Examination of Witnesses (Questions 389-399)|
18 MAY 2004
Q389 Mr Betts: May I begin by giving
apologies for Andrew Bennett, who would normally be chairing this
meeting. He is unavoidably away this morning. Could I invite you
to the Committee, Minister. For the sake of our record, could
you introduce yourself, then perhaps you would like to make an
introductory statement or we could go straight into questions,
whichever you wish.
Mr Pond: Thank
you, Mr Betts. My name is Chris Pond. I am the Parliamentary Under-Secretary
of State at the Department for Work and Pensions and one of my
responsibilities is council tax benefit. That is why I am particularly
pleased that the Committee is including a consideration of council
tax benefit in this inquiry because it is a very important element
of the structure of council tax, ensuring some element of fairness
in the way in which council tax is administered and the burden
falls. Therefore, the challenge we are all trying to face, to
make sure people get the council tax benefit which they need and
deserve, I think will be assisted by the inquiry by the Committee.
Mr Betts: We have joined-up committees
as well as joined-up government.
Q390 Sir Paul Beresford: Minister, congratulations.
You are about the only minister I have seen who has not come along
with an army sitting beside him for all the questions, so it is
obviously going to be an easy morning, and I quite liked your
opening shot. Quietly, within these four walls, we listened to
you last week telling us how wonderful council tax benefit was
and how the take-up was going, but our indication is that it is
low and it is failing. Could you brief the Committee on what you
are doing about it and how it is going to improve?
Mr Pond: I think all of us would
accept, Sir Paul, that take-up of council tax benefit is too low.
We know that for pensioners we are talking about rates of take-up
of between one-half and two-thirds, which all of us would agree
is far too low, especially amongst pensioners who are also owner-occupiers.
The question about what has been happening in recent years is,
I think, a confused picture. Certainly the figures show that the
take-up in proportionate terms has been falling. There may be
a number of factors for that. One is the increasing proportion
of pensioners who are owner-occupiers, who, as I say, are likely
to have a lower rate of take-up than other groups of pensioners,
let alone groups across the board. We have also seen increases
in council tax benefit rates and applicable amounts which are
above the rate of inflation. That has meant, with the other changes
which no doubt we will have an opportunity to discuss in this
session, that the number of people eligible for council tax benefit
has increased, and that will mean that the proportionate take-up
figures are likely to fall, even if there is not a great reduction
in the number of people who are actually receiving the benefit,
because, as you extend the benefit to higher income groups, then
by definition the take-up will tend to be lower amongst those
groups who are not normally used to claiming means-tested benefits.
Q391 Sir Paul Beresford: When I knock
on doors in my constituency and in others and meet pensioners
or people who ought to be claiming benefits and ask them, there
are a number of responses. We have some of the responses from
some of the witnesses: it is too complicated, too intrusive, they
cannot work it out, nobody is really going to be able to help
them, the council does not seem to know. This is a form that is
31-pages too long. Do you think it is too long and too complicated?
Do you think you are being paranoid about fraud? Have you tried
to fill it in yourself?
Mr Pond: I do not think we are
being paranoid about fraud because we need to make sure that
Q392 Sir Paul Beresford: Too paranoid?
Mr Pond: Too paranoid, because
we need to make sure that we make the correct payments of the
correct benefit to the correct people, and, indeed, at the correct
time. We are pretty well focused on that, but at the same time
we want to make sure that the system is as simple and as easy
to understand as it possibly can be. Of course those two objectives
are not necessarily contradictory. A simpler system, one that
is easier to administer, is also one which is less likely to be
subject to fraud and error. I would like to see a reduction in
the size of the claim form. We have already made steps in that
direction. The Pension Service is doing a lot of work to try to
make sure that when people apply for pension credit they are told
if they may be entitled to council tax benefit and they receive
a copy of the form. Of course the home service for the Pension
Service, the local service, will visit people in their homes if
necessary and fill out the form for them. We are doing everything
that we possibly can to make sure people understand the way the
system operates, that people know if they are entitled to this
benefit and that they are encouraged to take it up. We recognise
that for many pensioners, especially, there is a feeling that
perhaps council tax benefit is something they should not have
to claim: they feel it undermines their independence and their
dignity. That is why, through the council tax benefit awareness
campaign which we launched a few weeks ago, we want to get across
the message to pensioners that this is something to which they
are entitled: they deserve it, they need it, and we want them
to get it.
Q393 Sir Paul Beresford: Have you tried
to fill it in?
Mr Pond: I have not tried to fill
in the form, no.
Q394 Sir Paul Beresford: It might help
Mr Pond: I would welcome the Committee's
assistance with that. I might have to turn to the local Pension
Service's help as well. We recognise that it is inevitably too
complex. There is certain information which we do require but
we are trying to keep the form as simple as possible, despite
needing that information.
Q395 Sir Paul Beresford: Every department
has targets and they like to impose targets. What is your target
Mr Pond: On take-up of council
tax benefit we do not have a specific target. All I can say to
the Committee is that we will not be satisfied until everyone
entitled to that benefit is receiving that benefit, especially
those pensioners, perhaps 1.7 million pensioners, who are entitled
to this help but are not getting it. My target would be to say
100%. We do not want anybody to fall through the net.
Q396 Sir Paul Beresford: I think we will
note that. Are there any regional or local variations in take-up?
Mr Pond: There are regional and
local variations. There is often a problem where people are tending
to be entitled to rather less in cash terms and that might mean
that in areas like London and the South East there is an additional
problem, but perhaps, Mr Betts, I could give the Committee a note
on that point. I do not have the details here but we could look
at what information is available on regional and local variations.
Q397 Sir Paul Beresford: It is slightly
more complicated when witnesses have told us that the council
tax benefit system assumes that they are able to generate an income
of 10% per annum on their savings. The best savings rates on offer
are 4.5% per annum. Why does the CTB system assume such a high
rate of return on savings and would the Department support proposals
to bring the assumed rate more closely into line with the real
Mr Pond: As you know, Sir Paul,
we are already moving in that direction. The assumed income on
capital, the £1 per week assumed income for every £250
of capital or part thereof, has historically been built into the
system. Through pension credit we have made that twice as generousso
we are only now assuming £1 for every £500 of capital
or part thereofwhich reduces the assumed interest rate
to 10%. We recognise that is still too high and we are taking
steps both to increase the generosity of the capital limits and
also to ease the assumptions in terms of the income that is generated
from that capital. We recognise that for pensions especially that
is very important.
Q398 Sir Paul Beresford: Targets on that?
Mr Pond: No targets on that. The
Chancellor has already given us the announcement that from April
2006 we will see a doubling of the minimum capital limits on the
income-related benefits across the board to £6,000 which
will be ignored altogether, and of course for pension credit guarantee
recipients there is no upper capital limit. We are seeing what
we can do to move in that direction further, but no specific targets.
Q399 Mr Betts: We talk about the size
of the form, which clearly is a massive undertaking for many people.
You say that the Department and yourself are trying to get that
down. Do you have a target that you have set, such as "Go
away and produce me a form of, say, eight pages, or something
much more reasonable"?
Mr Pond: No, I have not done that,
Mr Betts, partly because, as I say, there is certain information
which we do need. We are trying to make sure that in bringing
together that information the same people are not asked the same
question several times. If we can get different parts of the Department
and, indeed, different local authorities who administer council
tax benefit to ask that question only once, then that will ease
the process. It may mean that the form remains longer than any
of us would wish, but the simplicity of filling out the form is
increased as a result. But all the time we are looking to see
whether or not we can reduce the size of those forms as well as
make them easier to fill out. As you know, with pension credit
we now have the mechanism whereby people can have the form filled
out for them over the phone through the pension credit application
line. It is then sent to them for them to check and sign. I would
like to see us in the longer term being in the same position with
council tax benefit. At the moment the Pension Service is able
to send out the forms to people, and, indeed, for those who find
the form difficult to fill in, as I say, the local service will
visit people in their homes if they wish and fill it out with
them. So we are doing everything we can to improve the system
within the constraints of certain information that we need to
administer the benefit properly.