HL Deb 29 April 1993 vol 545 cc440-2

3.30 p.m.

Lord Stallard asked Her Majesty's Government:

Whether they are satisfied with the working of the housing benefit scheme in the light of the recent report by Shelter.

The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley)

My Lords, we are still studying the report and its recommendations. Local authorities are responsible for the day-to-day operation of the housing benefit scheme and for the quality of service they provide to their customers. We do, however, note the considerable public expenditure consequences of the recommendations in a scheme which is expected to spend £8 billion in 1993–94.

Lord Stallard

My Lords, I thank the Minister for that reply and I am glad that he is studying the report. Has he noticed that one of the major problems which affects housing benefit claimants is the delay in processing their claims? Is the Minister aware that the requirement for councils to process the claims is 14 days but many of them take much longer? The time taken ranges from 112 days to 27 days. That means that tenants rapidly fall into arrears with the huge rents they have to pay. Landlords cannot wait for the money and as a result we are creating homelessness through a measure which was designed to assist the homeless. Is that not a matter which we ought to consider urgently? Should councils not be informed that the 14-day limit is a requirement and not just a luxury? If they cannot meet the 14-day requirement should they not meet the interim payment requirement, which many of them do not meet either?

Lord Henley

My Lords, I do not accept the noble Lord's second point that housing benefit itself is causing homelessness. I simply cannot accept that a mechanism that is designed to help people out of homelessness is actually causing it.

In respect of the noble Lord's first specific question I would accept that there are occasions when the local authorities are probably not meeting their targets. However, as far as we are aware 75 per cent. of all claims are processed within 14 days of the local authorities having the necessary information. That is important. That is the statutory requirement.

As the noble Lord correctly said, local authorities must make interim payments where there is a delay. Further, under the Citizen's Charter local authorities are now collecting data for performance indicators on housing benefit. That information will be published next year. We hope as a result to be able to improve their service.

Baroness Hollis of Heigham

My Lords, I should like to link the report with the Government's own return to work initiative which was published yesterday and which we welcome. Is the Minister aware that a family which doubled its earnings from £60 a week to £120 a week is only £5 a week better off because benefits, and especially housing benefit as the report shows, are withdrawn too sharply? Is that not perverse?

Lord Henley

My Lords, I am aware of the concerns of the noble Baroness about the level of the taper in housing benefit and the other income-related benefits. I have to tell the noble Baroness that we have to allocate resources as best we can. Any reduction in the taper, particularly if one, say, reduced the housing benefit taper from 65 per cent. to 50 per cent., would be extraordinarily expensive. In that particular case it would cost something of the order of £340 million a year.

Earl Russell

My Lords, my noble kinsman said that he could not understand how housing benefit might lead to homelessness. Will he consider two ways in which that could happen? The first is where housing benefit falls far short of the rent and the tenant cannot meet the difference, and the second is when housing benefit is not paid for many months after it is due. Are those possible?

Lord Henley

My Lords, I have already dealt with delays and stated that local authorities have a duty to make interim payments where there are delays. I also would like to say that it is necessary that there should be, in a benefit which deals with public money, rent restrictions where landlords seek to charge rents above market levels at the expense of the taxpayer. However, I should stress that vulnerable groups are protected from housing benefit reductions unless they can be expected to move to cheaper accommodation that is available.

Lord Addington

My Lords, will the Minister take on board the fact, which was pointed out in the report, that under the current system students' income is more than £450 below the income they would expect to gain from social security benefits alone for the 18 to 25 age group? Would it not make sense to restore students' right to claim housing benefit or, failing that, to bring in a new system of student financing?

Lord Henley

My Lords, as the noble Lord will know, in the main full-time students are outside the benefit system. We believe that they should be, quite correctly, the responsibility of the education system. I see no case whatsoever for returning to the days when large numbers of students were claiming housing benefit and, for that matter, other income-related benefits.

Lord Stallard

My Lords, in his original reply the Minister mentioned the rising costs of housing benefit. Could that not be because there are now more people unemployed than ever and there are therefore more housing benefit claimants? In his reply to the noble Earl, Lord Russell, the Minister failed to recognise that rents can rise twice a year but housing benefit rises only once a year, so that the number of people falling into arrears increases rapidly accordingly. The CAB regularly reports cases of people falling into arrears and being threatened with eviction because of these anomalies. Is it not time that we debated the whole matter in detail in this Chamber?

Lord Henley

My Lords, I am sure that my noble friend the Chief Whip will have heard the noble Lord's last remark. I quite accept the point that obviously income-related benefits are affected by the state of the economy. As regards the question of rent increases, as I explained, we have to have restrictions to ensure that the system does not become a vehicle whereby landlords can take ever-increasing sums of money from the taxpayer.

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