HC Deb 08 December 1999 vol 340 cc273-80WH 1.30 pm
Mr. Simon Hughes (Southwark, North and Bermondsey)

Outside our Chamber, carols are being played and the spirit of Christmas is in the air, but I am not going to be able to tell such a cheerful tale here.

I received this morning a policy research briefing from the National Housing Federation entitled "Housing benefit system in crisis". It certainly is in a crisis, which is entirely unacceptable. Many of the poorest and least advantaged people in Britain—though our debate deals with England—are suffering, while many local councils incompetently handle housing benefit and while the Government, despite promises and fine words, incompetently fail to make them do any better. In some parts of the country, the system is a shambles and in other parts it is a disgrace. In my borough of Southwark—I know that you live there too, Mr. Deputy Speaker—housing benefit administration is both a shambles and a disgrace.

I hope that this debate will encourage the Government to answer some questions. Instead of merely promises of reviews, monitoring, assessments and injunctions on local authorities to do better, we want action and answers, so that our constituents do not have to contend with such a consistently awful service. We are sick of people passing the buck; sick of councils engaging contractors who then are passed the blame; sick of contractors working on the basis of contracts that can never be produced; and sick of constituents being passed around from pillar to post, day after day, week after week, month after month.

I was in my constituency office this morning when I received a phone call from a lady who is entitled to £88 housing benefit a fortnight, but she has not been paid since 26 July and we are now in December. She has had to pay £58.50 to the council out of her pension while she waits for the arrears.

Every day, more people in north Southwark and Bermondsey complain about housing benefit—people such as an old lady of 81 living alone in west Walworth, with no immediate family, dependent on state pension and related benefits. She wrote to me in April this year. She moved to a new property, after which her housing benefit stopped, and she received demands for payments of £253.56. She has written to me seven times altogether, since first contacting me in April. In September, she wrote: I am out of my mind with worry … I hate being in debt. In October, she wrote that the housing officer has received all the proof he needs yet he still insists I have to pay full rent of more than £63.00 per week plus council taxes. Just how does he expect me to do this out of my pension? He should try doing it. I am really suicidal, Mr. Hughes, over this lot. I have always paid my debts,—more so the rent". On November 25, she wrote again: I cannot understand why I am having all this trouble, both from the neighbourhood housing office and now the council tax department. I had a letter threatening me unless I pay what they say I owe they will take action. I am worried sick, it is making me confused … How am I able to pay full rent, heating and water charges and council taxes out of my total income of £82.25? She has yet to hear about her renewal claim, and she is not assuaged by the answer that it is all the fault of the new verification process.

A private tenant—the previous lady was a council tenant—applied to renew his claim for housing benefit on 21 September this year. It was due to expire on 28 November, giving the authorities two months to deal with it. Due to continual errors, he has yet to receive confirmation of renewal by the beginning of December. His last payment was on 16 November.

For a final example, I take two constituents who are private landlords, a couple who own two neighbouring houses. They wrote to me when they were owed £8,000 from their two properties. It took 11 weeks to process one renewal claim because of inaccuracy and delay. They still await the other claim being processed.

That is just not acceptable. The figures that I am about to give will shock even some of the least shockable Members of Parliament. There are rules that set out what councils should do, according to which local authorities should seek to promote the well-being of the local community and help those that they can into employment. According to the framework rules for the administration of housing benefit and council tax benefit, councils should "operate an efficient system", provide an "efficient service", provide "best value" to taxpayers and claimants, provide an effective service in terms of quickly and accurately determining and paying genuine claims, provide a "customer-focused service" to communicate clearly and effectively with clients, provide advice and information, treat people with courtesy and respect their dignity and privacy. The experience of my 81-year-old constituent is hardly an example of that.

The rules are clear. There are also regulations, the most important of which are that determinations should be made within 14 days of supplying the relevant information and the first payment should be made 14 days after receipt of the claim. There are other dates and timetables, but those are the two crucial dates.

I interject that a further problem arises from the existence of different systems for applying for housing benefit and for council tax benefit and income support. People may not provide the right information the first time and may be confused as to what information they should supply. We should consider establishing a common form of application so that those who are entitled to income support as well as housing benefit and would normally have to go to the Department of Social Security as well as the council office could have their claims examined at the same time. It would be better to streamline procedures as much as possible.

Let me deal with Southwark first and then widen the context. Southwark has a Labour council hanging on by its fingertips. Control is through the casting vote of the mayor, as in Islington, which we hope will cease to be Labour-controlled this month with Southwark falling not long afterwards. My party is currently in opposition in both boroughs. In 1996–97, Southwark's system was run in-house by the internal contractors and 97 per cent. of claims were processed within two weeks. Charter marks and awards were conferred. What happened the following year is a reflection of the result of the pressure put on councils by the previous and the present Government to do less themselves and contract out more. As soon as the contract went out, payment within 14 days went down to 60 per cent., and last year it was down to 22.4 per cent.

I raised that matter across the Floor of the Chamber last year with the Under-Secretary, the hon. Member for Wallasey (Angela Eagle). She answered: I am aware of the problems being experienced in Southwark. My officials have received a detailed report"— and I would be grateful if it were published— which confirms that there are delays. An action plan has been drawn up to clear the arrears of work that have been implemented. I have asked to receive reports from the authority so that progress on the action plan can be monitored"— and I would grateful if they could be published too. Southwark and the private contractors are … working together … I am told that the arrears of work have been reduced considerably and that the authority expects to make further progress on the workload until the situation returns to normal in November."—[Official Report, 19 October 1998; Vol. 317, c. 948.] My colleagues on the council—including Councillors Derek Partridge and Nick Stanton and our housing spokesman, Councillor Niko Baar— have pursued this matter persistently in other committees, as the council records show. We forced an additional meeting of Southwark council last November with requisitioned business in order to deal with those matters and there are perpetual promises of further reports and further investigation.

I would like to tell hon. Members the result of the "return to normal". The council decided that it could set a target for this year of 102 per cent. of its rent due to be collected—that means some of the arrears plus 100 per cent. of this year's rent. So far, according to the report presented to last night's meeting of Southwark housing committee, it has collected 93.63 per cent. The rent collected in Southwark is about £150 million a year. Rent arrears were targeted to be under £20 million, but are already running at £26 million. The target percentage for the assessment of new claims within 14 days is 100 per cent., yet only 5.4 per cent. of new claims are being assessed within 14 days.

Last night, the majority group on the council tabled a motion asking for a further report to be brought to the council in March 2000 saying what would be done and how performance targets would be met. My Liberal Democrat colleagues tabled an amendment that was accepted, saying that if the targets were not met by 31 January, appropriate action should be taken in liquidated damages against CSL, the contractors, and a report should be submitted to the committee in March 2000 on the possibility of terminating the contract. Had it not been for my colleagues, we would simply have been given the same complacent answer that we have received for over a year. If returning to normal means that 5 per cent. of the claims are processed in time, Southwark residents do not think much of normality.

In a letter in October concerning a specific inquiry about the private sector tenants and their landlords who were owed £8,000, the chief executive of Southwark wrote: I can confirm that Southwark Legal Services will not commence possession proceedings until a document known as `HP pre-court pro forma' has been obtained. This document confirms that the tenant named is not awaiting the outcome of any application for Housing Benefit. The figures he then gave me showed that 6,600 claims were outstanding on 1 October compared with 3,500 in June. A paper before last night's meeting of the housing committee confirmed that at Lambeth county court, 35.3 per cent. of the 168 cases listed by Southwark for possession between 13 and 27 October this year were adjourned specifically because the housing benefit had not been processed. The judge said that the court was appalled by the large number of cases being adjourned, particularly those adjourned more than once for the same reason. The court told the council that, if the position was not remedied quickly, it would consider simply dismissing any case brought back to it that had originally been adjourned because of housing benefit and in which the issues had still not been resolved.

Every sum not collected and every instalment of rent not paid because the housing benefit is not paid means that repairs and maintenance are not carried out. Not only are my 81-year-old constituent and thousands like her identically nearly driven to suicide, but much less maintenance and for fewer repairs are done. Southwark refuses to show its contract with CSL even to members of the council who have a right to know. I ask the Minister to direct the council or to take other powers to ensure that the contract, even if not its financial terms, is published so that the reason why Southwark will not take action against CSL to terminate the contract can be out in the open for all to see.

The contract was apparently so badly drafted that anything that could be defined in court as outside the responsibility of the council would allow CSL not to be liable. Therefore the verification procedure introduced this April, which is a checking procedure to avoid housing benefit fraud, might prevent CSL from being liable. Blame just gets passed to and fro. CSL remains in place. In contrast to the in-house contractors who did the job excellently, we now have an outside firm which is doing appallingly in Southwark and elsewhere in the country, yet no one is willing to take action. A report is brought back regularly to the council, yet the council does not respond. That happens not just in Southwark, but elsewhere. Yesterday, the Freedom of Information Bill received its Second Reading. Freedom of information should mean that contracts like this are not secret but are out in the open. If we can have more openness in local government for these matters, we might have a more satisfactory conclusion.

In its letter of 6 December, the National Housing Federation says that, according to the survey that it has just completed, the average claim time for its housing association properties around the country is 7.3 weeks. The league table for local authorities around the country shows that Southwark is bad, but it is not the only one in that position. Lambeth, which is next door, is worse. That is another Labour-controlled council. It has the poorest performance indicators in inner London, and over the last financial year it processed only 29 per cent. of claims within 14 days. Colleagues in Lambeth have told me about an 85-year-old woman living in sheltered accommodation and in remission from cancer whose renewal form was lost and who was therefore sent a £500 demand for arrears.

The league table for last year shows that Lambeth processes 29 per cent. of applications within 14 days, Islington processes 49 per cent. and Southwark 60 per cent. The national average is 84 per cent. Other councils in the west country which also have CSL as their service provider have criticised its performance. My hon. Friend the Member for Taunton (Jackie Ballard) drew attention to the practice in Taunton Deane council. Kingston upon Thames has returned its housing benefit administration to its in-house team and has terminated its contract with CSL. If more people terminated their contracts with CSL and took it to court for liquidated damages, we might get somewhere.

The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley)

In preparing for the debate, I looked at the question that the hon. Gentleman is addressing. Kingston has not terminated the contract but has given the contractor notice of its dissatisfaction. In fact, just one Labour council has terminated its contract with this supplier.

Mr. Hughes

I stand corrected. My information was that it had. I was aware that it was considering it and I was told that it had. The Minister's information may be more up to date.

Newham, because of the backlog, now answers only emergency phone calls. In Norwich last year, 58 per cent. of housing benefit overpayments were misclassified as fraud. The picture is clear. Although I obviously have a constituency interest, which is where the issue began, my inquiries reveal that similar problems around the country are not uncommon. Another test is the number of complaints to the ombudsman. Last year, for this one element of council activity, there were 74 complaints in Brent, 43 in Islington, 53 in Wandsworth, 123 in Southwark and 296 in Lambeth.

I saw the report of the speech given by the Under-Secretary, the hon. Member for Wallasey, to a conference in Bournemouth in October where she said that local authorities were vital to the success of welfare reform and that they should take more responsibility for improving customer service, reducing errors and cutting fraud in benefit claims. She said: Some local authorities provide a very high quality service. But the picture is inconsistent. In far too many cases people claiming benefits receive a slow and inefficient service. We know that, but who will do anything about it is now the question.

There are a couple of ways forward. First, the Government must address the question, which they have not yet addressed, of the supply and price of rented accommodation. I served on the Committee debating the Bill that became the Housing Act back in 1988. The Conservative party was in power and it was clear that we would eventually reach a stage where property prices would rise but housing benefit would not keep pace. That has now come to pass. Chancellors do not write cheques to fill the gap when a private landlord raises the price. We need to answer that question.

Secondly, the Government must do something about the national housing benefit system. There were promises of a great reform, but I read in Sunday's newspapers that there will now be no great reform. The Government have decided that they cannot now do anything and that it is all too complicated and difficult, so the issue will be put on the back burner. I hope that that is not the case. I therefore have the following list of further questions.

First, will the Minister please ensure that his officials contact the local authorities that I named—in particular, Southwark—to ensure that the contracts are published and that all the information comes out into the open? Will he publish all the correspondence between Southwark and the Department since last October, when I raised the matter in Parliament. We shall then be able to see exactly who said what to whom and who did or did not do anything.

Secondly, will the Government please back off from insisting—this would be odd from a Labour Government, but new Labour Governments never surprise me in this respect—that everything that is efficient must be done outside the public sector and that everything that is inefficient is inefficient because of the public sector? When Southwark ran these matters itself, it did so very well; when these matters were contracted out, they were handled badly. There is a moral there somewhere, which might be that we should sometimes let councils get on with the job themselves and not force them always to contract out. I am aware of the change from compulsory competitive tendering to best value. That is progress, which I welcome. None the less, can we please take the pressure off and allow local authorities to make the choices that they think are best, rather than forcing them to contract everything out into the private sector because of a dogmatic view in central Government?

Thirdly, will Ministers ask Southwark council to apologise to Southwark residents?

Fourthly, will Ministers review the procedures and the timetable, not to make them longer, but to ensure that determinations and payments are made on time? Will Ministers ensure that the timetable works and the penalties are stronger?

Fifthly, will Ministers examine the remedies for delay? If our trains are late nowadays, we can get damages. If I do not pay my tax on time, I must pay a penalty every day that goes by. Why does no increasing penalty have to be paid if a case is not processed in 14 days? At the moment, if the 14-day deadline is missed, it gets put on one side and no one takes much notice.

Next, will Ministers please re-evaluate the verification process? Of course we want to eliminate housing benefit fraud. However, if we introduce provisions that suddenly put the whole national system into crisis, something is wrong with the planning and practice of the implementation.

Lastly, will Ministers please note that I shall respond to inquiries in a simple way from now on, as other colleagues probably will? I shall suggest that people with a complaint seek payment from the ombudsman of the fullest possible remedies—£100 if they get a notice seeking possession, £250 if the case goes to court and £50 if they get a warning letter. The cost to the public purse will increase more and more because of an incompetent system.

Sometimes people ask why some of us are anti-Labour. Some of us are anti-Labour because our experience of Labour local and central Government and that of many of our constituents is so appalling. This is a disgrace and must not be allowed to continue. I hope that any remedy takes effect sooner than the promised remedy of a year ago. Since that promise, things have got worse, not better. I shall return to the issue until we get adequate answers.

1.54 pm
The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley)

The hon. Member for Southwark, North and Bermondsey (Mr. Simon Hughes) knows the procedures of the House well, and it is unfortunate that I am left with six minutes in which to answer 24 minutes of charges. Obviously, I cannot do as much justice to the hon. Gentleman's serious questions as I would have done if he had left longer for my reply.

In an attempt to be helpful, I should say that I welcome the fact that the hon. Gentleman raised such an important issue. At the start of his speech, he described some extremely worrying individual cases and raised issues with which all of us in the House would want to deal. He made some trenchant criticisms of everyone, including his local authority, the Government and contractors. In fact, he said that he was sick of the council, the Government and the contractors. However, with great respect to him, making charges against others and spotting the errors is the easy part. The Government want to find the solution, and I hope that the hon. Gentleman does, too.

The hon. Gentleman is not suggesting that it would have been a good idea to return the Southwark housing benefit system to the previous contractor. I do not think that he is suggesting that it would be a good idea to return it to an in-house bid, although he raised the possibility later in his speech.

We need to address ourselves to what the Government are doing and to examine the extent to which our programme to tighten up and to squeeze fraud out of the housing benefit system will solve the problems that the hon. Gentleman raised. We must work in partnership with local authorities on housing benefit to achieve our aim of a modern and effective welfare state that is secure against fraud and abuse. Of course, housing benefit must be fitted within the Government's wider policy objectives and our wider housing policy of providing a decent, affordable home for everyone. I agree with the hon. Gentleman on that.

We are already putting in place policies to increase the administrative efficiency of housing benefit, to combat fraud and to improve work incentives for people who are out of work and who therefore claim housing benefit. We shall introduce further proposals as part of our housing Green Paper, which will be published in due course.

In the couple of minutes that I have left, I want to talk about some of the things that we are doing. We have introduced remote access terminals or RATs—that is the only acronym that I quite like—in local authorities to give them controlled but direct access to information that is held on Department of Social Security computer systems. Some 400 local authorities, including the London boroughs of Southwark and Lambeth, have the terminals. If they make adequate use of those that they have and want additional ones, those will be made available. We are considering providing more information than we currently provide through those terminals.

We are taking action to cut down on the paper chase. Millions of bits of paper flow between housing benefit administrations and the Benefits Agency. The large volume of paper transactions contributes to delay and errors. We have carried out tests, which show that we can achieve significant improvements in housing benefit clearance times by transferring information electronically. We are currently piloting the scheme in 20 local authorities and intend to roll it out in the new year for local authorities as a whole.

The hon. Gentleman mentioned best value. From April next year, we are introducing a duty on councils to obtain best value. That is a key part of our drive to modernise local government in ways that allow local authorities to measure their achievements. Best value will replace the discredited system of compulsory competitive tendering.

The hon. Gentleman asks me to take specific actions, including requiring the local authority to publish certain documents. That is a matter for the local authority, although the hon. Gentleman will be aware that the Government have sent the benefit fraud inspectorate to inspect Southwark. I shall ensure that the inspectorate gets the Hansard report of this debate so that all the hon. Gentleman's representations to me will be made to the inspectorate. If he wants to make further representations to it, he is perfectly at liberty to write to me—

lt being Two o'clock, MR. DEPUTY SPEAKER adjourned the sitting, without Question put.