Welfare Reform Bill

My Lords, I am delighted to have the opportunity to discuss the amendment further this evening. Clause 36 provides powers for prescribing the manner in which housing benefit is paid to all types of tenants. We require that power to allow us to specify the payment method for certain categories of social housing. Before I respond to the amendment, I will clarify for the House once again what the Government’s intentions are in the social sector. It is a priority for the Governmentto build financial inclusion and to encourage individuals, where possible, to take responsibility for their own affairs. One way of achieving that would be to enable customers in the social sector to take responsibility for paying their own rent. However, we realise that this may be difficult for some customers. So, as we have publicly committed, we will proceed cautiously with any reform of the social sector, ensuring that proper safeguards and support mechanisms are in place. In the private sector, we believe that a great many customers are ready to start managing their own payments, which is why one of the key features of the local housing allowance is that, in most cases, housing benefit will be paid to the customer. However, we will not force that responsibility on to those customers who are unable to exercise it. There will be safeguards to protect those customers, so that local authorities can determine whether the housing benefit should be paid to the landlord. This amendment would enable regulations to be made that would require local authorities to put every new customer through a long and potentially complex assessment procedure. The amount of information that all customers would have to provide would greatly increase. Much of the information would have to be of a private and confidential nature. The administrative burden on local authorities would increase and could lead to slower processing times and to all customers having to wait longer for their benefit. Local authorities may also require information from a greater number of sources, thus increasing information sharing between different organisations. I reassure the noble Lord that the amendment is not necessary. Currently, if a local authority receives notice that a customer might be vulnerable, it is obliged to investigate. The notice may be provided by the customer, the customer’s family, welfare organisations or healthcare professionals. The local authority will also pay housing benefit to the landlord if a customer is eight weeks in arrears or more and if that is in the customer’s best interest. That helps to mitigate the risk of eviction, about which the noble Lord, Lord Skelmersdale, is so concerned, as it aligns with the point at which a landlord would be able to file for eviction of a customer on rent arrears grounds. In many cases, local authorities will act much earlier than that, so that if customers experience problems they will intervene. In addition, each local authority will have its own procedure to identify those customers who cannot manage their own payments, without having to investigate claims. Using the evaluation of the local housing allowance pathfinders and comments from the welfare organisations working with us, we will provide comprehensive guidance to local authorities. Our experience from the pathfinders has shown that the procedures in place to identify vulnerable customers are working extremely well. I hope that noble Lords will take comfort from that. Only 4 per cent of pathfinder customers have their housing benefit paid directly to the landlord because they have fallen eight weeks into arrears. A further 12 per cent have it paid to the landlord because the local authority has identified that they might struggle to manage their financial affairs. The remaining 84 per cent of customers are receiving and successfully managing their own payments. Indeed customers in pathfinder areas were more likely to report being up to date with their rent payments than those in the control areas with which the pathfinders were compared. I know that noble Lords are concerned about ensuring that we have a proper variation in conditions for control areas and a wide variation in locations that are used for pilots. That is an extremely important point. The processes and policies in place are working, and there is nothing to suggest that they will not do so in future. Therefore, I urge the noble Lord to withdraw the amendment.