Housing Benefit (Local Housing Allowance and Information Sharing) Amendment Regulations 2007

rose to move, That an humble Address be presented to Her Majesty praying that the regulations laid before the House on 8 October be annulled (SI 2007/2868). The noble Lord said: My Lords, following the analogy that we heard when discussing the previous regulations, I make it clear that we are not trying to wave a red flag at these regulations, although we certainly wish to wave a few amber flags around, raise some questions and get some answers from the Minister. I make it clear that we welcome the evidence from the nine pathfinder areas that direct payments have risen to 84 per cent from an average of about 45 per cent before local housing allowance was introduced. We support the Government’s ambition to encourage financial responsibility and we recognise the evidence that financial inclusion is an important step towards finding employment and getting off benefits. However, we are not convinced that the local housing allowance policy will achieve these objectives when it is rolled out nationally and that proper provisions are yet in place to protect vulnerable individuals. The DWP Housing Benefit Local Housing Allowance Guidance Manual, for use by local authority housing benefit officers, states very clearly: "““You will not be expected to be pro-active in identifying someone as potentially an unlikely payer””." Vulnerable individuals are therefore responsible for presenting themselves as likely rent defaulters. How can that be right for mentally impaired people, illiterate people, those who cannot speak English or those who are tackling drinking or gambling addictions? Cases can be referred also by landlords, friends or families, but these people may after all have their own agendas. As part of the purpose of the reform is to remove the stigma associated with housing benefit, how will landlords know that tenants are receiving LHA and be in a position to raise the alarm about non-payment? Cases can be referred also by advice, welfare or social services. As my noble friend Lord Addington proposed in Committee, we should assume that these vulnerable groups will struggle to handle their financial affairs. Changes to direct payments should therefore take place only once an assessment has been made that they can cope. In its current form, payment to landlords and a case assessment are not automatically triggered until rent has fallen into eight weeks of arrears. That is a long time for money to be misspent and for relations between landlord and tenant perhaps to break down. In some pathfinder projects, benefit officers were keen to intervene early in cases where rent went unpaid, rarely waiting for the eight weeks of arrears before triggering an investigation. Is there not a danger that sharp landlords will spot that, by alleging rent arrears, they can get their income guaranteed? Evidence from the pathfinders suggests that there is a problem with the appeal system being clogged with allegations of arrears. Housing benefit officers are encouraged to become proactive only once direct payments have been suspended. The DWP guidance manual states: "““If you decide that direct payments are appropriate, you should set a diary date in order to conduct a review of your decision, not exceeding 12 months, to look again at the decision””." That review process is expected to be repeated annually. For the most vulnerable individuals, for whom direct payments will never be appropriate, that can represent an annual ordeal of uncertainty. For LHA to prove effective, a more reliable and proactive system is required to identify vulnerability. The objectives of the reform may be admirable, but the assumption that direct payment is suitable in all but the most extreme cases is wildly overoptimistic. Why do the Government assume that this change to LHA will represent a major lifting of the administrative burden? Some aspects of the reforms are genuinely simpler, such as calculating rent levels from local median estimates, for example, rather than the actual rent paid. Other parts are hideously complicated, as when HB officers are expected to take account of other income received by the tenant and the impact of other people living in the household, for example. The conclusion from the pathfinder evaluation is, I am bound to say, very carefully worded. It says: "““On balance the net effect administratively of the LHA … in the longer run … ignoring set up costs and some specific implementation difficulties, is probably positive, but it is unlikely that this constitutes a ‘substantial’ advantage to HB administration and delivery””." That is not exactly what I would call a glowing reference. We simply cannot make fundamental reforms of this flawed system on the cheap. Any reform of housing benefit delivery must be properly resourced and take account of large numbers of vulnerable cases requiring sensitive handling. The more complicated estimates of rent settlements, which in most cases increase income, such as the impact on others living in the house, will be overlooked—or there is a danger of it—if we do not put enough resources into reforms. The evidence by one HB officer to the pathfinder evaluation made the point well. He said: "““Dealing with claimant vulnerability has … frequently proved to be difficult, time-consuming and resource intensive, and significant efforts have had to be made to set up and maintain arrangements with other departments and agencies in order to adequately fulfil this function””." What assessment have the Government made of the extra burdens that they are placing on our already strained advice services? The LHA guidance manual instructs local authorities to refer cases to advice services for almost any problem. If direct payment has been suspended, advice services will work with individuals so that it can be restored. If vulnerability has been identified, local authorities are instructed to refer to advice services and, if clients require a bank account to begin direct payment, they are advised to call advice services—and advice services are one of the bodies expected to identify potential vulnerability. The burden laid on them hardly bears thinking about. The experience in pathfinder areas has been largely positive, to be fair, with local authorities and welfare and advice services working together so far. However, it is wishful thinking to presume that that will be repeated everywhere after national rollout. As Citizens Advice said in its submission to the evaluation, it is, "““worth noting that all the pathfinder authorities had made a choice to take part in this pilot, and were also well resourced and supported by DWP. They were therefore highly committed to making it work. These conditions will not be present in national roll out””." Indeed, wider Citizens Advice and Shelter evidence on delivery across the country, "““leads us to believe that it is very unlikely that this level of activity and commitment will voluntarily be undertaken by every HB department””." That is Citizens Advice—and if that organisation does not know what it is talking about, I do not know who does. We on these Benches have warned the Government time and again that advice services funding is hampered by ring-fencing of funds and reliance on a plethora of different forms of funding, in some cases almost in penny packets. We have had this same problem come up under the whole question of generic debt advice and pensions. Individuals who are most likely to struggle under the LHA provisions are also most likely to need additional advice, whether on debt, disability, welfare, employment or immigration. Can the Minister assure me that increased funding for advice services will incorporate provisions for general advice as well as specific housing benefit advice? This is a missed opportunity to reform the arbitrary unfairness experienced by people under the age of 25, as we discussed in debates on the Welfare Reform Bill. The room rates for single people, who are statistically far more likely to be in poverty already, and the most vulnerable to drugs and homelessness, are simply inadequate. The pathfinder evaluation reported that across the nation the rate at which the LHA is set is generally considered fair and adequate to meet housing needs, except the rate set for shared rooms, which is the rate to which under-25s are constrained. Citizens Advice found that 87 per cent of single-room rent claimants have faced a shortfall between housing benefit received and the rent levels that they pay. The research says that this inevitably, "““puts young people at greater risk of social and financial exclusion, making it more difficult for them to find and sustain employment””." How can it be right that local housing allowance fails to help young people at their most vulnerable when they are starting their careers and living away from their families? I beg to move. Moved, That an humble Address be presented to Her Majesty praying that the regulations laid before the House on 8 October be annulled (SI 2007/2868).—(Lord Oakeshott of Seagrove Bay.)