| Previous Section | Back to Table of Contents | Lords Hansard Home Page |
3.53 p.m.
Baroness Hollis of Heigham: My Lords, I have only five minutes in which to respond to many questions from both the noble Lord and the noble Earl. I hope that noble Lords will forgive me if I try to deal with the main ones and follow up some of the detailed ones in writing. I shall treat the questions as a shopping list rather than dissect them because your Lordships have had the benefit of the Statement.
The noble Lord, Lord Higgins, asked, first, whether the legislation was secondary or primary. It is secondary and will be dealt with by regulations. Secondly, he asked whether we would consult the Social Security Advisory Committee and take heed of its advice. We always have regard to the views of that committee.
Thirdly, he asked what counts as "local"—a point also raised, I believe, by the noble Earl, Lord Russell. In terms of the 10 pathfinder areas, in particular—there will be one in Scotland, one in Wales and others in inner London boroughs and rural areas—they may be coterminous with a local authority area but basically the rent officer will decide what local areas to set, based on the local housing market.
Essentially, the rent officer could decide that in, say, Norwich, the local reference rent for a three-bedroomed family house which housing benefit would meet would be, say, £65. That would then be publicly available in the Jobcentre Plus office. Anyone on income support or JSA who came into that office and who was entitled to a three-bedroomed house by virtue of their family size before the income calculation came into play would know that, when they went to look for a property, they could obtain housing benefit of £65. If they spent less than that, they would keep it; if they spent more, that would be their choice. If they needed to spend more because of exceptional circumstances—for example, they might have a disabled child whose needs called for an extra bedroom, whereas a child
of that age would not normally have such a requirement—they would be entitled to discretionary payments.As of last year, a £50 million budget has been in place, of which the Government put in £20 million, and local authorities are still spending less than half that money—only 40 per cent. Therefore, there is headspace to respond to that type of circumstance as well as to protect vulnerable people. That is how the system will work. No one will be worse off; indeed, 60 per cent of people will gain, and the average gain will be between £10 and £15 a week.
I was asked about the cost of pathfinders. The cost is £20 million for the 10 pathfinders, which will cover some 5 to 10 per cent of tenants in the private rented sector.
The noble Lord, Lord Higgins, asked about fraud. Our current belief is that fraud is running at between £800 million to £1 billion a year. We are driving it down. We hope and expect to do so by at least 25 per cent by the year 2005–06. When we came to power in 1997, local authorities made 700 prosecutions. Last year, there were 1,700 prosecutions. In addition, the noble Lord will recall that in 1997 we introduced a new penalty in the fraud Act. In total, there have been 2,600 cautions and penalties. Therefore, whereas 700 prosecutions were made in 1997, the figure is now 4,000. However, we still have some way to go, and I would not dream of saying otherwise.
In terms of timing, if the pathfinders scheme proves satisfactory, we shall roll out the national scheme in approximately 2005–06. It cannot be introduced into the social rented sector—a point on which the noble Lord, Lord Higgins, pressed me—until the restructuring of social rents has taken place. We expect that to take until the end of the decade. As the noble Lord knows, local authority rents are based on pooled historic costs of construction as opposed to national averages reflecting current market values.
The noble Earl, Lord Russell, knows that, at present, any individual seeking housing benefit must look at a property and then apply to the rent officer for a determination. In future, because that information will be known in advance, we shall be able to simplify and speed up the process. It is hoped that error and fraud will be reduced. No one will be worse off and half the people will be better off. As a result, I hope that the welcome offered today by the noble Earl will be fully endorsed by other Members of your Lordships' House.
As to the matter of the run-on, the situation is even better than the noble Earl described. Currently, if a person starts work, the run-on of his full housing benefit will continue, if he receives JSA, for four weeks. However, in future, he will continue to keep his existing housing benefit until the local authority has made the new determination. If the local authority takes 10 weeks, the tenant will enjoy it for six weeks and will not be expected to refund it. Therefore, there is a powerful incentive to local authorities to speed up their processes.
I was asked whether the benefit would be automatically uprated for inflation. It will be uprated by rent officers, reflecting movements in the local rental market. As the noble Earl will know, different areas increase their rental levels considerably over a year as compared to other areas, according to housing pressures. Therefore, an automatic national increase would simply not be reasonable or fair.
I have talked about pathfinders. Perhaps I may write to the noble Earl about gypsy sites. With regard to the Frank Field issues of antisocial behaviour orders, I was careful to say that the Government are seeking to make effective antisocial behaviour orders—very often at the request of local authorities. The people who most hate and detest antisocial behaviour are tenants in otherwise respectable council estates who find their lives made miserable by young thugs, graffiti, burnt-out cars, vandalism and drug purchasers, addicts and the like. It is in their name that we seek to act.
4 p.m.
Lord Campbell of Croy: My Lords, I am glad to hear that reform is in prospect for housing benefit. Does the Minister agree that a large proportion of total benefit fraud in recent years has been in housing benefit? Is she aware that tightening the eligibility requirements and the monitoring system would be of real advantage, in particular to eligible disabled people? Is she entirely confident that the proposed changes will reduce fraud?
Baroness Hollis of Heigham: My Lords, yes. As the noble Lord will know, and as has been discussed in this House, the problem at present is that housing benefit is a high value benefit. It can be worth £450 per month in London. It is also a complex benefit to administer. There is also a steep withdrawal rate when a person moves back into work. If we put those three things together, we have a recipe for fraud. Local authorities continually seek to balance accuracy, given that it is a high value benefit, against speed of delivery, which allows tenants to make a quick decision and to go back into work or, if necessary, to come back out of work.
By moving in the direction we have today, I genuinely believe, in the words of the noble Earl, Lord Russell, that we are squaring the circle. It will allow for much greater simplicity. Everyone will know where they stand. At present 60 per cent of private sector tenants' rent is paid to the landlord. This fraud is often a landlord fraud. In future it will be paid primarily to tenants unless there are good grounds not to do so. That, too, should reduce fraud. By virtue of its ease, simplicity, transparency, the supporting administration and the direct payment to tenants, I am confident that we should be able to address the concerns of the noble Lord, Lord Campbell of Croy.
Baroness Carnegy of Lour: My Lords, I understood the noble Baroness to say in the first part of the Statement that deregulation would happen by secondary legislation. Will that happen under
deregulation legislation? I do not want to waste the time of the House. Perhaps the Minister can tell me whether that will happen.
Baroness Hollis of Heigham: My Lords, this is not about the deregulation of rent; it is about producing an "upfront" housing benefit payment. Therefore, it will be passed in the ordinary way by secondary legislation. It has no connection with the deregulation of rents. We are talking ultimately about restructuring social housing rents, which is a different issue. At present about 90 per cent of private sector rents are deregulated. As far as I know there are no proposals to change that.
Baroness Carnegy of Lour: My Lords, perhaps the Minister can clarify one matter. Does that mean secondary legislation to existing legislation, which allows for secondary legislation?
Baroness Hollis of Heigham: My Lords, yes, that is my understanding.
The Earl of Listowel: My Lords, I hope noble Lords will forgive my ignorance in this matter. This may affect a concern raised with me by mothers in temporary accommodation in Paddington about long waits in offices with shabby, unwelcoming interiors and little provision for children. Will the new measures allow an opportunity to consider where the distribution of and inquiries about housing benefit take place? Am I right in understanding that there will be fewer visits as a result of these measures and therefore less trouble for such parents?
Baroness Hollis of Heigham: My Lords, as regards the second point raised by the noble Earl, one proposal is that people will be able to make their housing benefit application by telephone. More generally, most people on benefit will normally be coming in and out of the new Jobcentre Plus offices. As the noble Earl will know, these new offices integrate the old employment service and benefit offices. If he has the opportunity to visit the new offices, I believe he will be as impressed as I was. They look like airport lounges with stripped pine floors and comfortable seating. When I last visited, there was free orange juice for the children. They are extremely comfortable and welcoming.
We hope that people will receive at that point an holistic service. They will be able to discuss their benefit entitlement; try to work out whether they could or should go into work; whether they should change their accommodation; and whether they can come out of a half-way house into full accommodation and like matters. All of that information will be available at Jobcentre Plus. Particular issues about individual claims will be a matter for local authorities. But at Jobcentre Plus all the information I have mentioned will be available to them.
Next Section
Back to Table of Contents
Lords Hansard Home Page