§ Motion made, and Question proposed, That the sitting be now adjourned.—[Ms Joan Ryan.]2.35 pm
§ The Parliamentary Under-Secretary of State for Work and Pensions (Malcolm Wicks)
It is a pleasure to serve under your chairmanship this afternoon, Sir Nicholas.
It is clear that housing benefit and its reform should be high on our agenda. I welcome the opportunity of outlining the Government's views on housing benefit and our ideas for future reform. I am sure that we will have a constructive debate, given the hon. Members who are here.
About one in six households—almost 4 million households—are supported by housing benefit at an annual cost of £11.5 billion. Those householders include many older citizens and families with children. For those households, housing benefit often provides the only means of paying for decent accommodation. Without it, those struggling to live on a low income could find themselves living in poverty or even homeless.
Since its introduction in 1988, housing benefit has been relied on as a safety net for tenants in privately rented accommodation. It is vital, especially for people who are moving to get work, moving out of the family home or cannot afford home ownership.
To develop a scheme that fixes levels of benefit in line with market rents and that can cope with variations in rent is highly complex. Once again, we find ourselves wrestling with the same concerns that William Beveridge faced when he was drawing up his famous 1942 report. In many respects, that is at the heart of this question.
The existing scheme provides reasonable support, but its sheer complexity makes it difficult for local authorities to administer it effectively. Some can cope with the administration, but others are struggling to manage and are falling well below acceptable standards. Following the assessment of the benefits service as part of the comprehensive performance assessment, which was published shortly before Christmas, our benefit fraud inspectorate now has a complete picture of how benefits are being administered by all single-tier authorities. The results were encouraging: about 30 per cent. of authorities achieved the top score for benefits. However, about 14 per cent. have been assessed as providing a poor service, which means that they are achieving less than 40 per cent. of the performance standards used in the assessment process.
We also know from our quarterly performance monitoring that a quarter of local authorities are taking more than 60 days to process a new claim for housing benefit. That cannot be right. By contrast, the best take only a week or two. The administrative complexity of housing benefit has a direct effect on claimants and their 136WH families, and can inhibit any move from benefit dependency into employment. The system is complex because it requires endless form filling, and is confusing to tenants and landlords. Delays in payments often lead to uncertainty, anxiety and even eviction.
We are especially concerned about the lack of transparency in the scheme. In the privately rented sector, tenants are in many ways "shopping in the dark." They do not know how much housing benefit they will receive when choosing somewhere to live. As a result, they must cope with the uncertainty that their benefit may not cover the rent. That is why reform is needed and we should consider the deeper issues about how tenants should be supported.
The first stage of our housing benefit reform programme is already under way. It has been a strategy for far closer co-operation and partnership between central and local government. The aim has been to understand the reasons why administration of housing benefit varies so much and to start addressing them one by one.
Our strategy has combined clear objective and standard setting. Last year, we published the first set of national performance standards, setting out our expectations for a good housing benefit service. The strategy also combines inspection and monitoring by the benefit fraud inspectorate; practical support, for example, through the Department's help team, which involves our officials and outside experts, including from local government; and the removal of some structural inefficiencies.
The strategy has already delivered demonstrable results. Backlogs are falling in many authorities that we have been working with—for example, Hackney, Manchester, Kirklees and Northampton. I am pleased that that is the case. In authorities that we have been working with, there are also clear signs of more general improvement in claims processing and dealing with changes of circumstance. I am pleased that complaints to the ombudsman about housing benefit have declined in number significantly.
We have boosted the strategy by making the biggest investment in housing benefit administration since the scheme began in 1988. The support that we announced in this year's spending review represents a 32 per cent. cash increase over the next three years. That includes £200 million for a performance standards fund for investment in performance improvement. Funding has also been provided for the extra work for local authorities in respect of the Government's new tax credits and pension credit.
A further stage of reform is needed, however, as there is still plenty of room for improvement. My right hon. Friend the Secretary of State for Work and Pensions announced on 17 October last year a vision for a much simpler and much fairer system. The new reform package includes ending the requirement to make a new claim when a person gets a job; providing a simpler, rapid re-claim process if the job does not work out; developing a modern service that facilitates claiming over the telephone; cutting out duplicate claim forms; and abolishing the need to re-claim housing benefit automatically after a fixed time, the so-called benefit period. That is particularly important. It makes no sense in extremis for someone of 90 who has lived in the same 137WH dwelling for 40 years on more or less the same income to have to re-claim housing benefit more or less every year. We are ending that bureaucratic nonsense.
The key element of the package is the introduction of a standard local housing allowance, initially in the private rented sector. In a nutshell, housing benefit payments will be based on a system of standard allowances. These will be fixed according to area and family size, but not to the rent charged. The standard allowance will be calculated in a similar way to the local reference rent, reflecting rents in the middle of the range for different sizes of property in each locality.
Publishing those rates in advance will allow tenants to know how much they can expect housing benefit to pay for and to use that knowledge to find affordable accommodation that meets their needs. That will reduce the administrative burden for local authorities and make the system far more transparent for tenants and landlords. It will minimise the delays that make tenants worry that starting a job will complicate their housing benefit claim and increase their debts.
We will begin by introducing the standard local housing allowance in 10 pathfinder areas. It is a big step forward and we need to undertake a full evaluation of how it is working before a national roll-out. A number of the authorities have confirmed their participation: Blackpool, Edinburgh, Brighton and Hove, Lewisham and North East Lincolnshire. Early on, one of the chosen 10, Tendring, had to drop out of the process because of the IT changes affecting that authority, but Blackpool took its place. A number of other authorities will, I am sure, join in the process, but in the coming weeks they are going through their own due process at local authority and council level. The remaining authorities are Conwy, Coventry, Leeds, Middlesbrough and Teignbridge. I am confident that the great majority of those authorities will be able to help us in the pathfinder areas.
§ Mr. Andrew Love (Edmonton)
Given that there are particularly acute problems with housing benefit in Greater London, and particularly in inner London, has any thought been given to having two London authorities rather than one, in order to obtain a better judgment of whether the system will work in that particularly difficult market?
§ Malcolm Wicks
The London borough of Lewisham has already agreed to take part in the pathfinder scheme. Those of us who know Lewisham will agree that it has many characteristics, including inner London characteristics. We considered including a further London borough. At present, because we have the 10 we require, we do not intend to do so, but our mind is not closed to that possibility. The inner London boroughs have particular problems, so my hon. Friend's point is well made.
An important part of our radical proposals for change involves moving to payment of benefit to the tenant in the majority of cases, rather than to the landlord. We know that some landlords are worried by that proposed shift away from direct payment to landlords. However, we are building in safeguards so 138WH that direct payments will continue for vulnerable people, such as those with learning difficulties who might be unable to manage their own affairs, or for tenants who have built up arrears.
We will be monitoring that area carefully in the pathfinder schemes, during the two years of the project, and we will engage with landlords to explore ways of handling the matter. We have already begun those discussions with landlords.
§ Mr. Mark Lazarowicz (Edinburgh, North and Leith)
As the Minister said, the city council in my area has agreed to participate in the pathfinder scheme. I know that the decision to do so eventually received support from all the parties on the city council. Although the attitude to the pathfinder project has been generally supportive, concern has been expressed that the monitoring of the scheme should be sufficiently flexible and should be put in place sufficiently quickly to take account of any difficulties that arise during the operation of the scheme. In areas such as my own where there is high housing demand, it is important that the standing housing level allowance is sufficiently high to reflect the real market conditions and any increases in the general market rent that could occur very quickly. Will the Minister give an assurance that the pathfinder scheme will be operated in a sufficiently flexible way to take account quickly of any problems that are identified in particular communities?
§ Malcolm Wicks
In thanking my hon. Friend for that intervention, may I say that we had a useful meeting with the city council in Edinburgh on our proposal for a pathfinder scheme in the city? We learned a lot from that meeting.
The purpose of running the 10 pathfinder projects is to learn a great deal about this novel and radical proposal. We will work closely with each of the 10 local authorities in a number of different ways. We have planned a seminar for the pathfinder authorities next month. Obviously, we need to take account of the lessons that we learn.
I know that there are a number of concerns about the possible impact of the proposals on local housing markets, and we must take account of those concerns. I hope that there will also be a continuing dialogue with the MPs from the pathfinder areas. Our view is that this is the way ahead in the privately rented sector and that, nationwide, this is probably where we want to move to before the end of the decade. That is why we have called it a pathfinder, because we know where we want to go, but we need to find out exactly how to get there, rather than simply using a pilot.
I am not saying that we have all the answers. There are a number of proper concerns that we must monitor and evaluate. In the coming weeks we will be discussing the nature of the monitoring and evaluation that should take place. It must include the impact on the local housing market, as my hon. Friend said. It must include the attitudes and behaviour of both landlords and tenants. We also need to evaluate the impact on the local 139WH housing benefit administration. We are contemplating a complex monitoring and evaluation process and a complex action research exercise.
§ Mr. Lazarowicz
Briefly, my concern is not only about flexibility at the end of the project, but about the ability to change quickly during the course of a pathfinder project.
§ Malcolm Wicks
I cannot provide a guaranteed assurance about that because a project might need to be tested across the country—nationwide and nations wide: one in Scotland, one in Wales, others in England—and we shall need to study the effects, but we will be sensitive if any adverse consequences arise. That is as far as I can go.
The proposal to assume that in future housing allowance should be paid to the tenant is not a wholly radical change. About 40 per cent. of claimants in the deregulated private rented sector already have their benefit paid to them rather than to their landlords. Many landlords have seen the advantage of having tenants take on full responsibility for rent payments.
From the tenant's point of view, if the rent paid were less than the allowance—part of the choice that might be made—and he could find accommodation for less than the allowance, he could keep the difference. That is a practical expression of the choice and responsibility strategy that we are pursuing. Someone looking for accommodation who placed a high value on housing and wanted to spend a few extra pounds of their own money on it could readily do so. Again, it is part of the empowerment programme that we are trying to implement, initially through the pathfinders.
§ Richard Younger-Ross (Teignbridge)
I apologise for missing the beginning of the Minister's comments. Following up the concerns expressed by the hon. Member for Edinburgh, North and Leith (Mr. Lazarowicz), my constituency of Teignbridge may be one of the pathfinder authorities. When the Minister came to speak about it, he was asked whether the housing market could dry up as a result. Local authorities would then have to put more people into bed-and-breakfast accommodation at their own cost. The Minister said that no financial burdens would result from the exercise, so will the money be made available for such an eventuality?
§ Malcolm Wicks
I am not at all anticipating that eventuality. The financial guarantee that we have offered local authorities is that the reasonable costs of a pathfinder project will be borne by my Department. It would be unfair if they fell on the local council, but we are not embarking on these projects on the assumption that they will create the sort of difficulties that the hon. Gentleman anticipates.
Any change produces anxieties among landlords, but they should benefit from our setting out and publishing clear housing allowances. Sometimes they complain when, unbeknown to them, a tenant left a property weeks or months before they knew about it, and overpayments are sought from landlords who have received the direct housing benefit payment. Of course, that would cease in future under our housing allowance proposals.
140WH We are not pretending to have all the answers. If we did, we would go nationwide as soon as possible. At present, we are monitoring and evaluating developments in the 10 areas. We shall keep in the closest possible contact with local authorities and with right hon. and hon. Members who are actively involved in the process. I was pleased to accompany the hon. Member for Teignbridge (Richard Younger-Ross) in his own constituency.
The system will empower benefit recipients to make similar choices to those paying their own way about whether to move nearer to a local school or to relatives, whether to share with friends or to trade quality for a bit more space. The great majority of citizens at their respective income levels have to make such choices about housing and we want to enable those currently receiving housing benefit to enjoy the same choices in future.
We believe that tenants will benefit from the responsibility of paying their own rent, but we are also concerned to ensure that no one loses out financially from the new scheme. We do not believe that anyone will lose out; in fact, we estimate that about half those affected in the pathfinder areas will gain from the changes.
As well as benefiting tenants, the simplified scheme and removal of benefit periods will release resources at local authority level for a more targeted approach to fraud, which is the final topic on which I want to comment. Like everyone else, I attach great importance to combating fraud in our social security system. We have an ambitious target—the first time that a target has been set for tackling housing benefit fraud—of reducing by 25 per cent. fraud and error in housing benefit by 2006. We need a more flexible system that meets the needs of our modern customers, but we must also ensure that local authorities carry out regular, targeted checks on tenant circumstances. We will build a strategy to combat fraud and error into the reforms from day one, and our benefit fraud inspectorate will be closely involved throughout.
That is our vision of a better system, towards which we will work during the next few years. It is a vision that will make housing benefit a rewarding area in which to work and that is at the heart of the Government's strategies to target poverty and enable more people to enter employment. Housing benefit spending is a large part of the Government's housing bill, and getting it right has become a high political priority. We are determined to put right the legacy of neglect and cuts-driven change that housing benefit has endured in the past.
We are in a phase in which housing benefit has a positive role and key part to play in handing choice and decision making to the customer. We are half a century from direct state action and the issues of shortage and rationing that affected the post-war Governments. Expectations are higher now. We expect a flexible, responsive benefit system that enables people to get work and choose the home in which they live. That is why our housing benefit reform is so important to our overall social security strategy. We are working hard with others to achieve it.
§ Mr. Julian Brazier (Canterbury)
I, too, welcome the opportunity for today's debate on this important subject and join others in welcoming you to the chair, Sir Nicholas. I apologise in advance to the Committee—
§ Mr. Brazier
I am sorry. I apologise to the Chamber in advance that I may have to leave early for an emergency visit to the dentist, but I hope that that will not stop me getting my teeth thoroughly into the subject.
The cost of housing benefit has extended steadily under all Governments, and the Opposition will support any sensible initiatives, although for the system to be reformed, bold action is needed. It is worth setting the context. When Labour came to power nearly six years ago, the reform of the whole benefit system, of which housing benefit is one of the most important elements, was declared as one of the Government's highest priorities. The Opposition are in favour of pilot tests when they are appropriate, but it is sad to think that nearly six years on we are hearing the second series of announcements of pilot testing of doing something serious about housing benefit.
We also supported the Back-Bench proposal of the right hon. Member for Birkenhead (Mr. Field) to withhold housing benefit payment from families who cause problems to their neighbours through antisocial behaviour. The Liberal Democrats shamefully talked that out in July last year, and we would like to know, and were hoping that the Minister was going to tell us in his introduction, whether the Government will introduce that measure themselves.
Today, just fewer than 4 million households receive housing benefit. That includes many families with children and a high proportion of pensioners. The benefit assists one in six households, and the cost to the taxpayer has risen to £11.5 billion, so what happens to the benefit is important not only to a large number of recipients but to taxpayers.
At the last election, we focused on improving the administration of housing benefit through sharing best practice, lowering the regulatory burden and reducing overpayments, error and waste. Alas, it will not have escaped the House's attention that we did not win the election, and it is interesting to see what the Government have done. Today, there are people who are homeless on the streets having been evicted from their houses by councils whose failure to pay housing benefit reliably is a source of the problem. It is a scandal that affects thousands of people throughout the country and needs to be tackled.
However, the truth is that the blame for that does not lie entirely with the councils concerned. The Government have done as much to hinder councils and complicate the system as would almost seem possible. In recent years, the number of statutory instruments and circulars relating to housing benefit has increased.
§ 3 pm
§ Sitting suspended for a Division in the House.142WH 3.15 pm
§ On resuming—
§ Mr. Brazier
I was saying before we suspended that the number of statutory instruments and circulars made the work of councils in administering housing benefit much more difficult. In the five years before this Government took office, there were in total 61 statutory instruments and 230 circulars. Many of us feel that was too many. In the first five years of this Government, statutory instruments increased by half to 90 and the number of circulars almost doubled to 400.
It is not just the Opposition who are saying this. In a report last year the Audit Commission pointed out thatover time, the Government has made many changes to the scheme…because of these changes local authorities are finding the scheme increasingly complex and difficult to administer and the service provided to claimants has worsened since the mid 1990s".It went on to say:In the past, the Government has not always allowed adequate time for councils to comment on proposed changes, or for councils and IT suppliers to implement them. This has often led to problems after implementation…The Government provides funding for local authorities to make HB payments through an over complex regime containing perverse incentives.Another critical body was the Government's own Better Regulation Task Force which reported last year thatthe local authorities complained that the housing benefit regulations and their many amendments have not been consolidated since the original regulations were made in 1998.The BRTF also found housing benefit administration was "in a mess" and "needing urgent action". It also mentioned considerable delays before claims were assessed and paid and stated:Housing Benefit is almost impossible to understand. The rules are complex and it is not clear how decisions are made.That same report also made it clear that the Government have made the situation worse by an excessive number of minor changes and an overflow of paperwork. It concluded:the whole housing benefit regime is in need of radical reform.Today around two fifths of claimants do not receive their housing benefit within 14 days. Some families have to wait over six months to receive any money. That is despite the fact that the numbers of new claims are falling. Even after such long waiting times numerous mistakes are made; some councils have errors in about 30 per cent. of their housing benefit claims. Information placed in the Library after a recent parliamentary question shows that clients in Sedgefield have to wait 102 days on average for their housing benefit claims to be cleared. The figure for Oxford, another place chosen quite at random, is 76 days. The average processing time is 52 days in England and very nearly as long—48 days—in Scotland.
Behind those statistics lie thousands and thousands of cases of individual misery. Delay in some cases can mean eviction. In most cases it results in terrible stress, often on extremely vulnerable people. The Government have failed to ensure that there is at the very least a minimum standard of housing benefit administration in 143WH different areas. Processing times, administrative costs and the level of error vary widely and are unacceptably high in many areas.
In October last year the Audit Commission published a report that found that long delays in paying housing benefit and failures of customer care are causing hardship and anxiety as well as the threat of eviction to which I referred earlier. The administration is tarnished by error, waste and fraud, which cost the taxpayer hundreds of millions of pounds a year.
We are all in favour of tackling housing benefit fraud, but it is a little disappointing that the Minister should be announcing a target for doing so only now—nearly six years into the Government's term in office. It is also disappointing that it is presented in such a long-term way.
Even within local authorities, departments have been unable to communicate, because of the Data Protection Act 1998. As a result, families have faced eviction, and fraud has prospered. Does the Minister accept that some people who are homeless today were evicted from their houses simply because the council failed to handle their housing benefit properly?
§ Ms Karen Buck (Regent's Park and Kensington, North)
The hon. Gentleman has not mentioned outsourcing. Does he accept that housing benefit administration collapsed in several local authorities—including Conservative-controlled Westminster, which is my local authority—after it was outsourced to Capita? At one point, 25,000 items of post were unopened. Does he believe that ill-thought-out outsourcing can be a major factor in poor administration?
§ Mr. Brazier
I cannot comment on the particular circumstances in Westminster because I have not been briefed on them. However, outsourcing has a mixed record. In some cases, it has proved extremely successful; in others, it has been unsuccessful. The Government, whom the hon. Lady supports, are very enthusiastic about outsourcing across a range of issues, so I invite her to think carefully about what she is saying.
In its 1997 manifesto, the Labour party claimed that housing benefit fraud cost £2 billion a year, but the estimate now seems to have come down. I may have to find out from Hansard what the Minister says in his winding-up speech, but I look forward to him setting out the Government's current estimate of the level of fraud and how it equates with the long-term target that has been announced.
Measures designed to tackle fraud are not helped by the recent lack of successful convictions. Figures from the House of Commons Library obtained by my hon. Friend the Member for Havant (Mr. Willetts), the shadow Secretary of State for Work and Pensions, show that 50 per cent. of local authorities have failed successfully to prosecute anyone for housing benefit fraud or council tax benefit fraud over the past full year. According to the National Housing Federation, the Government have failed to recognise the extent of the problem and its seriousness for landlords and, in particular, tenants.
I end with a few comments on the measures that have been announced today, although little about them is new. The Minister acknowledged that two fifths of 144WH payments already go directly to tenants, rather than landlords. What impact will increasing that proportion have on the incentive for landlords to take in harder cases? Will those in areas where there is competition for rented properties be more enthusiastic about taking in social cases if they think that they will not be paid directly? That is worth considering.
How far will the scope for ending periodic revision extend? The Minister gave the uncontentious example of a 90-year-old lady who had been living on a state pension at the same address for many years, but what other cases will be affected and how? Someone may innocently overclaim because they are unaware of the impact that a change in their circumstances has on their housing benefit. Is there a danger that such people, who might be quite vulnerable, will suddenly face huge claims for back-payments?
Is there a danger that we might return to the situation in the old days when there were two different housing benefit regimes, one for social housing tenants and another for private tenancies? The Minister's announcement about pilots applies to only one category. He has a long track record in this area, extending back long before he was a Member of Parliament. Does he recognise—perhaps I should ask whether he still recognises, because he certainly used to—that the central problem with housing benefit and its sister benefit, council tax benefit, is that huge numbers of people are trapped in dependency because of the incredibly high rates of tax and of benefit withdrawal?
§ Mr. Love
I listened carefully to the hon. Gentleman's contribution, which reminded me that the central problem with housing benefit was its introduction in 1988 as the most complex of all benefits. That complexity leads to all the problems that he outlined. Does he, therefore, accept some responsibility, on behalf of the previous Conservative Government, for the difficulties that we are discussing today, which this Government are now trying to cure?
§ Mr. Brazier
I am happy to respond to that point. As a Back Bencher in 1988, I wrote not one but three pamphlets, at least one of which was reviewed in the newspapers, attacking the changes and making it clear that I thought that many of them were mistaken. One of the saddest features of the Labour Government is their approach to social security, because they have built on the worst features of the mistakes made in 1988. They have steadily increased means-testing, while undermining their strong inheritance in other areas, such as the sheer scale and scope of the pension funds that existed when the Labour Government came to power in 1997. Six years on, they have not offered us a comprehensive new approach. Instead, in addition to the huge number of small, detailed changes that they have made, we are today enjoying the announcement of a small number of pilots and a few new ideas. I have made it clear that, in principle, we support the idea of introducing a standardised local rate, but that idea has been a long time coming and we are still only at the stage of a few pilots being announced, and those on a tentative basis.
Will the Minister say in his winding-up speech whether the Liberal Democrats' shameful talking out of his distinguished colleague's proposal to link deductions 145WH from housing benefit to grossly antisocial behaviour—a measure that received support right up to Downing street—will be the end of the matter or whether the Government plan to reintroduce the proposal in Government time?
§ Mr. David Lepper (Brighton, Pavilion)
I am pleased that this debate is taking place under your chairmanship, Sir Nicholas.
I thank the Minister and his officials for spending time in discussions with officers and leading councillors at Brighton and Hove city council about the proposed pathfinder status. I am glad that my city council has agreed to be one of the pathfinders. I also thank the Minister for the time that he spent discussing the proposals with representatives of local agencies in the city of Brighton and Hove that are working on housing issues.
I said to my right hon. Friend the Secretary of State, privately, when he first announced the proposals, "I think they are good and if they work in Brighton and Hove, they will work anywhere." I felt that then and I feel it now because affordable housing is the big issue in the Brighton and Hove city area, perhaps even more than in some other parts of south-east England. Strategies, such as quotas in planning, the Government's starter homes initiative, the NHS housing allowances for some of its staff, the rent deposit scheme and the proposals in the Local Government Bill, which is at present before the House, to allow council tax discounts on empty properties and second homes to be varied help us locally to deal with the problem.
However, Brighton and Hove relies far more heavily on the private rented sector for housing than most other parts of the country do. It is an area of very high house prices, it is a high-rent area and it is a popular area for second homes. That is not new; it can be traced back to the Prince Regent's deciding to build his winter palace in Brighton at the start of the nineteenth century. Ever since, it has been a popular place for second home owners. It is worth remembering that when he built his palace he was converting a local farmhouse into something rather more palatial. That trend has continued. All these factors put pressure on the unemployed and those who are on low wages when they try to find somewhere to live.
The Minister stressed the importance of housing choice. However, many in my constituency feel that where there is housing choice it is on the part of the landlords, who can choose who will rent their property. It is right that they should, but they know that however high the rent, there will always be somebody in the queue for a property who is willing and able to pay the high price.
I will give my very sympathetic support to the pathfinder status of Brighton and Hove city council area. The Minister will not be surprised that I have concerns that I wish to raise with him. I spoke of landlords having the choice of whom they should rent to. Some council officers, councillors and housing agencies in Brighton and Hove are concerned that the unfortunate bias against housing benefit tenants might 146WH be aggravated by the proposal of further direct payment to the tenant. Direct payment is good; it should be the responsibility of the tenant to decide how to pay their rent. However, the proposals, if they are to be successful, must be presented in such a way that they help to overcome such discrimination.
There are also concerns about how the scheme will be delivered. Training and retaining skilled housing benefit staff is a real problem for my city council. There is a simple explanation for that: once staff have been trained they can earn much higher pay working for agencies, often across south-east England. They use the skills that they developed working for my council. There are severe resource implications for my city council and its housing department services. They may have to buy back some of the agency staff on higher rates of pay as well as attempting to recruit their own staff. It would be helpful if the Minister suggested the level of support, with respect to resources for staffing and the training and retention of staff. What I am discussing is part of a vicious circle. Who can blame housing benefit staff who have been attracted away by the higher rates of pay at agencies in a high rent, high housing cost area such as Brighton and Hove?
I should be grateful if the Minister said something about the level of support and planning that is already being carried out in relation to information and communications technology. We have already had mention of occasional unfortunate ICT support programmes that are found wanting at an early stage in the introduction of a new project. I should welcome the Minister's thoughts about how to ensure plainer sailing than has been the case with some other new schemes.
I welcome what the Minister has said about guarding against the possibility of fraud and his statement about the flexibility that will be allowed, particularly in relation to vulnerable tenants. It would be helpful to know to what extent it will be possible to exercise that flexibility at a local level, or whether it will be subject to strict national guidelines. I hope, also, that the Minister will comment on the question, which I know the National Housing Federation has raised, of moving away from the four-weekly arrears payment system for benefit. That is a matter of some concern to people working in the housing field.
My hon. Friend will not be surprised at my mentioning an omission from the proposals, because it concerns the issue on which I have had more conversations with him and his predecessors than any other since I was elected. It is what is now called young people's rent—the single room rent. I welcomed the decision that the Government took in 1997 not to extend the restrictions involved in the single room rent to those aged over 25, as the outgoing Conservative Government had planned to do. Minor, but nevertheless welcome, changes were made to the single room rent last year. I like to think that not least among the reasons for the changes was lobbying by me and other hon. Members because of what was happening in our constituencies. Nevertheless, for 18 to 25-year-olds in my constituency, there are continuing and, I believe, worsening problems in relation to housing. I am not sure that the current proposals will address them.
Prior to the introduction of the single room rent by the Conservative Government in 1996 a major local agency in my city, the Brighton Housing Trust, was able 147WH to house 50 per cent. to 60 per cent. of the young people who approached it for housing advice. It would house them in the private rented sector. By December 2000, following the introduction of the single room rent restriction, that proportion was down to 11 per cent.
I talked this morning to representatives of the Brighton Housing Trust and of Hove YMCA youth advisory service, which is the other major agency working with young people in the Brighton and Hove city area. They told me that it is now virtually impossible for them to place young people on housing benefit with landlords in that area. In 1996 there were 25 landlords quite willing to accept young people as tenants. By June 2000 that number had dwindled to two and, as I was told this morning, it is now none.
The need to consider again the single-room rent for young people was one aspect of the Brighton and Hove City private sector housing forum's manifesto on housing benefit, which I presented to my right hon. Friend the Prime Minister—by chance, exactly one year ago today. I am pleased that many of the other things that local agencies, tenants and councillors in my constituency asked for or suggested in that manifesto are included in the proposals that we are debating.
However, the special needs of our young people need to be recognised by further steps in relation to their right to housing benefit. I do not argue that that should be by further shifts in the definition of their entitlement, but by an ending of the system that discriminates against the under-25-year-olds.
§ Mr. Steve Webb (Northavon)
It is a pleasure to take part in this debate, of which there should be more in the House. It has been measured and considered, with expert and informed contributions, such as those from the hon. Member for Brighton, Pavilion (Mr. Lepper), who has first-hand experience of the pilot areas, my hon. Friend the Member for Teignbridge (Richard Younger-Ross) and the hon. Member for Edinburgh, North and Leith (Mr. Lazarowicz)—he is no longer present—who were able to bring a local perspective. We have enjoyed the expert perspective of senior members of the Select Committee. I hope that we can critically assess the proposals.
I welcome a number of aspects of what has been proposed on housing benefit reform. The waiving of the requirement on pensioners to make regular annual claims must be a good thing—it is long overdue and is welcome. The possibility that someone making a claim will have a clearer idea of eligible rent upfront must, if deliverable, be a step in the right direction. I think that pre-tenancy determinations were supposed to have delivered that, but for some reason have not done so. They are a potential benefit of the pilot schemes.
I want to focus on some of my concerns about the pilot schemes and on some questions that need to be answered during the evaluation. However, it is worth setting that in the context of housing benefit. The consultation paper, which was produced in October 2002, had a fascinating chart on page 9, which I took to bed with me last night. What struck me about the information was that elderly and disabled people dominate housing benefit. With all the talk about housing benefit, work incentives and poverty traps, one 148WH imagines that housing benefit is about low-paid workers, yet predominantly it is not, though it obviously matters to such people. We are mainly talking about pensioners and disabled people. According to the chart, roughly £8 billion of the £13 billion of expenditure projected by the end of the public spending planning horizon will be spent on elderly and disabled people. Perhaps most strikingly, the growth in housing benefit expenditure since the mid-1990s has occurred almost exclusively in those two groups. It has continued to fall for employed people and to ease off for lone parents and other groups.
An objective that the Minister did not state for the reform—he hinted that it was not an objective—is to control expenditure on housing benefit. He said that he did not want a cuts-driven agenda. Could he clarify his stance on whether one of the objectives of the pilot and the eventual national roll-out is not to cut expenditure on housing benefit? If the proposals are a way of controlling or perhaps reducing spending by the back door and if, given the current state of the labour market, spending on the unemployed or lone parents probably cannot be reduced by much more, the reduction will have to come from the elderly and the disabled trading down. That is part of the incentive structure being put in place through the standard housing allowance.
I question whether we want to encourage disabled people and some 4 million pensioners to trade down. Would that be realistic? I do not think so. It would be very unsettling for many older people and for many disabled people. If we do not expect them to trade down, it calls into question how effective the strategy might be. After all, the Minister says that we might get round to the whole of the private rented sector by the end of the decade. Another chart on the same thrilling page of the document says that the private rented sector is less than a quarter of the whole stock of housing benefit cases.
I am always wary when I see a Government document with the word "radical" on the cover because I know that it is not radical. The Government seem to be saying that somehow, into what the Minister hopes will be new Labour's fourth term of office, less than a quarter of tenants on housing benefit will be on the new regime. Radical it ain't.
The problem is the other three quarters. If I were to say on the streets of Yate in my constituency that the Government's ethos for those on housing benefit is an agenda of choice, people would fall over. The notion that there is any choice, particularly in the social rented sector, is a joke. People are desperate for anywhere that is better than where they are. They do not have a choice; they simply take what they are given. That is true of the vast majority of the social rented tenants, and I suspect that it is also true of the private sector in large parts of the country. I accept Peter Kemp's comment that it is wrong to say that nobody has any choice, but there must be large swathes of the country in which most people have little choice. To suggest that this is an agenda for reform and choice for tenants is overselling, to put it no more strongly than that. I rather doubt that it is a new agenda for choice and options.
Benefit is mostly for social tenants, not for the people we are talking about today. It is mainly about pensioners and disabled people, whom the Minister does not wish to move around. Therefore, the benefits for them of a flat rate housing allowance when they 149WH know at the start of the tenancy what the rent will be are probably pretty limited. Most of these people probably do not move much anyway. We must remind ourselves that this is not very radical at all.
§ Mr. Brazier
I agree with many of the hon. Gentleman's sentiments, but will he tell us why disabled people, whom nobody wishes to see less well off, should not have incentives? Many of them would like to get back into the labour market, if they are not already there. Does he not agree that many disabled people tell us that the structure of the benefits system puts strong perverse disincentives in the way of their getting back into the labour market?
§ Mr. Webb
We should remind ourselves that disabled people can be part of the workforce. Indeed, some of the people we are talking about are working and in receipt of housing benefit. However, many of the people that we are talking about are long-term sick and disabled for whom therapeutic work might be appropriate. The reason that most disabled people who could work and who want to work do not work has nothing to do with the housing benefit system. Housing benefit would not be near the top of the 10 main reasons why disabled people are not working. It is not irrelevant, but it is not the primary consideration.
The main incentive is not to take a job but to move house, which is what seems to lie behind the Government's agenda. If you give people a flat rate housing allowance they may move to somewhere cheaper and keep the difference.
Fundamental to the proposals is how the standard housing allowance is determined. We are told that it will be determined in a similar manner to the local reference rents and the young person's rent. At present, that process is far from transparent. I hope that the Minister can assure us that the manner in which the reference rents and the standard housing allowances have been worked out will become much clearer. The average punter may claim housing benefit, only to be told some months later that he will receive less rent allowance than he expected. In theory, he can query the decision; in practice, he will accept it as if it had been handed down from on high.
There seems to be no accountability or transparency about where these numbers come from. They will be critical to the operation of the new system, because they will determine the amount of money that people get. We need to know much more openly how the levels are calculated—and that has to be more open to challenge.
As was intimated in an intervention on the Minister earlier, the information needs to be very up to date. If local rental markets are changing rapidly, we cannot have rent officers using 18-month-old data. That will cause real hardship and mess up the system. We need it to be transparent and up to date.
The locality over which the reference rent for standard housing allowance is calculated is critical. Some concern has been expressed to me that the Government want to progress towards using bigger localities. One can see the attraction of that. One can see that being able to post on a web page the information 150WH that anywhere in Stockport the rent will be such and such would have the attraction of simplicity. However, there is a real danger in providing a single rent figure for diverse housing markets. What that approach means is that if there are nice areas where people want to live and nasty ones where they do not, the people on housing benefit then end up in the nasty bits. It is straightforward. Unless localities are defined to include only areas where rents to not vary a great deal for comparable property, we could bring about ghettoisation. I do not say that hysterically, but I see it as a real danger. That would be contrary to much of what the Government want to do in mixing tenures and social groups. I hope that the Minister will reassure me that there is not a drive towards bigger localities in which one rent figure will be applied to all, but that localities will be chosen carefully.
The hon. Member for Brighton, Pavilion was right to draw the Minister's attention to the continuing issue of the young person's rent. The change that the Government made was marginal. I am not aware whether they have yet published any assessment of its effects, showing whether it has tackled any of the iniquities of the single room rent system. I am told that in some cases it made the allowable rent something like a pound a week higher. Does the Minister have any up-to-date information about the effect the switch has had? How much more can people now receive in housing benefit? Is the change removing some of the problems that young people have faced?
The evidence from charities, such as Barnardo's and Shelter, is that young people who live independently of their parents often do not do so out of choice. The Minister talked about choice, but often the young people in question are living away from their homes and families not because they want to but because they have to. In many parts of the country a shared house is not necessarily available. Is it right to penalise someone, telling them that they will be given only the rent for digs or a shared house, even if there is no suitable house to share and they are not willingly living independently?
One can understand that the taxpayer does not want to pay for 19-year-olds to live on their own in big flats with hefty rents, but have we not gone too far in the other direction? Should not a civilized and caring man such as the Minister feel uncomfortable that the current system for young person's rent continues at all? In particular, should he not feel uncomfortable about the arbitrary distinction between 24-year-olds and 25-year-olds? We all know that lines must be drawn, but what is the rationale for that one? One could understand drawing it at 16 or 18, but there is no justification for drawing a line between the ages of 24 and 25, and treating 24-year-olds as second class citizens compared to 25-year-olds.
The determination of the standard housing allowance is built on shaky foundations. It is built on the local reference rent, which is murky, and on the single room rent, which is decidedly dodgy. We need to examine those foundations.
We need to consider the issue of shopping around. The Government want people to know how much rent they pay. Fair enough. Based on that information they want them to look for cheaper rents—to shop around. Is that always a good thing? Is it always a good thing to put pressure on people to move away from the 151WH community and support networks that they have been part of, including schools and child care that might enable them to move off welfare into work? Is such pressure self-evidently a good thing? We seem to take it as read that it is, but I should like to sow a seed of doubt. Do we want people to become more itinerant and less settled, or to put down roots? In particular, surely we want people who are on housing benefit and who then get jobs not to move out but to stay put, to provide role models and patterns of being that will bring others with them. If big localities are used to set rent levels, we shall have a greater problem with shopping around and more ghettoisation.
If, in the short term, the Government pay a standard amount of housing allowance, and landlords become aware that that is the standard amount, landlords will know that tenants are carrying that amount in their back pockets. What is to prevent landlords who are charging below average rents from jacking them up? That point was made by the hon. Member for Regent's Park and Kensington, North (Ms Buck) in response to the ministerial statement. I understand the Government line that there will be competition in the housing market and that perhaps other people will undercut them, but it is simply not like the market for baked beans among different supermarkets. There is not that quick entry and exit, and contestability. Surely there is a real danger—the pilots will show this—that the measure will put low rents up. Is that really what we want?
Direct payment to landlords has been mentioned and I am very concerned about the proposal in that regard. I spoke to Citizens Advice—the name now used by the National Association of Citizens Advice Bureaux—which expressed concern about low-paid workers who get some help with their rent through the housing benefit system and pay some of the rent themselves. Those people know how much their rent is; the system does not shield them from that. The example was given of someone in low-paid work who had other debts. Someone might call at their door to say that they want payment on a particular debt. If people in low-paid jobs get cash from the benefit system and someone knocks at their door to put pressure on them, the temptation will be to prioritise that bill over the rent, and we all know the consequences that rent arrears can have.
I am not being patronising. I am not suggesting that direct payments should be mandatory; I am talking about enabling. There should be a choice. Why are we against giving tenants a choice as to whether there is direct payment? The Government seem to have gone from one extreme to the other. They have now gone to the extreme whereby, apart from vulnerable people or those who have got into deep arrears, people have no choice about direct payment. Surely people should have that choice, particularly those who are already paying something towards their rent.
The Minister will say that if people get into arrears, it is all right, because there can be a switch to direct payment, but that will happen only after eight weeks, at which point the landlord has gained increased rights to throw someone out. In addition, by the time the local council has sorted out the direct payment, a few more weeks of non-payment might have gone by. Those are real problems. I believe that the consultation paper referred to the unpopular or criticised system of direct 152WH payment, but there was a reason for its introduction, and I wonder how confident the Minister is that those reasons will not come back to haunt us.
I have a couple of other observations to make on the pilots before setting out a slightly different strategy. I am keen that, when assessing the pilots, the Government should ask all the questions, not just the ones about their own scheme. In other words, they should take this unique opportunity to consider in detail all aspects of the housing benefit system and the way in which they work.
We have not talked about non-dependant deductions, for example, which is clearly a complex system. The hon. Member for Brighton, Pavilion rightly praised the Government for not introducing the single-room rent for the over-25s, but he did not mention that that was paid for by jacking up non-dependant deductions, which made it harder for young people to live with their parents. There is always a quid pro quo with these things.
Will the pilots consider the whole operation of housing benefit in local areas? If it becomes apparent to the people doing the assessment that other aspects, such as the single-room rent, are causing problems, will those lessons be learned, too? Will the Minister assure us that the Government will consider not only the questions that they want to, but other, awkward issues?
What can the Minister tell us about control authorities? What are we comparing those people with? Obviously, we can compare them with the way they used to be, but given the way in which these things change and the complexities of the housing and labour markets and so on, it is hard to compare now with then. We want to compare now with a different now. What work is the Department doing on coming up with control authorities? How will that process work?
Will the pilots teach us any lessons about the social rented sector? That is where the bulk of housing benefit tenants are, where most of the money goes and where many of the problems are. Will the pilots tell us anything about the main group of people who have problems with the housing benefit system? I fear that we are talking about the end of the decade or the mid-2010s before we get on to the private sector. Admittedly, I would be happy to take that in my in-tray as the incoming Secretary of State at that stage, but it would be nice to think that some work had been done beforehand—I think that I got away with that.
It behoves those of us who quibble and criticise to suggest what else might be done. I want to float an idea that I believe was original when I thought of it, but which has been suggested by many other people since, so I cannot claim that it is unique. There are two big problems with the route that the Government are taking: one is an omission and the other a commission. The omission is low-income homebuyers. This debate is about housing benefit, not renting benefit. If we believe that there are so many issues, such as poverty traps, that affect low-income renters, why are we so silent on homebuyers?
The consultation document cites approvingly a report that discusses shopping incentives and housing benefit reform for renters, but that report also discusses support for low-income homebuyers. Mysteriously, the Department does not cite approvingly the sections of the report that discuss homebuyers.
153WH What is the strategy for low-income homebuyers? The real poverty trap that I come across in my surgery is not primarily experienced by people with high rents who cannot afford to work—perhaps because the rents are not as high in my area as they are in some—but by people with big mortgages who cannot afford to work. Is it not time to get rid of the distinction between a low-paid person trying to pay a rent and a low-paid person who cannot afford a mortgage?
How might that be done? Now that the tax credit system has been extended not only to families with children, but to childless couples and single people over 25, some sort of flat rate housing credit—not pro rata to housing costs—could be put into the tax credits system. That credit could then be top sliced off the eligible rent in the housing benefits system. In that way, low-income homebuyers could be brought into the equation, and the number of people receiving both tax credits and housing benefits could be reduced, which is the opposite of what the Government propose to do.
The pilot schemes will increase the number of people receiving both tax credits and housing benefit, because by paying a flat rate rent, rather than the actual rent, some people who would not have qualified will be brought in. As a result of the proposed changes there will be more, rather than fewer, people on housing benefit and more people receiving both tax credit and housing benefit.
However, with my proposal, if, for example, the first £20 of someone's rent or mortgage was met by a £20 payment through the tax credit system, then the eligible rent for the remainder would be £20 less. Thus, if that person was only receiving £5 or £10 per week in housing benefit, they would not have to touch housing benefit at all. That would mean less hassle for local authorities and would give them more time to spend on anti-fraud measures or other areas.
Will the Minister reflect upon what I have said and tell us what his strategy is for low-income homebuyers? Will he also tell us why he did not take the route of putting fewer people on housing benefit, rather than of adopting a strategy that will increase their number?
I welcome the fact that the Department has sought to bring the issue before the House and that we have had the chance, in this forum, to have a more measured consideration of such matters than we often do. I hope that the Minister will respond to some of the concerns about whether the pilots will achieve, even over nearly a decade, some of the things that have been claimed for them.
§ 4.2 pm
§ Ms Karen Buck (Regent's Park and Kensington, North)
I start by declaring a couple of interests. I write for Housing Today, and I receive some research support from Shelter.
I welcome this debate and the fact that, as has been said, we are able to analyse in a more considered way some of the issues arising from the proposed flat-rate housing allowance and the policy implications of housing benefit more generally.
I intend to speak about some of the problems associated with housing benefit as it currently applies, and as it will probably continue to apply for some years, 154WH to the majority of claimants across the country. I will reflect in some detail on the ways in which we should monitor the pilots of the proposed flat-rate housing allowance, and I hope that hon. Members will forgive me for doing so in such detail. I believe that it will be helpful to have on the record some of the means of measurement that we will need to adopt to ensure that we have rigorously analysed whether the scheme will work. I shall also refer to one particular group of people for whom I have concern—households in temporary accommodation.
I welcome the fact that the proposal will be piloted. That is an important gesture, because it allows us to take a considered approach to whether it will work. As someone who is deeply sceptical about the proposal, I will be happy to be proved wrong. If the proposal works, by increasing access to housing supply, increasing choice and helping to cut poverty, no one will be more pleased than me. Those are shared objectives. I doubt that those things will happen, but I shall be pleased if they do. I share the objectives stated by the Government of greater transparency, greater clarity—some of which may be afforded by a flat-rate allowance—and greater choice.
I accept—it is an extremely important point that was mentioned by my hon. Friend the Member for Brighton, Pavilion (Mr. Lepper)—that the Government's proposal may work in some parts of the country but in others it could be a disaster. As with anything housing related, we have to come to terms with that reality. Policies that could work wonderfully in areas crippled and blighted by the crisis of low demand may benefit from a choice-based system, and I would be the first to say that they should. However, we should also recognise that there is another side to the coin. There are wide areas, primarily in London and the south-east, where such a system could have the opposite effect, and people should not be driven into homelessness or debt as a consequence.
My hon. Friend said that if the policy worked in Brighton it would work anywhere. I beg to differ slightly with him for one reason. Brighton is a self-contained community; it is a town in which people may look within the local market for housing. My hon. Friend may want to contradict me—I appreciate that people go to Brighton from London and other areas. However, the city of London is subject to the separate problem of displacement. That is something that worries me about the single London pilot—it will be in the borough of Lewisham—that my hon. Friend the Member for Edmonton (Mr. Love) mentioned. If people are unable to access properties in Lewisham, they will find a rented property elsewhere, and if that does not work out they will end up in the queue for social housing in that area. That will have to be measured, and I will return to the matter briefly later.
I am schizophrenic about what the Minister said in his introductory remarks. If the roll-out for the private rented sector is not completed for several years, part of me cheers. My heart soars like a lark because I am so anxious about it. On the other hand, there is the consequent likelihood that for the majority of people caught by other problems in the present system of housing benefit there will be no possibility of change, and they need such a possibility for two reasons.
155WH It is different in parts of the north of England, but the present system in London and parts of the south-east fails, first, because the absence of choice in the private rented sector for low-income households is driving an increasing number of families, households and individuals into the queue for social housing. My borough and other London authorities cite the fact that the end of an assured shorthold tenancy is a major route into social housing. Access to the private rented sector by households on housing benefit has declined dramatically since the mid-1990s, for reasons such as the housing market, trends in buy-to-let and so on. It is possible that the pilots may exacerbate that trend, and we will have to measure it.
The queue for social housing is lengthening dramatically. One of the principal routes into the queue for social housing in high-demand areas is through a short-term, unsustainable private tenancy. That is bad news for local authorities in high-need areas and for those who are forced through a series of moves into an unstable lifestyle. In my casework experience, that frequently results in people running up thousands, if not tens of thousands, of pounds of debt as they attempt to sustain a tenancy that they cannot afford. People in the private rented sector are often in deeply unsuitable, unattractive and poorly maintained properties; they are asked to pay £300 or £400 a week and their housing benefit is restricted. That issue was raised by the hon. Member for Northavon (Mr. Webb).
The Minister will correct me if the figure is wrong, but I understand that 70 per cent. of private tenancies have a rent restriction applied to them, and that the average rent restriction is £19. In Westminster, which I admit is at the sharp end of the trend, it is common for people to face a rent shortfall of £60, £70 or £80 a week. People are trying to manage that on income support. They fail, and end up being accepted as unintentionally homeless and joining the queue for social housing. That is utterly mad. We must seriously address the failure of the present system, which, even if the pilots provide us with a workable alternative, will continue for many years to drive households into the lengthening social housing queue.
The second and related point is the fact that housing benefit shortfalls are a major contributory factor to poverty. The Government are to be wholly commended both for their targets and for their action in reducing poverty, particularly child and pensioner poverty. I am an enthusiastic supporter of almost every element of that policy and am happy that the Government are achieving demonstrable success. However, we have a blind spot about housing costs, particularly in areas such as London. As a result, inner London has the most child poverty in Britain—41 per cent. of our children are in poverty. Before housing costs are taken into account, there is a relatively even pattern of child poverty across the country. When housing costs are taken into account, the picture is transformed, and the figure for London is devastating. If we are to tackle poverty, as the Government are committed to doing, we have to do it evenly across the country. It is no good saying that places such as inner London, and other areas with high housing costs, can go hang; the issue is too difficult to deal with.
156WH In the short term, alongside any pilots—which I hope are successful—we must recognise the chronic nature of the housing benefit shortfall and find a better way to integrate housing benefit with tax credits. Part of the poverty problem in London is that there is a considerable pool of people who are some distance from the labour market. Many of them cannot get over the barrier of high housing and child care costs. We must not allow that situation to continue for years.
I also support the point made by the hon. Member for Northavon about low-income homeowners. Even allowing for the fact that—thanks to the Government's economic stewardship—mortgage rates are admirably low, in London and some other areas with high housing costs, people who are on mortgage protection and income support and have high mortgages are unable to make the transition into the labour market for fear of losing their protection and being unable to maintain their mortgages. The problem must be addressed.
Those are my concerns. I have a few questions for the Minister concerning the flat rate housing allowance. I am not expecting him to reply now, but hope that he will respond in writing. Will he test a number of issues in the pilot schemes as an ongoing baseline assessment, with control groups and with what I described earlier as a posthumous assessment? That involves, first, local reference rents, which were also mentioned by the hon. Member for Northavon, whom I support. There is evidence from some areas that the clustering of localities for local reference rent purposes leads to a significant increase in the local reference rent. That happens in areas with sharply contrasting housing costs, such as the constituency of my hon. Friend the Member for Islington, North (Jeremy Corbyn), and it is bad news. It means either that people cannot access housing at all or that they are forced entirely into low-income housing, which undermines the Government's objective of creating mixed communities. Will the Minister revisit the already flawed system of determining local reference rents, and make sure that the rent officers reality test local reference rents against the availability of properties, because there is undoubtedly a disparity in several areas? Given that local authorities have strategic housing responsibilities, which the Government recently reinforced, will the Minister give them a role, alongside rent officers, in determining the localities for local reference rents?
Will the Minister consider using indicators in the pilots to measure changes in the supply of property at, above and below local reference rents? Will he look at precise data on the extent and scale of shortfalls between rent and housing allowances? Will he consider the number of homelessness applications that are made because of private sector rent arrears and the loss of shorthold tenancies? Will he take account of the reasons why people lose such tenancies? They may do so because of the rent or for other reasons. Will he also look at the change in average rent levels during the pilot schemes, at the distribution of rents across the deregulated private sector in the relevant areas and at evidence of clustering around local reference rents, which would show that some landlords were taking advantage of them?
When he winds up, will the Minister comment on the under-occupier incentive scheme, which the Department for Work and Pensions introduced? Cash incentives do not seem to have a significant effect in 157WH encouraging people to move to smaller properties. Does he accept recent research, which compounds the findings of earlier studies when it suggests thatthe quality of vacancies and the practical help offered to potential movers are much more significant than the availability of incentive payments"?Clearly, one objective for the schemes is to encourage people to utilise the housing stock better, but cash incentives do not appear to do that. Would a penalty component—people facing loss of income if they remain in a property with a rent higher than the reference rent—have an impact on behaviour?
Will the Minister commit himself to regular surveys of tenants to establish whether they find it easier or more difficult to find property at or below the local reference rent?
Can the Minister let me know what percentage of claimants in each authority is paid under the new rules and is, therefore, affected by the change? I assume that tenants who are still under the old system, in which the difference between the rent and the local reference rent is topped up, will continue to get that top-up. Will the Minister confirm that?
We also need to know how many landlords of properties where a current shortfall is due to the property-specific rent accepted the benefit that was previously paid but then increased the rent to the flat-rate level. That would illustrate that landlords who provide substandard accommodation can charge the same as those who own similar accommodation of a decent standard. As I said, I do not expect the Minister to respond to such detailed points today.
Lastly, the Minister will be aware that the number of families housed in self-contained temporary accommodation is rising rapidly. That is partly thanks to the admirable commitment to remove families from bed-and-breakfast accommodation. However, families remain in so-called temporary accommodation for many years, and the rents are extremely high. Something must be done to enable such people to enter the labour market. Families in my constituency often rent ex-council flats that were sold under the right to buy, and they pay £300 to £350 a week in rent. The money is reimbursed through housing benefit, because they are in temporary accommodation. However, it is impossible for those people to enter the labour market. Sixty thousand households are in temporary accommodation, and the figure is likely to rise, certainly in the short term. Can the various Departments do something to provide proper work incentives for families in temporary accommodation to keep them in touch with the labour market or to help them back into it after suffering the trauma of homelessness? Otherwise, a huge pool of people will be locked out of the labour market for many years, to everyone's detriment.
I am grateful to have had the opportunity to make these points. I am sceptical about the flat rate allowance, although I am sympathetic to the idea of making one available through the tax credit system to people in all housing sectors. Obviously, that would require a form of means-testing, but I can live with that because the benefits outweigh the disadvantages. The critical point, however, is that, alongside any such system, there must 158WH be scope to act sensitively in individual cases and to top up the rents of people in very high rent areas, whether they live in the social housing sector or the private rented sector. Otherwise, the consequences for them could be very severe.
§ Andrew Selous (South-West Bedfordshire)
I echo the hon. Member for Northavon (Mr. Webb) in saying that it is a pleasure to take part in this afternoon's debate. The measured and thoughtful contributions to an important subject show the House at its best.
Housing benefit is extremely important, involving nearly 4.5 million households in the UK. The cost to the Exchequer is about £11.5 billion—12 per cent. of all social security benefits—and it is paid by the Department for Work and Pensions. The figure approaches nearly 1 per cent. of total GDP. It is also worth noting that council tenants' rents in England and Wales contribute £1.5 billion towards the cost of paying for housing benefit.
When the Labour party wrote its manifesto in the run-up to the 1997 election, it rightly identified some £2 billion of housing benefit fraud per year. The Labour Government came into office with the laudable intention to do something about that. We are all enemies of benefit fraud; it benefits no one other than those who defraud the system and it brings the welfare state into disrepute. We are all committed to doing something about it.
§ Jeremy Corbyn (Islington, North)
I agree that fraud is wholly unacceptable, but does the hon. Gentleman agree that another form of fraud can be seen in the incompetent delivery of housing benefit by contracted companies such as ITNet? The people in my borough suffer from that and it amounts to fraud.
§ Andrew Selous
I agree with the hon. Gentleman. I hold no brief for any company involved in the outsourcing of housing benefit, to which the hon. Member for Regent's Park and Kensington, North (Ms Buck) has already alluded. In some parts of the country, that clearly has been a disaster. Like me, the hon. Gentleman probably knows of some successful experiments in outsourcing. I shall be moving on to administration later, but the hon. Gentleman is right in what he says.
The National Housing Federation report, "Housing Benefit—missed opportunities", claimed that the £2 billion figure had become considerably larger since it was first identified by the incoming Labour Government in 1997. The report stated:In much of the country the problem has reached, or gone beyond crisis point".In the light of the available figures, it is regrettable how little success has been achieved in tackling this laudable aim of 1997. In 1997–98, 220,000 cases of fraudulent weekly claims were established, from which only 700 successful prosecutions resulted. In 2000–01, only 100,000 such fraud claims were established, which I find alarming. I fear that that is not the result of the disappearance of fraud from the system, but due to local authorities, the Benefits Agency or Jobcentre Plus giving up the task of identifying and tackling the problem. Of 159WH the 100,000 cases, only 1,100 resulted in successful prosecutions, yet 460,000 were referred to the fraud and investigation section. Only the tip of the iceberg results in a successful prosecution, which is extremely worrying.
We know that 40 per cent. of authorities did not prosecute a single case, which I find especially worrying. Not one incident has been reported in the local media that can be drawn to people's attention to let them know that they will be prosecuted if they defraud the system. People get the message that they can get away with it, that this is an easy benefit to fiddle, that everyone does it and that nothing will be done about it. It would have a marked effect on the problem if only one or two high-profile prosecutions were given sufficient publicity in every local authority.
Why not incentivise local authorities by letting them keep some of the savings from successful prosecutions? There must, of course, be the highest standards of evidence and proof; we do not want local authorities bringing spurious prosecutions. Where the due process of law is observed and the correct evidence is collected, why not give local authorities an incentive to tackle the 460,000 cases that are going unchallenged and unprosecuted?
It is a fundamental principle of English law that we do not presume guilt before it has been proved. Cases have come to my attention—I raised them with the Secretary of State—where housing benefit was stopped while the local council made its investigation, only to be reinstated later when the local authority admitted that there was no proof or evidence of any wrongdoing. The tenant had to endure the fear of eviction, if not eviction itself. That is wrong. We would not stand for that in our legal system, and I fail to understand why we permit it to happen in relation to housing benefit. We should be tough on fraud, but things have got out of hand in that area. We must not stop benefit before guilt has been proved.
The Audit Commission severely criticised the administration of housing benefit in their report published in 2001, which has been mentioned. We know that some authorities are taking 100 days to process new claims and, as my hon. Friend the Member for Canterbury (Mr. Brazier) pointed out, the time taken to process claims varies greatly throughout the country. Some authorities are especially good, such as Camden council, which always does well. Others offer their residents a very poor service.
The Conservative party had two proposals in its manifesto for the general election in 2001 that would have helped. I ask the Minister to comment on them in his closing remarks. We proposed that the administration of housing benefit should revert to Jobcentre Plus—formerly the Benefits Agency—where local authorities clearly cannot cope; my hon. Friend has mentioned the worst 14 per cent. The Department should consider that option if it is clear that a local authority is giving an appalling service.
Our second proposal was that regulations should be changed only once or, at the most, twice a year. It is incredibly difficult for local authorities to cope with the constantly changing regulations, especially with all the different elements that must be entered into computer programs that run housing benefit. We all accept that 160WH there will have to be some changes, and that changes will not disappear. However, can we please have them at just two fixed points a year—say, in January or July—and can they be delayed until that time? It would be a considerable change if they could.
I welcome the fact that the Minister says that he is bringing in more money for the administration of housing benefit but, as my hon. Friend the Member for Canterbury rightly pointed out, there has been a huge increase in the number of statutory instruments and circulars to local authorities. It would do as much as anything to help the administration of housing benefit if there could be a decrease in the volume of such regulations to local authorities.
Many elements of the reforms proposed by the Secretary of State on 17 October 2002 are welcome. As the hon. Member for Regent's Park and Kensington, North (Ms Buck) said, I am sure that they will be successful in the parts of the country where there is genuine choice; mainly those parts north of Birmingham. However, in other parts of the country, it is clear that tenants do not have a great deal of choice, and the evaluation of the pilots will be critical. It is worth pointing out that even if the pathfinders were deemed to be successful and the scheme was rolled out nationwide, it would affect only some 800,000 out of the 4.5 million tenants who are on housing benefit. We are talking about reform of only a small part of the housing benefit system, and I urge the Government to move housing benefit further up their list of priorities and, in particular, to tackle the remaining tenants who will not be affected by the reforms.
§ Mr. David Drew (Stroud)
Does the hon. Gentleman include in the choice the introduction of Supporting People, which is happening this April? Supporting People has a particular impact on tenants living in sheltered accommodation and a disaggregation between Supporting People and the housing benefit budgets will possibly result in a stark choice for those who get housing benefit, who may lose out, and those who do not get housing benefit, who may end up paying increased charges. I hope that that can be examined—the Minister may wish to respond later—because it is an important aspect of housing benefit.
§ Andrew Selous
The matter of rent restructuring is also significant for housing benefit. I know that some district councils, not least my own, are severely concerned about the impact of both Supporting People and rent restructuring on their budgets. The integration of that with housing benefit will be critical to local authorities' budgets, as well as to the tenants themselves.
I want to examine the rights and responsibilities of housing benefit. In his statement to the House on 17 October, the Secretary of State said that in making tenants responsible for paying their rent, he was reinforcing the link between rights and responsibilities. Many Members welcomed that element of his statement. Indeed, if I remember rightly, the right hon. Member for Birkenhead (Mr. Field) described that element of reforms as an end to serfdom for tenants. In pursuing the theme of rights and responsibilities, I am particularly exercised by cases of "neighbours from hell" who are in receipt of housing benefit and their effect on the communities that they terrorise. By what 161WH right do those tenants take tax payments from the neighbours whom they terrorise and claim housing benefit to pay their rent? The Government are examining different measures, including how to improve antisocial behaviour orders and acceptable behaviour contracts.
§ Andrew Selous
No. We should consider what the right hon. Member for Birkenhead said in an article in The Sunday Telegraph on 5 May 2002, from which I shall quote briefly:When thinking about what might tip the scales of justice away from the brutes and bullies, and towards my decent constituents, I singled out housing benefit above other social security payments precisely because so much trouble is generated by a few families, whose arrogance and aggression is increased by their sense that they are untouchable.Such people think that they cannot be moved from their properties, whatever behaviour they indulge in.
I shall illustrate my point with two cases from my constituency, which are fresh in my mind because I have dealt with them recently. We know that the Government want to make more use of antisocial behaviour orders and that they are trying to improve acceptable behaviour contracts. We know that they are also considering introducing stricter tenancy agreements. The threat of withdrawing housing benefit should be one weapon in their armoury. The Bill introduced by the right hon. Member for Birkenhead proposed that housing benefit should be withdrawn from any tenant who was found guilty twice by a court—there is a high standard of proof; it is not something that can be done on the whim of a local authority—of antisocial behaviour in three years, and that the tenant should possibly be threatened with eviction. The Government have said that they support the Bill in principle and intend to take forward the idea.
It is no part of my brief as a Member of Parliament to see a single extra homeless person on the streets. However, I served on the Committee that considered the Homelessness Act 2002—along with the Minister who is here today—and I went into that Committee with a genuinely open mind. I did not know what my views on the subject were. I sat and listened to Labour Members from all over the country, including areas where things are probably much tougher than they are in my constituency, and to many of my own colleagues, and every single one of them supported the measure because of their experiences of seeing constituents terrorised by a minority of families.
A couple of months ago, there was an extremely nasty case of aggressive, racist antisocial behaviour in my constituency, where one coloured family was being terrorised and the whole community suffered badly. I attended meetings with the police, local authority and local clergy, and it was only when local council officers went and spoke to the two families responsible and those families realised that their tenancies were at serious risk 162WH that they stopped their bad behaviour. That community is now peaceful, the two families who were responsible for the bad behaviour are behaving better and the family who were terrorised are no longer being affected.
§ Mr. Love
I am sure that all hon. Members would agree that we face some terrible difficulties with antisocial tenants in our constituencies. Did the Committee to which the hon. Gentleman referred—whose members, he suggested, all agreed on the proposal—consider the consequences of withdrawing housing benefit and its likely impact not only on the immediate family, but on a wider group of people?
§ Andrew Selous
Yes, indeed. It is not just my suggestion that everyone on that Committee agreed. If the hon. Gentleman cares to examine the record of the Standing Committee, the votes make it clear. He will see that every single Conservative and Labour Member voted the same way. Indeed, it is a pleasure to be able to say a few words about that Committee because the filibustering of one Committee member prevented us from getting a word in edgeways.
I want to illustrate my point by referring to another case in my constituency. An Indian gentleman visited my surgery twice in the past two months. He and his partner, who is expecting their first child, have been terrorised for months by their next-door neighbour. The council has tried every single measure known and open to them to stop the antisocial behaviour of the council tenant who lives next door, sadly to no avail.
§ Jeremy Corbyn
It is good of the hon. Gentleman to give way. Is he aware that racist behaviour is a criminal act anyway and there is a criminal law to deal with it? It does not have to be dealt with through tenancy law; criminal law deals with it. Likewise, if an owner-occupier behaves in a socially unacceptable way, housing benefit cannot be taken away because there is probably none to take away. Criminal law is there to be used for that purpose.
§ Andrew Selous
I find myself in the strange position of agreeing with both the hon. Gentleman's points. It just happens that the two incidents that I mentioned had a racist dimension. However, I have many other examples of constituency cases, as I am sure the hon. Gentleman has, in which race has played no part. Of course I accept that there are laws that deal specifically with race crimes. Race crimes are hateful, and it is right that we have such laws. However, race was an incidental factor in the two cases to which I referred.
As far as those two cases are concerned, the local authority has tried everything. In the Indian gentleman's last letter, he asked whether it was worth coming back to see me. He had been through all the options with the council and had tried all that I had suggested to him, yet it seemed impossible for the council to obtain the required level of evidence. The Government must consider that in their reform of housing benefit. Indeed, the former Minister, the right hon. Member for Birkenhead, has said in the House that he is committed to the principles of housing benefit reform.
The current Minister, when he took the Housing Benefit (Withholding of Payment) Bill through Committee, said that he was committed to and 163WH understood those principles. Therefore, this is an important area. I hope that the threat of withholding housing benefit will result in people ceasing appalling behaviour. I hope that the threat is used rarely, if ever, but I have already seen that when a council gets really serious and says that someone may lose his home if such behaviour continues, that can lead to a great improvement.
§ Sir Nicholas Winterton (in the Chair)
Before I call the hon. Member for Roxburgh and Berwickshire (Sir A. Kirkwood)—I hope that I shall have the support of all Members here—I congratulate him on the award of a knighthood in the Queen's new year's honours' list. It is an honour that is richly deserved. I call Mr.—I mean, Sir—Archy Kirkwood.
§ Sir Archy Kirkwood (Roxburgh and Berwickshire)
I am humble and happy and proud, Sir Nicholas, because you and I both know that there have been only two such awards made for services to Parliament. I am deeply delighted to follow you, the first person to receive such an award. I am sure that Members here would want me to recognise that.
This has been a good debate. It is a pleasure to follow my colleague the hon. Member for South-West Bedfordshire (Andrew Selous), who makes a thoughtful contribution to the work of the Select Committee. He made a thoughtful contribution this afternoon, as indeed did all colleagues who preceded me. It is a particular delight that the hon. Member for Brighton, Pavilion (Mr. Lepper), my hon. Friend the Member for Teignbridge (Richard Younger-Ross) and the hon. Member for Edinburgh, North and Leith (Mr. Lazarowicz), who all represent pilot areas, have taken the trouble to attend. The Minister is correct—this is an important debate which has been well attended. Not only is it an important subject but it is being seriously and tangibly piloted throughout the United Kingdom in a way in which we shall have a continuing interest. It is a pleasure to be here.
I can make a shorter speech because of the quality of the debate so far. Many of the salient points have been made. The Minister has done reasonably well. I gave his consultation document on the pilots a warm welcome before Christmas because I was desperate for something to be done. I must say, however, that having read the consultation document over Christmas, I am now less enthusiastic about it. I shall come to that in a moment.
We must understand that bigger forces are at work in the formulation of housing benefit policy. The Government need to sort out housing policy before housing benefit will ever be positively affected. A diversity of rented accommodation and affordable owner-occupation has to be available to communities. There is no magic formula. There is no piece of algebra that will suddenly simplify housing benefit. We must all recognise that. The only way in which the Minister could have made real progress in this area would have been if the comprehensive spending review last year had afforded some more money. I know that the Government are trying to make some progress, but more money needs to be put in and more thought needs to be given to providing affordable housing throughout the United Kingdom.
164WH The Government's policy is to make strategic wholesale moves in the direction of tax credits rather than benefits. The Minister cannot ignore that; he has to work within and around it. There are some real worries there. I agree with the hon. Member for Regent's Park and Kensington, North (Ms Buck) that the Government have done a lot of commendable work in addressing poverty. They have targeted poverty for their own reasons and have taken the whole profile of public spending in the direction of tax credits. The worry for housing benefit is that the ways in which tax credits are being delivered, based on annual gross household assessments, do not sit that well with the legacy system that he is left to work with for housing benefit based on income support. There is a disjunction between the two systems.
There are bigger forces at work within which the Minister must work as best he can. He has £30 million for this important pilot. We have to make the best of it. Like the hon. Lady, I have an open mind on this. I wish the pilot well. However, having looked at it more closely, I wonder whether we are going to get much out of it. She is right to want to nail down what we are trying to get out the results of this pilot by way of monitored measurement that is meaningful and can be translated to other parts of the country in other ways.
We should not forget that there are still big problems in the current system. Much has been dealt with in earlier speeches. The Government seem to be saying in the consultation document that they have ticked the box of addressing the administrative problem of the current system and are now moving on. That was the sense I got from the consultation paper. That is not quite right. It is true that the situation has improved, dramatically in some cases. In my local authority some of the problems are being addressed. There is more consultation between central Government and local authorities. That is welcome. But there are still far too many circulars going around. Too much concern is given to minor changes of income from week to week. It is all de minimis. It should all be swept away. Little would be lost in terms either of additional fraud or extra expenditure if changes could be accepted more easily. People have to register all sorts of tiny changes and then they are sent another form. That does not help the system.
There is real concern about some of the non-dependent deductions. That has been mentioned earlier. There is an ethnic dimension to that. I have learned much about this from my colleagues on the Select Committee. There are not large numbers of people from the ethnic minorities in south-east Scotland. Non-dependent deductions bear down heavily on ethnic minorities. The single room rent restrictions have a particularly bad effect on disabled people who sometimes need larger properties to live in. A whole series of things must still be borne in mind, not least take-up. Take-up is an issue with all these new means-tested benefits, but it continues to be an issue in housing benefit.
It is not safe to assume that the administration of housing benefit, improving as it may be, is yet properly addressed. More needs to be done. The second point that I should like to make, which was made eloquently by my hon. Friend the Member for Northavon (Mr. Webb) is that home ownership issue needs to be addressed, certainly before 2010. The focus of the 165WH debate in that period of time will be on the private rented sector. If we are to be effective in dealing with poverty, something must be done in the home ownership category.
I refer the Minister to a valuable new piece of work by Roger Burrows, using the Joseph Rowntree Foundation poverty and social exclusion survey of Britain, which was reported in yesterday's Financial Times. I find it surprising that, according to his research, half of all people living in poverty are home owners. He asks, with some force, whether it is equitable that home owners receive only 8 per cent. of state support for housing costs. We must be careful not to spend all our time focusing on a small, although important, piece of reform that we hope will go well; there are bigger issues to be considered, as my hon. Friend the Member for Northavon said.
§ Mr. Brazier
The hon. Gentleman is the second Liberal Democrat to raise this issue. Is he suggesting that part of the £11.5 billion currently spent on housing benefit should be redeployed, or that there should be a substantial, costly new benefit, that will affect large numbers of people?
§ Sir Archy Kirkwood
The Institute for Fiscal Studies has made the sensible point that the Government missed an opportunity in addressing private and public aspects of housing benefit when they put large amounts of money into dealing with child poverty. There is an argument for doing so, and they have made progress in that respect, but the point that the IFS makes is that to go so far in that direction without doing anything to redress issues surrounding benefit in general was a missed opportunity, and I agree with that. I am not the Liberal Democrat spokesman on the matter, so the hon. Gentleman cannot pin what I say on my party, but we do need to put more money into housing support. However, I am not going to be daft and say that on Monday we should introduce huge extra public expenditure on home owners. What I am saying is that between now and the end of the decade, as growth develops, resources become available and reform evolves, we must not forget low-income home owners. I do not say that off my own bat: there was a unanimous, all-party Social Security Committee report on housing benefit in July 2000 to which three distinguished Conservative Members signed up. If the hon. Gentleman has a problem with that, I suggest that he talks to them, not just to me.
I hope that we will have the opportunity to say that the pilot did not work if that is the case. If it takes us no further forward and no conclusions can be drawn from the £30 million spent after the evaluations have been made, I hope that we will be big enough to say, "Okay, we tried it. It didn't work and we need to try something else." That is not to prejudge the pilot but to say that pilots are not necessarily for ever. If it makes no effective difference or, indeed, if it causes unforeseen problems, we should reserve the right to say that it was worth trying but we do not think that it will be fruitful to pursue such a proposal.
From a Scottish Member's point of view, I am nervous that in the long term, in the next 10 years, we will end up with a devolved rent policy and a reserved 166WH UK housing benefit policy. The Minister is making a claim for a policy in England whereby English and presumably Welsh social rented sector markets will he reformed over that period, but I am aware of no such policy in Scotland. I am in favour of devolution, but we must be careful to avoid ending up not only with different policies in the tiers of the private rented and home owner sector. It is a problem throughout the UK, but we must keep the policy in some sort of kilter. Otherwise, it will cause us problems in future.
Finally, I do not think that the Government have finished with tax credits; I believe that there will be more reform in that direction. We must therefore find a way to ensure that, as things evolve, housing benefit is properly integrated with tax credits, as the July 2000 Select Committee report also said. That cannot be done on a cost-cutting basis. All the reforms undertaken before 1997 were difficult and failed because the agenda was really to save money. I do not believe that this Government's reforms fall into that category, but unless we ensure that proper integration continues and that proper housing provision is a priority, there will always be problems with housing benefit.
§ Mr. Andrew Love (Edmonton)
I was not sure whether it was appropriate for me to make a contribution this afternoon. With so many Front-Bench spokesmen and Select Committee members present, I felt a little isolated. In any case, much of what I wanted to say has already been said, so I shall try to be brief, but it is important that my hon. Friend the Minister hears views on housing benefit issues from throughout the House.
This has been an excellent debate. Hon. Members have made measured and thoughtful speeches, and I do not particularly want to strike a party political note, but it is important to remember that housing benefit was introduced under the previous Conservative Government and that in many ways we are still living with the consequences.
The complexity and confusion of housing benefit has been talked about, and a number of contributions have focused on fraud and error. One of the propensities of such a complex system is that, in the main, it allows error, but also a significant level of fraud. Much has also been said about overpayments, but the other side of that coin in housing benefit administration is that there is a significant level of underpayment, which is even more worrying.
I think that the hon. Member for Canterbury (Mr. Brazier) spoke about work disincentives. We must put that in context: 42 per cent. of housing benefit is paid to pensioners. When talking about work disincentives, we must be clear who is affected. I believe that it is mainly a problem of high-rent areas, such as Greater London, Brighton and some of the other areas that have been mentioned. There is a very significant disincentive in those areas.
Shopping incentives have been mentioned. Again, where there is an adequate supply of rented accommodation, such a system may be appropriate and may work, as my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) said, but I am sceptical about its ability to work in some of the more stressed areas of the country, particularly Greater London.
167WH There are many problems with housing benefit administration, from low standards to the very variable way in which many people, including my constituents, are treated daily. It is a considerable problem. Many tenants are threatened with eviction because of administration failures. Looked at the other way, that means that many landlords do not receive the correct rent because of those same failures. We need to put that into context; it is a significant problem, but others are more serious. The steps that the Government are taking to harmonise rent structures, among other things, are leading to a radical change in housing benefit. However, as the Minister said earlier, that will happen over 10 years. The problems are so great that we should do something immediately. Therefore, with some caveats, I welcome the reform that we have discussed today and the introduction of the standard local housing allowance.
One of the things that has reassured me about the pilot schemes is that the document "Building choice and responsibility: a radical agenda for Housing Benefit" produced by the Department for Work and Pensions, says that the intention of the reform is that rents willaim to reflect market conditions and reflect rents in the middle of the market.That is important. I hope that that policy will overcome some of the problems caused by rent restrictions, which we have debated. Not only are people in great difficulty because they have to bridge the gap between the benefit payment and their rent, but society faces a significant amount of homelessness and has to deal with the costs that that entails and the additional demands that are placed on social housing. That is a significant issue, especially in Greater London.
It is important to echo the comments made on a number of issues by the hon. Member for Northavon (Mr. Webb) and by my hon. Friend the Member for Regent's Park and Kensington, North. The first is transparency. One of the great difficulties with the current rent officer service is that nobody seems to know how determinations are reached, yet there is great controversy over them. We must consider seriously how the system of rent determination can be made trustworthy, so that people can have confidence in it. I should not like there to be litigation in this area, but if we are to avoid controversial situations, transparency is the first principle that must be underscored.
The second is accuracy. When I deal with local cases, I hear of determinations that are based on statistics that are a year, 18 months or two years out of date. That cannot be the right basis on which to make a rent assessment. It is particularly important in areas that have experienced enormous house price inflation and private rent inflation in the past couple of years. If I were to compare rents there now with those of a year or two ago, there would be a significant difference. That affects those who are hoping to move into the private sector and are looking to housing benefit to meet their costs.
It is an important principle that there should be consultation with local organisations that are familiar with the localities in which determinations are made—local authorities, Citizens Advice bureaux and landlords have a role to play. We must ensure that we have accurate, up-to-date figures.
We have talked about localities. We need to reflect the housing markets in each locality. As has been said, if there is an enormous variation in rent in a locality, 168WH people will inevitably move from the higher rent areas to the lower rent areas. We therefore need rent comparability across localities. If the proposals are to work, that point will be particularly important, particularly in the context of London, where there is an enormous variation in the rents that can be charged, even within relatively small areas.
We have talked about tenants taking responsibility for the payment of their rents. Like others, I would not quibble with that. However, there have been good reasons why rent has been paid directly to landlords and those will not be whisked away because of the introduction of a pilot scheme. We should consider people who are particularly vulnerable and whether eight weeks is the appropriate time, as tenants and landlords will be in difficulty in relation to housing benefit payments. I would like the Minister to consider that carefully. Although I accept the principle, and know that the matter will be dealt with sensitively, cases in which it would be appropriate to make the payment directly to the landlord need to be considered, as that will ensure the success of the scheme.
People have talked about changes in circumstances. I will not go into every improvement that the Government have made, all of which I welcome. However, I would like the Government to go further; for instance, by looking at the week-by-week adjustments made to housing benefit in an area. In terms of the working families tax credit and the new credits that will be introduced, a longer time scale will be used. The Government could usefully look into that in trying to merge the ways in which the housing benefit and those tax credits are dealt with. Improvements could still be made there.
My hon. Friend the Member for Regent's Park and Kensington, North mentioned pathfinder areas. I am disappointed that only one London authority has been considered. Lewisham shares some inner and outer London characteristics, though I think that there are issues that are specific to inner London. Choosing another area of London to be part of the pilot scheme would help to ensure that the right lessons are learned about the pilot schemes in the different areas.
In relation to the scheme's introduction, it will be important to monitor the results. We must ensure that the scheme that is to be rolled out nationwide takes into account the lessons learned from the pilots. For example, organisations of landlords have expressed their concerns about the impact of the pilot schemes on them, and about whether they want to enter into them. The word "choice" is used a lot. The hon. Member for Northavon said that the change is perhaps not as radical as some suggest. I agree that the choice will be limited. However, any increase or improvement in choice for tenants is to be welcomed. I hope that we shall monitor that carefully.
On the impact on work incentives, one of the Government's central aims is to get people back to work. We should consider how the pilot scheme assists that. Housing benefit has generally not been very good at providing work incentives, particularly in high-rent areas. It would be good to know whether the pilot schemes will improve that situation.
The single room rent provisions are now called the younger person rent restrictions. Others have commented on the matter before, and it is important to 169WH do so. The research that the Government carried out showed that the restrictions on single room rent, as it was called then, were causing financial hardship. There was considerable debt among young people under 25, and eviction. The extension to the scheme was introduced because that and other research, on which hon. Members have commented, showed that the shortfall between the amount received in benefit and the amount of rent that young people were having to pay was around £34, and could be even higher in Greater London.
The scheme was introduced more than 18 months ago in. I believe, July 2001, and should be evaluated because of concern expressed by organisations such as Shelter and others to which hon. Members referred that it has made little difference. People are not receiving significantly increased housing benefit and are still facing similar problems. The Institute of Revenues, Ratings and Valuations, which I hope we can regard as an independent body, has said that the scheme has made little practical difference. An evaluation of the scheme and a report to Parliament are now overdue. I believe that a report was promised when the changes were introduced, and I urge the Minister to produce one.
In general, I welcome the pilots and the new scheme, which offers the prospect of a significantly different benefit scheme that will ameliorate at least some of the substantial problems with the current scheme. That must be welcomed, and I look forward to seeing a report to Parliament on how the scheme is going.
§ Richard Younger-Ross (Teignbridge)
I thank the Minister for saying that he will involve the Members responsible for the pathfinder areas. We all look forward to seeing how the detail is rolled out, as it is only through the detail that we will see just how effective the scheme will be, whether it will ultimately work or fail, and whether it will throw up unexpected problems.
I have concerns about the scheme, especially about the effect of the standard allowance. If a level is set above the existing lower rents, as it is in the documentation distributed by the Minister, there has to be an expectation that the rent levels will rise in areas with a housing shortage. There can be no other consequence. If landlords can see what the rent level is, they must use the opportunity to raise their rents. That will not matter to the Minister as it will have no effect on Government money. Its impact will be to undo one of the benefits claimed by the Minister—that it is putting extra money into the pockets of people on benefit.
Such a level will also affect those people who are not on housing benefit, as well as those on low incomes who are not entitled to any Government help but who are in rented accommodation. Many people in a constituency such as Teignbridge fall into that category. They already struggle to find appropriate accommodation. I fear that any jacking up due to the allowance will have a detrimental effect. I am not saying that that will necessarily happen. I hope that those predictions are wrong and that the Minister is right, but I have my concerns.
170WH I have a second, albeit lesser, concern. Any scheme that is to work and be effective must be seen to be fair and just. How the boundaries are drawn up may throw up apparent injustices on both sides of the same street. It is possible to have identical properties with identical tenants but with different rent levels because the properties fall into different areas. The result may be that a couple on one side in No. 48 may have an extra £5 a week in their pocket, but the couple opposite may have an extra £15. That will create a sense of injustice and unfairness. Any system with such a built-in injustice will eat like a cancer into the long-term viability of the scheme.
As I mentioned earlier, I am concerned about the impact on the availability of rented accommodation. As the scheme is reviewed, we must have clear, comparable control areas in order to assess the exact impact on the market. It would be easy for people to see an apparent reduction in rented accommodation in an area for X, Y and Z, but we cannot have excuses for any reduction: we need a proper comparison to show that the scheme is the reason for the reduction. Control zones are crucial to the task.
Teignbridge is an area of high-cost housing, but low salaries. The ratio between salary, income and housing costs is as bad as in the south-east and we suffer from many of the same problems. The area has a real shortage of rented housing. Costs are lower than in London, so when some Londoners retire, they buy a small property in Teignbridge, perhaps after selling their Kensington property, and have enough money left over in the bank for their retirement. That forces up housing prices and impacts on the availability of accommodation for people on low incomes.
The scheme relies on landlords buying into it. People moving into second homes or seeking summer let holiday accommodation exert pressures on the market. If landlords fear that some tenants will not pay, they will look for the easy option. In a place like Teignbridge, that means selling up, realising the capital and investing in something else, so we might face the prospect of significant reductions in available accommodation. Furthermore, Teignbridge has already stretched the number of people paid directly by the Government rather than landlords. As the Minister said when he visited Teignbridge, nationally about 60 per cent. of housing benefit is paid to landlords and 40 per cent. is paid directly to tenants, but the reverse is the case in Teignbridge, so we have a smaller element to play with. If we lose that smaller element, the effect on Teignbridge will be catastrophic.
Until recently, Teignbridge has not had to put people into bed-and-breakfast accommodation. Any reduction in the housing market will result in more homeless people unable to secure accommodation. When they come to the local authority for help, all it can do is find bed-and-breakfast accommodation for them. That will mean greater costs for the authority and worse conditions for all concerned.
Another concern is the impact on rent deposit schemes. The local organisation wrote to me to say that its rent deposits system will not work under the scheme. I ask the Minister to reflect on the problem and talk to the rent deposit schemes in the pathfinder areas to 171WH establish how best to overcome it. I cannot give the Minister any instant answers, but we might be able to find a solution in the coming months.
§ Malcolm Wicks
With the permission of the House, I shall say a few more words. We have had a serious debate, reflecting the importance of housing benefit. At times the scrutiny of our proposals has been detailed. At least one hon. Member was generous enough to say that she did not expect me to answer all the questions today. Although she reserves the right to change her mind, I reserved the right to listen to her the first time. As usual on these occasions, if it would be more useful to answer some points in writing, I shall of course do so.
At the start of the debate, Sir Nicholas, you advised that succinctness would be a virtue. So it is, but I have a fistful of replies to present and scrutiny, too, is important. However, I shall try to be as brief as that balance allows me.
One theme of the debate, not least of the contribution of the hon. Member for Canterbury (Mr. Brazier) at the opening of the debate, was the issue of antisocial tenants. There is widespread concern about that in our communities, let alone in the House. At this stage, I can say only that, as announced in the Queen's Speech, the Government will be legislating further, with a range of measures, to tackle those problems that seriously blight the lives of so many of our constituents. For example, the Government will be legislating for new action against antisocial tenants in the social housing sector. As has been noted, were it not for the Liberal filibuster we would now have on the statute book a minor but useful measure providing housing benefit sanctions; but despite the clear will of the House, that was stopped by the Liberal Members, and they need to explain that to the electorate at the relevant time. The Government will be legislating widely on the matter.
As a footnote, I add that whenever such proposals are brought forward we understandably hear that it might create homelessness. We need to look at the problem more widely than the Liberals were able to do. For instance, at least one of my constituents was a victim of antisocial tenants and had in effect to make herself homeless because she was not prepared for her children to be subject to abuse and cruelty from a neighbour. She became homeless and her child, therefore, had to go to another school. Homelessness should not be used as a card for only one side of the debate; far from it.
§ Ms Buck
Certainly for me, the point is not primarily about homelessness, because that must regrettably be used as a tool only in extremis. My concern is that we already have tools to evict people—the antisocial behaviour order and the acceptable behaviour contract—which are well used in my locality. I do not believe that we need to add extra penalties; we need to make the existing penalties work effectively.
§ Malcolm Wicks
I understand my hon. Friend's point. I shall not say more, because the Government will be making proposals across the board on antisocial behaviour.
The hon. Member for Canterbury spoke about housing benefit expenditure, rather implying that it continues to increase. Let us look at the facts. Housing 172WH benefit expenditure more than tripled between 1979—a significant date—and 1997—another significant date. Since then it has fallen by about 20 per cent. in real terms. That speaks for itself. It is not about the Government setting out to reduce housing benefit expenditure per se, but about the success of other antipoverty and welfare-to-work strategies, which people will welcome.
Another theme raised by a number of hon. Members was that of regulation, red tape and the number of circulars being issued. I am sensitive to that. Nevertheless, we need to bring a bit of common sense to bear. Some of the circulars are not always there to change benefit regulations in complex let alone needless ways. Some of them will simply present local authorities with helpful information on how to run the scheme more effectively, or reflect other changes being made by the Government.
To play the red tape card all the time can be a little silly, although there is a substantive point to be made. For that reason I have established within the Department a regulation scrutiny group, which includes local authority representatives, that advises the Department on the flow of regulations that we need to make. I cannot remember whether the hon. Member for South-West Bedfordshire (Andrew Selous) said that it was in the Tory party manifesto, and it is not my job to deliver all the manifesto commitments of every party; and I did not know about that. However, I have done it: whenever possible, which is not always, we now endeavour to introduce changes only in April and October. That is important, and our regulation scrutiny group helps us with that. We have introduced a monthly newsletter to local authorities that includes some of the helpful information that previously might have been in circulars. Partly as a result of that, but for other reasons too, the number of circulars issued in 2002 reduced substantially. Hon. Members will be pleased to see my commitment to Tory party manifesto pledges in that respect as well.
§ Jeremy Corbyn
On the question of circulars and information, the Minister will be aware that the benefit inspectorate has examined the administration of housing benefit in Islington and found its system seriously wanting. Many other authorities are in the same situation, with contractors failing to deliver an adequate system. Is he prepared to intervene and hand back the systems to local authorities to run them in the way that Camden does so efficiently?
§ Malcolm Wicks
That is a matter for the local authority concerned. In this debate, we have sometimes not allowed for the fact that although housing benefit is a social security policy administered at one level by our Department, local administration is carried out by local authorities. They are democratically elected and make different judgments from time to time, not least in London, about whether to contract out or to contract back in. Some have chosen the latter course.
Much of the detailed work that we have done has removed burdens on local authorities. For example, we have piloted and will now go nationwide on the idea that registered social landlords—or housing associations as I still prefer to call them—may in future help verify claims for housing benefit, rather than the local authority 173WH having always to do that. That was a successful pilot that removed a piece of bureaucracy. We have also allowed agency and contract staff, some of whom are highly professional and experienced as I saw in Hackney, to undertake more functions in housing benefit determinations, which we discussed in a delegated legislation Committee. The local authority will conduct a 10 per cent. check on quality, and it is a way of cutting out needless bureaucracy because, at the moment, the contracting agency or agency staff member in the town hall makes the determination before the whole decision is then gone through again. Those are small but significant ways in which we are trying to improve the situation.
The hon. Member for Canterbury outlined many criticisms of housing benefit administration, some of which I agree with. I mentioned some in my opening remarks, and my next comment has to be, "hence our reform programme". The problems are why we are scrutinising housing benefit in ways that I outlined, including measures such as the performance framework, the help team and extra money to local authorities. We have listened to local government about the funding, and our medium-term reform programme is about that. There are also our more radical ideas, if the hon. Member for Northavon (Mr. Webb) will forgive me for using the word "radical", for a housing allowance scheme.
Understandably, we do not talk tough only on fraud, but are delivering results. Fraud in related benefits—income support and jobseeker's allowance—has declined in recent years by some 24 per cent., which has saved the taxpayer £230 million. We take fraud seriously, which is why we are undertaking a research exercise to establish a new measure of how much fraud exists in the housing benefit system and why, in advance of that, we have established for the first time a fraud reduction target for housing benefit of 25 per cent. by 2006.
Like many other Members, the hon. Member for Canterbury raised the pros and cons of enabling the tenant to receive housing benefit, rather than paying it directly to the landlord. It is a strategy not without risks, which is why we are piloting it and will evaluate it carefully. However, the hon. Gentleman should understand that we have to get away from a nanny state and the assumption that we cannot trust the citizen, individual or tenant to receive her or his rent but that it should go directly from the state via the local authority to the landlord. That is not about citizenship or empowerment, and both the Conservatives and the Liberals need to take seriously the notion of balancing individual responsibility with individual rights.
§ Mr. Webb
If the Minister recalls what I called for, it was to give individuals choice about the way in which they wanted to receive their money. If an individual finds it easier for the assistance he or she gets with the rent to be paid directly to the landlord and to budget 174WH with what is left, is it not empowering to give that individual the choice rather than to take it away from them?
§ Malcolm Wicks
The majority of landlords are responsible and decent, but as many of us know, not least in London, not all of them are. We need to be careful that a tenant—
§ Malcolm Wicks
Hang on a minute, if I may use such an unparliamentary term. The hon. Gentleman must realise that some tenants who appear to be making the choice that the money will go direct to the landlord in future may have been pressurised into that choice by the landlord turning up on the doorstep. There is no need for naivety about that. I have met one landlord—I will not say from where—who told me that he had already asked his tenants, and that they would all like him still to receive the money. Let us not be too silly about this.
§ Mr. Brazier
I am grateful to the Minister for giving way again on the same point. I asked him to evaluate in the pilot whether there would be a disincentive for landlords to take tenants, particularly those in some of the more sensitive categories. Hon. Members on both sides of the House have testified to the huge areas of southern England where landlords can choose their tenants because there is such a shortage of rented accommodation. My concern is that the pilot should address the question whether that has the effect of disadvantaging some people in the market.
§ Malcolm Wicks
Obviously, we need to safeguard the privately rented housing system. In many areas, it is the oil in the housing market, and can make the market more flexible and provide housing for vulnerable people. That is why we will continue to talk to landlords about that issue, and will include them fully in the evaluation.
My hon. Friend the Member for Brighton, Pavilion (Mr. Lepper) raised a number of important points. I was pleased that he was able to participate in our meeting at Brighton city hall. I believe that I have to call it the city hall now, since for some reason Brighton narrowly beat Croydon to get city status. My hon. Friend enabled me to meet a number of local representatives from the voluntary sector and landlords in Brighton and Hove to discuss the issues. I recognise the difficulties of the Brighton housing market. The rents are high, and it is a city that is under pressure in many ways. That is one of the reasons why we wanted it to be a pathfinder area. Later in the debate, my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) referred to Brighton as self-contained. That is not a phrase that I would have applied to Brighton—I would have called it extrovert rather than self-contained. I thank my hon. Friend the Member for Brighton, Pavilion for his intervention.
With regard to transparency, the advantage of the housing allowance scheme is that tenants will know their budget in advance, and as any renter knows, that is the first condition for finding accommodation. I hope that even in difficult housing markets such as Brighton, the housing allowance scheme will have many advantages.
175WH The issue of information and communications technology has become increasingly important in a whole range of social security policies, as we in the Department know. We will work closely with the software suppliers in the 10 pathfinder areas. We have already had some discussions with them to ensure that they are fully on board and aware of what the pathfinders scheme is about.
The issue was raised about landlords finding it more convenient to be paid in advance rather than in arrears. I understand that point, but housing benefit is paid in arrears like other benefits, and that is the way in which most of us are paid our wages and salaries. Changing to payment in advance would instantly worsen the problems of delay and overpayments. There are difficulties.
The Chairman of the Work and Pensions Committee, the hon. Member for Roxburgh and Berwickshire (Sir A. Kirkwood), spoke about vulnerable tenants and about paying landlords directly. We will be talking very carefully to local authorities about the discretion that they have in the matter. We believe in a social philosophy of empowering tenants by giving their housing allowance to as many of them as possible. It is their housing allowance; it should not go directly to a landlord. Many vulnerable tenants, although by no means all, may wish to continue paying the landlord directly.
One or two hon. Members raised the issue of the single room rent. I understand its importance, and it has been acknowledged that the Government have made some progress on it. There are serious difficulties; perhaps that was an omission in our deliberations this afternoon. If we are to be wise about social policy and about those who are heavily dependent on benefits, we must also consider their position vis-à-vis that of many of our other constituents. We must consider the housing experience and aspirations of those who are in work but who are not well off. There is a difficulty in that most under-25s who are not on benefit can afford only shared accommodation. That is the experience of the young people whom I know.
Would it be right or wrong for us to enable those on housing benefit to have superior accommodation, perhaps not very superior but still superior, to that of young working people? That poses a serious difficulty. We must consider how the experiences of those on housing allowances should compare with those of the working population, as it could raise serious issues. At present, most working people in London or in Brighton, for example, cannot choose exactly where they want to live. We must consider those difficult issues more deeply than perhaps we have.
§ Mr. Webb
Another comparator is the many young people who are lucky enough to have a loving, secure home where they can live until they have enough money to live, independently. They have a choice; they have somewhere where they will be looked after. I am sure that before the Minister became a Member of Parliament he would have attacked the single room system; he would not have supported it then. The Minister is penalising those who have no choice; they do not lead the life of Riley; they are often forced out of their homes. How can it be fair to tell such people that we will not even meet their rent?
§ Malcolm Wicks
We have become fairer on that. As a result of the changes that we made, the average rent level has risen by £5 a week—I will check that and verify it if necessary—and that is reflected in housing benefit. There has been a not insignificant change in that matter. I understand the point that the hon. Gentleman is making. There have been welcome changes for children who have been in care and who, until recently, were left at the age of 16 to fend for themselves. Our mind is not closed on the issue. Nevertheless, we must consider the needs of other young people if we are to get the broad acceptance of the welfare state that we all want.
§ Mr. Drew
With regard to my earlier intervention on the hon. Member for South-West Bedfordshire (Andrew Selous), does my hon. Friend accept that this is not just about working people? Pensioners are also affected; that is the point that I made about Supporting People. We must consider very carefully how housing benefit affects those who do not get it as well as those who do.
§ Malcolm Wicks
That point is well made, and we must reflect more on it in future. I may have only 11 or 12 minutes now and I have a fistful of scrutiny to get through. It would be wrong for me to allow any more interventions, if colleagues will forgive me.
The hon. Member for Northavon made several points. He challenged how radical these proposals are. The last radical thing that a Liberal Government ever did in this field was to introduce rent controls in 1915 when the working class in Glasgow rose up during the first world war as their men were fighting at the front. The hon. Gentleman often sounds older than he looks, but I do not think he was there at that radical moment.
People will judge whether we are being radical. We are starting with the private rented sector. The hon. Gentleman seemed to get excited about page 9 of our document, which he was reading in bed last night. Perhaps, tonight, he should venture on to page 19, where we sayIn principle, however, we shall also look to introduce standard allowances for social rented housing and would like to test this out through an early Pathfinder where conditions allow.I refer him to page 19, to read with his mug of Horlicks tonight, and he may be excited by our radical ambitions; but that is another debate.
I was disappointed that the hon. Gentleman seemed to raise doubts about the proposals. They are not without risk—that is why we are evaluating them—but I am surprised that the hon. Gentleman is not more in favour of our proposals because, in terms of choice, empowerment and a proper sense of citizenship, they set out the direction that our social policies should take.
What is the alternative? I cannot believe that the radical Liberal alternative is simply to stick to the existing housing benefit system, which requires us to make detailed inquiries about each and every rent that is paid. We still tolerate a situation in which the rent of six out of 10 people is paid to landlords. I doubt whether that is where we want to be in the future.
The hon. Gentleman is in danger of supporting the status quo, and I do not think that he entered Parliament to do that. All the issues will be properly evaluated and there will be control groups of local 177WH authorities to reflect different markets; high, medium and low rents. We are thinking seriously about the problems. The hon. Gentleman and I have backgrounds in social research, and I hope that he will trust me to take seriously the evaluation process. I am happy to talk to him about that.
Another important issue is that of low-income homeowners. We all understand that, compared with 30 years ago, there are now many homeowners on lowish incomes. That is partly to do with the ageing of the population, but partly to do with marital breakdown. It may have something to do with the adverse consequences of the policy of selling council homes. Some people who have become homeowners might have fallen on difficult times, although they still live in those dwellings.
There is no code here, but we are actively thinking about all those issues. Indeed, only next week, I am meeting with the homeowners steering group, which includes representatives from the industry, academics and others. We talk to the likes of Professor Steve Wilcox. I have noted the new Joseph Rowntree Foundation report on these matters from the professor in the department at York university where I used to work at the beginning of my career. I hope to be talking to him about these serious and challenging issues.
My hon. friend the Member for Regent's Park and Kensington, North is sceptical about our proposals, but she will not want to become a force of conservatism on housing benefit because that is not her instinct. She hoped that she was wrong about the issue. We can agree on that; I hope that she is wrong, too. London Members understand—my London accent is at least as good as that of the hon. Member for Edmonton (Mr. Love)—the current acute housing difficulties. If, on further reflection, it seems necessary to start another pilot scheme in inner London, we shall. I cannot promise that, but we have an open mind on the matter.
I understand the difficulty with housing benefit restrictions affecting the constituents of my hon. Friend the Member for Regent's Park and Kensington, North and many other people throughout the country. It is proper for there to be some restrictions. For example, the community would expect restrictions to be in place to deal with cases in which people are living in accommodation that is far too large or in which the landlord is asking an extortionate rent for the property. The community would expect us to have those restrictions in place. However, I understand those concerns.
My hon. Friend the Member for Regent's Park and Kensington, North might be surprised to learn that a smaller percentage of rents are restricted in London than in any other region. I shall send her the figures; they are 59 per cent. in London—I have to say that that surprises me—against an average of 67 per cent. However, the absolute level of restriction tends to be higher in London than elsewhere, which reflects the higher rent levels in the conurbation.
I was asked whether the so-called housing benefit top-ups would remain in place. Local authorities will still be able to use discretionary payments to top up people's 178WH benefits if they want to. There are no plans to abolish those additional payments, which will continue to be available in exceptionally difficult circumstances.
My hon. Friend the Member for Regent's Park and Kensington, North was generous enough to say that I could not be expected to reply to all the points raised during the debate, but she raised important points about the evaluation—I put a lot of store by it—such as local reference rents, the concept and nature of localities, questions of supply and homelessness. I promise that we will consider all those issues.
The hon. Member for South-West Bedfordshire focused particularly on fraud. I take the problem of fraud seriously. The verification framework was introduced, not without some controversy. The work of the benefit fraud inspectorate includes trying to drive up housing benefit standards and the encouragement of home visits so that local authorities can ensure that the claimants are who they say they are and that they have not sub-let the house. Those issues are important, and we take them very seriously.
The latest figures show that in 2001–02, local authorities successfully carried out 50 per cent. more prosecutions than in the previous year. Local authorities started making full use of formal cautions in 2001–02. I am encouraged by those figures. The hon. Gentleman mentioned, at the extreme, those local authorities that take more than 100 days to process claims; there are some like that, but we should not exaggerate. For the record, our quarterly monitoring figures show that only 20 authorities—that is too many—out of 408 take more than 100 days. However, the overall record is not good enough and we are trying to drive up standards.
I was asked whether, in extremis, the Government could take over the powers local authorities. We have powers to issue directions, and we have done so on a limited number of occasions. We order local authorities in specific ways and monitor them while they get their act together. In a different way, we had quite properly to be heavy-handed with Hackney and I am pleased to say that the authority has now seriously turned the corner in the right direction.
§ Malcolm Wicks
That was certainly part of it.
The Chairman of the Work and Pensions Committee, the hon. Member for Roxburgh and Berwickshire, raised a number of important points. The background to the debate is the sheer importance of housing and housing policy. Housing benefit alone cannot solve what are essentially housing and policy questions. The hon. Gentleman mentioned the importance of home owners, and I promise that our minds are not closed on that. He also asked whether we would still proceed if the pathfinder or pilot schemes went seriously wrong. No, we would not. We call them pathfinders because we are trying to find the exact detailed path to follow. I do not anticipate it but if something went seriously wrong, we would think again. The hon. Gentleman also mentioned devolution, which was interesting, as housing has been devolved and housing benefit comes under the United Kingdom social security system. We have to work through those matters; I had a meeting with the Scottish Minister responsible for housing on that very subject.
179WH My hon. Friend the Member for Edmonton spoke about the problem of underpayment or non-take-up. Our position is clear; we want every social security pound to be properly claimed and paid honestly and properly to all those who have a proper entitlement to it. Housing benefit take-up figures may not be good enough, but they are not too bad compared with other benefits. About 92 per cent. of people entitled to housing benefit receive it. I am not complacent about that, but it is at least moving rapidly in the right direction. My hon. Friend suggested that rent officer data could be out of 180WH date. I understand that, but rent officers use only recent market evidence; it is up to six months old. Reference rents are reviewed every month to ensure that they keep pace with changes in the market. I hope that I have reassured the hon. Gentleman.
§ Sir Nicholas Winterton (in the Chair)
We are grateful to you for what you have done, Minister, but we have run out of time.
§ It being ten minutes to Six o'clock, the motion for the Adjournment of the sitting lapsed, without Question put.