Department for Work and Pensions' response to questions submitted by the Committee
Winter Supplementary Estimates
Further increases in expenditure on housing benefit and council tax benefit subsidies are forecast in the Winter Supplementary Estimate. Part of this is attributed to the impact of the introduction of the Local Housing Allowance. Is this leading to greater costs overall or is it offset by reductions elsewhere?
1. There continues to be uncertainty about the impact of the recession on a number of work-related benefits, including Housing Benefit. The Winter Supplementary forecast increased the original Budget provision, to take account of this uncertainty and ensure adequate provision was included in both the Department's Estimate and also fed into the wider fiscal position. The continuing rollout of Local Housing Allowance is a major change to the benefit system and as such was also a contributory factor in the need to increase funding provision.
2. Since the Winter Supplementary Estimate was laid, claimant numbers for Housing Benefit have been in excess of Budget expectations. New claims will move straight on to the Local Housing Allowance, increasing the anticipated expenditure on Local Housing Allowance cases, which will not be offset elsewhere. However, the main driver for the increased cost is the higher than anticipated claimant numbers seeking Housing Benefit, rather than the change to Local Housing Allowance.
Are claimant volumes continuing to rise generally, and if so are there yet signs of slowing in the pace of increases?
3. The
labour market has improved considerably and the claimant count is currently
some 450,000 lower than published in Budget 2009. The number of people claiming
Jobseeker's Allowance has fallen for two out of the last three months and if it
continues to follow the assumptions set out in Pre-Budget Report (PBR) 2009,
social security benefit expenditure will be some £10 billion lower over the
next 5 years. Unemployment assumptions, as audited by the National Audit
Office, are published by the Treasury in
The Winter Supplementary Estimate explanatory memorandum (paragraph 9) states that £8.6 million is to be transferred to the Ministry of Justice to meet costs associated with Employment and Support Allowance appeals to deal with an expected increase of 21,000 in the number of appeals. What are the total additional costs forecast of such appeals this year, and how many appeals in total are now expected? What percentage of cases does this represent?
The following table sets out the relevant figures for 2009-10
4. The additional 21,000 was directly related to Employment and Support Allowance appeals increases, which takes the total volume covered by the costs transferred to 126,000 against a projection of 180,000, a difference of 54,000, mostly for Incapacity Benefit appeals.
5. If all appeals made were to be processed in 2009-10 the additional forecast costs would be £12.8 million. However, capacity constraints on The Tribunals Service mean that not all cases will be heard. The transfer of £8.6 million represents the volume of appeals that are forecast to be cleared in the year.
£4.7 million is being transferred in the Winter Supplementary Estimate (paragraph 8, explanatory memorandum) to the Ministry of Justice to fund costs of contacting non resident parents following the repeal of Section 6 of the Child Support Act 1991. Does this mean that extra costs are being imposed on the taxpayer overall as a result of this change?
6. A change in policy has resulted in a transfer of funds from the Department to the Ministry of Justice. Following the repeal of section 6 of the Child Support Act 1991, there was expected to be an increase in the number of consent orders that will go through the courts for child maintenance, as clients now have a choice whether to use the statutory maintenance service or come to a private arrangement including, in a small number of cases, consent orders through the courts. However, the potential increase in the number of court orders was expected to be offset by a reduction in the statutory caseload. Therefore, costs are simply being incurred in a different part of Government and were not an additional imposition on the taxpayer.
March 2010 |