Draft Contracting Out (Functions of Local Authorities: Income-related Benefits) Order 2002

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Mr. Webb: I sense that the Minister has moved on from fraud. Nothing in what he has just said reassures me that the contractors have any incentive to stop fraud.

Malcolm Wicks: The contractors have several incentives. First, I presume that they want to keep the contract. Secondly, the 10 per cent. sample check will be one way to detect whether fraudulent cases are getting through the system: the benefit fraud inspectorate will undertake those checks once it is set up in the local authorities. Thirdly, the local authority is still the body charged with eradicating fraud from housing benefit, and will keep a close eye on the situation. The hon. Gentleman should therefore be reassured.

The hon. Gentleman asked whether it is sensible for contractors and agency staff to be responsible for discretionary housing payments. Some authorities may decide to retain such decision making; at the end of the day, the local authority decides such matters. However, we expect the local authorities that choose to allow contractors or agency staff to take the decisions to provide detailed advice on how to operate the discretionary housing payment arrangements. The guidance that we will issue to local authorities will reflect that.

Mr. Clappison: Given the interest in the question of fraud, will the Minister consider writing to members of the Committee with details of the guidance that will be sent about the provisions to tackle fraud while housing benefit administration is contracted out?

Malcolm Wicks: Yes, I will give that undertaking. We are keenly interested in the matter, which the new anti-fraud target reflects.

The hon. Member for Northavon has a slightly suspicious mind on these occasions. He wondered why we might want the BFI to monitor the local authorities that had decided to give this power to the companies. A little common sense is needed. The processes are new, and we believe that they make sense. However, the BFI is there independently to evaluate and to advise Government on these matters. This change is significant. We believe that it is an improvement, but it seems sensible to ask the BFI to monitor it and to advise us whether it is the improvement that we hope and expect it to be. I repeat that it has nothing to do with the pros and cons of contracting out. It is for local authorities to determine whether they contract out, and the order is not about enabling more of that to happen.

The Department for Work and Pensions is concerned to improve the overall quality of housing benefit administration for the sake of customers, who all too often suffer too many delays. That is why we are seeking to improve the quality of housing benefit administration in a range of ways. It is true that training has been poor, and we need to improve it in local authorities and contractors. I say to the hon. Member for Northavon that it would be unfair to suggest that agency staff, or the staff employed by contractors, are of poorer quality and more poorly trained than local authority staff. In my experience, that is not necessarily the case—the hon. Gentleman's body language suggests that he is not convinced. On two visits to Hackney, which has had some serious problems, I was impressed by the quality of the agency staff who were brought in to help the local authority. The hon. Gentleman should keep an open mind. In that spirit of open-mindedness and liberalism, I commend the order to the Committee.

Question put and agreed to.


    That the Committee has considered the draft Contracting Out (Functions of Local Authorities: Income-Related Benefits) Order 2002.

Committee rose at four minutes past Five o'clock.

The following Members attended the Committee:
Butterfill, Mr. John (Chairman)
Blizzard, Mr.
Casale, Roger
Clappison, Mr.
Follett, Barbara
Heath, Mr.
Joyce, Mr.
McKechin, Ann
Munn, Ms
Pope, Mr.
Prentice, Ms Bridget
Smith, Angela
Tredinnick, Mr.
Webb, Mr.
Wicks, Malcolm

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Prepared 15 July 2002