Welfare Policy in Northern Ireland Contents

3Options for continuing the mitigation package

67.The mitigation package legislation clearly states that Welfare Supplementary Payments will end on 31 March 2020. Amendments to the legislation would be required to allow Welfare Supplementary Payments beyond this date—but without a Northern Ireland Assembly, the Department for Communities would not be able to pass amended regulations as they would need to be approved by the Assembly.83 The Fresh Start Agreement included a commitment that the allocation of funding for the mitigation package would be reviewed in 2018/19, which would have been the point at which a decision could have been taken by the Executive to continue the package. In the absence of the Executive the Department for Communities undertook a review of the Scheme.

68.The Department for Communities concluded in its review of the mitigations scheme that “in the absence of a functioning Assembly it is considered that the only viable option for providing the legal authority for the Department to make mitigation payments beyond 2020 would be for the Westminster Parliament to bring forward appropriate legislation.”84

Using Discretionary Housing Payments

69.The Department for Communities has proposed that, in the continued absence of an Executive and in the absence of legislation by Parliament, that Discretionary Housing Payments (DHPs) could be used to continue to pay benefit cap and SSSC mitigations.

70.Using DHPs to mitigate the benefit cap is allowed for in the DHP legislation, since it allows the payments to be made to claimants who are affected by the benefit cap who are not otherwise eligible for a Welfare Supplementary Payment. The Northern Ireland Discretionary Housing Payment budget is currently £5 million per year to 2024–25. The Department noted that the budget underspend for Discretionary Housing Payments in 2017/18 (£3.6 million) could cover the estimated cost of continued mitigation against the benefit cap.85 The Department for Communities estimates that the future cost of SSSC and benefit cap mitigations would cost £22.1 million and £3.33 million per year respectively.86

71.When it comes to the Social Sector Size Criteria (“bedroom tax”), the Department explain in its review of the mitigation schemes that “while the legislation would need to be amended in order to permit Discretionary Housing Payments to be used for mitigation for the Social Sector Size Criteria”, this would not be difficult since it would not need to be approved by the Assembly.87 In this case Westminster would, however, still need to legislate to provide funding for the payments.

72.Scotland has used DHPs to mitigate the “bedroom tax” since 2013/14. Whilst the legislation requires that they remain discretionary in legal terms (so that claimants are not automatically entitled to them), the Scottish Government has allocated additional funding for DHPs to local authorities so that in practice any households affected by the SSSC should receive a Discretionary Housing Payment to cover the shortfall if they apply for one.88

73.The main drawback of using Discretionary Housing Payments to replace the mitigation payments is that they cannot be applied automatically, as the existing payments currently are.89 The Department for Communities concluded in its review of the mitigation schemes that “it would not be possible to guarantee that all claimants affected by the Social Sector Size Criteria would receive a Discretionary Housing Payment equivalent to any loss of benefit”.90

74.We asked the Department for Communities how practical it would be to use DHPs to make mitigation payments. The Permanent Secretary, Tracy Meharg, said:

In theory we could but operationally it is very challenging. Every time we look at these we have to look through the four lenses of budget, operational challenges, legislative challenges and policy challenges. In theory we could, but those other things would have to be overcome, and then we would need a runway. We would have to think about what we are doing as we are funnelling 33,000 applications in this big funnel into a single vehicle, which is discretionary, which is operationally very challenging.91

75.In follow-up written evidence, the Department explained that there would be additional staffing and administration costs, partly because manual processes would be needed to pay Universal Credit claimants:

There would be clear resource implications for the Housing Executive in terms of staffing and possibly from a technology infrastructure perspective, that would require additional funding. While the Housing Benefit system currently operated by the Housing Executive has the facility to automate Social Sector Size Criteria and Benefit Cap mitigation payments for those claimants on Housing Benefit, this would not currently be the case for Universal Credit claimants which would require an element of manual intervention.92

The Department also suggested that, even with prior preparation and automation of the process, it was concerned that making mitigation payments through DHPs may not be practically feasible because of the likely increase in demand in a short period of time:

The Housing Executive could begin to collect data on potential Discretionary Housing Payment applications due to the Social Sector Size Criteria in advance of 31 March 2020, and would aim to maximise the use of automation in the overall operational process. However, even with the provision of increased funding there would, of course, be reservations around the operational impact of having adequate resources in place that would be capable of seamlessly delivering Discretionary Housing Payments for such an increased demand in the projected timescale.93

76.Paying “bedroom tax” and benefit cap mitigations through Discretionary Housing Payments would be operationally extremely challenging. This is not surprising, given that around 35,000 claimants might be expected to apply for DHPs in a short period of time, through a system not designed to handle this volume of claims. The fact that such payments would be discretionary, rather than automatic, risks some claimants slipping through the net. Using DHPs is, however, the only plausible and legal means of continuing the two main mitigations without legislation from Westminster—and clearly preferable to the mitigation payments stopping altogether. Even so, the serious risks to claimants and the amount of money that would have to be spent on making changes to the DHP systems that could otherwise to be used to help claimants, should make clear to the UK Government that it has a responsibility to avoid this option having to be used.

77.We recommend that, in the continuing absence of an Executive and only in the event of the necessary legislation failing to be put in place, the Department for Communities continue to pay “bedroom tax” and benefit cap mitigations through Discretionary Housing Payments. The Department for Communities should also, in response to this report, set out its plans for how it would make claimants aware of the need to apply for payments in the event that mitigation payments were made through DHPs.

Legislation by the UK Parliament

78.Legislation passed by the UK Parliament would be the most effective way of continuing the relevant parts of the mitigation package in the absence of an Assembly and Executive, and would avoid the need to use Discretionary Housing Payments to replace the payments.

79.From a legal perspective, legislation would only need to be in place by the end of March 2020. If the mitigation package were not to continue, the Permanent Secretary of the Department for Communities told us that the Department would need to begin contacting claimants in Autumn 2019.94 The Department would therefore need to be assured before then that legislative cover would be in place by March 2020, in order for it not to begin the work of contacting claimants and preparing other options, such as using Discretionary Housing Payments to continue the mitigation payments.95

The Government’s position

80.The Northern Ireland Office has refused to say whether the UK Government would bring forward legislation to continue welfare mitigation in Northern Ireland, and has argued that its priority is reinstating an Executive. In oral evidence taken before the Northern Ireland Affairs Committee in March 2019, the then Secretary of State for Northern Ireland refused to commit to passing legislation to extend the mitigation package after it is due to end:

It would not be right to start putting numbers or dates on that [extending the mitigation package]. All I will say is that I am aware of the situation and we want to re-form the Executive. All of these conversations are about how to mitigate something that is less than ideal. Let us try to focus on re-forming the Executive and then we do not have to have these mitigating conversations.96

Legislating in devolved areas

81.Under the legislation governing UK devolution, the administrations have areas for which they are constitutionally and routinely responsible. However, Parliament retains the power to legislate in those devolved areas. To respect the autonomy of the devolved institutions, there is a constitutional convention that the UK Parliament will not normally legislate on devolved matters without the prior agreement of the devolved legislatures in whose ‘constitutional space’ they are legislating.97 This is effectively a ‘self-denying ordinance’, known as the “Sewel Convention”. It has the status of a constitutional convention and is not legally enforceable in the courts.

82.When the UK Parliament does wish to legislate on a devolved matter, the UK Government would usually seek what is known as “legislative consent”. This involves a devolved legislature agreeing to a bill by passing a “legislative consent motion”.98 The Sewel Convention was clearly framed on the assumption that the devolved institutions would continue to operate. In the absence of an Assembly and Executive, however, the Sewel Convention cannot operate normally as there is no devolved legislature to provide consent.

83.The UK Government has already legislated in areas that would otherwise fall within the scope of the Sewel Convention in passing successive Northern Ireland Budget Acts, and providing legislation to continue Renewal Heat Incentive Scheme payments via the Northern Ireland (Regional Rates and Energy) (No 2) Act. This allowed payments to be made to Renewable Heat Incentive Scheme participants beyond what would have otherwise been a cut-off at the end of March 2019. The UK Government has also committed to pass legislation to implement payments to victims of historical institutional abuse if there is no NI Executive in place.

84.Continuing the mitigation package is an area around which there is a substantial degree of political consensus. A number of Northern Ireland political parties—the Green Party in Northern Ireland, People Before Profit, Sinn Fein, and the SDLP—submitted written evidence to our inquiry. All expressed a desire for the mitigation package to be extended beyond 2020.99

85.We accept that legislation to extend the mitigation package falls within devolved legislative competence. However, the circumstances surrounding the package ending are clearly exceptional: a potential drastic impact on vulnerable people and no Assembly to extend the legislation. Whilst restoring the NI Executive is rightly a priority for the Secretary of State, this does not preclude taking action when circumstances require it. There are clear precedents for the UK Government legislating to continue payments, and political consensus that the main parts of the mitigation package should continue. There is therefore no good reason why the UK Government cannot bring forward legislation to extend the mitigation package.

86.The Department for Communities has said that it would need to start contacting claimants in Autumn 2019 if the mitigation package was not to continue. The UK Government must therefore act quickly to end the uncertainty—for the Department for Communities, but most of all for claimants in Northern Ireland.

87.We recommend that the Secretary of State for Northern Ireland make a statement to Parliament as soon as possible making clear the UK Government’s intention to pass legislation to extend the mitigation package, and bring forward such legislation to come into effect before the end of March 2020. The UK Government should provide funding for the mitigation package—including the Discretionary Support Scheme, the Universal Credit Contingency Fund, and funding for independent advisory services—in a Northern Ireland Budget Act.

83 Department for Communities (2019) Review of Welfare Mitigation Schemes, p44

84 Department for Communities (2019) Review of Welfare Mitigation Schemes, p45

85 Department for Communities (2019) Review of Welfare Mitigation Schemes, p47

87 Department for Communities (2019) Review of Welfare Mitigation Schemes, p40

88 NIAO, Welfare Reforms in Northern Ireland (2019), 1.12; https://www.gov.scot/policies/social-security/support-with-housing-costs/#discretionary-housing-payment

90 Department for Communities (2019) Review of Welfare Mitigation Schemes, p46

92 Department for Communities (WEL0041)

93 Department for Communities (WEL0041)

97 House of Commons Library, Brexit: Devolution and legislative consent (Briefing Paper 08274)

98 House of Commons Library, Brexit: Devolution and legislative consent (Briefing Paper 08274)

99 Green Party Northern Ireland (WEL0035); People Before Profit (WEL0032); Sinn Féin (WEL0017); SDLP (WEL0031)

Published: 9 September 2019