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In fact, I have been waiting for some time for the department to bring forward long-term change because it was presaged by no less a person than the Chancellor of the Exchequer in the 2003 Red Book. It was clearly said then that the Government were considering the case for “further” change of the Social Fund. That was in 2003. We now have 2010 poverty targets, and we know the Government have a challenge in trying to meet those. We have got a brand new public service agreement dealing with socially excluded adults, a group that requires the services of the Social Fund. We have also, rightly, got a lot of heavy consideration of financial inclusion through the Thoreson review. We have had the interim review—I did not think it added up to much and I am looking forward to February or March when the final report comes through. Financial inclusion may well be a new element that the Social Fund moves into, rather than anything else. Yet still nothing has happened.

We have had no shortage of ideas; we have even had David Blunkett, a Member of Parliament, writing a pamphlet in October 2006 for the Resolution Foundation, Ladders Out of Poverty, which had a lot of good ideas—I commend it to the Minister as bedtime reading. Various Ministers have talked about seasonal grants—the last one I remember was Jim Murphy MP, when he was Minister, at the back-end of November 2006. I got excited about a story in the Observer for a short time because I thought that it was at least some evidence that there was something going on in the undergrowth of the department, and that if I just contained my patience something would emerge which would fit the bill in terms of long-term reform. I do not think we have seen anything. It would help me and the rest of the House enormously if, in this debate, the Minister said something about what the Government have up their sleeve in the future on where the Social Fund will be in five or 10 years’ time.

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I want to spend most of my time this evening looking at more operational end resource issues; they are by definition more short-term, and deal with some of the pressures being experienced both within the Jobcentre Plus bureaucracy and by the claimants outside who are trying to get access to the services offered by the Social Fund. I am particularly concerned about crisis loans and community care grants.

First, the new Jobcentre Plus standard operating model is a good thing. I am in favour of the general principles behind the system that requires and enables people to make claims for their benefits by telephone, by and large. Yet this has been running over the last two or three years, and the more I look at it the more I come to the clear conclusion that there is a percentage of the claimant customer base that cannot reasonably be expected to successfully negotiate the telephony system we have. There are various estimates about how big a percentage that is, and my best guess—it is no more than that—is that something of the nature of 10 per cent of the client base of Jobcentre Plus are at risk of failing to properly access these services in the way that would be reasonable, unless other things are done in addition to what we have in the standard operating model at the moment. There are some real concerns in trying to deal with that operational issue.

We have got until March 2008 before the model is finally rolled out. The centralisation process has worked for the vast majority of people, particularly the service available to pension credit and all the rest of that, but there are emerging issues that are not going to go away, which suggests they are problems still to be addressed. If we need any evidence, the citizens advice bureaux report produced last summer, Not Getting Through, captures all the difficulties that bureaux advisers had in dealing with customers’ and claimants’ problems in accessing community care grants and crisis loans in particular. I also lodge as evidence to support my case the Social Security Advisory Committee’s Occasional Report Series No. 3, which raised some concerns about telephony services as well. These are serious people, they know what they are doing and they have put their finger on a real problem which is not going to go away unless we do something about it.

My first plea for operational and resource issues of a short-term kind is, then, to get a much higher level of efficiency across the board in how these crisis loans and community care grants are administered. I have access to Independent Review Service figures relating to community care grants for the period from 1 April to 31 December 2007. From this evidence, the Minister should not just accept at face value some of the target average figures, because the averages mask and disguise some really appalling delays being visited on some customers and clients, who are not in a strong position to be able to withstand the financial consequences of not having the money.

In the course of the initial decisions that the IRS received from April to December 2007, the headline total comes through that 68 per cent of cases were decided within 10 days. That sounds fair enough. If one looks behind that, performances within that 68

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per cent range from 95 per cent in Northumbria, which is very good, to 21 per cent in Norwich which is not at all good. Looking at the longer target, 98 per cent of cases were decided within the 30 days. Again, Ministers might be lulled into a sense of complacency and think that that is not a bad score, considering that the system has not yet bedded in properly, but 11 offices achieved 100 per cent, which is really good and at the other end of the scale, Norwich again achieved 51 per cent within 30 days, which is only half.

Looking at review decisions—not initial decisions—the problem is worse: 40 per cent of cases were reviewed within the 10-day standard period and there was a range of 92 per cent in Lancashire West to 9 per cent in the West Midlands. Looking at the 30-day average for review decisions, 86 per cent of cases were reviewed within that period, with two offices reviewing 100 per cent within that time, which is great. Again, the worst performing office was Norwich which achieved 41 per cent in that 30-day target—I do not know what is going wrong in Norwich.

The figures get worse for November and December. The most recent figures are trending in the wrong direction. The outstanding work in Jobcentre Plus, according to the IRS, is at the review stage, but at the end of November 2007 Jobcentre Plus allegedly had 26,000 initial applications awaiting decision which is about two weeks’ work, as I understand it, and 11,500 outstanding reviews, which represents about six weeks’ work. Those are bad figures.

If the Minister is not prepared to take my word for it, I hope that he will look very carefully again at the review by Sir Richard Tilt, the IRS Social Fund commissioner, for 2005-06. Sir Richard Tilt is a very serious man and he has been doing this work for six or seven years now. In his summary of issues for consideration he lists certain points, but I do not have time to go through them in great detail this evening. However, seeing the kind of figures that I have just raised and having access to Social Fund inspectors who find individual cases that sometimes are much worse than the figures I have just quoted, Sir Richard is very aware of the difficulty. Three times in his set of 10 or so issues for consideration at page 7 in the 2005-06 annual report, he stresses the need to, “take urgent action”. He talks about the need to identify accurately the demand levels for crisis loans made by telephone, about which I have just spoken—as with community care grants—and taking urgent action to ensure that staff at Jobcentre Plus comply with the policy of accepting written applications for crisis loans, because there is some confusion about that. He goes on to suggest that we might introduce a facility of applying by telephone for reviews of crisis loan decisions at the earliest opportunity to try to cut down on some of the backlogs and delays. There is a menu of action for the short-term under the heading of more efficiency across the board in terms of the standard operating model in Jobcentre Plus.

A couple of other things need to be attended to and they are more of a resource and budgetary nature. The discretionary part of the budget needs to be increased because we still have postcode and calendar lotteries. The Select Committee which I had

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the privilege to chair in 2001—the old social security Select Committee—made a special feature of that in its recommendations in 2001. The position has not changed and arguably it is getting worse. Postcode and calendar lotteries need to be wrung out of the system. That will require a fresh look at the way in which the budget is deployed.

Eligibility needs to be widened. I am saddened and distressed to discover that alignment payments are still being used. People who do not get an early benefit decision apply for a crisis loan because they do not have the benefit in time. That attacks the crisis-loan budget in a way in which it was never designed to operate, so that people who need crisis-loan help do not get it because others need help as negotiating their benefit payments has taken too long.

We really need to reduce some of the existing exemptions; for example, I have never understood why people cannot claim for a deposit for a house. People can claim for rent, but they cannot claim for a deposit which secures the tenancy and sometimes that needlessly leads to homelessness.

The final point I want to make on the operational issues that need to be considered in the short term is that the telephony and the system of application for Social Fund applicants, particularly those trying to get access to crisis loans and to community care grants, are just not working. I think all that background adds up to a compelling case both for urgent consideration of the short-term issues and remedial action in the longer term for fundamental reform.

7.45 pm

Lord Oakeshott of Seagrove Bay: My Lords, I congratulate my noble friend on securing this debate and highlighting these important issues which affect some of the most vulnerable people in our society. It is a pleasure to support him. He speaks with great experience and authority after his many years specialising in this area in another place.

I want to focus on the problems that people have in accessing crisis loans. They are very much at the sharp end; they are the casualties of our society. I want to highlight some of the aspects covered by Sir Richard Tilt in his report and I shall press the Minister on what action the Government will take to remedy the situation.

Crisis loans give immediate help with day-to-day living costs or help in an emergency, as the CAB points out, to people who really are in desperate need. I think it is fair to say that there is a very worrying trend of incompetence in how the decisions are made. The percentage of crisis-loan decisions that have to be changed has been rising steadily from 50.8 per cent in 2004-05 to 52.9 per cent in 2005-06 and to a shocking 58 per cent last year according to the most recent report. Can the Minister tell us why that is deteriorating? Does he accept that that is a completely unacceptable position? What action is he taking to deal with it? You can apply for these loans if your emergency could put the health and safety of you or your family at risk, as the DWP official guidance states. There were 1,448,000 applications last year. That is a lot of people in crisis and a lot of people with problems: 334,000 were initially refused.

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From reading the commissioner’s excellent report, I believe that part of the problem is access. Although he acknowledged that Jobcentre Plus dealt with more than 1 million applications for crisis loans, the IRS has continued to receive complaints from all over the country about the difficulties that people face accessing the scheme. The main reasons for complaint were inability to get through on the crisis-loan telephone lines, despite trying constantly, officers refusing to accept applications made in writing or face to face and a failure by officers to record and issue a written decision if refusing an award, thereby preventing the applicant pursuing a review.

All the evidence indicates that difficulties that people experience getting through on the crisis-loan telephone lines are widespread. They did two samples. Between 1 November and 22 November 2006, only 10 per cent of the calls made were successful in getting through; 41 per cent found the line engaged; 5 per cent had no reply; 27 per cent got a recorded message; and 17 per cent were placed in a queue. Those are people in desperate need. When we come to the most recent figures—for February to March 2007—only 4.8 per cent of calls were successful in getting through and no less than 54.4 per cent got a recorded message. That is unacceptable. Can the Minister tell me what he is going to do?

The conclusion of the independent report states,

The Social Fund Commissioner suggests that,

He also suggests that,

There is worrying evidence in his report of extreme regional disparities in performance. I am not quite as sad as my noble friend Lord Kirkwood, but I, too, have done a little study and looked at back reports. Why was it that in 2005-06 only 22.5 per cent of crisis-loan decisions in the south-east were confirmed—in more than three-quarters of cases the office got it wrong—which is less than half the level in some of the better areas? In 2006-07, the correct assessment rate in the north-east, the best region, was two and a half times higher than that in the south-east. What is it about the south-east that makes for these persistently poor results? What action will be taken?

As my noble friend Lord Kirkwood said, there is an unfortunate randomness and unfairness, and I shall talk about that a little more. There is a postcode lottery in the way the Social Fund works depending upon where one lives in the country. It works very fairly, but why should it be as the independent review service reported to the House of Commons Select Committee? It said:

In the highest-demand areas, restrictions mean that even people who meet the highest criteria of qualifying need are not receiving payments or are receiving insufficient payments. Out of 78 Social Fund districts in 2006-07, only 23 were able to grant all high priority need applications without restrictions. It is not surprising that the House of Commons Select Committee concluded:

That highlights the most immediate and urgent problems that I want to take up, following my noble friend. I look forward to the Minister’s reply.

7.53 pm

Lord Skelmersdale: My Lords, it is now just 17 years since I last turned my attention to the Social Fund, so I am grateful to the noble Lord, Lord Kirkwood, for prompting me to look at it again. In one sense, nothing has changed since it was fully introduced in April 1988 by its insertion in the Social Security Act 1986, which was introduced by my noble friend Lord Fowler. I say that because it was, as it still is, severely cash-limited, even though, according to the Institute for Fiscal Studies, absolute poverty is now rising again. The Government regularly speak about financial inclusion and what they are doing to encourage it, but as things are at the moment, it appears to be failing the most vulnerable, the very people whom the Social Fund was set up to help.

I note an answer given by the Minister responsible to the Treasury Select Committee of another place on 16 November 2006. He said,

That means even those resources that the spokesmen for the party on my right have described as, if not quite “disgracefully limited”, then verging on that. Later, the Minister said that he thought it was possible for the Social Fund,

The noble Lord’s Question for Short Debate is timely indeed, and both he and I will expect to hear what more is being done, given that a year has passed since those comments were made by the Minister.

It is not, to be fair, that the Government have been doing nothing over the past few years. They have abolished the double-debt rule whereby someone’s available budgeting loan award was his maximum amount minus—for some unknown reason—twice his existing budgeting loan debt, and have replaced it with a single-debt rule. However, I would be grateful if the Minister would tell me how that works. Does it mean that loans are cumulative, as they should be? In other words, can loans be taken out in tranches, up to the maximum allowance? The Government have introduced just three rates for the budgeting loan

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maximum amount: for single people; for childless couples; and for families, whether with one or two parents. They have increased the minimum budgeting loan that can be awarded from £30 to £100 and doubled the amount of capital an applicant can have to £1,000 for the under-60s and £2,000 to those over that age. They have also reduced the loan repayment rates and increased the loan repayment period. Lastly, they have increased the overall debt limit from £1,000 to £1,500.

All these are positive measures, which we on this side of the House welcome, but—and it is a big but—they are useless if the people who need Social Fund loans cannot get access to them. Therein lies the problem that has beset the fund ever since its inception. The first problem is the uneven spread across the country of applicants and of the available finance in each social security office. Following Gershon principles, the Government are in the process of reducing the number of access points from the 120-odd social security offices that there used to be to just 20. They cover 23 areas, three of which are in London and one of which, for some unknown reason, is in Milton Keynes—perhaps the Minister could explain that one. That means that for almost all clients, access to the Social Fund officer has to be by telephone, as we heard from the noble Lord, Lord Oakeshott, who pointed out some of the difficulties that that entails. During my research updating my knowledge of this subject, I heard of one client who gave up after two hours on the telephone. That is not uncommon, but is clearly a disgrace and needs to be rectified. I say to the noble Lord, Lord Kirkwood, that the problem does not necessarily lie at the door of the potential client: it is much more likely to lie at the door of the administrative facilities and the equipment of individual offices.

This reduction of offices also means that Social Fund officers do not know the area from which the client is calling, so can no longer give advice about other appropriate sources of finance or whatever other help is required, as good officers were wont to do in days gone by, and the White Paper has suggested will become the norm. Furthermore, Leslie Strathie, the chief executive of Jobcentre Plus has confessed that telephone calls are neither recorded nor monitored. How does this help the client, or indeed those parliamentarians trying to understand what is going on? I have been told of a West Bromwich man who was unable to get through to the crisis loan number and spent the last of his money on fares to a jobcentre office to apply in writing, only to be told to keep trying the phone lines because written claims were no longer used, which is nonsense. That is totally unacceptable, and such statements can only be made because of a lack of training, or perhaps, in that particular case, retraining.

Talking of training the officers, like the noble Lords on the Liberal Benches, I ask why there is such variation in decision times. The IRS informs me that for cases received from 1 April to 31 December, 68 per cent of initial decisions on community care grants were decided within 10 days. That is an average figure, and we all know that averages are the mean of extremes. As the noble Lord, Lord Kirkwood said, in this particular case, performances ranged from 95 per

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cent in Northumberland to 21 per cent in Norwich. Why? Is it that are there not enough staff in Norwich, that the budget is inadequate, that staff are taking too long to make a decision, or what? I do not regard there being more applicants in Norwich—if there were—as an excuse. As we have heard, when in the same period these decisions went to review, 40 per cent were reviewed in 10 days, again hiding wide variations; performances ranged from 92 per cent in Lancaster West to only 9 per cent in the West Midlands. The same two questions apply.

The resolution of the levels of staffing is self-evident and can be dealt with; however, the question of money is not. I am not advocating injecting more money into the budget, but with only 20 area offices, the department should be able to do the same as I did when I was responsible in Northern Ireland. We had 21 or 23 social security offices—I cannot quite remember—and each one had already been given a monthly budget by the time I arrived. Inevitably, some offices overspent and others used nothing like the amount that they were allocated, so I took executive action to even this up by transferring money from the haves to the have-nots. Would that the Minister were working in a department where he had such power, but he clearly is not. Does he consider that that could become the norm in this country now there has been this drastic reduction in numbers of offices dealing with the Social Fund?

When a Social Fund application is refused, the would-be client turns to other sources of finance. Because banks are usually unwilling to lend money to such people for fear of non-repayment, almost their only recourse is to loan sharks and others with unacceptably high interest rates. They are often unaware of what they are getting into, even though annual percentage rates are published. The Institute of Financial Services published a study in 2006 saying that 79 per cent of the population did not understand the term “APR”, and, even more alarmingly, 50 per cent did not understand what “50 per cent” meant. If these figures are to be believed, and I have no reason to doubt them, that is hardly a plaudit for the expression “education, education, education”. What are the Government doing about financial education? The pressure on the Social Fund might decrease if people knew that they could afford other sources of finance. Those other sources include, but are not limited to, credit unions. These are, alas, not as numerous or as widespread as we would like. Will the Government seek to encourage their formation? The more available they become, the more we will encourage thrift in our society.

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