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Lord Mackay of Ardbrecknish: The amendment would require the Secretary of State to allow local authorities a certain period in which to make representations to him on the content of inspection reports. The amendment largely pre-empts the provisions already made in Clause 8 of the Bill. I do not believe that it is necessary to pre-empt the provisions of Clause 8.

The proposed procedure of inspection, reports and directions was designed to be fair to local authorities. It may be helpful if I outline them briefly. Following receipt of an inspection report, the Secretary of State will first ensure that the report is copied to the local authority concerned. This will happen in all cases, even where the performance of the authority is exemplary. It is unnecessary in such cases to make provision for the authority to respond to the report as this amendment does. Indeed, to do so would create an unnecessary layer of bureaucracy.

In a case where the Secretary of State believes that action may prove necessary, he will be required, before taking any action, to invite the local authority to consider the report and to submit its proposals to improve performance and remedy any failings identified. The Secretary of State must then consider any response, along with the report, before making any directions to the local authority.

So the provisions in Clause 8 already ensure that the authority concerned will have the opportunity to consider and respond to the report before directions are issued. Clearly, where an authority disagrees with the accuracy of the report or wishes to challenge the findings, it will be free to comment accordingly. Where the authority considers that any recommendations are inappropriate it will be able to state the reasons why.

The Secretary of State's power to issue a direction is permissive precisely to allow for circumstances where it would not be appropriate to make or even consider making a direction. Where the authority has raised compelling arguments against doing so, the Secretary of State must take these into account. It may not be the intention, but the amendment as drafted appears to introduce an additional stage in the process. To require an additional period of 28 days for comment prior to inviting the authority's proposals would only prolong the process and make it unduly bureaucratic.

The amount of time allowed for an authority to respond to a report must be flexible. Given the wide differences in local authority performance and the variations in caseloads between different authorities, it would not be appropriate to lay down a mandatory response time. It is precisely in order to maintain fairness that we need to be able to adjust to the particular

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circumstances of each individual authority when setting deadlines for action. In general we do not anticipate that an authority would be expected to respond in less than 28 days. There may, however, be occasions when swift action is necessary, while in other cases longer periods would be justified.

Clause 8 already makes adequate provision for a local authority to respond. With that explanation of how we believe the procedure of inspection, report and direction will work, I hope the noble Lord will feel able to withdraw the amendment.

Lord Carter: That was a very helpful response but perhaps I may put a point to the Minister. He said that the amendment would require the local authority to respond even when there was no reason to criticise its performance. I suppose that it could always write back to say, "Thank you". The intention of the amendment is to give an authority the opportunity to make comments about such issues as the accuracy of the statement in the report and the methodology used. If we go along with the Minister's argument and say that this is not required, will the local authority be allowed to make such comments when it submits its proposals in response to the report? When it submits its proposals for putting right whatever may be wrong, will it be allowed to say, "Yes, we understand what we have to do but we would like to point out that the reason for the problem is the inefficiency of the department"?

Lord Mackay of Ardbrecknish: Yes. I think I indicated that where the authority disagrees with the accuracy of the report or wishes to challenge the findings it will be free to comment accordingly. It can make some of those comments before it even comes back to the things it might do if it wishes to challenge points of fact, if I may call them that, or the accuracy of the report. It can do that. That is why I think a little flexibility is required.

Lord Carter: I was referring not just to accuracy. I was also thinking of more subjective opinions where the authority might feel that the problem had arisen because of wrong action on the part of the DSS. I do not wish to press the amendment to a Division. I shall read with care what the Minister said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5 agreed to.

Baroness Turner of Camden moved Amendment No. 53:

After Clause 5, insert the following new clause--

Change of circumstances: review of award

(" . In section 5(1) of the Social Security Administration Act 1992 (regulations about claims for and payment of benefit) at end of paragraph (j) insert" and for requiring a review of the award and an award to be made within fourteen days of receipt of notice of any change of circumstances;".").

The noble Baroness said: The purpose of this amendment is to ensure that changes of circumstances are processed within 14 days of the notification of that change. As we know, people have a duty to inform the

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authorities of a change of circumstances, but, unlike the initial claim in housing benefit cases, there is no timescale within which the local council should process that change. As a result, when a claim is eventually processed, recipients may find themselves faced with considerable under or overpayment and local authorities will then have to seek to put the matter right.

We have to remind ourselves when dealing with the benefit system that we are dealing with people who are by definition very poor and often disadvantaged and who live, as it were, very close to the edge. That means that any underpayment may be a matter of grave penury. Alternatively, if through no fault of their own, having made the notification of change of circumstances, nothing happens and suddenly they are asked to make up the underpayment, that may be a considerable embarrassment and the person concerned may not have the money available.

I do not think that it is too much to expect that a change of circumstances should be processed within 14 days. If we do not have that kind of timescale laid down in legislation, we may very well find that people are subjected to disadvantage which should not be there at all. I beg to move.

Earl Russell: This is rather an important amendment. The Minister and the noble Lord, Lord Lucas, may remember a number of exchanges that we had on the housing Bill where we were in danger for a while of passing like ships in the night. The noble Baroness, Lady Hollis, and I and many others, were asserting that many people were made to wait for many months before getting housing benefit. The Minister gave a whole series of statistics showing that very few people had to wait beyond a fortnight. It was only after very lengthy debate that it emerged that we were measuring two different things. Those of us speaking on this side of the House were measuring the length of time from when people put in the initial application for housing benefit or notifying the change of circumstances from which a claim arose. Ministers were measuring the time of a fortnight, on which there is a statutory check, from when the local authority got all the information on board. The clock does not start ticking for a local authority until all the information has been gathered in.

There have been local authorities--I think of the London boroughs of Lambeth and Brent in the bad old days before reforms began--which used to leave things for many months before they even began to ask for the information needed. In fact, I believe that the London Borough of Lambeth--I would not swear to the recollection now--once discovered a number of sacks containing applications for housing benefit, which had been left lying in a corner of an office for as long as six months.

The point that the noble Baroness, Lady Turner of Camden, made about people living near to the edge is very applicable indeed in that situation. If people have received overpayment through no fault of their own and they are then asked to repay an enormous sum all at once, even if the money is legally due, repaying it may be very difficult indeed.

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Some of us may have received bills from the Inland Revenue for several thousand pounds at a time for back tax which the Revenue has suddenly discovered is due, although in possession of all the information. That sort of thing can cause us, in much more comfortable circumstances, a considerable amount of dismay. If it can cause that to us, then how much more it must cause dismay to people who are really right on the edge and who may be refused the chance to cash a cheque because of an overdraft of £5?

At that sort of level, delay is very serious. So we need some recognition of the fact that the local authority clock ought to start ticking a bit faster. It is like not starting the stopwatch for the Olympic mile--or the 1500 metres, I should say, these days--until the runners are past the first 800 metres. That does not give a very accurate reading. This may not be exactly the right thing to do about it, but something must be done about the problem. People are suffering quite badly because nothing has been done yet.

6.15 p.m.

Lord Mackay of Ardbrecknish: The effect of this amendment would be to provide a power to make regulations to guarantee that notifications of changes of circumstances relating to the majority of benefits administered by my department and local authorities would automatically trigger a review which would have to be dealt with and a decision made within 14 days.

If regulations such as the amendment suggested were made, they could not provide for any exception to the 14-day time period. The amendment is needlessly restrictive. For practical reasons there is a need for exceptions to a 14-day general rule.

Decisions on benefit entitlement by adjudicating authorities are made on the information available to them and deciding the facts on the balance of probabilities. If the officer does not have sufficient information in order to make an accurate determination, he must properly seek more information, otherwise the claimant may be underpaid or overpaid. Proper determinations may not be possible within 14 days if further information has to be obtained either from the claimant or a third party.

For example, the claimant may notify that he has started part-time self employment but say that the business is not yet making any money. The adjudicating authority must arrange further inquiries on the nature of the business and estimated income and expenses before being able to decide whether benefit should be adjusted. A 14-day rule would place a requirement on the claimant to provide information to a very tight, if not impossible, deadline. Failure to provide the information may result in a decision which is to his disadvantage. Under present arrangements, the claimant is allowed up to a month to provide the information and that period runs from the date he was asked to supply it. The month may be extended for good reasons.

For most benefits, legislation has, since 1948, provided for decisions on claims and reviews to be made wherever practicable within 14 days. Different provisions exist for housing benefit and council tax

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benefit, but local authorities are nevertheless expected to deal with all determinations promptly. Failure to do so in overpayment cases may result in an authority losing central government subsidy.

It is, of course, a matter of public policy that the service given is prompt. Public services must now publish charters or service statements and report on performance and costs against those service standards. The Benefits Agency has targets for dealing with changes and the vast majority of cases are dealt with within 14 days. So, for the Benefits Agency, the increased costs would therefore be for very little gain.

While one always has to be a little cautious when looking at these measurements, because there may be a difference between the time of first notification and the time the clock starts ticking because the information was totally inadequate, the fact is that, for all changes--not just changes of circumstances--for income support, 95 per cent. of the cases are cleared within six days; for retirement pensions, 86 per cent. are cleared within five days and for child benefit changes, 92 per cent. are cleared within 13 days. Therefore, the Committee can see that we attempt to meet very exact targets because we are aware of the need to make speedy decisions in these cases.

As I have said, to make a 14-day rule would put the department and the various agencies into a straitjacket unnecessarily, which would not always work to the benefit of the claimant. Therefore, it is inappropriate to set on the face of legislation an absolute time limit which would apply in all circumstances regardless of the practical difficulties. I believe that the existing arrangements are satisfactory and that they do, in the great majority of cases, although perhaps not exactly, meet the purpose behind this amendment, as explained by the noble Baroness, Lady Turner of Camden. With that explanation, I hope that she can withdraw her amendment.

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