1 Responsibilities and coordination
1. Means testing is applied to many benefit programmes
in order to direct support to those most in need. The Government
spent £87 billion (13% of total public spending) on means-tested
benefits in 2009-10, which the poorest fifth of households rely
on for a third of their income.
Responsibility for means testing is currently dispersed across
departments. The Department
for Work and Pensions (DWP) administers several large means-tested
benefits, including Income Support and Jobseeker's Allowance,
while HM Revenue & Customs (HMRC) administers Working Tax
Credit and Child Tax Credit. Other departments and local authorities
are responsible for a wide range of means-tested benefits including
free school meals and free prescriptions.
2. There is a balance to be struck between means
testing and other ways of providing support, for example, achieving
similar objectives through the introduction of a living wage or
increased minimum wage.
Means testing can help to keep total benefit spending at a lower
level, but it may create disincentives to work and can deter those
in need from claiming support.
Departments face important choices that require them to balance
competing needs and priorities.
3. It is not clear who should be responsible
for the benefit system as a whole, and there is no clear accountability
for interactions between means-tested benefits.
For example, no cross-departmental group currently exists to examine
the effects of means testing across different departments.
The witnesses from Age UK, Child Poverty Action Group and LSE
were concerned that decisions have been taken on a one off basis
and lack a 'big picture' perspective, particularly in the context
of the current reforms.
4. Departments do coordinate in some areas, for
instance in their strategies to reduce fraud and error, but such
coordination is typically on an ad hoc basis, with important issues
sometimes falling through the gaps.
Departments recognised that no single body was in charge of means
testing in the round, and that their focus was on immediate priorities
such as delivering reforms.
DWP and HM Treasury told us that departments who administer programmes
should be responsible for making sure their own means-tested benefits
work well. DWP told
us that it works with other departments where required, for example,
to tackle issues relating to the delivery of Universal Credit.
No single body has taken overall responsibility for considering
how individual decisions about programmes fit together.
5. In the future an increasing amount of means-tested
benefits are going to be locally determined and administered.
Local authorities are being given powers to set Council Tax Benefit
rates while at the same time needing to achieve 10% cuts in support,
while universities are setting up bursary systems to support students
under the higher fee arrangements.
In both cases many different bodies will be involved, potentially
increasing the complexity of the benefit system and creating circumstances
where disincentives to work could be high for some people.
6. None of our departmental witnesses felt that
coordination between all government departments or with local
authorities was their responsibility. DWP told us that bilateral
discussions are currently used to resolve issues where programmes
interact and operational issues need to be addressed.
When asked about improving coordination with reforms to Council
Tax Benefit, HM Treasury stated that it should be DCLG's responsibility
to ensure that local authorities implement means testing in a
way that is consistent with other reforms.
2 C&AG's Report, para 1. Back
Q 29 Back
C&AG's Report, Appendix Two Back
Qq 1, 3 Back
Qq 8, 21-22, 77 Back
Qq 3, 16 Back
C&AG's Report, para 12. Back
Qq 35-36 Back
Qq 11-12 Back
C&AG's Report, para 4.13. Back
Qq 39, 54 Back
Qq 34, 40 Back
Q 44 Back
Qq 29-30, 34 Back
Q 12 Back
Qq 4-5, 55 Back
Q 41 Back
Q 40 Back