Examination of Witnesses (Questions 80-99)
MR PHIL
WOOLAS MP AND
MR JAMES
PLASKITT MP
18 JUNE 2007
Q80 Martin Horwood: Can I ask two
questions? One is a question I asked Help the Aged as well. Can
you confirm that there is at least for pensioners no data on this
form that is not collected elsewhere, and if that is the case
are you now saying that in principle, again, at least for pensioners,
you would be in favour of a completely automated process that
got rid of the form altogether, as Help the Aged have suggested?
Mr Plaskitt: Again, you have to
disaggregate the group of pensioners, because we will have quite
a lot of information on some but we lack appropriate information
on others. For example, a pensioner owner-occupier not in receipt
of pension credit we are not going to have an awful lot of information
on, but again the Pension Service, as it builds up its services
to pensioners, including the all-benefit check, brings the potential
of improved take-up even there as well.
Q81 Martin Horwood: In principle,
you would want it to be completely automated and get rid of forms
altogether?
Mr Plaskitt: I think it is a problem
of what "complete automation" means. As I said before,
you have to do an assessment to establish whether there is entitlement
to this benefit.
Q82 Chair: I think what was being
explored in the session before you came in with the witnesses
from Age Concern was that the information is held by different
bits of Government already on an individual so that Government
could do the assessment on the basis of the information they already
have. Obviously, they would then do what departments now do, filling
in the forms, send them to the person and say, "Is this right?",
but that is what is being suggested.
Mr Plaskitt: I think we can keep
progressing towards that. Many of the things that we are doing
at the moment, the scans that we operate on the information that
we have about pension credit, for example, which we will continue
to do with new claims, for example, mean that we are going to
get very adept, certainly amongst the pensioner group, at getting
people signed up for their pension credit, but you have got this
scale, that the less involvement they have with any other part
of the benefit system the harder it gets to achieve automation.
Having said that, for those where it is easier to get very close
to that they are in all probability the poorer pensioners and
the ones where we would want to make sure, if there is a priority,
that we are improving take-up.
Q83 Martin Horwood: Minister, you
have just said yourself that even when you fill it in on the telephone
for them and send them the form your take-up is still only 50
per cent, but there is a huge difference between being very close
to automation and actually completely automating the process.
Mr Plaskitt: That is why I am
saying I do not think you can get to full automation because we
have run into this evidence, which is quite interesting, that
even when you go to very considerable lengths to make this the
easiest process in the world, we found on that exercise where
we pre-populated over 100,000 claims forms for pensioners 50 per
cent of them never came back in.
Q84 Martin Horwood: As the Chair
said, there is a fundamental difference between pre-populating
a form that somebody still has to complete and send back and just
sending them the central assessment you have made and saying,
"Is this right?", and, assuming it is right, "That
is fine. We will just do it normally. Only if it is wrong will
you have to tick anything and send it back". That would make
a huge difference, would it not?
Mr Plaskitt: Yes, but on that
call-out exercise that we did it was a three-page form and we
completed it. All we were asking pensioners to do when we sent
it to them was check it was correct and sign it.
Q85 Martin Horwood: Exactly. So surely
if you do not even require them to do that it is going to be a
better system, is it not?
Mr Plaskitt: But I have also got
to safeguard against error in the system, that is absolutely crucial.
That also is an impediment to getting to something like full automation
because the Department has an obligation to the taxpayer as well
to make sure that we are paying the right amounts of benefit to
the right people. If you begin moving away from checking the accuracy
of information, and having people authorise what they are telling
you, you risk opening up issues on incorrect payments and error
in the system. I do not want the two things to pull against each
other.
Q86 Martin Horwood: Surely it should
all be accurate anyway. If you held it centrally in order to make
the assessment—
Mr Plaskitt: Yes, but you are
suggesting that we consider moving away from the situation where
we get claimants to confirm that the information is correct.
Q87 Martin Horwood: I do not say
you should send it to them to check as Help the Aged suggest.
Mr Plaskitt: Look, I will consider
any of the measures, and I know some of what they put forward,
what I am saying to you is it is not as easy as it is sometimes
put to you, to be honest. We have got very good systems at making
it easy, but there is still this issue about people not signing
on the dotted line. There are other reasons, of course, why they
might not and they are interesting to explore.
Q88 Chair: Have you explored them?
Mr Plaskitt: Yes.
Q89 Chair: And briefly, why did they
not reply? Might it have been they did not think there was much
money involved?
Mr Plaskitt: It is interesting
if you look at that, because if you break down amongst the people
who do not take up this, there is a bit of a graph which confirms
the less they are getting out of it, the less inclined they might
be to take on the benefit. I think the figures show something
like 40 per cent of the non take-up is those who would gain less
than £10 a week from it. The further up the scale you go,
where the benefits are considerable, for example the full council
tax might be paid, happily you find a much higher take-up. I guess
the issue is, when people look at a small take-up, especially
pensioners, they might be saying, "Is it worth my while getting
involved in this system for that small amount of money".
That is one of the reasons that we find.
Q90 Mr Betts: Listening to what you
were saying a few minutes ago, Minister, when you talk about the
complications of having all these administering bodies called
local authorities, is there any hint in there you might be considering
looking at a more national based system for dealing with council
tax benefits?
Mr Woolas: You have got to be
clear—and we have to be clear—about the difference
between entitlement and automatic because the two are different.
If one were to say "This is automatic" then you would
not need every billing authority to administer CTB, you could
just do it as a central service. As long as that is not the case,
and that is our policy, it makes sense that there are different
bodies, particularly when you look at the interaction of housing
benefit, which of course is very, very common, that there are
those different centres. Now, of course, the three page form is
not incumbent upon the local authority, there are local authorities
who do their own forms who try to interact with other campaigns
and other entitlement benefit claims in other areas, particularly
housing benefit.
Q91 Mr Betts: So the answer is the
Government is not looking to take the responsibility away from
local authorities?
Mr Woolas: No.
Mr Plaskitt: But we are looking
to assist local authorities in more effective administration.
We issue a best practice guide to local authorities which we think
they find helpful but we give more practical forms of support
in the form of funding from my Department's standards fund. I
think to date about 38 local authorities have had money from us
to fund specific take-up campaigns of council tax benefit and
there has been some quite good work done on that, interestingly
with the same kind of results as our own centrally administered
take-up campaigns in that they have found still this stickiness
about even when they have almost done 100 per cent of the work
for someone they still will not take the final step to process
the claim.
Q92 Mr Betts: Looking at what information
might be available to try and make the process a little bit more
automatic, not completely automatic, we have talked about the
pensions service and how that could help in identifying people
and steering them along to fill forms in, what about HMRC, is
there no role there because they are always looking at a lot of
data about people's earnings who are not pensioners?
Mr Plaskitt: Potentially I think
there is, which is why it is important that we are exploring more
opportunities for data sharing between ourselves and HMRC. There
is a lot of work going on on this data sharing. Obviously you
have to build absolutely critical safeguards in as you do it but
I see a lot of potential to build on the work we are already doing
in that respect, and it probably could help with this.
Q93 Mr Betts: Are we likely to see
anything practically come out of this in the foreseeable future?
Mr Plaskitt: I would hope so.
The whole point of doing the data sharing is to ensure a smoother
and more effective administration of the benefits system.
Q94 Mr Betts: What sort of form would
that take? Are there any ideas coming to light about how that
might progress?
Mr Plaskitt: In a sense it is
rather like the sharing we already do with local authorities.
If HMRC and ourselves share data, the indication would be this
person probably has a benefit entitlement and if we do not see
a benefit entitlement in payment we should contact that person
and ascertain why that is not the case. It enables you to do effective
targeting of your take-up campaigns. In a sense it gives you more
and more information about the customers and with that information
you can go after the people you suspect have not taken up their
entitlement.
Q95 Mr Betts: Can I move on to a
slightly different issue which is that the Chair said at the beginning
that the take-up is not the only issue that has been expressed
as a concern to us so far. Clearly, as I understand it, there
are 1.2 million pensioners who are living in poverty in this country
and who are paying full council tax. Now many of those may be
entitled to some council tax benefit if they claimed. There is
this other group of people—and the figures we got were quite
startling: 3.2 million working age adults living in poverty could
pay for full council tax and within those families 1.5 million
children living in poverty where the family is paying full council
tax now—most of those would not be entitled to council tax
benefit if they claimed it since people are not eligible because
of the system. Is it really defensible for the Government to have
a policy where 1.5 million children are living in poverty in this
country and we are asking their parents to pay the full amount,
a very significant tax?
Mr Woolas: Our policy is first
of all predicated on keeping council tax bills down, hence the
capping policy, and we have to take that into account as it is
all taxpayers' money at the end of the day. Secondly, just under
15 per cent—the figure is 14.2 per cent—of the total
council tax bill is recycled through council tax benefit and because
it is an income related benefit one could argue that you are into
definitions there, the definition of poverty that you are using
is a different definition than is used in the council tax benefit
system.
Q96 Mr Betts: The Government has
accepted these figures.
Mr Woolas: I would not want to
give the impression that we have increased poverty, we have not.
Interestingly, the rates of take-up have gone down as people have
got better off.
Q97 Mr Betts: My understanding is
these were figures according to the Government's early definition
policy.
Mr Woolas: Yes. I am simply making
the point, Mr Betts, which I suspect you know I am making, which
is that you can take one definition of poverty and apply it generally
to incomes but the fact of the matter is that just under 15 per
cent of the council tax is paid for by the benefits system.
Q98 Chair: It is the same definition
of poverty that is being used for pensioners and for working age
adults, and the point that Mr Betts is making is that one group
on poverty, however defined, seem to be given a great deal of
attention in the sense of improving take-up, and the other group
which is actually bigger on the same low incomes, is not being
given the same attention in the sense of looking at some reform
of council tax so that it is not weighing so heavily upon them.
Mr Plaskitt: Can I clarify what
we think the gaps are. From the information that we are working
on, we think there are around two million pensioners with an entitlement
to CTB not taking it up. The non-pensioner equivalent is up to
about 700,000.
Q99 Mr Betts: The point is not people
not taking council tax benefit up but people living in poverty
who are paying for council tax, some of whom may be entitled to
council tax benefit when they apply but the vast majority of whom,
where they are working age adults and their children, would not
be eligible because the council tax benefit rules actually are
not as favourable for non-pensioners. The reality is, is it not,
that people start paying council tax at lower incomes than they
pay income tax?
Mr Woolas: Other things being
equal.
Mr Betts: Yes. Working age families do.
Is that fair?
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