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Earl Russell moved Amendment No. 255CH:

After Clause 108, insert the following new clause--

Housing benefit: determinations

(". In section 5 of the Social Security Administration Act 1992 (regulations about claims for and payments of benefit), after subsection (1)(r) insert--

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"(s) for enabling requests for reasons for a determination affecting a claimant for housing benefit, and for a review of such a determination, to be made by an agent for the claimant." ").

The noble Earl said: The Committee will be relieved to hear that this amendment has nothing whatsoever to do with drafting. It is concerned with the use of agents to ask for determinations for housing benefit or to request a review on behalf of the claimant. There are many reasons why claimants may not be able to do that themselves. They may be extremely old or infirm; they may be ill; or they may have language difficulties. In all those situations, it may be easier for the claimant and the administrators, and, indeed, cheaper, quicker and more comfortable for all concerned, if the use of an agent is allowed. That may also apply for people with learning disabilities or with difficulties in communication.

I believe that it is a practical proposal. I hope that the Minister will consider it. I beg to move.

Lord Mackay of Ardbrecknish: Procedures are already in place to facilitate the arrangements which are the focus of this amendment. We in the Department of Social Security are not aware that these arrangements create difficulties for those who use them. Therefore I hope that the noble Earl can see that the amendment would mean an unnecessary addition to the statute book.

The appointment of an agent to deal with a specific issue arising out of a person's claim for benefit is a long-standing feature of the social security system. Typically, an agent may be appointed to collect the claimant's benefit payments if, for example, he or she is unable to get to the post office themselves. Where the issue in question is the basis on which a determination has been made or the scope for a review of that determination, the relevant information may be provided to a third party if the claimant consents. Where the request is made under the aegis of a reputable organisation such as a citizens advice bureau or a trade union, consent on the part of the claimant is assumed. In housing benefit, requests for a statement of reasons or review by an agent or representative simply have to be countersigned by the claimant. So there is no great bureaucratic structure surrounding the treatment of a representative whose aim is the resolution of a particular area of concern to the claimant. The aim is, of course, to sort out any problem to the satisfaction of the claimant while minimising the administrative burden on all concerned.

Where a person is unable to act on his or her own behalf through mental incapacity or some other cause, as in the case raised by the noble Earl, the Secretary of State has power under Section 5 of the Social Security Administration Act 1992 to deal with the problem. Regulations made under that power provide for a person to be appointed to act for the claimant. In such circumstances, the appointee stands in the shoes of the claimant in all respects. I hope that helps to address one of the issues raised by the noble Earl.

I am not sure whether the noble Earl has any specific problems. If he does, we should be interested in hearing them. However, we do not believe that there are any problems with this procedure of people acting as agents

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for others who for any reason cannot act on their own account. If there are any, we shall be happy to hear of them, examine them and try to refine the arrangements if necessary.

What worries me a little is that the one group that might benefit from the amendment, were it to stand, would be landlords seeking to take advantage of their tenants through the housing benefit scheme--in other words, setting themselves up as agents. I know that that is not in any way what the noble Earl intended, but it could be one of the consequences of an amendment like this. We already have the procedures in place in this area to deal with the kind of examples where somebody requires help from a third party. Given that assurance and explanation I hope the noble Earl can withdraw his amendment.

Earl Russell: I am grateful to the Minister for that very helpful reply. I take great pleasure in the fact that it is helpful. In recognition, nevertheless, that the subject continues to need thought, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hollis of Heigham moved Amendment No. 255CJ:

After Clause 108, insert the following new clause--

Administration of housing benefit not to be a defined activity

(". The determination of claims for, and payment of, housing benefit and council tax benefit shall not be defined activities for the purposes of Part I of the Local Government Act 1988 (Competition).").

The noble Baroness said: This amendment relates to the interlocking of housing benefit with some changes introduced by the Department of the Environment on compulsory competitive tendering.

A few weeks ago the DoE Minister issued a consultation paper which, if adopted, will dramatically affect local authority work that goes out to CCT. Financial services, which in most local authorities include housing benefit and council tax benefit administration, will have to expose 65 per cent. of their work to CCT. That is truly very foolish. Housing benefit in particular is under strain. We have already debated half a dozen amendments today relating to that.

First, the Government rightly want--and tenants rightly need--to have housing benefit paid more speedily than in the past. Otherwise, as already made clear, tenants will risk eviction by impatient landlords who have not received the rent. It is essential to prevent that and to avoid adding to the problems of homelessness. So local authorities must speed up the delivery of benefit.

Yet at the same time, as we discussed in relation to an amendment some 10 minutes ago, the Government rightly want and encourage local authorities to prevent and detect housing benefit fraud, often of a fairly sophisticated sort. Therefore, local authorities should not cut corners, but should take enough time to be fastidious.

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Thirdly, at the same time, the Government are continually changing the regulations under which housing benefit is allowed. There were regulation changes in January; there will be further changes in October. This is a system in which we need to speed up payments, while simultaneously decreasing fraud, while at the same time coping with government changes to regulation. This is the system that the Government propose to put out to compulsory competitive tendering. The prospects are horrific.

My first objection is a management one. Housing benefit is a stressed system. Rightly, there are conflicting objectives. Yet to these strains will be added another one; namely, exposing the work to CCT. That means not only asking hard-pressed staff to draw up the specifications of their work for CCT, but expecting those same staff to go through the trauma of bidding for their own jobs while continuing to run a department. Precious energy and effort will be diverted away from the job in hand. If they themselves win, they will be likely to have done so by cutting their own staffing costs and thus reducing their ability to pay benefit on time and without error or fraud. If, however, they lose and the administration of housing benefit is handed over to an outside company, because housing benefit is so complex we are likely to see errors, delays and fraud mount while the staff of the new company start from scratch and learn the system.

Look at the difficulty that the DSS is currently experiencing in moving over from IS to JSA. It has had to slip six months because the systems could not deliver. Look at the problems the DSS had when part of its most routine work in handling order books was privatised. People went without money for weeks. Has the Department of the Environment talked to the DSS about the implications of imposing CCT? I cannot imagine a worse time at which to throw all local authorities' housing benefit administration up into the air by imposing CCT. I find it quite unbelievable.

Where local authorities wish to use private companies, that is fine. The staff will have geared up to that and will have worked out a partnership which may now be of several years' standing. But I predict that where an outside company wins against the local authority's own in-house bid--in other words, where privatisation is imposed on housing benefit administration--there will be chaos. Systems will break down; giros will be lost, delayed, underpaid, over-paid. Every time the housing benefit regulations change--and at the moment they are changing every six months or more frequently--the entire contract has to be renegotiated with the local authority at considerable cost and effort. Who will be held accountable when landlords start evicting tenants because the housing benefit cheques have not arrived and the rent goes unpaid? Will it be the councillors who have had CCT forced upon them, or senior housing and treasury management staff who have had CCT imposed? It is appalling.

I accept that housing benefit adjudication will not be put out to tender. But in practice that is not a distinction that can hold, especially when dealing with fraud. So our first objection is that there will be management and administrative chaos.

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Our second objection is that housing benefit and council tax benefit administration is extremely sensitive, just like income support or disability payments. To administer correct benefit staff will need to handle sensitive and confidential information about a couple's marital situation, when for example a pregnant woman may expect the birth of a child; their finances; their employment; their relationship with their children; their domestic life; their debts; their relationship with the landlord; and any arrears they may have. It is some of the most confidential and sensitive information that local authorities ever handle. Local authority staff are well trained to handle such information sensitively and professionally and to regard confidentiality as of the utmost importance.

What confidence can we have that a company that wins a bid merely because it has submitted the cheapest, lowest tender will apply the same professional standards in handling such sensitive questions? We know what happens. We have had experience of what happens when local authorities do as the Government require and accept the lowest tender. They pay the staff least; therefore the staff turn over rapidly; therefore little is invested in training. We know that customer complaints then mount and systems collapse. Those are the facts.

My third objection is that, as late as November 1995 (six months ago), the DoE confirmed by circular to local authorities:

    "given the sensitivity [of the administration of revenue services and benefits] Ministers have undertaken that authorities will not be compelled to market test any of this work, and the competition requirement has been set at a level to take this into account".
Only six months later, without publishing any supportive evidence, the Government have gone back on their word. Following consultation, local authorities may be forced to expose this most sensitive work to CCT. Why is that? As the entirely impartial and professional Institute of Revenues, Rating and Valuation says, the only explanation can be that the DoE is responding:

    "to private briefs from a group of disappointed contractors".
That is interesting. I wonder what the Tory Government hope to get in return. I beg to move.

7.30 p.m.

Lord Mackay of Ardbrecknish: The noble Baroness rather ingeniously added that argument to this part of the Bill, although it has little or nothing to do with the four clauses and schedules that we are discussing now. Nonetheless, she seized the opportunity to run one of the Labour Party's favourite hobby horses--its objection to any competitive tendering within the services of local authorities. In this case, it is the financial services of local authorities. But, frankly, the position is the same regardless of the service of the local authority. Whether it be in the collection of dustbins or any other service, the noble Baroness's party believes very firmly that the private sector has no part to play and cannot teach local government anything in regard to efficiency or effectiveness.

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