Welfare Reform Bill

Sheila Gilmore Excerpts

Wednesday 15th June 2011 Commons Chamber

[John McDonnell]

Amendment 53 relates to the abolition of the social fund and addresses a number of the concerns that Members raised on Second Reading and in Committee.

The Government propose to abolish key elements of the social fund—the community care grants and the crisis loans—and to replace them with support through local authorities. The social fund, particularly the crisis loan, is critical to many Members in representing their constituents. That is the case not only in my constituency but across the country. These mechanisms support people in desperate need and at key times in their lives, and they are safety nets when people are facing essential expenditure that they cannot meet. My concern is that many organisations have made representations to the Government, Committee members and Members of the House urging that the social fund should not be abolished without robust and effective alternatives put in its place. The proposal should certainly be fully explored and tested before any change is made.

Social funds have been critical. The numbers of recipients of social funds and of applications demonstrate their importance. In 2009-10, there were 640,000 applications for community care grants, 3.64 million for crisis loans and 1.69 million for budgeting loans. Some 263,000 CCGs were awarded, 2.7 million crisis loans were awarded, and 1.2 million budgeting loans were awarded, so the expenditure was significant. They have a significant impact on individuals’ lives and in tackling poverty across the country. Some £139 million was spent on CCGs, £109 million net was spent on crisis loans, and £482 million gross on budgeting loans. This is therefore a large-scale activity that is vital to the most vulnerable and poorest members of our society. Even at this level of expenditure, however, the Public Accounts Committee concluded, having investigated CCGs, that only 32% of legitimate demand was being met.

I am extremely pleased that the Department for Work and Pensions is retaining budgeting loans and advance loans for alignment payments. However, I and many Members and voluntary organisations working in this field are unclear about what will replace the crisis loans and the CCGs. I am gravely concerned about the proposals to transfer responsibility to local authorities, which will be expected to design their own schemes for emergency support. Those responsibilities are being transferred at a time when local authority budgets are being cut. My understanding is that the funding will not be ring-fenced. In their consultation, the Government suggested that local authorities could also meet some of the demands with payments in kind—food parcels and second-hand furniture were mentioned as examples. I am also concerned that without clear guidance councils might be able unilaterally to introduce and force new conditions on those applying for emergency support.

I tabled the amendment because of the real danger that we will now be faced with numerous schemes being developed by local authorities, and that vulnerable people will lose this essential support. I am concerned that if the funding to local authorities is not ring-fenced, it will be diverted to other priorities.

Let me give the example of what happened to the playbuilder grant in my area. I chair the local play association, which I also helped to set up. When the ring fence was lifted, the Government initially sought to withdraw elements of the second year of the scheme. I am grateful that the Secretary of State for Education reinstated them and returned significant amounts to local authorities, which was a real breakthrough. However, because the money was not ring-fenced, much of it unfortunately appears to have been diverted into other areas of council expenditure, rather than going to improve play for children. That is just one example, from the most recent period, of funds that were not ring-fenced being allocated to local authorities and then spent for purposes other than those that the Government had intended. The Minister has agreed that allocations will be based on social fund spending, which will be regularly reviewed and the data updated. However, my concern is that if money is not ring-fenced in the first stages, it will be creamed off in the early years to be spent elsewhere.

[Sheila Gilmore (Edinburgh East) (Lab)]

We in Scotland have had four years’ experience of the removal of ring-fencing, supposedly to free up local authorities. I would be interested to hear my hon. Friend’s comments on our experience. Now that the ring fence has been removed, it is difficult to track what is happening to funds such as the supporting people fund, which give people valuable low-level support.

[John McDonnell]

I hope that my hon. Friend will forgive me: I forgot about the experience in Scotland. What she describes is a classic example of what could happen. I am quite fearful, because I have been a councillor and I know about the pressures on local authorities when they expend their resources. If there are no clear guidelines or statutory duties placed on the authorities, elements of expenditure that the Government might have allocated with the best of intentions might not be spent in the way that the Government would want.

I am fearful that if people lose access to the scale of emergency support they currently draw on, their alternative will be to go to higher-cost lenders such as loan sharks, thereby falling into greater debt. Even in advance of the reforms, we have already had a number of pawnbrokers opening up in the town centre in my area, with the local citizens advice bureau reporting increased evidence of the use of loans from loan sharks. A number of organisations have expressed their concern that having numerous different local schemes could mean that we end up with—I do not like this phrase—a postcode lottery of access to life’s necessities, as a result of the loans not being distributed coherently and consistently. I am also concerned that local authorities seem not to have been given any guidelines or directives about establishing an appeals mechanism. Unless an appeals mechanism is set up, claimants will not have the security of being able to challenge decisions made locally.

I would therefore urge the Government not to abolish or wind down the social fund without giving an absolutely clear commitment about what will replace it. If emergency support is to be localised, we need strong, unambiguous and extremely clear statutory duties placed on local authorities to support vulnerable people, and for those duties to be attached specifically to such funding. I urge the Government to think again about ring-fencing, so that the money cannot be diverted away from the poor. The social fund commissioner proposed that the Government consider establishing national criteria for the schemes to be drawn up by local authorities, to ensure consistency in the use of local discretion. It would still be possible to reflect local circumstances, but national parameters would be set on the use of that discretion. I am also concerned that the devolution of emergency support services might create high administrative costs—this has been mentioned by a number of organisations, including Age UK and the Disability Alliance—which might divert funds away from provision for the poorest.

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That is very much in the spirit of empowerment, which we often hear the Government talk about in other respects. When people are at a crisis point in their lives and turn up to ask for assistance—perhaps fleeing domestic violence and needing to set up a new home—I fail to see how it empowers them when the only thing available is a second-hand recycled white goods store that may or may not have the form of assistance that they need. Whether or not it will be good value for money is another point. We all know that second-hand and recycled goods are of less value than new ones. There are all kinds of practical issues to consider.

[Sheila Gilmore]

Is it not also the case that many of the arrangements for people to purchase second-hand furniture are increasingly set up as social enterprises, which are intended to recoup money and make a working profit to go back into the business, so they will charge people, albeit less than for new goods, as otherwise their enterprise will not work? In any event, if this were going to be free, it would have to be heavily subsidised by someone.

[Ms Buck]

My hon. Friend makes an excellent point. The Government’s mindset is an old-fashioned one. There is an excellent case for making better use of recycled goods as a commercial or social enterprise facility, but there is also a strong empowerment argument for letting individuals make their own choices with cash at their disposal to meet their needs appropriately. As my hon. Friend rightly says, in many cases, the vision we used to have of a charitable sector simply opening a warehouse into which people can go to choose whatever donated goods might be available no longer applies.

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[Maria Miller]

I hope the right hon. Gentleman will forgive me if I do not take many interventions, because I am very conscious of the time and of the desire of Opposition Front Benchers to get through the selection list. Many questions have already been asked and I will deal with them as I go through my remarks.

Before I respond to the issues that have been raised, I will set out the three basic principles that are central to our reform. The personal independence payment will provide support for long-term needs. It is one of a wide range of benefits that are on offer. It will be based on an assessment of the impact of a health condition on an individual and their ability to lead an independent life, rather than just on the condition. Above all, it will be fair.

Amendment 43 seeks to exclude individuals from the face-to-face consultations in the new assessment process for PIP. DLA relies on a self-assessment form and I will not go through the details of why that does not work. One of my constituents had to take a four-hour course to learn how to fill out the DLA form, which shows its ineffectiveness. One of our key proposals to ensure that the benefit has a more consistent and transparent assessment is that most people will have a face-to-face consultation with a trained independent assessor. The consultation will allow the individual to play an active part in the process, rather than passively filling in a form, and put across their views on how their health condition or impairment affects their everyday life.

We recognise the importance of ensuring that the assessment process is sensitive and proportionate. The Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), has a great deal of expertise in that area from his work on the work capability assessment. Let me be absolutely clear that when it comes to PIP, some people will not be required to attend a face-to-face consultation. I was clear about that in Committee and I reiterate it now. For such people, the assessment will be carried out on the basis of evidence that has already been gathered. Such decisions will be at the discretion of the individual triaging the assessment as it goes through.

Amendment 43 would undermine one of the key principles of PIP. It would effectively label people by health condition or impairment, rather than treat them as individuals. The disability organisations with which I am working day in, day out on the development of the assessment and the overall benefit would feel that to be a step back, not a step forward. The impact of a condition can vary greatly. Under the amendment, somebody with a severe mental impairment would not have to have a face-to-face assessment. That is a broad category, which covers a wide range of conditions that affect people in many ways. Although we accept that not everybody who has a severe mental impairment will have to undergo a face-to-face consultation, for others it will make a great deal of sense. For that reason, I cannot accept the amendment.

I deal now with amendments 44 to 47, 76 and 77. I am grateful to the Opposition for agreeing that PIP is a long-term disability benefit, and that there should be an expectation that there will be limitations for a period of not less than 12 months. The proposed qualifying period will allow us carefully to assess someone’s ability to carry out a range of activities once their condition has settled down and potentially once the effects of treatment and rehabilitation have begun. PIP will be a valuable, universal, tax-free benefit—that is carried forward from DLA—and it will be paid irrespective of whether a person is in or out of work. I emphasise that point for the hon. Member for Islington North (Jeremy Corbyn), who conflated it with an out-of-work benefit. It is our view that the additional financial support that it brings should start only once other support mechanisms have played their part and once the financial burden becomes onerous for an individual over the long term, regardless of their income.

I can reassure Members that the Government have been listening to the arguments regarding the return to a three-month qualifying period, and we will continue to listen and talk regularly to disabled people and their representative organisations. We recognise that for some people there may be additional financial burdens at the outset, but we have to consider the matter within the ambit of the wide range of other support that is already available during the early months.

[Sheila Gilmore]

Will the Minister give way?

[Maria Miller]

Will the hon. Lady forgive me if I do not give way now? Perhaps if I do not cover her point, she can intervene on me later.

The hon. Member for Aberdeen South has tabled amendments 76 and 77, about how we treat fluctuating conditions. That is absolutely an important part of ensuring that we have a successful assessment. The use of the term “every time” in the Bill has caused some concern, I believe unnecessarily. I hope that I can allay her concerns about it.

Our approach will be to have two main components to the assessment. First, we will consider whether an individual is able to carry out an activity, and whether they are able to do so reliably, repeatedly, safely and in a timely manner. If they cannot, it will be considered that they cannot complete that activity at all.

Secondly, the assessment will not be a snapshot of any one day, as I am sure the hon. Lady would expect. It will consider an individual’s ability to carry out activities over a period of time—we suggest a year. It will consider impacts that apply for the majority of the time. We will determine whether somebody has met the required period condition by considering whether they would be likely to meet the requirements of the assessment if they were assessed at any point over the period in question, which will effectively create hypothetical assessments across that period. We envisage that the assessment will not consider the effects of a disability on just one day, because the same principle will apply across the whole period. That means that we will consider an extended period of time, and that we will still apply the “majority of time” test. I think she will be reassured by that. As such, individuals will be able to meet the required condition even if their disability fluctuates over the specified period. We intend to include the treatment of fluctuating conditions in the next iteration of the assessment regulations, which is due to be published in the autumn. I hope that provides some reassurance.

I turn to amendments 66, 41 and 42. We have already announced that we will not remove the mobility component of DLA from people in residential care from 2012, as originally planned. We have also said that we will re-examine its position within the personal independence payment, which is precisely what we are doing. When that work is complete we will make a final decision, in the context of the full reform of DLA and the introduction of PIP.

[Maria Miller]

Perhaps the hon. Lady can let me finish and see whether I have covered her point.

We will treat care home residents in exactly the same way as any other recipient of DLA. The views that have been expressed during, and in the lead-up to, today’s debate have been vigorous and made people’s positions clear. That is why we are not introducing the change in 2012 and are undertaking a review of the practical issues on the ground. We will not produce a review report, because we are not undertaking an official review. We are simply collecting information about the implementation of the policy at the moment, as I am sure Labour Members did when they were in government to inform their policy decisions.

[Sheila Gilmore]

Will the Minister give way?

[Maria Miller]

I will give way briefly.

[Sheila Gilmore]

It is very important that the Minister clarifies exactly what is intended. Does she still intend at some point, perhaps after a review or some information gathering, to treat the people affected as a group and decide whether they are entitled to the benefit, or will each individual case be assessed? If it is the latter, how will the information be gathered?

[Maria Miller]

If the hon. Lady will listen to my full remarks, I hope that she will be satisfied. We have made it clear that we want to remove overlaps, and that we do not ever want to limit severely disabled people’s ability to get out and about, so we will not do what she describes.

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[Mr Reid]

I am extremely grateful to the Minister for that—I wish that every time I spoke for a minute I could bring about a change in Government policy.

In the few minutes remaining, I want to talk about the proposal not to pay any PIP for the first six months. What concerns me is that that will impact severely on people who have a sudden onset of a very disabling condition, such as a stroke, cancer or the loss of a limb. Thankfully, that happens only to a relatively small number of people of working age, which means that any savings the Government would make would be very small. However, for someone in that unfortunate position the first six months is often when the costs are greatest. They and their families have to adjust to the sudden reality of coping with a disability. During those months, people are often faced with extra costs such as special aids, adaptations to their homes or frequent trips to a specialist hospital that might be far from where they live. Adaptations to the home are up-front costs that need to be paid within the first six months. Depending on their condition, those people might face many other costs.

Another relevant issue is that until PIP is awarded, other benefits such as carer’s allowance are not available. Therefore, I urge the Government to look carefully at ways of taking those circumstances into account and see whether they can find a way to make financial help available for people in that position so that they can cope with the extra costs they face in the six months after the onset of the condition.

[Sheila Gilmore]

I want to speak briefly to the question of three and six months, because the Government have said that people will be able to find other forms of assistance. What they mean by that is means-tested assistance, but many people will not qualify for it, because their partner might earn as little as £7,500 a year or have—

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[Mr Duncan Smith]

I have always said that the door is open to everybody to discuss the effects and how some of them can be ameliorated—or not, depending on what the issues are. The answer is therefore yes—as a London MP, I should join that delegation too—although I still believe that we have the right policy, because it is about balancing fairness for those hard-working people who pay their taxes who often feel that those beyond work are not working themselves.

[Sheila Gilmore]

Will the Secretary of State give way?

[Steve Baker (Wycombe) (Con)]

Will the Secretary of State give way?

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[Sheila Gilmore]

The Secretary of State wishes to present the Bill as being about people who are workless or feckless, but hard-working taxpayers who suddenly fall ill and are unable to claim the personal independence payment for six months could well be excluded from benefits because they have been savers. Is that fair?

[Mr Duncan Smith]

If the hon. Lady had looked at what the cap covers, she would know that those on tax credit will be exempt, as will those on DLA, widows and others who are in difficulties. The cap is about those who we believe should be able to go to work but are not doing so. Of course, this would just be all stick if it were not for the fact that the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) had recently introduced the biggest back-to-work programme this country has ever seen, to support those in greatest difficulty. Universal credit is about helping to improve people’s incomes when we get them back into work with a bigger incentive. We are striking a fair balance by doing all that while also placing some expectations on those who are waiting to go to work.

That is also the point of the next bit, which is about conditionality and sanctions. The Bill places a level of responsibility back into the system by strengthening our conditionality and sanctions regime and requiring all claimants to accept a claimant commitment setting out their individual responsibilities—a sort of contract that will enable them to understand that they have certain obligations and that there are certain things that we are obligated to do for them. That is fair. Many claimants I have spoken to out there are completely confused about what they should or should not be doing.

When those responsibilities are not met, we will have the power to apply a robust set of sanctions, which will be made clear to the claimant at the beginning. Opposition Front Bench who were in the previous Government will know from going round jobcentres that claimants often still profess, even at the last moment, to having no knowledge of the fact that they will face sanctions if they do not comply. So we are going to let them know early exactly what the sanctions will be. As with universal credit, they will then have a clearer understanding of what they are meant to be doing.

The next area, which we have dealt with in some detail, involves the personal independence payment. We are bringing more responsibility to the system, but I believe that we are also improving support for those who are able to work and for those who are not. Disability support is an issue. The Bill makes critical changes to the system, and the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller) made a sterling effort to explain them in Committee and on Report.

The changes to the current system of disability support will ensure that disability living allowance is no longer awarded on the basis of subjective and inconsistent decisions. I hope that all hon. Members will recognise that this is a bold attempt to bring this area of benefit up to date and to ensure that those who are not getting what they should will do so, and that those, however many there are, who are getting too much or not the right amount will get that adjusted as well. The truth is that this will be based on their ability to live their lives. I agree with my hon. Friend the Minister about the checks involved. The DLA will be replaced in total by a personal independence payment, which will be based, for the first time, on regular and objective assessments of need.

This brings me to perhaps the biggest thing in the Bill: universal credit. This lies at the heart of all our reforms. It involves the principle that it should no longer be possible for people to be better off on benefits than in work, or for people to fear moving into work. I say “fear” because people are often concerned because they simply cannot tell whether they will be better off or worse off in work. No longer are we going to try to pick the number of hours that somebody should be working; rather, we will say to them, “You must make that choice, in line with work, relevant to your caring responsibilities and all the other issues that affect you.” This is a bold reform to help people to improve their chances and give them the assistance they need. That goes alongside the Work programme, as I said earlier, which will support all those people who are trying desperately to make the best of their difficult conditions and get back to work.