Examination of Witnesses (Questions 340
- 359)
WEDNESDAY 7 MARCH 2001
ANGELA EAGLE,
MP, MR STEPHEN
WATSON, AND
MR CHRISTOPHER
EVANS
Mr Thomas
340. I wanted to ask some questions on the regulated
fund leading on from the Chairman's remarks about the winter fuel
payments. You would accept, would you, that fuel poverty is not
confined to those of pensionable age?
(Angela Eagle) Yes. The interdepartmental committee
that we had, found two major causes of it: one was low income—unsurprisingly;
the other was under-occupation, people living in houses that are
much too big for them. Generally they tend to be older people
whose families have upped and gone and left them in a large property
which they then, on their incomes, cannot afford to heat. The
two major causes, therefore, are under-occupation and lack of
income.
341. And disabled people on low income as well?
(Angela Eagle) Yes.
342. In light of that, do you think there is
a case for extending winter fuel payments to those other categories
that we have mentioned, the people who are suffering fuel poverty?
(Angela Eagle) Well, the issue of winter fuel payments
and why they were created was really to aim at not only at the
fuel poor but at older people. We have estimated—and I know
that there is a campaign to extend winter fuel payments to those
who currently effectively get cold weather payments, that is the
disabled and those with children under 5—that that will
cost an extra £3 million[1]
a year. If we look at the disabled, there are extra provisions
in disabled benefits which are meant to take account of the issues
of having to have warmer homes or pay more because of the condition,
and I do not think at the moment we are contemplating an extension.
343. But you would concede there is a case for
it?
(Angela Eagle) Well, I would say that the income-related
benefits and the disability benefits already take account of the
extra fuel costs of people's conditions. There is always a case
to be made for everything: you could extend winter fuel payments
to those who currently get cold weather payments but it would
cost substantial amounts of money and thus far, to my knowledge,
the government is not contemplating doing it.
344. But it is costing £1.7 billion at
the moment, is it not, to provide winter fuel payments on a non
means-tested basis, even to very wealthy pensioners?
(Angela Eagle) We always have this argument when we
introduce help that is particularly focused such as the Minimum
Income Guarantee on those with low incomes. We get accused of
extending means-testing and then, when we introduce a universal
payment to everyone in a particular category, we get accused of
not focusing it properly. We like to do a mixture of both. I think
the UK welfare system has always had features of this mixture.
We have had universal benefits such as Child Benefit going to
people, and we have also had more focused means-tested benefits
such as the Minimum Income Guarantee, which we have introduced,
and the winter fuel payment which is universal. We also have contributory
benefits so we do have this mix in the UK system.
345. On winter fuel payments, would it be a
distortion of the evidence you gave earlier on the role of winter
fuel payments within the Social Fund for me to say this: that
really it is a convenient slot, basically, in which to put this
rather substantial payment? It cannot conveniently go anywhere
else?
(Angela Eagle) The Social Fund is good at making one-off
payments of entitlement—be it cold weather payments, winter
fuel payments, funeral payments, et cetera. The rest of the social
security system tends to be much more tied up in making on-going
weekly payments and, when we were faced with an administrative
decision as to where to put it, it seemed to fit most obviously
into the regulated side of the Social Fund. Again, it does not
interfere or reduce the amount of money available in the discretionary
Social Fund; the two are entirely separate.
346. Dealing with funeral payments, would it
surprise you to learn that we have had quite a lot of evidence
expressing very real concern, not only at the big increase in
the refusal rate for funeral payments but also the very modest
level of that funeral grant currently standing at £600 leaving
a shortfall, more often than not?
(Angela Eagle) It would not surprise me that you have
had those representations. The funeral payments end of the Social
Fund is one of the most difficult for anybody to deal with because,
clearly, people are in a bereaved and difficult situation and
the regulations are quite tightly drawn. The changes were made
by the previous government and put into effect in April 1997 and
there was a clampdown on the numbers of people who were eligible.
This was I understand because of a large increase in expenditure
in this area. The idea of the funeral payment system is to allow
for those people who are responsible for organising a funeral
of a loved one and, therefore, related in particular ways to be
able to afford a simple and respectful funeral within reasonable
cost. The £600 is kept under review: we do have contact with
the funeral industry, I think they call it, to look at costs and
see how we can be certain that simple respectful funerals can
be afforded.
347. So are you saying that you do, in fact,
carry out some research in a systematic way to ensure that this
payment is in pace with actual costs?
(Angela Eagle) We do keep the level of payments under
review and officials from the department are in contact with the
funeral industry to talk about the kinds of ceremonies and services
that can be purchased for that amount of money.
348. Our evidence is that these funeral payments
are not adequate, frankly. How do you respond to that?
(Angela Eagle) Well, I think it is a difficult area.
One person's idea of a simple and respectful funeral is not everybody's,
and I think naturally when a loved one dies people want to do
their best for them in the final send-off. We do our best to come
up with compromises in this area and we keep that amount of money
under review and will continue to do so. As I say, I find it one
of the most difficult areas.
349. What has happened is there has been a tightening
up of the eligibility criteria and some people would say that
now that it has become a lot more difficult to get it, the very
least you can do is ensure that it is adequate once you have it?
(Angela Eagle) There are always different views of
what adequacy is and what a simple and respectful funeral is and
what should be allowed and what should not. The rules on funeral
payments ensure that, whatever method is used—be it burial
or cremation—all of those fees are properly paid and accounted
for, and the £600 is on top of the fees to pay for other
aspects of the ceremony.
350. Perhaps one of your officials could answer
this technical question: when was the funeral payment last increased?
(Angela Eagle) I think it was 1997.
(Mr Evans) Yes.
(Angela Eagle) It went up £100 in April 1997.
351. Why is it not possible to increase it or
look at it every year?
(Angela Eagle) We do look at it every year but it
is not indexed to any kind of indicator.
352. Could I ask you about overseas funerals?
As you know, the funeral grant is available where the deceased
is buried in the UK and sometimes in Europe, as we understand
it?
(Angela Eagle) That is the result of the European
Economic Area Treaties, as I understand it.
353. Do you think that discriminates against
people of African or Indian origin who may wish to bury their
deceased relatives in their country of origin?
(Angela Eagle) The idea of the funeral payment was
that it should allow there to be a simple and respectful funeral
for UK citizens in the UK. There was a slight extension because
of treaty requirements in the European economic area but it would
be a big extension of the system if we were to say that we were
going to begin to pay for burials abroad.
354. Would you look again at the possibility
of providing a contribution towards the costs of transportation
to other countries?
(Angela Eagle) I am not aware that we have ever looked
at it. I am not aware we have ever been asked, off the top of
my head, to look at costs of transportation but, as I said, it
would be a significant change to the system if we were to extend
it worldwide. The idea of a funeral payment system is that it
purchases simple, respectful funerals for UK citizens in the UK,
not in a place of their choice in the world.
355. We have had evidence that there is grave
concern about this. Are you saying you will not look at it again
or you will revisit the subject?
(Angela Eagle) We keep the whole system under review
but I am giving you a view of mine that it would be an extension
of the scheme to say that the funeral payment system could be
used to purchase a funeral anywhere in the world.
Mr Dismore
356. We have had quite a lot of evidence that
there is effectively a post code lottery and also a calendar lottery
in the way that an application for a discretionary fund Community
Care Grant is likely to be treated—a post code lottery in
that some districts are under more pressure than others, and a
calendar lottery in that, depending on the time of year, the budget
may or may not have been spent so the same applications could
receive very widely differing treatment in different parts of
the country according to the time of year. Is that fair, and what
can be done about it?
(Angela Eagle) Firstly, the Community Care Grant scheme
is discretionary as, in fact, is the Budgeting Loan scheme so
I do not think you are going to be able to achieve total consistency
geographically. This is a discretionary scheme: not an entitlement-based
scheme. With entitlement schemes you can guarantee similar treatment
everywhere at all times of the year and in every geographical
area. Discretionary schemes do not give you that guarantee. With
the changes to the Budgeting Loan scheme, we are beginning now
in the way in which we distribute the money to districts and we
make in-year allocations to try to get much more consistency across
the country with respect to the maximum amounts that are available
for loans. For Community Care Grants, the consistency that we
can achieve is partially to do with how we can budget across a
district, and perhaps Stephen might want to say something about
that. If we can predict expenditure well, then we can get more
consistency across the year. If there are sudden demands that
have been unpredictable, in some circumstances there is contingency
money available to try to maintain some consistency; in others
it is harder. This is a cash-limited scheme so clearly, if there
is pressure on the limits, you will get different decisions at
that time than if there is not a pressure on the limits. So what
we try to do to avoid the phenomenon that you are talking about
is to budget across the year and predict what demand is likely
to be to keep a fairly close eye on how it is going by tracking
it across time so we can make in-year allocations in budgeting
loans, and try to guess properly on a community care basis.
357. Would you accept the basic premise that
the simple concept of fairness really does demand that there is
more even approach to this throughout the country?
(Angela Eagle) We do our best to make it as even as
possible but, with a discretionary scheme, with hundreds of independent
decision-makers who are all making separate decisions in separate
areas of the country, you cannot get total consistency. If you
want total consistency, you have to have a system of grants and
entitlements that are set down in law so that they can be administered
in that manner. If you have a discretionary scheme, you are always
going to have slightly different results.
358. Looking at that further, obviously the
department issues guidance as to prioritisation and the Independent
Review Service have told us that they have identified 24 district
offices where they have effectively invented a new category which
goes beyond the guidance, which is `the highest of the high priorities'
which is what they are administering. There is substantial other
evidence from the IRS that some decisions on particular requests
are given medium priority when, in fact, they are high priority
according to the criteria in the guidance. What they say to us
is this: "Inspectors regularly see cases that are deemed
not to meet the qualifying conditions of Direction 4 when clearly
the conditions are met; or needs that are given medium or low
priority when the need is high priority. Although not conclusive,
the indications are that it is pressures on the budget that drives
such decisions. In cases of this type Inspectors will substitute
a decision and award the high priority needs".[2]
Do you not think really that that needs to be looked at and that
you should give a much clearer instruction to the district officers,
first of all, not to invent new categories which is effectively
subdividing high priority into even higher priority and, at the
same time, trying to make sure that people do process the scheme
fairly. It seems rather peculiar to have these different bands
of priority when, in fact, all these people are high priority
anyway?
(Angela Eagle) There are several issues there and
I will try and disentangle them and deal with them as best I can.
Firstly, the rules say that at a set time the highest priority
in a particular area has to be met; that is what decision-makers
have to do but they cannot exceed their budgets either so clearly,
if a budget is tight, the priorities that will be met will be
the more obviously urgent ones. If there is more money or more
leeway in the budget, then they are able to give grants—we
are talking about Community Care Grants—to people who in
tighter times might not qualify although their circumstances were
exactly the same. That is the unavoidable element of having a
fixed budget. I cannot think of a way that you could have a fixed
budget and not have that phenomenon. Secondly, we value the IRS'
comments, judgments and experience of how the system is working
very greatly and we have meetings with them and they raise these
issues with us, but they do only see one per cent of the cases
that the Social Fund handles and, by definition, the one per cent
that they see are those people who have disputed a decision. I
think you need to bear that in mind, therefore, as you evaluate
the experiences that they bring to you. There is no such category
as "highest of the high" in any of the directions or
guidelines but I can see how that might be a phrase that would
enter somebody's language if they know that, by the rules, they
have to ensure that if there is a range of needs in front of them
they have to make sure that the highest ones are paid first. If
the budget then is tight you can see that how you might define
"highest" would be different than at a time when you
could give grants to a broader range of people. I have thought
about this, and I do not see how you can avoid it if you have
a cap and a cash limit.
359. So when the IRS give us a list of the district
officers who, as far as they are aware, have given guidance to
decision-makers that the grant can only be given to the highest
of highest priorities, that is not correct?
(Angela Eagle) It depends. What does "highest
of high" mean? The guidelines say that the highest priorities
at a set time have to be met. In other words, if you have a cash
limit and you have three low priority grant applications and one
higher, you have to grant the higher priority one first and then
see what resources you have left to deal with the others. That
is what happens in the system everywhere. Whatever phrase you
use to define it, that is the order in which the Community Care
Grant has to be dispensed.
1 Note by Witness: This should be £300
million. Back
2
See Ev. p.40. Back
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