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Baroness Hollis of Heigham: Amendment No. 105 would effectively mean that the current wording of the Social Security Contributions and Benefits Act 1992, as it refers to the Social Fund, would be retained.

In order to explain why we do not support the amendment, it might be helpful to describe the purpose of Clause 68, and thus conjoin, as the noble Earl has done, both the clause stand part discussion and debate on the amendment.

Clause 68 defines in primary legislation for the first time the three separate elements of the discretionary Social Fund: namely, budgeting loans, community care grants and crisis loans. This is a fundamental change from the current legislation, which does not distinguish between the three different types of discretionary payments which the Social Fund provides.

Our purpose in doing this is to enable the Social Fund to be more straightforward for applicants, and for those who deal with their applications. I am sure that many Members of the Committee and the noble Earl will be aware of the difficulties experienced at present by claimants and Benefits Agency staff in relation to the Social Fund.

Under current legislation, each application has to be treated as if it were a request for assistance from any one of the three parts of the discretionary Social Fund. This means that each applicant has to complete a lengthy application form and provide enough information for staff to consider all three types of payment. Yet much of the information would be irrelevant. As a result, applicants find the Social Fund scheme confusing, unclear and time-consuming.

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We believe that Clause 68 will improve the Social Fund. By defining it into three separate, parallel funds, we make it possible for people to apply for, and give only the information relevant to, the particular type of payment they are seeking. We shall be able to introduce simple and specific application forms. We will make improved information freely available through forms and leaflets on each type of discretionary payment. Those arrangements will enable people to identify and apply first time for the specific payment which best fits their particular need and circumstances.

The noble Earl has raised questions as to whether people will know which to apply for--particularly, I suspect, people who may have difficulty in understanding or coping with applications as such. Perhaps I may give an example. A single person with literacy or learning difficulties wishes to apply to the Social Fund for replacement bedding but is not sure how to go about it and has difficulty in completing forms. If he or she, or someone on their behalf, contacts the local benefits office, they will be able to obtain advice about the Social Fund from Social Fund staff, either by telephone or by calling at the office. They will also be able to receive help with completion of the appropriate application form. In the event that a person is unable to attend the office due to a medical condition, it will be possible for a visiting officer to attend the applicant's home.

I have myself pressed this point. I understand the fear that has been expressed that claimants will be forced down the route of budgeting loan applications rather than being encouraged to apply for grants where those may be more appropriate; and that they will no longer be able to have loans converted to grants following the review.

These issues also arose during the course of the consultation exercise that we conducted. For example, they were raised by CPAG. We have considered them very carefully. Of course we are concerned to ensure that, where someone's circumstances warrant the award of a grant, they should receive one. But we think the way to improve arrangements is to make more explicit the circumstances for which grants or loans could be paid, and that is exactly what our simpler forms and improved information will do. We shall be consulting welfare rights groups, such as CPAG, NACAB and other interested organisations, on the content and design of the new forms and leaflets.

Another concern expressed was whether people would need to submit all three applications at once, just to be on the safe side. No, that will not be the case. Anyone in doubt can apply to Benefits Agency staff to find out which type of application seems most appropriate. I assure your Lordships that the advice will be genuine and objective, and that there will be no question of staff being instructed to press people towards loans rather than grants. If a grant appears appropriate, that is the advice that will be given. Indeed, where staff are dealing with a budgeting loan application, but know from their previous knowledge of the applicant that a grant may be more appropriate, they will be able to invite a grant application.

To reinforce the noble Earl's point, we will be expanding guidance to Social Fund staff to emphasise the importance of taking into account a particular situation--

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for instance, someone may apply for a budgeting loan but be refused it because he or she is too poor to pay it back, and that may therefore be a contributory factor in putting the family under exceptional pressure and thereby qualifying them for a community care grant. Thus I hope that, by expanding the guidance to staff, we will also ensure that they, too, have a responsibility to ensure that they seek to help claimants in that way.

Let me briefly give an example of when a loan or grant is appropriate. Let us take a lone parent with two young children who applies for help with bed and bedding for the elder child. The applicant states that the child started wetting the bed several months ago; that bed and bedding are now ruined; that the child is currently having to share the applicant's bed. The applicant also states that the child has developed behavioural problems due to bullying at school and the relevant authorities are involved in trying to resolve the issue. In such circumstances, a community care grant is likely to be appropriate due to it being accepted that the particular circumstances have placed the family under exceptional pressure. However, if the problems relating to the child did not exist and it was merely a case of replacing the bed and bedding due to routine wear, a budgeting loan would be appropriate, as it gives an interest-free source of funding to the parent.

I could give other examples, but it is late and I do not wish to delay the Committee. This clause is crucial to the introduction of the faster method of decision-making for budgeting loans contained in Clause 69. This clause will allow us to improve consistency of treatment, clarity of decision and efficiency in the administration of budgeting loan applications. It reflects our aim of modernising the benefit system through better use of technology.

It will mean that, when it comes to determining the budgeting loan, the considerations that will apply will be the length of time someone has been on benefit and the size of their family. This will allow lone parents in particular who have been on benefit for a long time and therefore have problems of dealing with the wear and tear that affects their goods to be able to get the budgeting loan without any of the questioning and cross-questioning that currently occurs and which may delay or defer their claim.

Our purpose in bringing forward Clause 68 is to enable the discretionary Social Fund application and decision procedure to be simplified for claimants, staff and taxpayers alike. I hope that in that context the noble Earl will feel able to withdraw the amendment.

I now turn to the government amendments with which this amendment has been brigaded. The purpose of Clause 73 of the Bill is to allow discretionary Social Fund payments to be covered by the existing overpayments and adjustments of benefit legislation contained in Section 71 of the Social Security Administration Act 1992. This is the legislation that gives the Secretary of State the power to recover overpayments of benefit where it has been determined that they were obtained by misrepresentation or the failure to disclose material facts. The method and terms of recovery will be the same as those for recovering overpayments of benefit.

Amendments Nos. 105B, 105C and 105E to Clause 38 have been brought forward to make explicit the procedure for dealing with discretionary Social Fund overpayments.

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As amended, Clause 38 will allow "appropriate officers" in the Benefits Agency to review a discretionary Social Fund determination on the grounds that the person who applied for the payment misrepresented or failed to disclose a material fact. This will enable the officer to determine whether an overpayment has occurred as a result of the customer's misrepresentation or failure to disclose information and, if so, the amount overpaid. The Secretary of State can then recover the amount overpaid, under provisions introduced in Clause 73.

When reviews of Social Fund determinations under Part VIII of the Contributions and Benefits Act are carried out, the current procedure is that the whole of the award is looked at again. However, overpayment reviews are a special case. The "appropriate officer" needs only to consider questions arising as to whether a person obtained a discretionary Social Fund payment by misrepresentation or failure to disclose information. Amendment No. 105C ensures that the "appropriate officer" need only consider circumstances which relate to an overpayment determination. Amendment No. 105E requires the "appropriate officer" to act in accordance with any general directions and guidance issued by the Secretary of State when dealing with overpayments. The amendments also apply to reviews on these grounds by Social Fund inspectors.

There are other, related amendments which I fear I have to explain to the House in order that, given Pepper v. Hart, the understanding outside is complete.

Amendments Nos. 105D, 105F and 105G are consequential technical changes. They ensure that "appropriate officers" and Social Fund inspectors only follow the limited review procedures when reviewing determinations on the grounds that the applicant misrepresented or failed to disclose information. I should like to assure the Committee that nothing in these amendments affects applicants' rights to apply for a review, either of the original determination in their case or of the determination that there has been an overpayment. They have a right of review, first, to a second "appropriate officer" in the Benefits Agency and then, if they wish, a further review to a Social Fund inspector at the Independent Review Service. These are technical but important amendments which enable the powers in Clause 73 to be exercised effectively.

I turn penultimately to Amendments Nos. 105H and 105J. Amendment No. 105H will limit the effect of Clause 73 to overpayments relating to payments made on or after the day on which the clause is commenced. This will make clear the date from which the provisions in Clause 73 will apply. It will ensure that Clause 73 does not apply to all discretionary Social Fund overpayments since 1988, when payments from the fund began. Such retrospection would be administratively difficult and almost impossible to undertake.

Amendment No. 105J is a technical amendment which tidies up the legislation. It removes subsection (2) of Clause 73, as this provision is now included in the schedule before Schedule 6, which contains other transitory provisions.

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The Committee may wish to cross-question me on these amendments. Many of them are technical. I commend the amendments to the Committee.

10.15 p.m.

Earl Russell: I should like to thank the Minister warmly for the great lucidity with which she replied to the amendment and introduced her own amendments. It seems that, as she gets more tired, she becomes more lucid. However, I will promise not to drive her too far down that road. I have no objection to any of the government amendments. I welcome several of the things the Minister said in reply to my own. I welcome the point about guidance, drawing attention to the possibility of grants for those who are too poor to get loans. That I welcome very warmly. I also welcome what she said about the length of time people are on benefit. That is a point which could be worth further exploration because it is an extremely interesting one. I am afraid overall though that her answer did not convince me that the Bill as at present drafted has got it right.

I hear a bell--we have alarms and excursions! But I hope we have no need for an excursion, not for a few minutes anyway.

I was reminded many times while I was listening to the Minister just now of what I had said about the excessive pursuit of tidiness. It seems to me that the Bill, with its attempts to classify applications to the Social Fund under three heads, is an attempt to run an orderly filing system. An orderly filing system and an orderly real world do not always go together.

There are two general areas of objection that I have to the Bill as it stands, and one is that it tends to assume a great deal of knowledge in the applicants. A great many people do not even know that it is possible to obtain grants under the Social Fund.

Secondly, it has too much faith in the ability of claimants to get clear answers by ringing up or going to the office and asking. The Minister had faith in the possibility of telephoning, which would have been better justified had the free line not been closed down last summer. Telephoning benefit offices is getting a little difficult. I think there would have been a better case for this ability to rely on the clerks if we had not had in place the change programme, which I understand is now known by the curious euphemism of the "modern services programme". That illustrates the derogatory possibilities in the word "modern". That, as I understand it, is doing far more damage to the administration of benefit offices than most of us are yet aware of. It is something of which we are going to hear a great deal more.

For these among other reasons, I am still not satisfied. I hope to return to this at a later stage of the Bill, but for the time being and before the Minister becomes any more lucid, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Clause 68 agreed to.

Clause 69 agreed to.

        House adjourned at twenty-three minutes past ten o'clock.

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