Select Committee on Social Security Minutes of Evidence

Examination of Witnesses (Questions 340 - 359)



Mr Thomas

  340. I wanted to ask some questions on the regulated fund leading on from the Chairman's remarks about the winter fuel payments. You would accept, would you, that fuel poverty is not confined to those of pensionable age?
  (Angela Eagle) Yes. The interdepartmental committee that we had, found two major causes of it: one was low income—unsurprisingly; the other was under-occupation, people living in houses that are much too big for them. Generally they tend to be older people whose families have upped and gone and left them in a large property which they then, on their incomes, cannot afford to heat. The two major causes, therefore, are under-occupation and lack of income.

  341. And disabled people on low income as well?
  (Angela Eagle) Yes.

  342. In light of that, do you think there is a case for extending winter fuel payments to those other categories that we have mentioned, the people who are suffering fuel poverty?
  (Angela Eagle) Well, the issue of winter fuel payments and why they were created was really to aim at not only at the fuel poor but at older people. We have estimated—and I know that there is a campaign to extend winter fuel payments to those who currently effectively get cold weather payments, that is the disabled and those with children under 5—that that will cost an extra £3 million[1] a year. If we look at the disabled, there are extra provisions in disabled benefits which are meant to take account of the issues of having to have warmer homes or pay more because of the condition, and I do not think at the moment we are contemplating an extension.

  343. But you would concede there is a case for it?
  (Angela Eagle) Well, I would say that the income-related benefits and the disability benefits already take account of the extra fuel costs of people's conditions. There is always a case to be made for everything: you could extend winter fuel payments to those who currently get cold weather payments but it would cost substantial amounts of money and thus far, to my knowledge, the government is not contemplating doing it.

  344. But it is costing £1.7 billion at the moment, is it not, to provide winter fuel payments on a non means-tested basis, even to very wealthy pensioners?
  (Angela Eagle) We always have this argument when we introduce help that is particularly focused such as the Minimum Income Guarantee on those with low incomes. We get accused of extending means-testing and then, when we introduce a universal payment to everyone in a particular category, we get accused of not focusing it properly. We like to do a mixture of both. I think the UK welfare system has always had features of this mixture. We have had universal benefits such as Child Benefit going to people, and we have also had more focused means-tested benefits such as the Minimum Income Guarantee, which we have introduced, and the winter fuel payment which is universal. We also have contributory benefits so we do have this mix in the UK system.

  345. On winter fuel payments, would it be a distortion of the evidence you gave earlier on the role of winter fuel payments within the Social Fund for me to say this: that really it is a convenient slot, basically, in which to put this rather substantial payment? It cannot conveniently go anywhere else?
  (Angela Eagle) The Social Fund is good at making one-off payments of entitlement—be it cold weather payments, winter fuel payments, funeral payments, et cetera. The rest of the social security system tends to be much more tied up in making on-going weekly payments and, when we were faced with an administrative decision as to where to put it, it seemed to fit most obviously into the regulated side of the Social Fund. Again, it does not interfere or reduce the amount of money available in the discretionary Social Fund; the two are entirely separate.

  346. Dealing with funeral payments, would it surprise you to learn that we have had quite a lot of evidence expressing very real concern, not only at the big increase in the refusal rate for funeral payments but also the very modest level of that funeral grant currently standing at £600 leaving a shortfall, more often than not?
  (Angela Eagle) It would not surprise me that you have had those representations. The funeral payments end of the Social Fund is one of the most difficult for anybody to deal with because, clearly, people are in a bereaved and difficult situation and the regulations are quite tightly drawn. The changes were made by the previous government and put into effect in April 1997 and there was a clampdown on the numbers of people who were eligible. This was I understand because of a large increase in expenditure in this area. The idea of the funeral payment system is to allow for those people who are responsible for organising a funeral of a loved one and, therefore, related in particular ways to be able to afford a simple and respectful funeral within reasonable cost. The £600 is kept under review: we do have contact with the funeral industry, I think they call it, to look at costs and see how we can be certain that simple respectful funerals can be afforded.

  347. So are you saying that you do, in fact, carry out some research in a systematic way to ensure that this payment is in pace with actual costs?
  (Angela Eagle) We do keep the level of payments under review and officials from the department are in contact with the funeral industry to talk about the kinds of ceremonies and services that can be purchased for that amount of money.

  348. Our evidence is that these funeral payments are not adequate, frankly. How do you respond to that?
  (Angela Eagle) Well, I think it is a difficult area. One person's idea of a simple and respectful funeral is not everybody's, and I think naturally when a loved one dies people want to do their best for them in the final send-off. We do our best to come up with compromises in this area and we keep that amount of money under review and will continue to do so. As I say, I find it one of the most difficult areas.

  349. What has happened is there has been a tightening up of the eligibility criteria and some people would say that now that it has become a lot more difficult to get it, the very least you can do is ensure that it is adequate once you have it?
  (Angela Eagle) There are always different views of what adequacy is and what a simple and respectful funeral is and what should be allowed and what should not. The rules on funeral payments ensure that, whatever method is used—be it burial or cremation—all of those fees are properly paid and accounted for, and the £600 is on top of the fees to pay for other aspects of the ceremony.

  350. Perhaps one of your officials could answer this technical question: when was the funeral payment last increased?
  (Angela Eagle) I think it was 1997.
  (Mr Evans) Yes.
  (Angela Eagle) It went up £100 in April 1997.

  351. Why is it not possible to increase it or look at it every year?
  (Angela Eagle) We do look at it every year but it is not indexed to any kind of indicator.

  352. Could I ask you about overseas funerals? As you know, the funeral grant is available where the deceased is buried in the UK and sometimes in Europe, as we understand it?
  (Angela Eagle) That is the result of the European Economic Area Treaties, as I understand it.

  353. Do you think that discriminates against people of African or Indian origin who may wish to bury their deceased relatives in their country of origin?
  (Angela Eagle) The idea of the funeral payment was that it should allow there to be a simple and respectful funeral for UK citizens in the UK. There was a slight extension because of treaty requirements in the European economic area but it would be a big extension of the system if we were to say that we were going to begin to pay for burials abroad.

  354. Would you look again at the possibility of providing a contribution towards the costs of transportation to other countries?
  (Angela Eagle) I am not aware that we have ever looked at it. I am not aware we have ever been asked, off the top of my head, to look at costs of transportation but, as I said, it would be a significant change to the system if we were to extend it worldwide. The idea of a funeral payment system is that it purchases simple, respectful funerals for UK citizens in the UK, not in a place of their choice in the world.

  355. We have had evidence that there is grave concern about this. Are you saying you will not look at it again or you will revisit the subject?
  (Angela Eagle) We keep the whole system under review but I am giving you a view of mine that it would be an extension of the scheme to say that the funeral payment system could be used to purchase a funeral anywhere in the world.

Mr Dismore

  356. We have had quite a lot of evidence that there is effectively a post code lottery and also a calendar lottery in the way that an application for a discretionary fund Community Care Grant is likely to be treated—a post code lottery in that some districts are under more pressure than others, and a calendar lottery in that, depending on the time of year, the budget may or may not have been spent so the same applications could receive very widely differing treatment in different parts of the country according to the time of year. Is that fair, and what can be done about it?
  (Angela Eagle) Firstly, the Community Care Grant scheme is discretionary as, in fact, is the Budgeting Loan scheme so I do not think you are going to be able to achieve total consistency geographically. This is a discretionary scheme: not an entitlement-based scheme. With entitlement schemes you can guarantee similar treatment everywhere at all times of the year and in every geographical area. Discretionary schemes do not give you that guarantee. With the changes to the Budgeting Loan scheme, we are beginning now in the way in which we distribute the money to districts and we make in-year allocations to try to get much more consistency across the country with respect to the maximum amounts that are available for loans. For Community Care Grants, the consistency that we can achieve is partially to do with how we can budget across a district, and perhaps Stephen might want to say something about that. If we can predict expenditure well, then we can get more consistency across the year. If there are sudden demands that have been unpredictable, in some circumstances there is contingency money available to try to maintain some consistency; in others it is harder. This is a cash-limited scheme so clearly, if there is pressure on the limits, you will get different decisions at that time than if there is not a pressure on the limits. So what we try to do to avoid the phenomenon that you are talking about is to budget across the year and predict what demand is likely to be to keep a fairly close eye on how it is going by tracking it across time so we can make in-year allocations in budgeting loans, and try to guess properly on a community care basis.

  357. Would you accept the basic premise that the simple concept of fairness really does demand that there is more even approach to this throughout the country?
  (Angela Eagle) We do our best to make it as even as possible but, with a discretionary scheme, with hundreds of independent decision-makers who are all making separate decisions in separate areas of the country, you cannot get total consistency. If you want total consistency, you have to have a system of grants and entitlements that are set down in law so that they can be administered in that manner. If you have a discretionary scheme, you are always going to have slightly different results.

  358. Looking at that further, obviously the department issues guidance as to prioritisation and the Independent Review Service have told us that they have identified 24 district offices where they have effectively invented a new category which goes beyond the guidance, which is `the highest of the high priorities' which is what they are administering. There is substantial other evidence from the IRS that some decisions on particular requests are given medium priority when, in fact, they are high priority according to the criteria in the guidance. What they say to us is this: "Inspectors regularly see cases that are deemed not to meet the qualifying conditions of Direction 4 when clearly the conditions are met; or needs that are given medium or low priority when the need is high priority. Although not conclusive, the indications are that it is pressures on the budget that drives such decisions. In cases of this type Inspectors will substitute a decision and award the high priority needs".[2] Do you not think really that that needs to be looked at and that you should give a much clearer instruction to the district officers, first of all, not to invent new categories which is effectively subdividing high priority into even higher priority and, at the same time, trying to make sure that people do process the scheme fairly. It seems rather peculiar to have these different bands of priority when, in fact, all these people are high priority anyway?
  (Angela Eagle) There are several issues there and I will try and disentangle them and deal with them as best I can. Firstly, the rules say that at a set time the highest priority in a particular area has to be met; that is what decision-makers have to do but they cannot exceed their budgets either so clearly, if a budget is tight, the priorities that will be met will be the more obviously urgent ones. If there is more money or more leeway in the budget, then they are able to give grants—we are talking about Community Care Grants—to people who in tighter times might not qualify although their circumstances were exactly the same. That is the unavoidable element of having a fixed budget. I cannot think of a way that you could have a fixed budget and not have that phenomenon. Secondly, we value the IRS' comments, judgments and experience of how the system is working very greatly and we have meetings with them and they raise these issues with us, but they do only see one per cent of the cases that the Social Fund handles and, by definition, the one per cent that they see are those people who have disputed a decision. I think you need to bear that in mind, therefore, as you evaluate the experiences that they bring to you. There is no such category as "highest of the high" in any of the directions or guidelines but I can see how that might be a phrase that would enter somebody's language if they know that, by the rules, they have to ensure that if there is a range of needs in front of them they have to make sure that the highest ones are paid first. If the budget then is tight you can see that how you might define "highest" would be different than at a time when you could give grants to a broader range of people. I have thought about this, and I do not see how you can avoid it if you have a cap and a cash limit.

  359. So when the IRS give us a list of the district officers who, as far as they are aware, have given guidance to decision-makers that the grant can only be given to the highest of highest priorities, that is not correct?
  (Angela Eagle) It depends. What does "highest of high" mean? The guidelines say that the highest priorities at a set time have to be met. In other words, if you have a cash limit and you have three low priority grant applications and one higher, you have to grant the higher priority one first and then see what resources you have left to deal with the others. That is what happens in the system everywhere. Whatever phrase you use to define it, that is the order in which the Community Care Grant has to be dispensed.

1   Note by Witness: This should be £300 million. Back

2   See Ev. p.40. Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 4 April 2001