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Baroness Hollis of Heigham: I hope that I shall be able to answer all the noble Lord's points. These amendments--the paving amendment and the substantive amendment--seek to explore how local authorities will be funded to meet the cost of any of the information that they have to pay for under these provisions. The provisions on obtaining information

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do not require local authorities to do anything new. They merely add to the means at their disposal for detecting and preventing housing and council tax benefit fraud.

Local authorities already receive an annual subsidy for administering housing and council tax benefits, which includes the detection and prevention of fraud. These arrangements are already enshrined in our legislation--at Section 140 of the Social Security Administration Act 1992.

These provisions also provide powers for additional subsidies for specific action. Specific subsidies are provided for action taken to prevent fraud, such as work under the verification framework. The noble Lord asked specifically what proportion of local authorities had now adopted a verification framework. The information from the Audit Commission report for 2000 is that 44 per cent had done so. In the previous year, 1999, the proportion was only 19 per cent. Therefore, we can already see how far local authorities have moved. The Government have made available 100 million over three years to meet the costs of all local authorities adopting the framework. As a result, the number taking it up is rising. We are meeting the costs of that initiative.

Specific subsidies are also provided as a reward for the fraud that local authorities detect. The more fraud they find the more subsidy they receive. These powers should make it easier for local authorities to detect fraud. For example, a local authority may receive a tip off that a housing benefit claimant had been bragging about the savings and investments that he had, none of which he had declared on his housing benefit claim. If the claimant denied having any savings, there is no way at present that the local authority could independently check that. With these new provisions, it could check with a credit reference agency to find out to what financial organisations the claimant had applied to open accounts with and then check those financial organisations to find out whether he did in fact have any savings. So, far from putting local authorities at a disadvantage, the ability to check information with independent sources will enable them to find more fraud and consequently to increase the subsidy they receive. If the Committee would like me to do so, I could spell out the degree of subsidy they actually get and the degree to which, if they go above a certain threshold, they receive additional proportions of the money saved and detected. Thus, there already exists a means of paying them for the inquiries they make of organisations; they are paid a reward.

The noble Lord suggested that the level of subsidy provided to local authorities is insufficient. We believe that it is sufficient. We have increased the amounts available to local authorities for the next three years. The increase generally for 2000-01 is 2.5 per cent, which is in line with inflation, but the housing benefit caseload has decreased by approximately 6 per cent. This recognises that local authorities have transferred some of their stock to housing associations and that those housing benefit cases may now be more complex.

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I could go on to talk about the subsidy arrangements and the incentives being provided for those, but I am sure that what we are doing is fully adequate.

The noble Lord asks why local authorities do not have the same range of powers as the DSS; and I am saying that they do, with two exceptions. One is that only the DSS may obtain information on the quantity of supplies of utilities, that is, the bulk data. That is because the bulk data is matched against our records of housing benefit provided to us by local authorities. We then send any potential problem cases involving housing benefit back to the local authorities with the appropriate information.

The other small exception is that local authorities will need the consent of the Secretary of State before entering into arrangements to obtain electronic access to records. This came up when we discussed amendments moved by the noble Lord, Lord Astor, and I tried to explain that we wanted local authorities to have the positive consent of the Secretary of State to ensure that they had verification frameworks, good reports and a benefit fraud inspectorate in place, to ensure that this information was not just floating around in inappropriate ways, as the noble Lord, Lord Higgins, put it.

I hope that I have addressed the points raised by the noble Lord and that I have assured him that we shall provide the information that he seeks and that the concerns of local authorities over meeting the costs of data collection and relating to prosecution are not as significant as he fears.

On the noble Lord's point about homelessness, we are expecting perhaps only 150 to 300 cases across the country where housing benefit is affected. He will know that if you commit an offence against housing benefit, it is not housing benefit that will normally bear the penalty but income support or JSA. This is quite deliberate, because we are not seeking to make people homeless, particularly those with families. The number of cases where housing benefit is affected is not expected on average to be more than one case per authority. His fear about the cost to local authorities of dealing with any homelessness that might result should not arise in practice.

I hope that I have reassured the noble Lord's concerns about the verification framework, payments for subsidy for detecting fraud and the unwarranted fears of local authorities about homelessness.

Lord Higgins: I am grateful to the noble Baroness, as always, for that full reply. It leaves one very clear question in one's mind: why is it that the Local Government Association seems to be totally unaware of the points the noble Baroness was making with regard to the extent to which there are already provisions in standard spending assessments to cover the prevention of fraud? It may regard the amount as inadequate, but at the moment the representations we receive seem to suggest that it is completely unaware that any of the money that it receives is supposed to be devoted to this purpose. That seems quite extraordinary.

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On the noble Baroness's final point, she said there was only likely to be one case per local authority, perhaps less. It would thus appear that the amount of extra money we are going to obtain as a result of this proposal will not be very great. That is in terms of prosecutions--

Baroness Hollis of Heigham: I think the noble Lord may have misunderstood me. I am not saying that there will not be a vast number of offences against housing benefit, but, as he will know, housing benefit is sanctioned, and money lost from housing benefit, only if there is no other qualifying benefit against which the sanction may be met. For example, if someone committed an offence against housing benefit, and most people (although not all) getting housing benefit are on income support or the JSA, the deduction would be against income support or JSA, even though the offence was committed against housing benefit. This is a way of protecting families against homelessness. As I said, our best estimate is that only 100 to 150--or a number of that order--will face an actual reduction in housing benefit, as such, which might produce a situation where someone could not afford to pay their rent.

Lord Higgins: Again, I am grateful, but this seems to suggest that the Local Government Association, which raised the point about the possible cost of homelessness and so on, is not aware of what is happening on the ground. Moreover, it seems that the department is not telling local authorities; so this is a rather strange situation. One presumes that the representations one has received were no doubt made in good faith, but the association seems to be unfamiliar with the situation described by the noble Baroness.

Baroness Hollis of Heigham: I entirely take the noble Lord's point. Perhaps it would be helpful if I repeated my answer in the form of a rather long letter to him. We could not only put a copy in the Library, but also send a courtesy copy to the Local Government Association so that it could circulate the contents to its members. Would that meet the noble Lord's concerns?

Lord Higgins: Yes, I think so; because there seems to have been a rather serious breakdown of communication. I now understand the point which the noble Baroness is making about there only being one case where housing benefit fraud is involved, because it is likely that fraud applies not only to housing benefit but to other benefits as well.

Baroness Hollis of Heigham: Even if there was no fraud against income support and JSA, and the fraud was only against housing benefit, the benefit sanctioned would be income support or JSA. Is that understood?

Lord Higgins: Yes, I understand the point which the noble Baroness is making; I hope that the Local Government Association might also. We need to see whether we can improve the communication. If the

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noble Baroness is prepared to answer in the way she has outlined, preferably as soon as possible, we can see whether on Report we get a rebuttal showing that it is not the Local Government Association but the Department of Social Security which is unaware of what is happening at the front end.

It is obviously very important that fraud against local authorities should be dealt with also, and the noble Baroness has pointed out that they will be able to check their data against that provided by the department, as far as bulk data is concerned. That is probably a sensible arrangement and we certainly agree with what the noble Baroness said with regard to electronic communications: that local authorities will be allowed to search for data on individuals only if their system is approved by the Secretary of State.

Having said that, it does seem rather an awful situation if we cannot trust the local authorities to deal with these matters in the way one would wish, so that the Secretary of State actually has to check up on them to see whether their computer systems are or are not inviolate. A great deal of data will be held on those computers, which would suggest that this is a matter of some concern.

However, these are not matters for the Department of Social Security but rather for the Department of the Environment, Transport and the Regions, the department concerned with local government. In the light of the Minister's kind assurance that she will write in the way she has described, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 62 and 62A not moved.]

On Question, Whether Clause 3 shall stand part of the Bill?

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