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Welfare Reform Bill

I, too, warmly welcome the Bill for all the reasons that other Members have mentioned. I am particularly concerned with part 2, which deals with housing benefit. We all know about the problems with the housing benefit system. It is incredibly complex: anyone who has seen the local authority manual for housing benefit will know just how complex. It is bureaucratic, as anyone who has had to endure it when trying to claim housing benefit will know, and that leads to significant delays in payment. Primarily, there are enormous shortfalls in the payment of housing benefit compared with the rents that people have to pay. For all those reasons, it has been a priority for the Government to reform the system. They introduced the local housing allowance pathfinders in 2003 and we are now beginning to get the results of those pilots. The pathfinders’ objectives were to: promote fairness, increase choice for the tenant, have greater transparency—tenants would know in advance the amount of local housing allowance that they were to receive—and increase personal responsibility. I shall revert to the latter shortly. The primary objective was bringing an end to the interminable waits for claims because of the bureaucratic nature of the system. Pathfinders have achieved most of the objectives and were especially successful in reducing the shortfalls between benefit and rent—from £24 to £17 on average. That is to be warmly welcomed. However, we need to consider several matters in our scrutiny of the Bill. All hon. Members who commented on housing benefit reforms mentioned direct payments to private tenants. I accept the objective of trying to increase personal responsibility. It is important if we are to assist people into employment, and the results of the pathfinders are encouraging. However, there are dark clouds on the horizon for the national roll-out of the scheme. Many people mentioned landlords’ resistance and expressed a view that that will increase the risk of non-payment and falling into arrears. I have some concerns that that will reduce the supply of accommodation for housing benefit tenants. However, my main worry is about vulnerable tenants. They include the elderly, people who are leaving supported housing or care and the statutory homeless. There is a whole group of vulnerable tenants. Although I accept that provision has been made for local authorities to pay the benefit directly to the landlord, the system does not contain adequate safeguards and we need to consider whether trained and qualified staff are required to make an assessment to ensure that those who are most exposed under a system of personal responsibility do not fall into significant arrears. One of the reasons for pathfinders’ success is the increased provision of financial advice to tenants in the pilot areas. Genuine difficulties undoubtedly arise when people have to set up bank accounts. Unfortunately, the Post Office card account is not available because, for some reason, the Post Office and local authorities do not have any agreements and people therefore have to set up bank accounts. There are major problems, with which people need help. For example, the European money-laundering regulations mean that people have to produce original documentation. That has proved a genuine difficulty in other circumstances. I was pleased that the Minister gave the reassurance today that the enhanced money advice facilities will be available when the scheme is rolled out nationwide. I want to consider the local housing allowance. Under the Bill, the rent service will set the local housing allowance and decide the broad rental market areas that that amount of local housing allowance will cover. Again, the pathfinder experience has been good. I welcome that and congratulate the Government because there has been a substantial reduction—from 58 per cent. to 39 per cent.—in the shortfalls that people experienced in those broad rental market areas. However, there have been significant variations, and several hon. Members voiced genuine concerns about that. For example, in Leeds, the scheme almost halved the number of people with a gap between their rent and housing benefit, but Conwy experienced only a small reduction. We need to look more closely at that experience, to determine how we can learn from it. There are also issues relating to transparency and to the boundaries of the broad rental market areas. I take the point made earlier about the significant variation in rental levels across Greater London, and we need to ensure that we get those boundaries right if we are going to make a success of the local housing allowance. The shared room rate restriction will apply to childless claimants under 25 years of age. I will not go into that matter in detail, but I have raised an Adjournment debate on the subject. I welcome the extension of the shared room rate introduced by the Government, and the subsequent reduction in shortfalls experienced by young people in the pathfinder areas. However, there is still a major difference between young people, who experience an average shortfall of £35, and others, whose average shortfall was just over £16. We need to look into this matter, and I hope that Ministers will be sympathetic to a debate in Committee on the best way forward for the shared room rate. I should like to make a brief plea in relation to interim payments, which have presented a particular problem in the housing benefit system. It does not look as though any changes will be made to the present arrangements, and I assume that that is because it has been accepted that the delays inherent in the existing system will not arise in the new system. However, we ought not to take that on trust. We need to strengthen the interim payments structure to ensure that people will be protected if their housing benefit is not paid, rather than finding themselves in arrears and threatened with eviction. Finally, I want to say a brief word on the housing benefit sanction to tackle antisocial behaviour. I am sympathetic in principle to what the Government are trying to achieve. We have to crack down on antisocial behaviour and I am interested in the rehabilitation support that has been suggested. However, we must ventilate some of these arguments in Committee to ensure that that support is real. We must also consider the implications for families and, especially, young children who are evicted and who have action taken against them. I am certainly sympathetic to the idea of establishing pilots to enable us to look carefully at this issue, because that is what is needed, and I hope that we will be able to improve the system to ensure that antisocial behaviour is dealt with. I strongly welcome the Bill overall, and I particularly welcome the provisions for setting up the local housing allowance. The Bill will make a significant difference to people at the margins of our society, and I hope that it will not only encourage them to get back into work but ensure that they are looked after with a proper safety net while they are in the transition period.