professionals involved in carrying out assessments related to benefit entitlement. Any professional not meeting these requirements will not be given approval to carry out assessments.

[Lord McAvoy]

My Lords, I thank the Minister for his Answer. He will recall, as many of us on both sides of the House do, the passage of the Welfare Reform Bill, when, quite frankly, the Minister promised that everything would be all right on the night. However, at one point Atos had 900 doctors performing the work capability assessments and now it has only 231. Does this mean a reduction in the standard of how the tests are conducted? In addition, these tests are being conducted with computer-based systems using descriptors in the assessment and they are failing a large number of people, leading to an even larger increase in the number of appeals. Does the Minister not realise the devastation caused when people get word of these things? When will the Government undertake a fundamental reform of the work capability assessment to make sure that the poorest and most vulnerable people in this country are not reduced to even lower levels of poverty?

[Lord Freud]

My Lords, over the past month Atos has been running at about 200,000 assessments; its average is about 100,000. There are 962 full-time-equivalent healthcare professionals working on them. We inherited this review and have now had four subsequent reviews: one internal and three from Professor Harrington. We have basically accepted and largely implemented 40 of the recommendations from Professor Harrington, who said in his latest review, last week, that significant and lasting improvements are coming.

[Lord German]

My Lords, is it not terrible that one in four of the premises that Atos uses for its assessments does not have flat-level disabled access and that wheelchair users cannot access these assessments? Can my noble friend tell the House whether the original specification for the Atos assessment centres contains any references to disability access? In view of the terrible circumstances in which many people in wheelchairs now find themselves, when will the Government be able to complete ensuring that all people needing wheelchair access have access to these assessment centres?

[Lord Freud]

I am not aware of the fine print of that particular contract, as it was done under a previous Government. A proportion of the assessment centres—currently 31, I believe—are not on the ground floor and lifts must be used. If there is then an emergency, such as a fire, those people will have to go down the stairs, which is obviously not satisfactory. To the extent that people are concerned about that, we make other arrangements: they are visited on the ground floor, somewhere else or at home.

[Lord Cormack]

My Lords, did anyone prior to seeing the Order Paper know what Atos was?

[Lord Freud]

My Lords, Atos is not an acronym in this case; it is the name of the company that does these assessments.

[Lord Haskel]

Following on from the question from the Liberal Democrat Benches, the Minister—

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[Lord Low of Dalston]

My Lords, the Minister will be aware of all the concerns that have been raised concerning Atos Healthcare’s conduct of the work capability assessment, some of which have already been mentioned in the exchanges that have preceded my question. Given that, can he explain why it has been appointed to carry out the new assessments for the personal independence payment? Have any lessons been learnt that might enable these new assessments to be carried out in a way which better commands the confidence of the disability sector?

[Lord Freud]

My Lords, one matter that concerns me a lot is the way in which Atos has been attacked. It is something that has also concerned Professor Harrington, who writes in his latest report:

“The WCA continues to be portrayed in an extremely negative light, often fuelled by adverse media coverage, representative groups and political points scoring. … Some recognition of the considerable work to date would give a more balanced picture”.

Atos’s quality target, which is to be below 5% on the quality side, has been achieved in 10 of the past 12 months and is now running at around 4%. Indeed, we are looking at whether we should now move the target figure for quality down from 5% to 4%.

[Baroness Uddin]

My Lords, given what the Minister says about the 200,000 assessments being undertaken, and to a high professional standard, how does he explain some of the figures that are coming from the disabled community about the lack of standard? What do the Government have in place to monitor the quality standard to which he aspires? Will he explain that to the House, and will he also explain why disabled people and their carers would complain about a perfectly professional, high-quality system?

[Lord Freud]

My Lords, the number of complaints against Atos is running at 0.57%, which compares, for example, with a figure of 3.5% for complaints about doctors to the General Medical Council. That is the level of complaint.

[Baroness Wilkins]

My Lords, 40% of those who go to appeal about an Atos assessment win their appeal. Will the Minister say what the cost of those tribunals has been and why the taxpayer should pay for the inadequacy of Atos’s assessments?

[Lord Freud]

My Lords, while the figure of 40% for those who go to appeal is roughly accurate, the total number of those found fit to work by the tribunal changes only 15% of that total. The reasons are usually to do with fresh evidence, which is either written or oral. The cost of that runs at about £11.3 million from the DWP’s perspective and £14.9 million from the point of view of the courts. That figure is for the first half of the current year.

Benefit Cap (Housing Benefit) Regulations 2012

Lord Freud Excerpts

Monday 12th November 2012 Lords Chamber

Moved By

[Lord Freud]

That the draft regulations laid before the House on 16 July be approved.

Relevant documents: 7th Report from the Joint Committee on Statutory Instruments, 10th Report from the Secondary Legislation Scrutiny Committee, considered in Grand Committee on 6 November.

Motion agreed.

Universal Credit

Lord Freud Excerpts

Tuesday 6th November 2012 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, the universal credit programme remains on schedule to launch the pathfinder in April 2013 and to go live in October 2013.

[Lord Touhig]

I regret that I do not share the Minister’s confidence in this matter but, on behalf of those who depend on benefits to survive, I sincerely hope that he will be proved right and I will be proved wrong. In Grand Committee the noble Baroness, Lady Stowell of Beeston, told me that,

“universal credit will be a digitally based process”—[Official Report, 8/10/12; col. GC377],

and confirmed that the Government intend people to claim this benefit online. However, work carried out by the noble Baroness, Lady Grey-Thompson, indicates that 8 million people in this country do not have access to a computer, and that of those, 3.9 million are disabled. What proposals do the Government have to ensure that people who are disabled and do not have access to a computer will be able to claim universal credit?

[Lord Freud]

My Lords, we did a survey on our complete claimant base and found, somewhat to our surprise, that 78% of them were already online, and, indeed, that 41% of them used online banking. Our target when we start next year is to have 50% of people going online, with others going to our other channels which support the online process. We plan to have a support and exceptions process to help the people who need support in getting their universal credit.

[Baroness Sherlock]

My Lords, is the Minister aware of the recent report of the Joseph Rowntree Foundation which showed that it will be very difficult for people to claim online because only 20% of people now do so and only 40% are ready and able? What will the Government do if people do not feel able to claim online? How far and for how long are the Government willing to extend paper applications to those who struggle?

[Lord Freud]

My Lords, I should make clear that we are not entertaining paper applications. We are looking at either face-to-face or telephone support groups. We have looked at pushing JSA online and the figures have gone up from 16% in September last year to 39% this September. We are moving people very rapidly to the online route.

[The Countess of Mar]

My Lords, the banks have shown us that computer systems are not infallible. Can the Minister tell the House what provision there is for back-up in case something goes wrong? These people are very vulnerable and cannot do without money for a long time.

[Lord Freud]

My Lords, we have a very substantial contingency prepared if, for instance, a disaster takes down our data centre—we have two data centres for that reason—and particularly if we have a cyberattack. We will have contingency built into the system to make sure that our payments systems do not go down because of these problems.

[Lord Stoneham of Droxford]

Can the Minister confirm that the Treasury is giving the fullest possible co-operation to his department on the computerisation of the universal credit system? In particular, are employers being sufficiently geared up to provide monthly pay information on their employees?

[Lord Freud]

My Lords, I am happy to confirm that the Treasury is whole-heartedly in support of this radical transformation of our welfare system. Part of the system relies on real time information through HMRC networks, and HMRC is driving ahead with a series of expanding pathfinders. It currently has 2 million employees or pensioners on the system today and is ramping it up into April and October next year.

[Lord McKenzie of Luton]

My Lords, the Minister will be aware, no doubt, of the KMPG survey undertaken recently. It concludes that:

“Moving to real-time information (RTI) reporting in which employers send payroll information to HMRC on or before every payday instead of after the end of the tax year is an enormous change. In the main, the larger employers are putting plans in place, or at least thinking about it. But many small and medium-sized businesses are likely to be blissfully unaware of this radical change”.

Is that not a cause for concern?

[Lord Freud]

My Lords, there is naturally a programme to get employers on board. HMRC has launched a major campaign—for instance, writing to 1.4 million employers so that they are ready in time. Even in the KPMG report, 75% of employers were aware of the change over and that was before this campaign got going.

[Baroness Armstrong of Hill Top]

Is the Minister content that people currently being moved from one benefit to another frequently have to wait three, four or more weeks because the system cannot cope? How is that meant to give us confidence in what the Minister and the department are proposing for next year?

[Lord Freud]

The noble Baroness is absolutely right on this particular problem. It is one of the reasons we are sweeping away the existing system—it is simply too complicated for people to operate. The real difference in the new welfare system is that we do not have a distinction between out-of-work benefits and in-work tax credits. You do not have to jump from one system to the other when you move category. You stay on the same system and do not have to suffer awful delays.

[Baroness Browning]

Will my noble friend confirm that people claiming disability benefits will be reassured that when the Government calculate the minimum amount they need to live on, the cost of maintaining a computer and purchasing internet access will now be part of that computation?

--- Later in debate ---

[Lord Freud]

My Lords, that is not how the benefits system is built up. It is not, and has not been ever under any Government, built up on the basis of needs. It is based on a particular set of payments for people in different categories. That will continue. In fact, under universal credit the gross amount for people who are unemployed will remain more or less unchanged as a direct result. Clearly people can get access to computers. They do not necessarily have to have them at home.

[Lord Bach]

My Lords, does the Minister accept that when universal credit comes in, an enormous number of wrong decisions are bound to be made? Is he aware that just when universal credit comes in, legal aid for legal help with benefit law will just have been abolished? Are those two facts merely coincidental, or is it a calculated act of policy, whose aim is to punish the vulnerable and the poorest?

[Lord Freud]

My Lords, when you turn what can be 200 pages of applications for the current suite of benefits into one very much more simplified system, clearly you will dramatically reduce the number of errors that people will make. I therefore think that the complaint is about the existing system and not about the system we are planning.

Housing Benefit (Amendment) Regulations 2012

Lord Freud Excerpts

Tuesday 6th November 2012 Lords Chamber

Moved by

[Lord Freud]

That the draft Housing Benefit (Amendment) Regulations 2012 laid before the House on 28 June be approved.

Relevant documents: 6th Report from the Joint Committee on Statutory Instruments, 7th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 15 October.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, we have already conducted a debate on these regulations in Committee and I am under no illusion about the strength of feeling that many noble Lords have on this measure. Clearly we have been through the issue thoroughly as we went through the Bill. We went through that a number of times. The Commons gave us a response and noble Lords will remember that at the conclusion of those debates I proposed undertaking some research to make sure that we understood the impact of this measure. On that basis in the Bill process it was decided not to proceed any further.

Let me summarise some of the main issues. We are not introducing this change lightly. There are a number of important principles behind this reform. There is a major financial imperative behind it; there is a compelling argument for reining in housing benefit expenditure and spending more generally. I know that many noble Lords do not disagree with the need to bring spending under control, but would no doubt wish to find a saving of £500 million a year from somewhere else. The question is, exactly where from? I have not yet heard any clear alternative for finding this kind of saving. That is why it would be quite wrong for the Government to backtrack on this measure now.

Another reason for this reform is that we believe that it will result in more efficient use of social housing stock over time, which in turn should help us to tackle some of the overcrowding. At the very least I hope that noble Lords agree that we need to do everything we can to improve the way that we use our housing stock. Doing nothing is not an option, not when we are paying for something approaching one million extra bedrooms for those affected by this measure and when there are more than a quarter of a million households living in overcrowded conditions in the social rented sector in England. In 2010 we inherited the highest level of overcrowding in the social rented sector since the published data began in 1993, with 7.1% of those households in England living in overcrowded accommodation. That is a fact we cannot ignore.

The noble Lord, Lord McKenzie, has asserted that this measure will risk costing more than it will save. Even if some people move—the Housing Futures Network research suggests that around 25% of people might move—that does not mean that we will not save money.

Where a claimant moves to smaller accommodation, it is important to consider the bigger picture rather than to look at just that one household. Even where a claimant moves into the private rented sector, that frees up accommodation in the social rented sector that can be relet to other families needing that accommodation. The relet may still generate housing benefit savings if, for example, the property is offered to claimants who would otherwise be renting privately or who were currently placed in more expensive temporary accommodation. I beg to move.

Amendment to the Motion

Moved by

--- Later in debate ---

[Lord German]

My Lords, I apologise to your Lordships’ House for missing the first few minutes of this debate. I was involved in another debate in the Moses Room at the time and it was difficult to shift sufficiently speedily between that Room and the Chamber.

I can well understand why many noble Lords want to reprise our lengthy debates on the Welfare Reform Bill. I also understand why people still have major concerns in this area. I do not think that any noble Lord present would say that these changes will be easy to accommodate. Difficult decisions will have to be made. As we all know, the changes are intended to relieve some of the strain on the housing benefit budget. However, the only fair element is that the benefit we are discussing will be brought into line with the local housing allowance.

Some noble Lords share my concern about the future of housebuilding. As the noble Lord, Lord Smith of Leigh, said, the previous Government did not meet housing demand. I only hope that the present Government will be able to build extremely quickly the number of houses that are needed to cope with society’s demand for them. We await action as regards achieving the number of houses that are needed.

There are two major concerns about the way these regulations will be implemented. The first is the ability of the housing stock to adapt and provide accommodation of the size needed in each area in order to allow those who wish to move to a different sized property to do so. The second issue relates to the changes affecting specific groups of people. I would like to ask some questions in relation to both those issues. I preface my remarks with mention of behavioural change. I have heard it said frequently in your Lordships’ House and in Committee that people’s behaviour in this area is of the worst kind. However, people do not always behave in a way that leads to the worst outcome for them. Some people behave differently.

There are two key issues I would like to ask questions about. My first question to my noble friend is: what assessment has the Department for Work and Pensions made, given the contact it now has had with people who will be affected by this measure, about the likely outcomes and the directions people will take as a result of what is happening? There undoubtedly will be, of course, some people who will wish to move. The issue then is the ability of the housing stock to be adapted very swiftly. Can my noble friend tell us what discussions there have been with housing associations, local authorities and private landlords to see whether adaptations can be made for people to move, probably into smaller properties, where house building has moved onto larger properties? Where are we in readiness for the sort of behavioural changes? I hope my noble friend the Minister can tell us.

I also wanted to ask about the £30 million of DHP—the £25 million for adapted properties and the £5 million for foster carers. This was an issue we pursued at some length during the course of the passage of the Welfare Reform Act. This was a very welcome area but I would like to really understand the Government’s dynamic on adapted properties. Will £25 million be provided over a longer period and what assessment has been made of the need for that length of time? Will £25 million be sufficient to cope with what it is thought will be the behavioural arrangements for people who live in adapted property where it would make no sense whatever for them to be moved on?

The second area I would like to investigate is rurality and rural housing, mentioned by the right reverend Prelate the Bishop of Norwich. Having spent some considerable time as an elected Member trying to get more social housing into rural communities, I do not underestimate the difficulties there have been in building social housing in rural communities. It is very much more difficult if people want to move to have to move away from a rural community into a quite different environment altogether. What estimate has my noble friend the Minister made of the demand and the pressures there will be on rural housing? Has he taken into account the community shift that would have to take place given the shortage of accommodation in rural areas and often the very high price of private sector rented accommodation there?

I also want to examine the issue of redesignation of properties. This is also one of the approaches that some housing associations are looking at. For example is a bedroom really a study or is a partition wall not really a partition wall? Have there been any discussions with housing associations and social landlords about the role and about designation, and about who has the authority to redesignate housing in this area? There is undoubtedly some scope for action for here. There is no national register of what is a room size. It would very difficult and probably a bureaucratic nightmare to try to create such a reference document. However, is it possible to look at the way in which housing associations can define their property differently where the circumstances provide and who would have the authority to undertake the redesignation, which may take some of the pressure off the ability to find appropriate housing? I do not envy the job of the Government and my noble friend the Minister in undertaking this obviously difficult task and I would be grateful if he could give me some answers to those questions.

[Lord Freud]

My Lords, this has been a powerful debate and I will do my best to answer the questions. We dealt with an enormous number of questions in Grand Committee and so, rather than me going on for a very long time, I would like to suggest that I confine my responses to the new issues that I have not already dealt with and then leave my responses on the other matters that are on the record in Hansard.

The noble Lord, Lord McKenzie, referred to the NAO report and to 2 million households receiving lower benefits. That assumes that claimants will not adjust their behaviour by doing the things that we are hoping they will do, such as taking on work, moving to more affordable or more appropriate accommodation, and so on. We are beginning to see evidence from local housing associations that with the change from 50% to 30% people are changing their behaviour.

As regards the point about the pressure on the supply of affordable housing, the early signs from the LHA are that there is no discernable impact on the levels of homelessness, which have remained steady. The housing benefit claims from people renting in the private rented sector are increasing, which suggests that people are able to find affordable accommodation.

The noble Baroness, Lady Lister, referred to the NAO report and to its observations on the monitoring of discretionary housing payments. We are currently considering the recommendations in the report and will look at how feasible it is to monitor the way that DHPs are used.

I have dealt with the point raised by the noble Lords, Lord McKenzie and Lord Smith, about movements. There are movements of people from underoccupied homes, presumably to smaller homes, which will allow larger families, if they are being supported in the private sector, to have cheaper accommodation and gain from making that exchange.

As regards the issue of room sizes, raised by the noble Lords, Lord McKenzie and Lord Best, and whether there should be an adjustment for single bedrooms, we wanted to keep the system simple and did not want to introduce something that might require landlords to go around measuring rooms. Indeed, the stakeholders, including the National Housing Federation, have welcomed that. It is therefore up to landlords and tenants to decide between them whether a property is appropriate for their needs.

When it comes to designation of what exactly constitutes a property, it is up to landlords to take that decision. They are unlikely to do that on a wholesale basis, but there will be individual properties where it makes sense for landlords to redesignate them as not being appropriate. There may be an individual property for which it is straightforward to do that. To be honest, we are not expecting there to be a massive effect, but there may be some instances of that.

The noble Baroness, Lady Turner, asked about temporary changes of circumstances. There are housing benefit rules to protect households from either temporary absence, such as going into hospital or being on remand, or where the death of a member of the household would result in the reduction of housing benefit. For example, housing benefit provides up to 12 months’ protection from rent restrictions if there is a bereavement in the family.

The right reverend Prelate the Bishop of Norwich asked about non-resident children. Where the tenant has non-resident children, housing benefit may already be paying for a room for the child or children in the place where they usually reside. It would be double provision potentially to fund an additional room in both parents’ properties.

The issue of rural impact was raised by the right reverend Prelate and my noble friend Lord German. The use of the percentage reduction, rather than a flat rate, means that the impact, because it is proportionate, is likely to be lower because rents are likely to be less in rural areas. On the specific question asked by my noble friend Lord German on the approximate amounts, roughly 10% of the impact is likely to be seen in rural areas.

As to my noble friend’s question on what evidence we have received so far, the responses by local authorities and housing associations indicate that there is a lot of activity—whether you are talking about the West Midlands making best use of a stock partnership that brings together seven local authorities and 11 housing associations in finding people the right number of bedrooms, speed dating in the London Borough of Southwark, or the Stockport homes initiative to look for joint tenancies. Indeed, Wigan Council, the council of the noble Lord, Lord Smith of Leigh, and Wigan CAB have developed Wigan Housing Solutions, which acts as a social lettings agency and is a natural progression from the existing bond-guarantee scheme. It is a bridge between the private and social sectors, with Wigan Housing Solutions helping to relieve pressure on the housing waiting list. There is a lot of activity.

Benefit Cap (Housing Benefit) Regulations 2012

Lord Freud Excerpts

Tuesday 6th November 2012 Grand Committee

Moved By

[Lord Freud]

That the Grand Committee do report to the House that it has considered the Benefit Cap (Housing Benefit) Regulations 2012.

Relevant documents: 7th Report from the Joint Committee on Statutory Instruments, 10th Report from the Secondary Legislation Scrutiny Committee.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, these regulations will allow for the introduction of a benefit cap, as set out in Sections 96 and 97 of the Welfare Reform Act 2012. From October 2013, the benefit cap will form a key part of our plans for universal credit and we will shortly be bringing regulations to the House to support the introduction of this. However, we do not believe that it is right to wait until all existing claimants have migrated to universal credit before taking action. We are, therefore, bringing these regulations forward now, which will enable us to introduce the benefit cap from April 2013 by working with local authorities to reduce the amount of housing benefit in payment. The regulations are regarded as being compatible with rights under the European Convention on Human Rights.

The regulations set out the detail of the cap, including the level that it will be set at; how we will calculate a household’s overall entitlement to welfare benefits for the purpose of applying the cap; what benefits will be taken into account; how any reduction will be applied; exemptions from the cap; the relationship between the cap and benefit sanctions and other deductions; and rules on decision-making and appeals.

The level of the benefit cap will be set with reference to average earnings for working families. On its introduction in 2013, the cap will be set at £500 per week for couples and single parent households and £350 per week for single adult households. For couples and lone parents, that is a weekly income from benefits equivalent to earnings of £26,000 a year net or £35,000 gross. Exempting those entitled to working tax credit and setting the level on an earnings basis ensures that we incentivise work even further by not including in-work benefits in the cap.

This policy was debated at length during the passage of the Welfare Reform Act. On top of that, many noble Lords came to the briefing session that I ran for MPs and Peers before the Summer Recess. I am grateful for their input. Noble Lords will by now be well aware of the Government’s reasons for introducing a benefit cap. It is about incentivising work and promoting fairness. As it is currently designed, we know that we pay some claimants more money when they are out of work than they could reasonably expect to earn from working full time, making it hard for people to see that they are better off in work. We are trying to tackle this with the introduction of universal credit and, alongside it, the benefit cap. The core principle is that the state should not pay more in benefits than the average family earns from work.

We have said from the start that there are certain groups to whom it would not be appropriate to apply the cap. We are exempting households which are in receipt of disability living allowance, personal independence payment, attendance allowance and the support component of employment and support allowance, as well as households entitled to working tax credit and war widows and war widowers. Since the debate on the Welfare Reform Bill, the Government have announced some additional easements: namely, those relating to industrial injuries benefits and war disablement pensions and their equivalents under the Armed Forces Compensation Scheme.

We do not want to penalise those who have recently found themselves out of work and are doing the right thing to find new employment. Therefore, we have put in place a 39-week grace period for those who have been in work for the 12 months previous to losing their job. This will allow people time to find alternative employment or consider alternative options in order to avoid the cap. Following the point raised very helpfully by the noble Lord, Lord McKenzie, during the Welfare Reform Bill debates, we have made sure that this grace period will run from whenever a person’s job comes to an end, whether or not the job finished before or after the introduction of the cap. We have consulted with stakeholders and the Social Security Advisory Committee, which considered the regulations and subsequently consulted on the impact of the cap. This has informed our plans for evaluation. We have already announced that we will publish a review after the first year of operation.

It was inevitable that our proposal for a cap would raise concerns about how it would be delivered and the impacts it might have. Many of the concerns that have arisen around the cap are based on an assumption that people will not change their circumstances. We do not believe that this is right, although sometimes people will need help and encouragement to make these changes. In the run-up to April 2013 we are working with claimants who may be affected by the cap to do exactly that.

Since May this year, those households which may be affected by the cap have been offered support from Jobcentre Plus. To date we have written to over 85,000 claimants potentially affected by the cap. We have followed this up with over 150,000 phone calls to make sure that claimants understand what the benefit cap means for them and to offer them the opportunity to work with Jobcentre Plus for employment support or to speak to their local authority for housing advice. We are also engaging across government and with local authorities to ensure that households are given the assistance they need to avoid the cap or mitigate its impact.

This Government firmly believe that those in the local area are in the best position to make decisions which impact people in their locality. That is why we are providing up to an additional £75 million for discretionary housing payments in 2013-14 and up to a further £45 million in 2014-15. This will be divided among local areas based on which has the greatest need. It will be used by local authorities to support those claimants affected by the benefit cap who, as a result of a number of complex challenges, cannot immediately move into work or more affordable accommodation, providing support to those who need it most, such as those fleeing domestic violence, and to prevent homelessness.

Finally, the Government firmly believe that there has to be a limit on the overall levels of benefit it is appropriate for the state to provide to those who are not working. The benefit cap aims to encourage long-term positive behavioural effects through changed attitudes to welfare, responsible life choices and strong work incentives. I commend these regulations to the Committee.

[Lord McKenzie of Luton]

My Lords, I thank the Minister for the way in which he introduced these regulations. They will inflict profound hardship on many households—according to the department’s own impact assessment, nearly 60,000 households, including 80,000 adults and 190,000 children. Next year the average reduction in benefit is estimated to be some £91 a week. Our opposition to these regulations should be clear from consideration which took place just this morning in another place. It is clear, and has been since our debates on the Welfare Reform Bill, that a one-size cap never fits all—we believe that people should be better off in work than on benefit, but these regulations are flawed and likely, in our view, to increase homelessness with a likelihood also of the cap costing more than it would save.

Having said that, we welcome the commitment to the 2014 review and, as far as they go, to the categories of persons who are exempt from these and the limited DHP top-up—the loaves and fishes as they will for ever be known as a result of my noble friend Lady Lister. The Minister’s department says that it is giving early notice to all claimants who could be affected by the cap. We have heard that 85,000 claimants have been contacted, with 150,000 phone calls made, so that they can change their circumstances and perhaps move into work. In addressing the inequities of the underoccupation provisions, the Government expect households to cope with this loss of income by starting work, reducing non-rent expenditure, using other income and moving to cheaper accommodation or a cheaper area. Given the work which the department has done to identify those households affected, can the Minister tell us how many households have other income to ameliorate the effect of the cap, what types of income are involved and what the average amounts involved are?

Some 64% of those affected are claiming either ESA or income support; that is, they are not required to be available for or seeking work. Some 50% of the households likely to be affected are lone parents. The criteria under which people are characterised at the moment under the welfare system are stringent. They are not spurious, so on what basis is the department seeking to override these designations? Is the department seeking to differentiate between individuals for this purpose and, if so, on what basis? We know that some 5,200 affected by the cap are in receipt of carer’s allowance because the qualification for carer’s allowance depends, among other things, on a person not being gainfully employed. What advice would the Minister give to these households and what is their route to avoiding the impact of this cap?

So far as reducing non-rent expenditure is concerned, can the Minister tell us what the department’s detailed engagement with those affected has concluded to date? How many households has it assessed as having scope to reduce non-rent expenditure and what are the main types of expenditure involved? So far as moving to cheaper accommodation is concerned, we note that nearly half of the households affected—46%—are in the social rented sector. What cheaper accommodation does the Minister think can be accessed and how does he consider that local authority allocation policies, which would typically have a local connection requirement, will assist in these circumstances? As for uprooting and going to other areas, has any assessment of the impact of this on families been made, especially the consequences of fracturing local support arrangements with the impact on health and educational outcomes? From the work undertaken to identify those families currently likely to be affected by the cap, how many such households have someone with a mental health condition and how many occupy housing that has been the subject of a disabled facilities grant?

We are indebted to the National Housing Federation for its briefing notes and the points that it raises, which I would like to go over. So far as discretionary housing payments are concerned, it says that the announced increase to help people hit by the cap after losing their jobs is welcome but that it is not appropriate to rely upon a discretionary, time-limited scheme to cover ongoing and legitimate higher housing costs. Concerns have also been raised about the levels of DHP available. In its report on the impact of housing benefit changes, published this month, the NAO said:

“It is not clear how the current level of funding for Discretionary Housing Payments has been determined or whether it is likely to be sufficient for local authorities in tackling the impacts of reform”.

Perhaps the Minister can therefore give us a breakdown of those calculations and the assessment.

The issue of temporary accommodation has, I think, exercised a lot of people. The National Housing Federation says:

“Temporary accommodation is a vital part of the homelessness safety net. It saves money by minimising the need for more costly emergency interventions such as housing families in Bed and Breakfast accommodation. However, it is more expensive to procure and manage than mainstream private sector accommodation.

It is for this reason that the Federation has argued for it to be exempted from the benefit cap. Due to these additional costs, without an exemption from the cap, many families will find themselves unable to meet their rent.

Households are placed in temporary accommodation by local authorities and as a result will have little scope to move to reduce their housing costs. These families, who have been made homeless through no fault of their own, could be forced to move long distances or cut back on essentials in order to pay for accommodation which they themselves have not chosen”.

How does the Minister respond to that point? The federation goes on to say:

“The cost of exempting temporary accommodation from the cap is £30 million—a small proportion of the estimated £270 million savings expected to be gained from the imposition of the benefit cap itself”.

What is the Minister’s response to that? It continues:

“While Government has said that under Universal Credit it will fund the management costs, if not the housing costs, of temporary accommodation outside the benefits system—helping some families avoid the cap—this will not protect claimants before they transfer to Universal Credit”.

--- Later in debate ---

[Baroness Thomas of Winchester]

My Lords, I have a very simple question for my noble friend. I think that he probably gave us the answer during the passage of the Welfare Reform Bill, but I am afraid that I have forgotten what it was. Those in receipt of disability living allowance are going to be exempt from the cap. What about those who have appealed against their initial assessment? I declare an interest because, while I have never been on benefits, I have appealed against a decision, which I won, so I feel for those who may not have been successful the first time in their assessment but who have then appealed. There can be a few months between these two events and it would seem very unfortunate if someone or their family was forced to move only to find that they had won an appeal at the tribunal, with all the upheavals that that would amount to. Can my noble friend tell me about that situation?

[Lord Freud]

My Lords, as I would have expected, we have had a very knowledgeable debate, and a lot of very learned views, which I always listen to very closely, have been put forward. Clearly, I am also aware of the concerns that have been voiced in expressing the anxieties of a number of external organisations and stakeholders, some of which were referred to today. I will try to deal with as many of the questions as I possibly can, although there were a lot of them.

Let me start with support and exempt accommodation. That needs to be looked at in two periods. As I said, once universal credit comes in we are looking to keep the housing costs outside universal credit. I am looking to make some long-term arrangements for people in exempt accommodation. I am particularly concerned about people in refuges and, clearly, in hostels. I acknowledge absolutely the issue of support and exempt accommodation, which needs some quite sophisticated work. Meanwhile, we are writing very specific guidance, as these are the people for whom DHPs really are designed to prevent some effects that we do not want to see.

On temporary accommodation, a point raised by the noble Lord, Lord McKenzie, that is again an area where we will use DHP. I know that the noble Lord, Lord Best, did some sums, but clearly this will be a huge incentive to move people very quickly to something much more permanent rather than staying for the full year in temporary accommodation, which, as he rightly said, is very expensive. Under universal credit, there are likely to be changes. We are looking at how we deal with temporary accommodation—especially the division between the management costs to which he referred and the actual housing payment element. We are out to consultation on that area and there will be more developments.

On the mental health issue that the noble Lord, Lord McKenzie, raised, those who have been assessed as being in the support group under ESA will be exempt, as will those receiving DLA and, later, PIP, so they will not be affected. The reason that PIP is not specifically mentioned in the regulations is that the PIP regulations have not yet been laid, so they will be consequential.

We do not have any information about other types of income that those households have—to answer a question asked by the noble Lord, Lord McKenzie. Where they do not have any other income, a claim for DHP can be made. I have already detailed the funds available.

Several noble Lords asked about stories of local authorities sending people all over the country. I remind noble Lords that it has always been the case that London boroughs have sent people out of borough and, in some cases, many miles away. The reason is that people come from all over the country to London boroughs; it is not always appropriate to house them in those boroughs and they are sent out. There is an important distinction to be made between local people and those who arrive with a homeless obligation in a particular borough. It is important because new regulations come into force later this week, on 9 November.

[Lord McAvoy]

Sorry, but will the noble Lord let me intervene at this stage? So if there are two families, a recently arrived family and a longer staying family in a borough, somebody would decide that the newer family, for want of a better description, should go and the older residential family should stay?

[Lord Freud]

I am referring to people who arrive in Euston and turn up homeless in Camden. They do not have the local links. There is a homelessness duty on Camden to do something, but there are not the local links. That has always been the position.

--- Later in debate ---

[Lord Freud]

Perhaps the noble Baroness will let me finish the point. A lot of the stories in the newspapers refer to the former. Councils have had arrangements for many years with other councils some distance away. We have reinforced the point—this is where the regulations coming in on 9 November apply—that where people are local, the council has to consider whether the location is suitable for the household’s individual circumstances, including the significance of any disruption to employment, education and caring responsibilities. Local authorities are required to carry out a full impact assessment before moving people out to other boroughs.

[Baroness Lister of Burtersett]

I am sorry to push this, but if the stories are referring to the first group, why are local authorities expressing fear that they could be subject to legal challenge for moving families out? We are talking about a different group.

[Lord Freud]

I am trying to say that if you read the stories carefully, as I have been, you will see that they refer to preparatory moves about what councils may do and what they are preparing for. The stories are fairly evanescent, if you look at them closely. Clearly one reason for that is that these changes have not happened yet. Through this year, we have had the introduction of the LHA reduction from 50% to 30%, which my noble friend Lord German talked about. There has not been a huge flood of changes as a result of that. The stories are about councils being worried and their preparatory plans. They are about plans to move people around councils, but local authorities have always done that, for the reasons that I have given. They have always had this problem in London—people arrive and the councils have had to do something about them. Let me repeat the obligation in the 9 November regulations. Under the regulations, local authorities are required to keep people in the local area whenever they can and to carry out a full impact assessment before moving people out to other boroughs. We have strengthened that localism point in recognition of the same sentiments that are concerning noble Lords today.

[Lord McKenzie of Luton]

Could the noble Lord just remind us which regulations these are? Is it right that they have already been laid and will come into effect? Under which provisions are they?

[Lord Freud]

They were DCLG regulations—I cannot remember the exact title, so forgive me. They have been laid and cleared and they are due to come into effect on 9 November. They are under the Localism Act—the noble Lord may be more familiar with them than I am.

On whether people will be treated as intentionally homeless if they are evicted as a result of rent arrears caused by the cap, again, it is for local authorities to make decisions on individual homelessness applications, as they do now. Under the statutory legislation, if the only reason for a person’s homelessness is a reduction in benefit that is outside their control, they should not be considered intentionally homeless by their local authority. The help available includes cases where the reduction is not much; it includes help in renegotiating rent or making up small shortfalls, help with moving to more affordable accommodation, other means of trying to help people back into the workforce, and so on.

There was a group of questions around the delivery process, which I will try to gather up into one. The department will identify cases through scans of analytical data, which will be clerically checked against live IT systems to see whether any exemptions or grace periods are in place, and it will obtain up-to-date benefit amounts. Data will then be transferred electronically to local authorities via ATLAS. The LA will confirm the correct amount of housing benefit and can apply the cap via an automated system. It will issue a notification to the claimant informing them that their housing benefit is being capped and the amount of their new housing benefit award. This notification will also give information on support available and who they should contact if they have a query about the decision.

[Lord McKenzie of Luton]

Before the Minister leaves that point, I am interested to understand the process, the mechanics. He said that there will be scanning of all the data. Of course, some of that would have to be of benefits that do not currently feature in housing benefit calculation. Will that be an ongoing scanning? I see that the Government are going to do something upfront to try to identify people, but people’s circumstances change. Will it be a real-time scanning?

[Lord Freud]

When there is a change in circumstance, it is up to the claimant to inform us of that, as it is now. We are still in the old world, or the existing world before universal credit. To ensure that all changes of circumstance are applied in a timely manner, we will use CIS, the customer information system, to report them. I think that the noble Lord is referring to that system, which holds a record of most benefits included in the benefit cap calculation. As the noble Lord pointed out, some of them are not included in CIS—especially child benefit, which will be identified by a further data match with the monthly IGS scans.

[Lord McKenzie of Luton]

I know that the noble Lord has a lot to get through, but is the obligation to report a change of circumstances an obligation arising from a change of circumstances which would affect the application of the cap, quite apart from obligations in respect of other benefits? Is that what we are talking about here?

[Lord Freud]

I was referring to the change of circumstance to the individual. Clearly, if we are changing benefit structures in some way, we will know that and be able to make that adjustment and send the new information over to ATLAS, but the important facts are the changes of circumstance of the individual, who will make the application for the benefit in the normal way. It will come through the systems and be scanned, checked, compared and sent over.

[Lord McKenzie of Luton]

A change of circumstance that would put someone within the benefit cap when they were not currently? Would an individual making a housing benefit claim have to say, not only, “I have applied for a change of circumstances that may change the level of housing benefit”, but, “I think I am therefore liable for the cap? Can you do me for it?”?

[Lord Freud]

It will not be exactly like that. It will be no change from the present position, where you should inform us of changes in your benefits in the normal way. When that happens, it will work through in the normal way into our systems. There is an obligation on all benefit recipients to inform us of changes in circumstances. There is no obligation on the part of the benefit recipient to inform us in relation to the cap; it is only to inform us in the normal way of changes in circumstance, as applies to the rest of his or her benefits.

[Lord McKenzie of Luton]

I apologise; I promise not to intervene again after this one, but that obligation, for example in relation to housing benefit, would be to report the change of circumstance to the local authority, not to the DWP. How does that fit with the notion that it is basically the DWP which has to notify the local authority, “We’ve got somebody here who may be subject to the cap”? Seemingly, there is no ongoing separate obligation on the local authority to report back in the opposite direction?

[Lord Freud]

I will be corrected on this if I am wrong, but ATLAS works both ways, so the information flows both ways, so we will have the information and will be able to notify and go through the normal process. We will know what is happening on housing benefit. That is how it will flow back and forth. There had to be an adaptation to ATLAS to make it a two-way flow. When it started, as the noble Lord probably remembers, I hope with nostalgia, it was a one-way process.

How and when are the guidelines being produced? The local authority Practitioners Operational Group, with a subgroup based on the benefit cap, has been briefed at working level on detailed procedures and guidance. Members have confirmed that people will develop detailed guidance and products which will supplement those to be published via the DWP intranet and the LGA’s knowledge hub.

The way that the benefit cap interacts with financial sanctions is that the benefit cap will apply to the overall level of household benefits. If the sanction is imposed, any reduction will be applied to the sanctioned benefit after the application of the cap. Otherwise, clearly, the impact of the sanction would be negated.

My noble friend Lord German and the noble Lord, Lord McKenzie, raised the issue of ESA. The specific exemption is to do with the people in the support group of ESA, not in the WRAG group. Several noble Lords mentioned carers. The benefits system is designed to provide financial support where caring responsibilities prevent carers working full-time. As such, the carer’s allowance should be treated in the same way, for the purposes of the cap, as other income-maintenance benefits. Clearly, where the carer is in the same household as someone entitled to DLA or ESA support, the whole household, including the carer, will be exempt. Most carers of working age want to retain a foothold in the labour market where possible. We know that more than nine in 10 claimants receiving carer’s allowance are claiming another out-of-work benefit. In other words, they are looking for work. Carers who move into work clearly become eligible for the working tax credit and will be exempt from the cap.

[Baroness Lister of Burtersett]

I am still unclear what behavioural change the noble Lord seeks from that group of carers. If they are already seeking work anyway, why do they need the cap to spur them on to do it on top of their caring responsibilities?

[Lord Freud]

Clearly, we are expecting that they will find work at that level.

On the grace period questions from the noble Lord, Lord McKenzie, which really boiled down to the self-employment questions, they are entitled to working tax credit if they meet the other conditions. On the 50 out of 52 weeks, there may be a gap in employment, but my understanding is that SSP, statutory sick pay, which is paid by the employer in the case of the employed, would constitute being in work, for obvious reasons. That actually responds to my noble friend Lord German’s questions.

--- Later in debate ---

[Lord McKenzie of Luton]

Can the Minister help me on one more point on the period of grace? If somebody is employed but falls out of work completely, and would otherwise fall within the benefit cap, the period of grace would operate. One of my questions is to do with circumstances where somebody is outwith the benefit cap because they are fully employed and then they fall below the level at which working tax credit kicks in. They are not unemployed at that stage, but their earnings are lower, their benefits are higher and they are potentially within the cap. Does the period of grace protect them in those circumstances? It would be logical that it should, but I am not sure that it does.

[Lord Freud]

Yes, effectively, in the current system, going below the 16 hours would take you into the benefit system, so formally out of work. Clearly, under universal credit it would be a very different system, and we would have to have a notional figure of what the equivalent of work is, which we will introduce when we have the universal credit. The noble Lord is absolutely right in his analysis and his conclusion that there is no other way of doing it when you think about it, given our existing system.

My noble friend asked when we will publish our guidance. We had consultation on that guidance in August and we will make it available towards the end of the year. I can confirm that DHP will be allocated on the basis of greatest need. We are consulting with local authority representatives right now—in November—and we will make an announcement at the end of that time.

I am taking a long time, but with the forgiveness of noble Lords I will keep going, because there are a lot of interesting questions to answer. I could end up writing, but I would prefer to deal with them now if noble Lords will indulge me. My noble friend raised the cumulative impact of the changes on the housing market. We are monitoring this really robustly; I think we have one of the best assessments on what happened to housing changes in terms of the LHA changes that we have made. I think the noble Lord, Lord Best, would agree that it is one of the most thorough examinations of what really happens in a housing market when you make these changes and it will be valuable for a lot of the purposes. Clearly there is an overlap when we look at the effects of the benefit cap as well.

On the issue of the calculator not working, we have had stringent availability standards and there were two short periods when it was down for maintenance. There is a lot of help available to use it. On behavioural change, one of the things you can never predict when putting in these pressures is how people’s behaviour will change. However, we really are working with a lot of stakeholders to make sure that decisions are made such that people respond positively to the implication of the cap for them.

I can confirm to my noble friend that we are committed to tackling child poverty, but clearly our focus is on trying to tackle the causes of that poverty and not just moving people around on slightly artificial income lines. One of the things that universal credit will do is to move a lot of adults and children out of poverty. I make the same point to the noble Baroness, Lady Lister. We are looking for better measures and clearly the negative impact on child poverty may be mitigated if affected adults in the family move into work and the benefit cap supports our plans to make work pay. The £500 per week limit for couples and households with children is above the poverty line for a lone parent with up to four children, and broadly equates to the poverty line for a couple with four children; looking at the mechanics, that is where it is.

[Baroness Lister of Burtersett]

The point I was raising was about the effect on child poverty should the Government introduce a new cap on families who are not in work with three or more children, over and above the benefit cap. What work is being done in the department to look at the effect of the interaction of these two different caps on child poverty? It is possible that the noble Lord was about to go on to this but he seemed to be moving on to another issue.

[Lord Freud]

We have not done any work on that because it is not agreed government policy, but it is something that we are looking at, clearly. To the extent that we do look at it, it will be done on flow and not on stock. That was very clear in some of the discussions on this particular option. However, it is about people who get more than two children rather than people with more than two children. People will at least be able to plan their families should that become government policy. Regarding local networks, as raised by the noble Baroness, Lady Lister, clearly we acknowledge their importance. That is one reason for the regulations coming in on Friday: to try to ensure that people are not moved without very serious consideration.

There was a question about our early findings. There has not yet been a coherent survey. However, there are some interesting figures from our early findings showing the effect of the cap, and I think we will be able to share those more widely when they are locked down. As the noble Baroness said, it is absolutely essential that we do not confuse things that are happening anyway, and that we try to get analysis of the excess. There is, however, an interesting point: quite a few people dropped out of the benefits system when this started. That is not a surprise. One would expect to find some of the people who feel uncomfortable claiming gathered in the area with the highest numbers of claims—I put that as delicately as I can. I hope to be able to give some more information on that.

The noble Baroness asked about childcare. Jobcentre Plus recognises the importance of childcare as a key enabler, and clearly financial assistance is available for a claimant moving into the labour market. We accept the need for appropriate childcare when we make that judgment.

I think that I have done my best to deal with the point about temporary accommodation. The noble Lord, Lord Best, talked about rent levels and urged a regionalised system, quoting the originator of the welfare state. The rate of increase in rent has slowed down a bit over the past year and local authorities are working with households affected by the cap to ensure that they are able to locate affordable homes. I was just looking at some rental levels, which show a slight slowdown in some months of the year.

I am running out of time. There is a lot of other business and I have to stop now. I will have to write on the other matters, as there was just so much—I counted 40 questions from the noble Lord. I commend the draft Benefit Cap (Housing Benefit) Regulations 2012 to the Committee.

Motion agreed.

Unemployment: Young People

Lord Freud Excerpts

Wednesday 24th October 2012 Lords Chamber

[Lord Bates]

To ask Her Majesty’s Government what further steps they will take to reduce the level of unemployment, particularly among young people.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

The recent rises in employment and falls in unemployment, including among young people, are encouraging. We are committed to providing support to young people to give them the work experience and skills they need to find sustained employment. This includes the youth contract, which will provide nearly half a million new opportunities to young unemployed people over the next three years, as well as the Jobcentre Plus offer and the Work Programme.

[Lord Bates]

I am very grateful to my noble friend for a very encouraging answer. It is wonderful to see more young people getting a job, but would he agree with me that there is one thing better than getting a job, and that is creating a job? Would he therefore consider bringing in new measures to encourage more young people—be they unemployed, school leavers or graduates—to set up their own businesses and thereby unlock the vast creative capital among our young unemployed?

[Lord Freud]

Yes, my Lords, my noble friend makes a most valuable point. We are expanding the New Enterprise Allowance to encourage more people—in particular young people—to start up businesses. While this includes financial aspects such as offering loans and financial support, it is the mentoring tied up with that process that helps the youngster, or indeed anyone taking part, in actually making that business a success.

[Baroness Wall of New Barnet]

The noble Lord, Lord Bates, has referred to creating jobs, and having a job is really important. But would the Minister agree that having a career that includes an apprenticeship gives those very young people a substantial opportunity to grow? In the funding that is available there are opportunities for young people to go straight into apprenticeships, which creates an income, not only for themselves, but for UK plc going forward.

[Lord Freud]

The noble Baroness is absolutely right. Apprenticeships are a vital route for youngsters to get into the workforce. We have put a lot of extra funding into apprenticeships, and the numbers are going up pretty steeply.

[The Lord Bishop of Leicester]

My Lords, could the Minister tell us what the Government are doing to ensure that the most vulnerable young people who enter the Work Programme are not simply parked by contractors because it is not financially viable to invest the resources needed to support them into work?

[Lord Freud]

Well, my Lords, the structure of the Work Programme is designed to make sure that no one is parked in that way. There are specific measures to prevent that happening. The main way in which to get the people who are the most difficult to get into work is by pricing; we price those people more highly than people who are simpler to get into work. We have also, as noble Lords will be aware, introduced a subsidy programme to encourage employers to take youngsters who are NEET into the workforce.

[Lord Martin of Springburn]

My Lords, the Minister will readily acknowledge that because of unemployment, some young people are unable to get work until they are 19 or 20. I know that he does not have the information now, but could he place in the Library the figure for how many UK adult apprenticeships there are? That would be very helpful.

[Lord Freud]

My Lords, the figure I have on apprenticeships for 19 to 24 year-olds is 31% of the total, which is 457,000 starts. I cannot work out the 31% in my head, but I might be able to do it later.

[Lord McKenzie of Luton]

My Lords, on the matter of the youth contract, how many wage subsidies have been taken up to date? How does the Minister consider that sustainable employment opportunities for young people would be enhanced by denying the right for under-25s to access housing benefit?

--- Later in debate ---

[Lord Freud]

My Lords, the wage subsidy is paid after six months. It was introduced at a time when remarkably few came into the workforce, so we would expect to see the figure start to move in the months to come and will be publishing the information on that basis. As to the second question, that is not government policy, although it is a matter of debate what is the right level of support for youngsters in the housing market.

[Lord Roberts of Llandudno]

Is the Minister aware that the youth unemployment situation varies from area to area: in some places it is very severe; in other places it is more favourable? What are the Government going to do to concentrate any extra resources in those areas that are really in most desperate need?

[Lord Freud]

My Lords, we have a whole range of programmes now. All of them are much more individualised than previous programmes, so there should be a response to different regions so that the money goes where the need is. I have previously cited the figure for how many youngsters are inactive and unemployed. In the most recent set of figures, I am pleased to say that we have got that figure down to 1.36 million, which is below the level at the last election. So we are doing something about that terrible structural problem of the NEETs, which has been growing over the past decade.

Occupational and Personal Pension Schemes (Automatic Enrolment) (Amendment) (No. 3) Regulations 2012

Lord Freud Excerpts

Wednesday 17th October 2012 Lords Chamber

Moved By

[Lord Freud]

That the draft Occupational and Personal Pension Schemes (Automatic Enrolment) (Amendment) (No. 3) Regulations 2012, the draft Child Support Maintenance Calculation Regulations 2012 and the draft Child Support Maintenance (Changes to Basic Rate Calculation and Minimum Amount of Liability) Regulations laid before the House on 2 July be approved.

Relevant documents: 6th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 15 October.

Motions agreed.

Young Offenders: Employment and Training

Lord Freud Excerpts

Wednesday 17th October 2012 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, I join other Peers in thanking the noble Baroness, Lady Healy, for raising this important issue. I also thank all noble Lords for their valuable contributions. Young offenders face multiple barriers in accessing employment, training and jobs on release from prison. If we are to tackle these problems and take effective steps to reduce reoffending, there has to be a co-ordinated response across government departments. Since May 2010, the Government have led positive change on how we tackle the causes of crime to reduce reoffending rates, as a number of noble Lords spelt out. The Government are committed to offering young unemployed people the opportunity to access high quality training relevant to the labour market so that they can gain the skills they need for sustainable employment and enable them to progress in a learning and work environment.

I will do my best to answer as many of the points put to me as possible, but I suspect that I will not get through them all in the limited time available. Before I do so, I will go through some of the steps that DWP is implementing to respond to the noble Baroness, Lady Nye, who looked at the programmes she liked, to try to explain that what we have replaced them with are in many cases doing the job rather better. Since last April, Jobcentre Plus managers and advisers have been given more flexibility to tailor support to claimants and local market needs. To support this, Jobcentre Plus has introduced a suite of measures bringing together communities, the voluntary sector and employers to help people get back to work. That support is complemented by the Get Britain Working measures: the new enterprise allowance supports those looking to start their own business; work clubs help claimants to share skills and experiences; the Work Together programme helps claimants to develop skills through volunteering; work experience is particularly important because it enables young claimants to get a placement with a local business; and finally a range of sector-based work academies which offer pre-employment training and work experience placements.

We added to that in April this year the Youth Contract, providing an additional £1 billion of support for young unemployed people over the next three years. The Youth Contract builds on existing support to provide young people with more intensive adviser support and work experience, as well as providing employers with wage incentives and apprenticeship incentives to encourage them to recruit young people. Within that total, £150 million of new support is directed at the most disengaged 16 and 17 year-olds to help them get into sustained learning, an apprenticeship or a job with training. In addition, we have launched a new innovation fund of £30 million over three years for social investment projects of the kind that the noble Lord, Lord Aberdare, would, I am sure, have his eye on in terms of providing opportunities. These projects aim to support disadvantaged young people and those at risk of disadvantage, with a particular focus on those aged 14 and over. We have completed the first round of commissioning for the projects and we are now looking at the second round.

Apprenticeships are right at the heart of the Government’s drive to equip people of all ages with the skills that employers need to prosper and compete. We want to make it as simple as possible for employers to take on apprentices, and we want advanced and higher level apprenticeships to become the level to which learners and employers aspire.

I am sure that all noble Lords are aware that last year we introduced the Work Programme, the biggest single payment-by-results programme in this country and possibly anywhere else. In response to the inquiry of the noble Baroness, Lady Sherlock, we introduced a feature to ensure that all offenders leaving custody are given immediate support through the Work Programme, on the proviso that they claim jobseeker’s allowance. So it is that group. Of the total of 80,000 leaving, 30,000 are in that category. I can also confirm that when we move to universal credit, the effect will be much wider. Not only can prisoners get on to the benefit system in prison, they are then picked up on day one. As the noble Baroness pointed out, that is a wonderful development.

Is that money enough? That is a good question. We will find out. It can be supplemented by the apprenticeship and employment incentives structures, so that is not all the money that is going to those youngsters. The noble Baroness was concerned that there would be parking after a period; it does not work quite like that. If you get a person into a job within two years, they are sustained well beyond the initial two-year period. You are not locked in to that two-year period; you have two years to start them on the process.

I will now try to pick up on as many other questions as I possibly can. There was an enormous number, so I will not cover them all. Where I have not been able to cover them, I will write.

Many of the questions surrounded my noble friend Lady Linklater’s jingle of a roof, a relationship, and a job, and looking at how one achieves that. When we look at the schools agenda, both the noble Lord, Lord Warner, and the noble Baroness, Lady Healy, talked about the Youth Justice Board which supported the establishment of seven resettlement consortia which aim to provide a co-ordinated approach across local authorities for all young people leaving custody, so that they can access the services that they need to help prevent them from re-offending. Each of these consortia engages with the third sector and private providers through national and local organisations, as the noble Lord, Lord Warner, pointed out.

In addition, the Ministry of Justice is now working with the Department for Education to take forward the commitment in the cross-government Ending Gang and Youth Violence report to explore ways to improve education provision for young people in and released from the secure estate.

The result of the review, Making Prisons Work: Skills for Rehabilitation, which came out in May 2011, means that a refreshed curriculum is being introduced in prisons, and there will be a strong focus on providing training and access to apprenticeships to prepare prisoners for employment. We are increasing collaboration between Jobcentre Plus, the National Careers Service, probation, colleges and other training providers to make sure that they are referred to the appropriate training and work opportunities.

The work in the private sector that my noble friend Lady Linklater talked about is based on the Jobcentre Plus provision of about 180 advisers working in prison, providing help and advice to offenders. Clearly, that ties in with early referral to the Work Programme.

With regard to some of the further measures that the Government are taking, the Home Office has committed £18 million of funding for 2012-13 to support the police, local agencies and the voluntary sector to tackle knife, gun and gang-related violence and prevent young people entering a cycle of crime. An Ending Gang and Youth Violence Team is now place, with the support of a virtual network of more than 100 advisers.

Picking up the concern raised by the noble Baroness, Lady Healy, on housing benefit for under-25s—the “roof” in the jingle—I remind her that that is not government policy, as she suggested; it is a topic of debate at this stage and no decisions have yet been made. I should also point out that were such a decision to be made, the issue that was being discussed was around automatic entitlement to housing; it does not necessarily mean that the most vulnerable groups would be excluded from such housing.

My noble friend Lady Stedman-Scott raised the issue of commissioning. Coincidentally, I have been taking a deep interest in that lately and have been meeting some of the financial groups considering it. She has put her finger precisely on the issue: we need a group that organises the structure between government and providers, a commissioning body or bodies to do that and get it to work well.

I must conclude. Punishment of offending behaviour upholds the values of law and order that all civilised society is based on. We know that work is a primary factor in reducing reoffending. The Government are working hard to ensure that young offenders emerge better equipped to become part of law-abiding communities and better able to reintegrate into society and build the skills necessary to have useful and productive lives.

House adjourned at 7.32 pm.

Unemployment: Older Women

Lord Freud Excerpts

Tuesday 16th October 2012 Lords Chamber

[Baroness Thornton]

To ask Her Majesty’s Government what steps they are taking to address unemployment among older women.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, the Government, through universal credit, the Work Programme and Jobcentre Plus flexibilities, are reforming the welfare system to improve incentives and provide more effective support to those without work. Advisers now have the flexibility to offer all claimants, including older women, a comprehensive menu of help which includes skills provision and job search support. All claimants who are long-term unemployed can access the tailored, back-to-work support on offer from the Work Programme.

[Baroness Thornton]

I thank the Minister for that reply. Indeed, this Question is by way of my 60th birthday present to myself—

[Baroness Thornton]

—asking the Government what they intend to do about the fact that older women are losing their jobs at a much faster rate than men. Indeed, unemployment rocketed by 27% last year. This is further evidence that this Government really do not understand the issues which are important to women. Does the Minister acknowledge the disproportionate and negative impact that the austerity agenda is having on the lives and employment of all women, but particularly older women?

[Lord Freud]

My Lords, I must congratulate the noble Baroness on her birthday. However, I must also commiserate with her as she has been completely bamboozled by her colleagues in another place. I have never seen a more misleading use of data for years, not since the 1970s when Denis Healey discussed inflation. If you take a very small figure and add 27% to it, you will find that it is still a very small figure. The actual level of unemployment of women in the 50 to 64 age group is 3.9%. That is the lowest rate of unemployment of any group of women. It is the lowest rate of unemployment of any group of women or men. Therefore, I do not think that the noble Baroness has pinpointed a particular point of concern in terms of unemployment.

[Baroness Brinton]

My Lords, one of the major challenges facing many older women in preparing for their retirement is the current complexity of the pension and pension credit system, which puts women at a disadvantage. Figures suggest that some women on average receive £40 a week less state pension than men as a result of changes. What is the department doing to simplify the system and give clarity to women as to what level of state pension they will receive?

[Lord Freud]

My Lords, as my noble friend will know, we are making big strides on pension provision. We have introduced the triple lock and we are talking about introducing a single tier of pensions, which will massively simplify the overcomplex pension provision in this country.

[Baroness Greengross]

My Lords, have Her Majesty’s Government looked at not just the salaries of those older women who are in work but at the terms and conditions of their employment—for example, the use of zero-hour contracts? Is there full recognition among government inspectors and so on that for many this is the primary, not secondary, source of income in the family?

[Lord Freud]

My Lords, the crude facts of the matter are that more older women are employed than ever before—3.5 million—and the rate of employment is also at an all-time high of 60.6%. Older women are doing extraordinarily well in the workforce and the reason for that is that they are very valuable employees. Even the BBC seems to have got round to recognising that.

[Baroness Turner of Camden]

My Lords, does the Minister not appreciate that many older women have not only the job of going out and trying to build up the family income but a valuable role as carers in many families? What can be done to assist women who have this double responsibility, both of working to boost the family income and providing much-needed carers in the family?

[Lord Freud]

My Lords, this is clearly of great concern to this Government and all Governments. We are taking significant steps to help carers. About one in six of older women who are inactive are inactive because they have caring responsibilities. Creating a far more flexible carer’s allowance and a universal credit element is one of the ways in which we are looking at that issue. We are also introducing flexibility in our conditionality regime at Jobcentre Plus.

[Baroness Afshar]

My Lords, is the Minister aware that a large number of minority older women do not register as unemployed but get employed in the black market and so do not have a pension from the jobs they have done? They are the people who are most unlikely to be employed in the formal labour market because, although they have extensive experience, they do not have the necessary paper qualifications. They are submerged in the data that are being presented.

--- Later in debate ---

[Lord Freud]

Noble Lords will all be aware of our concern to reduce the level of inactivity in the economy and the level of unemployment is only one way of looking at the figures. The most important thing is how many people are employed and what is happening to the level of inactivity. I am pleased to say that the level of inactivity for this group is going down quite sharply. Since the election, 110,000 fewer people are inactive, and that is something we are continuing to drive.

[Lord Wigley]

My Lords, is there not a danger of being a little complacent in this matter? Does the Minister accept that between August 2011 and August 2012, there was, over the UK as a whole, an increase of 7% in the unemployment rate for women over 50, but in Wales the increase was 14%, which is quite worrying? Does he accept that there is cause for concern and that we should take steps to minimise those figures?

[Lord Freud]

My Lords, when you have scarce resources, you must direct them efficiently. When you look at other groups with high rates of unemployment—the rate is 16% for women in the 18 to 24 age group while in this group the rate is 3.9%—you have to consider where you can most efficiently direct support. Do not forget that in the time we are talking about pension age has been increasing. The element of the impact of the increase is very small on a figure of unemployment that across the economy as a whole is probably below the rate of frictional unemployment.

Housing Benefit (Amendment) Regulations 2012

Lord Freud Excerpts

Monday 15th October 2012 Grand Committee

Moved by

[Lord Freud]

That the Committee do report to the House that it has considered the Housing Benefit (Amendment) Regulations 2012.

Relevant documents: 6th Report from the Joint Committee on Statutory Instruments, 7th Report from the Secondary Legislation Scrutiny Committee.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, these regulations introduce the underoccupancy reductions for working-age social sector tenants. They also support the implementation of the annual CPI uprating of local housing allowance. The regulations are regarded as being compatible with rights under the European Convention on Human Rights. This policy was debated at length during the passage of the Welfare Reform Act. On top of that, many noble Lords came to the briefing session that I ran for MPs and Peers before the summer Recess. I am grateful for their input. I do not intend to go over old ground. There is nothing new in the regulations that we did not debate during the passage of the Act. The purpose of today is to look in detail at the working of the regulations.

As I have said, there are two main purposes to the regulations. First, they make two changes to support implementation of the measure to uprate the local housing allowance by CPI from April 2013. The current provision to review existing LHA cases on the anniversary date of the claim will be abolished from January 2013. Instead, all claims will be reviewed annually on 1 April when the new LHA rates are set. This brings LHA in line with annual changes to other benefits. There will also be provision to review a case if the rent changes throughout the year, so that tenants will not have to wait until the annual review date.

Secondly, the regulations introduce restrictions to housing benefit for working-age claimants who are living in the social rented sector and occupying accommodation larger than their household size requires. The same size criteria that are applied to claimants living in the private rented sector will be used to determine whether accommodation is being underoccupied. These changes will result in a 14% reduction to housing benefit for those underoccupying by one bedroom and a 25% reduction for those underoccupying by two bedrooms or more. The average reduction in housing benefit will be £14 per week for those affected.

The reasons for reform are clear. As noble Lords are aware, this is part of a package to contain housing benefit expenditure. Importantly, there are more than 250,000 households living in overcrowded accommodation in the social rented sector in England—they need more space. We cannot justify paying housing benefit to cover the cost of extra bedrooms while others struggle in cramped accommodation. People who rent from a registered social landlord or local authority have in large part had their rent paid in full through housing benefit. This is not the case for those who receive housing benefit for a privately rented property. They have to make hard decisions about what is affordable to them and where to live, as do people who pay their own rent in full. It is time for those in the social rented sector to make similar choices. Some tenants may look to meet any shortfall in housing benefit by increasing their hours of work or taking in a lodger.

Crucially, this change will provide an impetus for landlords to manage their stock more effectively and help us address the real shortage of homes. There are approaching 1 million extra bedrooms in the social sector that are being paid for by housing benefit for working-age customers. This is indefensible. It is a waste of valuable housing stock. Interestingly, there is already evidence within the industry of a change in management of stock since the policy was announced. Seven local authorities and 11 housing associations in the West Midlands have come together as the West Midlands Making Best Use of Stock partnership and agreed to pool at least 150,000 homes to allow tenants easy access to properties across the region. The partnership hopes that this will enable people to find a house with the exact number of bedrooms that they need in order to avoid underoccupation.

Landlords across Merseyside have also developed a region-wide home swap scheme in response to the size criteria. Twenty housing associations and five councils are taking part; they own a total of 107,000 homes between them. Of these homes, 2,000 have been identified as underoccupied and they believe that another 5,200 could be underoccupied.

We expect to see positive behavioural changes among housing benefit tenants in the private rented sector, following our earlier reforms. Some claimants have said that they will look for a job to make up any difference between their rent and housing benefit and others will look for more affordable tenancies. This supports our view that the changes are both proportionate and measured.

During the debates on the Welfare Reform Act, I made a number of commitments to noble Lords and I will take a moment to update you on these issues. I know that some are concerned because the regulations do not define what constitutes a bedroom, including the room size. However, in practice, others take a different view. After discussions with the National Housing Federation, the Riverside Housing Association and others, we have concluded that most welcome the flexibility that comes with not including in the regulations a definition of what constitutes a bedroom. Some landlords made it clear that defining this in legislation would introduce a system that might involve them having to measure every room. So we are leaving it to landlords to specify the size of property, as they are best placed to do that. We expect the information that they provide to be reflected in the level of rent charged and to match what is agreed in the tenancy agreement.

In previous debates I said that we would think about costs to landlords as part of our engagement with other departments. We are working through the financial impacts on local authorities with the Department for Communities and Local Government as part of the new burdens protocol. That department has also funded the Chartered Institute of Housing to produce guidance for landlords. Making it Fit was published in May and included information on how to model and assess any risk to rental income. My department has met local authorities and advice organisations during the development of this policy. We have also produced comprehensive guidance to help them prepare for the changes in April next year. This includes a toolkit with model letters, leaflets and posters designed to heighten awareness among claimants.

On the next issue, we are adding £30 million to the discretionary housing payments fund from 2013-14. This is aimed at helping claimants living in significantly adapted accommodation and foster carers. I said that I would keep a watchful eye on this. We are currently talking to local authorities and are considering carefully how best to allocate this money. A decision will be made later in the year. I will also keep the discretionary housing payments funding under review.

There has been much debate over whether there should be specific exemptions from the underoccupation reductions for different groups. A presiding principle in the development of this policy has been simplification. For a policy to be administered easily and simply there must be few exceptions.

I have heard concerns that we are relying too heavily on the DHP fund and that there is not enough in the fund to help all those who will be affected. But we do not expect DHPs to be available to everyone who sees a reduction in their housing benefit due to underoccupation. The additional £30 million is targeted at those in adapted accommodation and foster carers. We have added a realistic sum based on what we can afford.

Finally, I should like to confirm that as far as the research timescales are concerned, the monitoring and evaluation will be for two years from April 2013 to March 2015. Initial findings will be available in 2014 and the final report in late 2015. We hope to start the formal commissioning process in the next month or so. We currently envisage that the evaluation will include small-scale primary research with a range of social landlords in local authorities across England, Scotland and Wales. Different types of authority, including a range of urban, rural, county and district local authorities, will be included. These will be selected to cover a range of different housing market demands so that we can explore the effects of the size criteria effectively.

[Lord McKenzie of Luton]

My Lords, I thank the Minister for his introduction to these regulations, which as he has explained cover two main areas: the introduction of size criteria into the social rented sector and the process for uprating the local housing allowance by CPI. I should say at the start that we oppose the regulations, particularly those related to underoccupation. The introduction of the size criteria— I think that we should adopt the Lord Best terminology and call them the bedroom tax—via the Welfare Reform Bill was hotly contested and rightly the subject of government defeats in your Lordships’ House. As noble Lords will recall, the hammer of financial privilege was ultimately deployed by the Government to get their way on the bedroom tax, and a £13 million top-up to the discretionary housing budget paid for by increased pain on the bedroom tax does not adequately address the strong reservations that are being expressed. Nor does it compensate for the misery that these regulations will bring to potentially hundreds of thousands of households. As the Minister has explained, the impact assessments make it clear that the regulations could affect 660,000 housing benefit claimants living in the social rented sector. They could mean an average loss of housing benefit of £14 per week, which is £700 a year.

Of course underoccupation in the social rented sector should be tackled, and many councils have a variety of schemes to do this. We would certainly support the arrangements and partnerships referred to by the noble Lord in presenting the regulations, but seeking to tackle it by curtailing housing benefit, as these regulations provide, is simply not acceptable. Indeed, it does not address the situation where under-occupation as defined is most prevalent—among older tenants. One of our objections to this policy is the lack of practical alternatives that tenants face. The uprated impact assessments make it clear that there is generally a surplus of three-bedroom properties and a lack of one-bedroom accommodation, so in many areas there are simply insufficient smaller properties for tenants to move into. I would also ask the Minister how far the Government think it reasonable for someone to move and thus uproot their family from existing networks of support—100 miles, 200 miles or perhaps 300 miles. If someone has to leave a job to move to a smaller property, will that be treated as good reason for the purposes of a claim for JSA, and does the Minister have any data on the average cost of moving home?

How practical does the Minister consider some of the various options that are laid out for tenants to consider, such as making up a shortfall from income? What other income does the Minister have in mind which is not taken into account in a housing benefit calculation in the first place, and which would of course gradually have a 65% taper in any event? Does the Minister specifically include disability benefits in this consideration? If it is savings, perhaps the Minister can tell us what the average working-age household savings are and how many weeks’ shortfall in housing benefit at £14 a week they would cover? It is suggested that moving into work or increasing working hours would be a solution. So far as moving into work is concerned, what happens if there is no work, and why does the Minister consider that the incentives to come in with universal credit are insufficient of themselves to encourage people into work? For how many households does the application of the WCA determine that somebody is not fit for work?

--- Later in debate ---

[Baroness Grey-Thompson]

My Lords, like other noble Lords, I am concerned about the potentially disproportionate effect these regulations could have on disabled people. It is my understanding that all disabled tenants other than those who need constant overnight care will lose a percentage of their rent if they have more bedrooms than they need. The DWP equality impact assessment, which was updated last June, clearly shows the disproportionate effect that the size criterion measure will have on disabled tenants. Based on the Equality Act 2010 definitions of disability, some 420,000 of the total 660,000 households affected contain a family member with a disability, which makes the housing benefit regulations very much a disability issue, and one that is of great concern to a huge number of people. There is the discretionary housing payments fund for 35,000 tenants with homes adapted for wheelchair access, but that is a small mitigation in terms of the 420,000 tenants who are potentially affected. I feel strongly that long-established definitions of disability do not depend merely on the presence of adaptations or on the outward appearance of a functional disability. I am very concerned that disabled people will struggle with these measures.

[Lord Freud]

My Lords, an enormous number of issues have been raised and I will do my best to deal with them. I know that this is an area of great concern to noble Lords. That was made clear during the process of what is now the Welfare Reform Act 2012, and I remind noble Lords that there were some government defeats on underoccupancy, which were reversed in the Commons. That is where we stand as the second Chamber when considering these regulations. However, as I say, I will do my best to answer the questions put to me as rapidly as I possibly can—in a fairly random order, if noble Lords will allow me.

I shall pick up some of the issues raised by the noble Lord, Lord McKenzie. Under the Localism Act 2011 there will be fewer tenancies for life, so both private sector and social sector tenants are less likely to have absolute security. On the assessment of the impact of the overall changes, noble Lords will be aware that we have produced impact assessments for each of them. It has been extraordinarily difficult to combine them because one is not sure on which basis assessments should be made, given all the other changes that are going on. However, people affected by more than one change have the DHP fund available to them. I should point out that when the fund is taken in its entirety, we are now looking at a very substantial amount of money. Next year, for instance, the full DHP pot will be running at £165 million, plus the localised social welfare fund will move over, which I think will be another £178 million. So a lot of money that is not ring-fenced for particular things is going to local authorities, so that they can look at the problems in their area to try to provide the appropriate support.

--- Later in debate ---

[Baroness Hollis of Heigham]

That will not do.

[Lord Freud]

I could go on for longer about this. Rural areas will need to look hard at the options of adaptations to property, lodging, moving or paying for the extra room. One issue raised by the noble Baroness, Lady Hollis, is that this is not directed at pensioners who want to move down. The reason for that is the concern that it is pretty stressful for very old people to have these kinds of pressures on them. If we are to have this decision that we cannot afford to support people with extra bedrooms—they can of course have them, if they can find a way of paying for them—and have that mechanism happen to people who are still of working age and capable of making the adjustment, rather than to pensioners, then as time moves on you will move the cohort up into the pensioner group. That is what is happening with that particular issue. It is a timing issue.

On the sums and my noble friend’s question about what will be available, I will try to give a few figures for context. We expect probably around 400,000 underoccupiers to need the one-bedroom properties according to these size criteria. If we look at surveys that have been done—I am thinking particularly of the Housing Futures Network survey—around 25% of those people are likely to look for an actual move. In the previous financial year, there were about 100,000 new lettings of one-bedroom properties in the social rented sector in England and around 25,000 new dwellings completed.

[Baroness Hollis of Heigham]

And about double that on the waiting list.

[Lord Freud]

There is an implication in that: who takes priority for those new houses and then who do you take off the waiting list for the larger properties? There is then a kind of order of position that becomes somewhat more manageable. Do not forget some of the examples given, such as that there would be children in these rooms. The reality is that for the bulk of people affected by this, their children have left home. That is why they have too many bedrooms. I think the figure is—I am plucking a number from my memory—70% of the people affected by this. I will be hit hard by someone if I have the wrong figure and I will get the right one in a second but, from memory, 70% of these people do not have their children at home. That is obvious because of the underoccupancy effect.

I responded to the question on DHP use from the noble Lord, Lord Best. We are not talking about a ring-fence system with the DHPs. When you have very hard cases, of the kind discussed this afternoon, local authorities can move in and help.

As to the total figure, I have already given that as £165 million for next year. That is made up of the baseline funding of £20 million, £40 million from the LHA reforms, £30 million from the social sector—under the size criteria that we are talking about—and £75 million from the benefit cap. These are the kind of figures for people who have multiple effects.

I must correct my earlier figure of 70%. My memory was just slightly faulty; the figure is actually 66%, not 70%. I apologise.

This is a good time to answer the question of the noble Lord, Lord Best, about making an assurance. Actually, it was not Lord Best. Who wanted that assurance?

[Baroness Lister of Burtersett]

It was me.

[Lord Freud]

It was the noble Baroness, Lady Lister, who wanted that assurance on the indefinite lasting of DHPs. I clearly cannot make any assurances through into the next spending review. To commit into the next spending review is, I suspect, the shortest way to get yourself fired that I know of, in any political party. However, when it comes to adaptations and foster children, the structure of this is not an eroding factor. It might erode, but only very slowly. Clearly, any Government would have to look very closely at how they maintained that type of support when they looked at the next spending review. So if that is some small reassurance, I leave it with the noble Baroness. I do not think I have got myself fired by saying that.

[Baroness Lister of Burtersett]

I certainly do not want to get the noble Lord fired, but will the department be doing all it can to ensure that that money is maintained into the next spending review period?

[Lord Freud]

We are doing a serious review, as the noble Lords, Lord Best and Lord McKenzie, and others have pointed out. We take reviews very seriously. They are public and they provide information to look at as we consider how we go forward. I certainly can say that the department and I take the information from these reviews very seriously. That is as far as I can go at the moment. The noble Baroness perhaps understands better now than when we were going through the Bill when I am making a move and when I am not.

Perhaps I may pick up on a point made by the noble Baroness, Lady Hollis, about overcrowding. Clearly the primary reason for these regulations, and we have made it absolutely clear, is that this is a huge Bill and we have to look at where we want to spend the money and how we make the half a billion pounds in savings. In other words, if we do not make savings here, where else do we make them?

--- Later in debate ---

[Lord Freud]

I do not want to get into a huge debate about housing policy because it is a huge and complicated area. Clearly, we are dealing with counterfactuals. There are some signs of bearing down on rents. During the middle part of this year, rents were below the CPI increase. As the noble Baroness argues, we are probably fighting supply and demand pressure going the other way. Within that, there are some signs that we are bearing down. Clearly, the Government’s strategies on getting more housing, particularly build-to-let, in the private sector as well as social housing are important initiatives. We have 146 providers delivering 80,000 new homes for affordable rent with government funding of just under £1.8 billion. Over the 12 months to August, private rents went up by 2.9% on the LSL rental measure for England and Wales, which is not hugely out of line with the CPI.

Arrears are clearly a primary concern for housing associations. I am aware of that. It is about managing the different proportions. When you look at the pie chart of the number of tenants who are affected, housing associations will have to watch closely how a proportion of tenants are supported. From going around talking to housing associations, I know they are ramping up their support for those groups. One of the interesting things about the housing demonstration projects is how housing associations are saying, “We thought we knew our tenants and we are finding with these demonstration projects that we did not, but we are now establishing completely different relationships with them”. I am sure that the noble Baroness’s housing association knew its tenants much better than the average, but that is what I am hearing from the demonstration projects.

On the point made by the noble Baroness, Lady Lister, the scheme already recognises the need for an extra room where there is a need for an overnight carer in the private rented sector, and we have carried that over into this scheme.

On the point made by the noble Lord, Lord Shipley, the legislation sets out the types of eligible charges, and guidance will provide more detail. We expect the costs to be met broadly as now.

The noble Baroness, Lady Lister, made a point about human rights. We have DHPs to assist people to move, and local authorities must consider human rights and obligations when making decisions about these kinds of cases.

The noble Lord, Lord McKenzie, asked about households not fit for work, and I think I have dealt with that. The two-thirds figure has not changed, and 56% report a disability that leads to a significant difficulty with one or more areas of daily life. That does not necessarily mean that the daily lives of the two-thirds are affected by their disabilities. I have touched on the question put by the noble Lords about what people can do; there are four or five things that can be done.

One or two noble Lords asked about income from lodgers. The first £20 of weekly income is disregarded entirely, which will usually cover the amount of money in the reduction, and half of the remainder is taken into account. I have made sure that under universal credit, the entire amount is disregarded. That is to be introduced from next year. I was asked by the noble Lord, Lord McKenzie, about the average cost of moving home. DCLG estimates that it is about £500 per move. On questions about the CPI, again that is to keep the pressure on. We froze it a year ago so that we can make the standardised changes with regard to CPI in April 2013. I was asked how long that pressure is likely to last. We have made it absolutely clear that we need to keep it under review. People have made projections up to 2030, but we are in unusual times since earnings normally rise faster than inflation and thus drag up other factoring events. Usually one would expect to have to review the figures as those factors come through. I am not sure yet how we will do the review, so I cannot spell it out. However, as we get closer to the right period, we will look at exactly how it will be done. I repeat, we will take it seriously.

[Baroness Lister of Burtersett]

I am sorry to hold the noble Lord up. I understand if he is not yet able to say how the review is to be carried out, but when the department does know that, could he perhaps tell noble Lords?

[Lord Freud]

I have pleasure in giving a commitment that I will tell noble Lords exactly how we plan to do it when we know. I think I have covered all the issues that were raised—

[Lord Kirkwood of Kirkhope]

I apologise for interrupting the Minister’s progress. Is there a communications strategy that will roll out with the policy? Obviously, this will have to be delivered by housing associations and local authorities. Is the noble Lord confident that proper notice will be given to those who are affected so that a letter will not arrive in the letter box a fortnight before the policy crystallises?

[Lord Freud]

We are holding a big exercise with local authorities and housing associations and, indeed, the institute is doing a lot of work on this. All the materials are currently going to the relevant bodies and it is up to them to deliver it. They have DWP-branded material in the form of leaflets and so on, so the information is available and ready to go out. Clearly, a lot of effort is going into working out who will be affected and making sure that they get support. There are model letters and leaflets that make up a full toolkit.

I hope I have dealt with the issues. Again, I know full well that noble Lords do not like this policy. That view has been expressed in the Chamber twice and I remember that absolutely, as I suppose noble Lords do, too. There is history here. Our votes were overturned by the Commons, this came back and noble Lords tried again. In the end, after one iteration of it was stopped, I said that I would take following that up in terms of research very seriously, and I set that in train. I hope noble Lords will accept that, unpalatable as these measures are, we have found the best balanced way of reducing the housing bill, which is simply enormous now. No one has said to me, “There is another, easy half a billion to find in the housing bill this way”. This is the fairest way of doing it. It requires a response from local authorities, housing associations and tenants but one that, in the majority of cases, those groups will be able to make. There will be hard cases. Let us hope that we have put enough resource into looking after various hard cases. With that, I hope that on balance noble Lords can support these regulations—with reluctance. I commend them to the Committee.

Motion agreed.