Examination of Witnesses (Questions 20
- 39)
WEDNESDAY 30 OCTOBER 2002
RT HON
ANDREW SMITH
MP AND MR
NEIL COULING
20. Will you make absolutely sure that how those
posts are created and how they work makes sense in terms of what
is already a statutory requirement for Early Years Partnerships
and the Children's Information Services, because at the moment
they are saying, "Here we are. We are the people responsible
for providing advice and information on childcare", and suddenly
along comes a new childcare co-ordinator in a different context?
How are they supposed to fit together?
(Mr Smith) The answer is yes, I already have done
and I will raise a report on precisely this issue.
21. We have already talked about the area initiatives
and Sure Start and the nurseries initiative and things of that
kind and they are generally wonderful, but the overwhelming majority
of children in poverty, including lone parents, do not live in
those areas of deprivation. What is the strategy for making sure
that we reach those people in poverty and out of work who are
not in the 20 per cent most deprived areas?
(Mr Smith) Because we operate a national service and
whilst some of the area based initiatives that are concentrating
on localities where there are particular concentrations of deprivation
will not be eligible for those, there are the other national programmes
which people are eligible for and we expect Jobcentre Plus to
be offering a service to everybody—and we have just been
talking about childcare—just as our Early Years unit will
be gathering information and monitoring progress in every community
in the country.
22. The problem, to take the childcare example,
is that the actual local authority provision of childcare outside
the statutory places for three- to four-year olds is declining,
so what you have got is very positive measures in the most deprived
areas but in other areas we are going backwards in some respects
(not in all respects), to take the example of the provision of
affordable childcare.
(Mr Smith) Just going back to what I was saying about
childcare partnership managers, I would expect their coverage
to include the whole of the country.
Mrs Humble
23. I have to say in my dealings with lone parents,
certainly in my constituency, there is not a shortage of affordable
childcare for young children. The real difficulty is for the older
group of children, the seven to 13 or 14-year olds. There are
many lone parents who delay going back to work until their children
reach that age so they are cushioned when they first start their
infant classes, and then they find that they cannot take full
time employment or even part-time employment spread throughout
the whole year because they cannot cope during the long school
holidays. Can I urge you to look at that age range of children
when you are having your dealings with the Department for Education
and Skills because it is parents with children of that age who
often find real barriers to work because there is nobody to look
after their children?
(Mr Smith) I will certainly take the point on board.
Miss Begg
24. I was very pleased that the rules on therapeutic
earnings were changed. The old rules were very rigid, particularly
for people with physical disabilities and a chronic condition
where their doctor had to say that the work was therapeutic. It
might be therapeutic psychologically but that was not why they
were getting incapacity benefit. With that caveat, it was a very
welcome change. However, the rules that have come in are only
allowing permitted work for 26 weeks rather than indefinitely
as it was under the old therapeutic earnings rule. That 26 weeks
must have been up last week because it was introduced in April
2002. I am just wondering what is it that your decision makers
are going to require as proof that they can extend their permitted
work for the next 26 weeks that would allow anyone who is on the
therapeutic earnings work to keep the higher level of earnings?
(Mr Smith) I am grateful for your welcome for the
reform. There are three groups we can talk about here. Universally,
for earnings of no more than £20 a week, people have got
the right to do that anyway. On the group that you are referring
to, for those working less than 16 hours a week on average, with
earnings no more than £67.50, they can not only work for
that first 26-week period which you described but that period
can be extended for a further 26 weeks if a person is working
with a job broker, personal adviser or disability employment adviser
who agrees that it will help them move towards work of 16 hours
or more a week. That option will be open for a number of people.
We did also, in response to concerns that were raised by disability
organisations during the consultation on the change in the rules,
widen the opportunities to maintain the position of people with
special needs who were supported in work by professional health
or care workers and they are not subject to the time limits to
which you refer, so therefore that is that third group.
25. Is there not a danger though for those who
do not fall into the category of special needs that they may ping-pong
backwards and forwards between the higher rate, the £67.50,
and then, after the year is up, they are not ready to take on
full time work so they come back down to £20 a week which
is the permitted allowance under the therapeutic earnings? They
are on £20 a week for a year, they try again, they get 26
weeks at the higher rate. What decision will your decision makers
make and what evidence will they need to decide whether people
can move on to the higher rate or no longer qualify for the higher
rate?
(Mr Smith) I certainly expect these rules to be applied
with sensitivity and for advisers and those supporting people
working in this way to be making a judgment about whether they
need the ongoing support in work that the professional adviser
advocates, the third category to which I referred, which is not
time limited, but of course, also whether they can move to work
more than 16 hours a week, whether they are aware of the availability
of the tax credits and whether they could, after a period of this
sort of work experience, be actually better off moving to slightly
more hours and to a self-sustaining job. In other words, we want
these new rules to work in a more flexible way than the old rules,
to be a pathway into sustained employment, where that is possible,
without denying reasonable opportunities to people for whom that
is not possible. We will keep all of this very closely under review
and I certainly would not want to see the ping-ponging which you
describe.
26. One of my concerns is that the leap is too
wide. If you are looking at the £20 therapeutic earnings,
that is about four and a half hours in a job that would pay the
minimum wage, but the next barrier is 16 hours. It is quite a
big jump for somebody who can manage four hours, even six hours,
maybe even eight hours, to then try to make that big leap to working
16 hours a week which opens up all sorts of other benefits such
as the disabled person's tax credit and all of that. Are there
enough links or stages for somebody who starts off being able
to work four to six hours a week to be able to increase their
time to ten and then move up? I am not convinced that those stages
are there at the moment.
(Mr Smith) I am not saying that the stage of moving
from the £20 a week to less than 16 hours is easy for individuals.
It depends very much on their circumstances and condition, of
course. I think there is flexibility there. This will be closely
monitored and experience will have a lot to teach us, I am sure,
but I think we should be looking also at those who can move from
15 hours—remember that if somebody for a period has had
up to £20 a week earnings in a few hours as you have described
them, and then has done one lot of 26 weeks of up to 16 hours,
and has then done another 26 weeks, so that they have now been
a year working at close to 16 hours, it is realistic at least
to explore with them the possibility of that becoming 20 hours
and then they are out of the benefit. I am not saying that is
going to be the case for everybody but it would be wrong not to
explore that opportunity.
27. Is it still too early to judge whether the
new rules are actually working and are encouraging more disabled
people to test out working without fear of losing out?
(Mr Smith) I think it probably is a little bit too
early but under the old system something like between 1 and 2
per cent of people receiving incapacity benefit were on therapeutic
earnings. The original estimates that were being made for this
new system were that we might get something like 2 to 4 per cent
on it. It is very early days in terms of the numbers coming through
the system. As I say, we will need to monitor it closely. I have
not had any reports of lots of complaints or problems about it.[2]
Mr Dismore
28. Can I raise a couple of very small supplementaries
in relation to this? In relation to the change from April 2002
to April 2003, I can illustrate that again by a constituency example:
Miss Durfield, who is 56 years of age, works in a charity shop
for 15 hours a week and earns at the moment £61.50. She is
worrying herself sick, even sicker beyond her disabilities, because
she thinks she is going to lose her job next April because she
will not be able to continue within these rules, and if she does
that it will obviously have quite severe consequences for her
and it would actually have entirely the opposite effect of what
the whole thing is about. Is there any prospect of extending the
transitional arrangements for people already in receipt of the
old system, beyond April 2003, for people like her because otherwise
effectively she is going to become unemployed at the age of 56
and probably unemployable for the future despite the fact that
she only has a job which is feasible by the scheme?
(Mr Smith) I will reflect further on that if I may.
Ms Buck
29. Secretary of State, I very much appreciate
the fact that you were at a meeting last week when we were able
to discuss in detail the issues on housing benefit. For the benefit
of the Committee I think it would help to outline briefly some
of the aspects of the reform that you are planning to introduce
into the private rented sector. Can I ask you one particular question
to start off with? As you are aware, I believe now that seven
out of ten private sector tenants making an application for housing
benefit will find part of their rent is not covered by housing
benefit. In your statement you assured us that nobody would be
worse off as a result of flat rate allowances. Does that mean
that the "no worse off" comparison is taking as a standard
point the fact that on average private sector tenants have a £19
a week shortfall between their housing benefit and their rent?
(Mr Smith) It certainly is the case that no-one will
be worse off in the pathfinder areas and the reason is because
we are taking the reference rent level as the level for the standard
allowance and also because where there are discretionary exceptions
we are allowing those discretionary extra payments to be made
as well. The beneficiaries will not only be those whose present
rent is below the reference rent level. There will also be beneficiaries
from those who are paying above the reference rent level but who
are restricted to less than the reference rent level and they
will not be paying as much extra as they are at the moment because
of the difference between where they have been restricted and
the reference rent level and it is on that basis that we can be
sure that no-one will lose and indeed that around half will gain.
30. On the pilot areas that you announced last
week can you tell us whether the Department has satisfied itself
that there is accommodation available at rents on or below the
reference rent level, because again, as you know, many of us are
concerned that the difficulty with the reference rent is that
it is simply impossible to find accommodation? Again there are
regional variations but in some parts of the country accommodation
is not there at or below the reference rent level.
(Mr Smith) We needed in the selection of the pathfinder
areas a critical mass of private rental cases. Those will include
cases that are below the reference rent level. We also deliberately
selected a range of pathfinders that would include high cost areas
where you would expect that to be a particular problem but also
medium and lower cost areas where it might not be so much of a
problem. Of course, one of the benefits of doing a pathfinder
project like this is precisely to learn what actually happens,
not just hypothetically how many people you think are going to
benefit but find out how many do benefit, whether it does exercise
a downward pressure on rents and to what extent, whether the simplification
that is involved does make people feel more secure about moving
into work, and whether it does help landlords deal with what is
a pretty impossible system at the moment in a more efficient and
effective way. There are all sorts of reasons in principle to
expect this to be a significant step forward but we do need to
see them in practice.
31. Can you tell us what the timescale is for
the evaluation of the pilots and that there will not be a roll-out
until there has been a proper and sustained evaluation in the
pilot areas?
(Mr Smith) I certainly would not expect a more general
roll-out before 2005 and we will want an ongoing evaluation of
how it is going as soon as they get under way.
32. What would you say your success measures
would be?
(Mr Smith) I think there will be a number of success
measures, first whether the system works more efficiently in terms
of claims being determined more quickly; secondly, whether tenants
are able to exercise a greater amount of choice, because I think
putting more power and responsibility in their hands—
33. Measured how?
(Mr Smith) We will be interviewing the tenants themselves
on their experience of the system, ditto the landlords and obviously
getting the feedback from local authorities as well. Whether it
has an impact on rent levels, what impact it has on the supply
of adequate quality rental accommodation as well, would be two
criteria, plus what I said about the benefits as far as people
being readier to consider entering the labour market.
34. And possibly also whether it has any implications
for statutory homelessness issues. Would that be something that
you would monitor?
(Mr Smith) Yes, of course.
35. I asked you last week and you may not have
had an opportunity to check this for me, but can you indicate
whether temporary accommodation is going to be excluded from this?
(Mr Smith) That would be my expectation, yes.[3]
36. You have indicated that in the long term
you would be interested in seeing how a flat rate allowance works
out for another ten years. I have always been very keen on the
idea of a flat rate contribution for low income owner-occupiers,
a means tested contribution, because, going back to the lone parents
and poverty debate, there is clearly some evidence that low income
home owners feel trapped by their mortgage interest relief which
they do not want to lose and that is one of the barriers to returning
to work. First, do you have any blue sky aspirations to roll this
out to low income owner-occupiers, and then, in the social rental
sector you have indicated, and I think absolutely rightly, that
until there is evidence of choice within the sector in all areas
of the country you would not be able to do it? Do you think as
a work incentive that it does make sense first of all to extend
this to social housing rents as part of the rent restructuring
programme?
(Mr Smith) In your first question about its extension,
we do have to take this stage by stage. There is a soundness to
the principles which underpin this which does have wider applicability.
We have not said that we are looking at it in relation to owner-occupation
but I see the logic of the argument you are putting forward and
that is something that might make sense to consider in the future.
I think the extension to social housing would need to depend on
progress on rent restructuring and on how far there is already
choice and more mobility within the sector. One thing we will
be keen to explore as the pathfinders get under way is whether
in any of these areas there might be an interest in extending
it to the social housing sector and if we were able to do that
in a practical way I would be keen to extend the pathfinders but
we do not know that just yet. Obviously, there are a lot of mechanics
to this which we have to discuss with the local authorities themselves.
We have invited the 10 pathfinders to take part. We have got a
conference on this next Tuesday with them, but of course we need
to get regulations through and we need them to go through meeting
cycles and so on to get their confirmation, so it will be some
way into next year before we can get it under way. Tempting though
it is to consider how the project might be extended, there is
quite a challenge in getting the core job of work done and I think
it is very important that this works well on the ground. That
is not just a question of designing the policy right and getting
the systems in place. If this is to work tenants need to be engaged
with it, landlords need to be engaged with it, so there is going
to be an important job of work in terms of information, education
and support out on the ground in the pathfinder authorities. We
want to get the core proposal tested right before we elaborate
it too much.
Mr Goodman
37. In February Frank Field introduced a Bill
to remove housing benefit from unruly tenants which had previously
been in the Government's Housing Green Paper. As you know, the
Government is sympathetic to the aims of the Bill but it ran out
of parliamentary time and the Prime Minister said in his speech
to your party conference: "Anti-social tenants and their
anti-social landlords who make money out of abusing Housing Benefit,
while making life hell for the community, should lose their right
to it." The question I am asking is, where do you go from
here? Are you definitely committed to bringing in a Bill or might
you, say, introduce a Green Paper on the subject? If the Government
are going to introduce a Bill, what can be said about the timetable
of that Bill and would that Bill be definitely produced by your
Department or might it be produced by another department, for
example, the Home Office in an amendment to the forthcoming Criminal
Justice Bill?
(Mr Smith) First of all let me repeat that I do believe
that matching the rights and responsibilities is something which
underpins the benefit system. The deployment of sanctions and
the case for so doing have to be judged on a case-by-case basis
across different benefits. For example, on jobseeker's allowance
there is a general acceptance that that is an allowance for looking
for a job and if you are not looking for a job and not co-operating
with the system then a sanction is reasonable. With housing benefit,
as I said in the House when I was challenged about this, I very
well understand and sympathise with the position of people who
are suffering hell from anti-social neighbours and think why is
all that being subsidised by the taxpayer. I think though when
examining particular proposal and policy measures, and you referred
to Frank Field's Bill, we do have to look carefully at the practicalities
and the consequences and workability of what has been brought
forward. I think the Bill in the end was talked out, was it not,
by the Liberal Democrats?
38. Correct.
(Mr Smith) Some Liberal Democrats, I should perhaps
have said.
Mr Goodman: One.
Mr Mitchell
39. Your first answer was perfect.
(Mr Smith) There are some important practical questions
here if you think about it. For those people who are not paying
their rent and do not care if they pile up arrears, you have to
think through what is the practical consequence of a housing benefit
sanction just to shift money from one column in a local authority's
ledger to another column; in other words, does it really impact
on them? Yes, it might eventually as the arrears crank up and
if they are evicted from the house but, of course, if they have
got children they will know that Social Services will be under
an obligation to house them somewhere else, possibly in more expensive
property. We have to think through this in an end-to-end way and
see if this sanction really does impact upon the behaviour that
we are talking about. Of course, in a small way the reforms that
we are exploring through the pathfinder pilots of the standard
housing allowance might actually make it more meaningful to operate
a sanction system because if you are paying people the money then
we might be getting a new culture of people taking more responsibility
for their rent paying and maybe a sanction will be more meaningful
rather than if it is all going on over their head to the local
authority. The other issue that we ran into with Frank Field's
Bill was a legal issue about whether it was proper to sanction
the benefit recipient, the householder, for the behaviour of other
members of the family. Indeed, amendments had to be brought forward
to narrow its scope in that way to make sure that it was compliant
with legal requirements. I think both of these issues and other
aspects of this are things that we need to examine further and
we are examining them further. There are other measures as well
in terms of anti-social behaviour orders, in terms of the measures
that the Deputy Prime Minister is working up in relation to rogue
landlords, in particular the exploitation of people in some low
demand housing areas. There is work on this front going on in
a number of Government departments and obviously I will keep the
Committee informed on the progress.
2 Please refer to the supplementary memorandum from
the Secretary of State to the Chairman of the Committee, para
20, Ev 20. Back
3
Please refer to the supplementary memorandum from the Secretary
of State to the Chairman of the Committee, paras 16-19, Ev 20. Back
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