[Sir David Amess in the Chair]
I beg to move,
That this House has considered funeral poverty.
It is a pleasure to serve under your chairmanship once again, Sir David. Whenever I come to this Chamber, you seem to be in the Chair, so it is nice to see the tradition maintained. It is also a pleasure to speak on this issue, which perhaps does not always get the attention that it deserves. Everyone will die at some point, unfortunately. It is an issue that we do not discuss often as a community or even within families, so it is worth bringing it to the Chamber today.
I am grateful to the many industry bodies, charities and campaign groups that have helped in drawing together the information for the debate. It has become clear in recent weeks that this is an issue of growing public interest and it is worth dwelling on why that might be. The hon. Member for South Shields (Mrs Lewell-Buck) had her ten-minute rule Bill just before the election. We have seen the National Association of Funeral Directors campaigning on this issue and Quaker Social Action innovating in how it is seeking to drive down the cost of funerals. I have discussed the issue with my right hon. Friend the Secretary of State on numerous occasions over the past five years and with Steve Webb, my hon. Friend the Minister’s predecessor in the Department. We have also seen Royal London and SunLife—two of the major insurers—issuing regular reports over the past decade indicating the extent to which funeral costs have gone up over the years.
I never thought that I would find myself saying this, but the Scottish National party may have shown us the way forward: just last Friday it published the Burial and Cremation (Scotland) Bill, which looks at many of these issues. Most interestingly of all, it includes a commitment to review funeral poverty in Scotland. I welcome that and would welcome a commitment from the Minister to look carefully at that Bill—the funeral poverty issues in particular—to see whether anything can be learned. Some of the issues would be a Ministry of Justice responsibility here in England.
When I do one of these debates, I meet all the relevant bodies, read all the relevant reports and gather far more information than I can possibly deploy in the hour at my disposal—not that I have the full hour at my disposal. I will do my best to enable everyone to speak. I recognise that the hour at the end of the day is a new format for this Chamber and I hope that we can accommodate everyone.
It is worth being quite specific. There is a full debate to be had about the rising cost of funerals, but that is not the topic of my debate today. I want to focus specifically on that group of people for whom the cost of a funeral is over and above what they can afford. Many of the trends, I agree, do overlap. Scarcity of burial space drives up costs, for example, but I want to focus in particular on those in financial need.
Does my hon. Friend agree that in places such as Redditch county, funeral poverty is a massive problem for people? Having lost both my parents, I know that the stress of needing to organise a funeral is bad enough without having to worry about the cost of it.
My hon. Friend is right. None of us really wants to think about what we will do when the reality presents itself to us and we have a funeral to organise. Not only do we have to process the emotions that we inevitably feel, but there is an entire series of practical steps that have to be gone through that we are probably not best placed to go through at that time. We are not acting as the informed consumer that we might be if we were going down the supermarket to make a normal purchase. This cannot be the normal purchase that we might like it to be.
The experience can be overwhelming at times and many people require a degree of practical help in trying to navigate the process. For some, yes, the need to organise might be a welcome distraction from the process of grieving, but I do not think it can ever be accepted that these things will just happen of their own accord. As Marie Curie points out, there can be quite an adverse consequence for the grieving process if the result is not the right one in the end. Above all else, the cost of a funeral can be a massive shock to the budgets of families who perhaps do not start off with a significant amount of resilience in the first place.
The fact that I organised today’s debate seems to have provoked a number of insurance companies into rushing out annual reports a few weeks early. Both Royal London and SunLife had to get a move on down the printers, and Royal London’s report, which came out on 5 October, showed once again that funeral costs continue to rise. It now estimates that about one in 10 people are struggling to meet the cost of a funeral. The other provider, SunLife, in its “Cost of Dying” report, which came out even more recently—this weekend—found that the cost of a basic funeral had risen to £3,693, with a further £2,000 spent on discretionary items such as extra limousines, venue hire and catering. That is a sizeable sum, which, if not met out of the deceased’s estate, will place a substantial burden on the family if they have few savings yet need to find the money for a deposit even to start the process. No wonder research shows that credit cards and funerals are two of the items that we most commonly find together.
For those whose financial resilience is low to begin with, the phenomenon of funeral poverty almost has a sad inevitability about it. It leaves people facing a scale of debt and a suddenness that they simply cannot be expected to prepare for, so I think that it is right and proper that we look today in particular at what the Government’s tools are for trying to deal with the problem.
The main one is the social fund funeral payment, which has been in existence since 1988. It combines an uncapped commitment to “necessary” costs such as burial and cremation fees, along with a capped amount of £700 to cover such items as the coffin, the memorial and funeral directors’ fee. With an average award of £1,347, it undoubtedly makes an important contribution to the costs of a funeral for those who receive a qualifying benefit and where no other family member can meet the bill.
It should be made clear that the benefit is designed not to pay the full amount of the funeral costs, but to make a contribution. That is the policy objective. It is worth assessing whether the benefit functions as it should against that policy objective. I am sure that we could all express views on whether it should achieve other objectives, and there might well be a debate to be had on that matter, but I want to assess the benefit against that particular objective to start with.
It is worth noting that within the average figures, there is a broad discrepancy. The discrepancy between the cost of a burial versus a cremation leads to some perverse outcomes. The amount that an individual gets will depend on which they opt for and where they are in the country. There is no inherent, internal logic in the amount that an individual will get when they are faced with meeting these bills.
The capping of additional costs at £700 has been controversial for quite a while. I first got involved with this topic when the NAFD came to see me about it. I understand why it is a complex issue. Some suggest that over time the value of the £700 has been eroded. Mathematically, that cannot be argued against. Inflation means that if we were paying that £700 now, based on the amount that it started out at when capping first took place in 2003, it would be slightly over £1,000. Perhaps the best way to think about this is not to argue whether it is too high or too low, but to look at the costs that it is designed to meet.
We have a very poor understanding of where the money from the social fund funeral payment is actually going. We understand where the capped amount—the £700—goes. It does not meet all the additional costs, many of which are discretionary and at the choice of the consumer, but the Government—rightly, in my view—seek to meet all the necessary costs, which relate to the legal requirement regarding the disposal of someone’s remains. It is right and proper that the Government should meet all those costs, and they recognise that. There can be no model in which all the necessary costs are not met.
However, despite five years of trying to achieve that—without any luck—it is very hard to track through the Department for Work and Pensions where those necessary costs are going. Different local authorities charge different fees for cremation and burial. There is no consistency across the country. There are some perverse factors, such as the growth of private crematoriums driving up local authority crematorium costs as well. I have asked on a number of occasions, as other hon. Members have, for more information on what the money is going on. It makes it very difficult, I think, for both the Department and interested observers to make an accurate assessment of whether the benefit is performing adequately and reaching its policy objective. We need to understand what the cost drivers are, and it is important that the Government try to work out what more they can do to improve the data collection. I would be interested to know what steps the Minister thinks that he can take to improve the data collection to allow that analysis to take place.
There are various anecdotal reports that not every council runs its crematoria on a cost-recovery basis. If some are seeking to cross-subsidise, that ought to be at least transparent to the Government; that might help them to understand how the overall amount spent remains roughly the same at some £46 million each succeeding year, while the proportion spent on necessary costs continues to fluctuate. The Government need a better understanding of what is going on.
Many have argued that a relatively straightforward step in the right direction would be to index-link the capped payment—the £700—to inflation. When I put that to the Minister’s predecessor, Mr Webb, he replied:
“One risk of index-linking these payments is that prices would rise and recipients would be no better off”.
I have interrogated that statement from as many logical positions as I possibly can, and I still cannot make head or tail of it. I do not think it relates to the reality faced by funeral directors or consumers. Although I recognise that there is a need for much greater transparency on the part of funeral directors when it comes to offering itemised estimates without having been asked to do so, to my mind a £700 cap leads to some perverse outcomes. Increasing numbers of funeral directors carry a substantial amount of debt because they have to act as debt managers, and that leads some of the larger chains to turn people away when it becomes clear that they may require some social fund payments to pay for the funeral.
I ask the Government once again to look at index-linking—not merely as a spending commitment, but to help them better understand the cost drivers from local Government and to use whatever savings they achieve to pay for the index-linking that would allow funeral directors to cover more of their costs. That would also give the Government an opportunity to look at saying to funeral directors, “Right. We have index-linked, so now let us look at how the industry can improve its delivery of services and act in consumers’ interests to get a fair outcome.”
I ask the Government to consider balancing the need to fund necessary costs with the need to ensure that those costs are constrained on the part of local councils—there can be no blank cheques—and that additional costs are not squeezed merely to ensure the funding of necessary costs, of which we do not have a full and proper understanding. There is a danger that, as debate on and public interest in the subject grow, we may get some perverse demands for change that will not lead to any improvement in the experience of the bereaved. We need robust, coherent data to judge the right way forward, and at the moment we do not have that information. Many observers in the sector strongly believe that to be true.
We also need to look at how the benefit works. From my time on the Work and Pensions Committee, I know that it is important to be quite forensic on each individual benefit. What is its policy objective? Is it delivering that objective? How is it being managed? With some 51,000 applications for the social fund funeral payment, some 41% of which were rejected, I wonder what scope there is to improve the pre-eligibility scrutiny of those applications, because 41% is quite a large number. I suspect that many will be quite transparently not eligible at an early stage.
There have been numerous meetings about how to improve the process, but we still seem to get roughly the same number of rejections. I would welcome the Minister’s view on what more could be done to improve that. The bereaved should not be left disappointed by going through the process of arranging the funeral, only to be rejected later. That can be quite devastating, and it causes many of the financial problems that I have mentioned. In turn, it leaves the funeral directors out of pocket, and they have to chase the debt.
Will the Minister address the situation of people who are awaiting a decision on a qualifying benefit? They are trapped in two DWP holding circles: a decision on their own benefit, which will have consequences for their entitlement to the social fund funeral payment. The form is very complex. Virtually every Work and Pensions Committee report that I have been involved with asks the Department to improve the layout of the form and to subject it to the test of the behavioural insights team. No DWP form can ever not be improved, and I think that this particular form would defeat even me if I tried to fill it in.
The timeliness of decision making matters. The Department’s performance on that is quite good; its target is 16 days, and it seems to fluctuate between 17 and 18 days, so it is not that far off—I can think of many other examples of where it is nowhere near its targets. Although that represents quite good performance, the target of 16 days is actually three days longer than the average time between a death and a funeral. Timeliness of decision making is still an issue, and it might be improved by a pre-application eligibility procedure, if such a thing could be introduced.
I would welcome the opportunity for relatives to know before they commission a funeral the scale of resources that they are likely to have at their disposal. Some relatives may feel that the measure of their grief and loss can somehow be proportionate to the complexity of the funeral that they commission, and although I understand why that is the case, it would be helpful for people to have a clear understanding from funeral directors at a very early stage about what the items on the bill will cost. It would help for them to know how much will be spent on each element and which elements were required, which were discretionary and which were optional. At the moment, people are not acting as informed consumers. Affordability works both ways, because if a funeral director offers a more affordable plan to the customer, they are more likely to get their money in the end. Both parties can benefit from that, and it would alleviate the levels of debt.
One interesting element of the debate is budgeting loans. Steve Webb participated in a debate on this subject a few years ago, in which he talked about budgeting loans being a solution to much of the problem. Despite repeated efforts by the NAFD to get more information out of the Department through freedom of information requests, no one seems to have evidence of any budgeting loan being taken out for the purpose of paying for a funeral. I would be interested to know whether there is any evidence that that is actually happening, because we do not have any data on it.
I will try to wrap up rapidly, because I am running out of time. I have been struck by the calls for regulation of the industry. I recognise that it is tempting to say that there should be a much greater state role, but I do not think that we have exhausted the good will of the industry. Quaker Social Action runs its fair funerals pledge, and many funeral directors are signing up to it, particularly from the younger end of the industry—the insurgents. That disruptive influence on the industry, focusing on what the consumers actually need, can only be a good thing. I am not entirely clear that the industry needs to be castigated. I know many of my local funeral directors, and they are compassionate, caring people who want to do the best on behalf of their community. I am sure that that is true in all our constituencies.
At the heart of the matter is the fact that no one goes into the process with a clear understanding of what costs they should reasonably expect. No one knows what a cheap funeral looks like versus an expensive funeral; one is merely presented with a bill at the end. It is difficult to understand how the component parts of that bill have been assembled, and, emotionally, one is probably not in a position to interrogate it. That can make it difficult to be an informed consumer, and it suggests to me that the market is not fully formed. It is hard to regulate a market that is not acting like one, and in which consumers are not making informed decisions at the point of purchase.
I support Quaker Social Action’s call for some sort of non-governmental third-party ombudsman role. When Steve Webb discussed the matter a few years ago, he talked about “Tell us once” being a possible mechanism for achieving that, but I do not think that it has lived up to its expectations in that regard. It has done a good job of reducing some of the bureaucracy, but it is not acting as a signpost to the best advice on how to navigate this complicated process. I would welcome the Government’s looking at signposting people to groups such as Quaker Social Action, and considering whether such a group could perform an ombudsman role. Yes, that would need to be funded—advice always needs to be funded—but I suspect that sufficient savings could be made in the administration of the benefit to fund Quaker Social Action to play that role.
Many would argue for some linkage between the social fund funeral payment and a defined “simple” funeral, and that suggestion perhaps causes the greatest concern. It is very hard culturally to define what a simple funeral would look like. Quaker Social Action has been cautious not to require those funeral directors signing its fair funeral pledge to guarantee to provide a simple funeral. Instead, it says that the funeral director should clearly advertise their cheapest available funeral.
We need to be careful not to go down the route of the state defining what type of funeral it is prepared to pay for. A lot of cultural elements circle around how we decide what is appropriate for our loved one. It is difficult to try to define what that simple funeral ought to look like.
I thank the hon. Gentleman; I appreciate that I will be speaking in a second. I have spoken to a lot of funeral directors who have said that they already offer a simple funeral. That was something that I proposed in my Bill, and the industry was split down the middle—some were for it and some were against it. I just wanted to clarify the hon. Gentleman’s point.
I suspect that we are closer to agreement than the hon. Lady might realise. I know what a simple funeral would look like and I know what its pricing structure would be; I just get a little nervous about tying the social fund funeral payment to that precise model. There may be cultural or religious reasons why people need optional extras.
In summary—if I have left any time for the Minister and anybody else—I would welcome a bit more information on how we can get the basic data to make the right decision about whether this benefit is delivering on its policy intent. I think it can, I hope it will and I look forward to hearing what everybody else has to say.
Order. The wind-ups will start at 10 minutes past 5. I want to include everyone, but I am afraid that colleagues will have to make very short speeches or interventions. With the leave of the House, Mrs Lewell-Buck will be making her speech while seated as she is temporarily incapacitated.
It is a real pleasure to serve under your chairmanship, Sir David; I thank you for allowing me to sit through the debate. I congratulate the hon. Member for Blackpool North and Cleveleys (Paul Maynard) on securing the debate. Funeral debt affects a growing number of people, but the private nature of grief and the social pressure to provide a decent send-off means that those people do not always have a voice. One of the things that we should always do in this place is speak up for the voiceless so the hon. Gentleman has done those people a great service by calling this debate today.
Perhaps like other hon. Members, the issue first came to my attention through a constituent who had got into serious debt paying for their brother’s funeral. At the time, I assumed that such cases were relatively rare but, sadly, that is not the case. More than 100,000 people are living with funeral debt, while others struggle to meet the costs, end up selling their possessions, or turn to friends or family to cover the cost. These debts are significant. Royal London’s national funeral cost index shows that the average debt is £1,318.
Does my hon. Friend know that since 2004 there has been an 80% increase in the price of funerals, but wages and benefits have increased only fractionally in line with inflation—if not, they are struggling to keep up with inflation? The average social fund funeral payment was £1,225, which means that there is a huge gap in what is affordable. Would she congratulate Quaker Social Action on its excellent work in this regard?
I would definitely like to thank Quaker Social Action, which I have done a lot of work with over the past 12 months. I am aware of some of the quite startling stats about this growing problem mentioned by my hon. Friend. I really do not think it is going to go away; it is going to get worse. Worryingly, as she said, the cost of a funeral service continues to rise well above the rate of inflation and the average debt is rising.
Losing a loved one, as most of us will sadly know, is one of the most difficult experiences we face in our lives. It shakes us and changes our world forever. In the middle of that personal turmoil, the last thing that people need is money worries. People will always feel a strong duty to do right by others when they depart, which makes it especially painful for those who are not able to provide what they see as a fitting service for their loved ones. That is why we need to have a really serious conversation about funeral affordability.
Hon. Members may be aware that in the previous Parliament I introduced a ten-minute rule Bill. The aim of my Funeral Services Bill was to approach some of the issues around funeral affordability. At the centre of the Bill was a call for the Government to carry out an overarching review of funeral affordability. When researching the issue, it quickly became clear how many factors affect the price of a funeral and how many Departments have a stake in it. Making funerals more affordable is not simple and requires co-operation between the Department for Communities and Local Government, the Department for Environment, Food and Rural Affairs, the Department for Work and Pensions, and the Ministry of Justice; only a cross-departmental approach can work. I hope that the Minister can give us a commitment that the Government will begin to look strategically at funeral poverty.
I am aware that there is not enough time to cover everything, so I will focus on one thing that should be reformed urgently: the way in which social fund payments operate. Funeral payments give people much-needed support, but the system has some major flaws. A funeral payment covers all of an applicant’s necessary costs plus up to £700 of other costs. That might sound reasonable enough, but, in fact, those other costs include things such as funeral directors’ fees and ministers’ fees—things that we can agree most applicants would consider necessary. The £700 cap was set in 2003 and has not kept pace with the rising cost of funerals, so funeral payment awards are increasingly inadequate. The average award is just over £1,300 at a time when the average funeral costs £3,700. If the cap on other costs had risen with inflation, it would stand at just under £1,000 today. As we have heard, funeral costs rise even faster than inflation. Although I appreciate the comment by the hon. Member for Blackpool North and Cleveleys that the social fund is a contribution, the reality is that if we want funeral payments to be fit for purpose, that cap needs to rise.
The other issue is the way applications are administered. At the moment, the DWP requires an invoice from the funeral organiser before it can process a claim, which means that people have to commit to a service before they know the value of the funeral payment they will receive. Inevitably, that means that some people commit to a funeral service they cannot afford and end up in severe debt. The process is completely backwards. The DWP urgently needs to look at how it can give applicants a clearer idea of the support they will receive, which will help people to make a more informed decision about the kind of service that is right for them.
I add my support for Quaker Social Action and the work it has done on the matter. My hon. Friend is making a point about the people’s ability to plan funerals. Does she agree that we have to be very sensitive to communities when the speed at which someone is buried comes into play in being able to plan and cost accordingly, and to some of the risks that creates for those communities?
My hon. Friend is correct; this does not only affect people who have the time to plan a funeral, which is short in itself. Some communities cannot plan—full stop—so that debt will be incurred by everybody across the board.
The decisions by the DWP are far too slow. Most funeral services, as we have said, are decided very quickly after a person’s death, but the average claim can take up to three weeks to process, which means that most people only find out whether they are entitled to support long after committing to costs. My Bill, among other things, called on the DWP to introduce an eligibility check to help applicants understand whether they are likely to receive support before they make any commitments to funeral costs. I hope that the Minister can update hon. Members on social fund funeral payments, and accept what his predecessors would not—that there are serious flaws in the current system. I would like him to tell us what he will do to improve the process.
When I introduced my Bill last year, I hoped to start a national conversation about funeral affordability. The Government and the wider public have become increasingly aware of the issue. This debate is a welcome continuation of that conversation, but it is about time that some of that talk is turned into action. I hope the Minister will tell us about some of that action today.
It is a pleasure to serve under your chairmanship, Sir David. I congratulate the hon. Member for South Shields (Mrs Lewell-Buck) on her speech and on her work on this issue. I also congratulate my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), who very effectively set out the problem that we face. He is a regular attender of the all-party group on funerals and bereavement, and this issue sits regularly on our agenda.
The existing system is not working, the £700 grant is inadequate and only 53% of those applying for a grant are successful. The consequence is that many people are getting into substantial debt. Funeral costs are often unplanned expenditure, and people mostly put it on their credit card. They may go to a mainstream lender, but in some instances they are forced to use backstreet lenders or build up debt elsewhere by borrowing to pay for goods. In some instances, people incur a debt with the funeral director. Of course, one of the funeral director’s roles is to offer a range of prices to families so that they can select a funeral that is appropriate and right for them. Cost is a factor, and the National Association of Funeral Directors has a strict code of practice for adapting funerals to people’s needs and constraints. It is not in a funeral director’s interests to sell a funeral that a family is unable to afford, but funerals are a sensitive time for families and it is not always possible for a funeral director to gather full information about a family’s circumstances and ability to pay. When the bill is finally received by a family, it often comes as a shock. Some funeral directors have put in place their own payment plan to enable bills to be settled over a lengthy period of time, which, in certain instances, leads to debts that the funeral director has simply not been able to recover. The impact on the funeral director, and on the possible costs of other funerals, should be borne in mind.
It is entirely right that the social fund exists, but it needs to be considered. I will take a short moment or two to mention the uncertain nature of the bills that families face. We should have a broader discussion and more openness about the cost of funerals, and greater thought should be given to the options available to people at a much earlier stage in their life. We speak a great deal about planning for people’s old age, and we know that the earlier people start to make such provision, the better. Perhaps people should start thinking about the time that comes post-old age. Instead of funerals being purchased in a very short space of time, perhaps they could build up and plan their funeral for some time.
When I looked into this subject, I was shocked to discover that many schemes are available, but they are not widely promoted, which might be because such promotion is inappropriate. I visited the website of a large national funeral director and discovered that for someone of my age—I was born on 16 January 1957— a basic funeral would involve expenditure of £27.75 a month. It may be that, in the same way as pension provision, if people gave some thought to their funeral at an earlier stage, a big, unexpected bill might be avoided.
Does the hon. Gentleman agree that some pre-paid funeral plans are not protected? My constituent thought they were protected. Their father had died, and they thought, “Fine, there is a pre-paid plan,” but the funeral director had gone out of business and their money had gone. There needs to be protection.
The hon. Lady draws attention to the need for some form of regulation in the management of such plans. I am suggesting that we consider greater promotion to raise awareness of such plans so that families avoid receiving a big bill at what is always a very difficult time. This is an important issue. My hon. Friend the Member for Blackpool North and Cleveleys deserves credit for securing this debate, and I look forward to the Minister’s response.
I will take two and a half minutes. I thank the hon. Member for Blackpool North and Cleveleys (Paul Maynard) for securing this debate. I am conscious that, at a time when people have been forced to tighten their purse strings, funeral poverty has risen sharply. Unfortunately, as with other things, wages have not increased enough, which means that the poorest in society are often faced with the very real prospect of not being able to afford to bury their loved ones.
A gentleman came to my constituency office last week regarding a funeral grant. He had lost his brother a few months previously, and the brothers who were left had borrowed money from here and there to pay the funeral costs. They applied for a funeral grant and were turned down despite three of them being in receipt of benefits. The brother who paid the majority of the costs was in employment, and for that reason, despite the fact that one brother was on the minimum wage and borrowed money to pay the costs, the brothers were ineligible for the grant. That is a common problem, and it becomes worse for staff on casual or zero-hours contracts. Such people cannot receive the financial assistance they need because they are classed as working, regardless of whether or not their income is regular.
Is it not time to have a means test for those who apply for a funeral grant? The gentleman who came to my constituency office was left with a burden. He is on the minimum wage, which means that he was not able to take the full cost himself. Prices have risen by 3.9% in the last year alone, which is £140 in real money. One in 10 people struggle to pay for a funeral, to the tune of £1,318. Over the past five years, the price of cremations has gone up by almost a third from £470 to £640. I welcome the work of the charities and organisations, but will the Minister indicate what help we can give? Will the rules be changed to include a means test? We need to help the most vulnerable in our society, and we need to ensure that people on zero-hours contracts, casual contracts or the minimum wage can get some financial assistance.
I commend the hon. Member for South Shields (Mrs Lewell-Buck) on her hard work. I am impressed by her contribution, and I look forward to the contribution of the hon. Member for Coatbridge, Chryston and Bellshill (Philip Boswell) on behalf of the Scottish National party because the Scottish Parliament has shown us the best way forward.
I will be brief, given the impending time limit. I support this debate, and I thank my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) for putting across the arguments so thoughtfully. I also thank the hon. Member for South Shields (Mrs Lewell-Buck) for raising this issue in the national consciousness in the way it deserves.
I will make a couple of brief points. The first is obvious, but it deserves to be said again that we have a cultural problem in this country, even more so than in many other countries, because we do not talk about death and, as a result, do not plan for it. That is part of the reason for the problems that we all get into. Death is a certainty, yet we do not talk about it and too few of us plan for it, even those who have the income to do so if they only thought about it at an earlier time.
As we have heard, it is possible to plan ahead and take a fixed-cost, pre-need funeral plan. I have also had constituents whose funeral director had gone out of business and, as we have just heard, their family only discovered it at the point of death, which is an awful tragedy. I have had two constituents in that position. Such schemes are important and should be promoted by the Government and by funeral directors because, in their defence, they fix the cost at the point at which the scheme is taken out. As we have heard, the cost of a funeral has risen so much in recent years that, in all likelihood, a funeral will be significantly cheaper if a scheme is taken out several years in advance.
Lastly—I know that we need to move on—we must, without bashing funeral directors, make the point that the cost of a funeral has risen enormously in recent years, by seven times the rate of inflation. That is too much. Many funeral directors have quite high margins; some basic products, such as coffins, can be provided for as little as £60 or £100. I do not want people to be pushed into undignified funerals, but funeral directors could do more to reduce the cost of funerals and enable members of the public to have dignified funerals at a sensible price.
Members might not be aware that there is a growing trend in this country of DIY funerals. That has both good and bad sides, but we need to be aware of it, because hundreds of thousands are happening now: members of the public do a lot of the work themselves rather than going through funeral directors. They take control of the paperwork, arrange and even conduct the service and make transport arrangements. That is a difficult process, but we need to be aware of it. If we do not sort out the problem, we will see far more DIY funerals in years to come.
I thank the hon. Member for Blackpool North and Cleveleys (Paul Maynard) for holding this debate on such an important matter, as he clearly highlighted in his worthy contribution. I also thank all Members who have spoken. After a serious piece of slash-and-burn, let me say that recent reports have found that not only are many people unable to pay for the cost of a funeral, 47% of individuals are forced to take out high-interest credit card debt or short-term loans to cover the shortfall.
According to findings published in The Guardian on 20 October, jobcentre staff actively encourage individuals to take on debt in order to pay for funeral costs. The fact that they have done so when individuals have approached them at a time of desperation and emotional turmoil after the loss of a loved one is morally reprehensible and frankly unacceptable. Although the reports do not specify whether encouraging individuals to incur high-interest debt to cover the costs of a funeral is an official Department for Work and Pensions internal policy, I hope that this debate will encourage the DWP to tackle that emerging pattern, and I would appreciate a ministerial response on that particular concern.
According to the 2015 Citizens Advice Scotland report, “The cost of saying goodbye”, which has been mentioned by many Members who have spoken, North Lanarkshire council ranks in the top 40% of the most expensive councils for funeral costs in Scotland. According to Citizens Advice, the total cost of a funeral for people living in our constituency falls somewhere between £2,500 and £8,000. As more than half the households in Lanarkshire have an annual household income of less than £20,000, the cost of a funeral in our constituency can represent more than one third of household income for many.
I pay tribute to the hon. Member for Blackpool North and Cleveleys (Paul Maynard) for introducing this important debate, which has inspired uncharacteristic consensus around the Chamber. Everybody in this room agrees that there is a problem and that funeral poverty is a huge issue affecting every constituency and every part of the United Kingdom, a trend shown by the 80% rise in funeral costs over the past 10 years—or higher in some parts of the UK. In the past year, the cost of a funeral has risen by more than 7%. Household incomes are simply not keeping pace.
As many Members have said, at an already difficult and stressful time, families are being forced into credit card debt and unwise access to money. They do so in desperation, to cover funeral expenses. Everybody understands that when a loved one dies, we want to give them the dignity and respect of a fitting send-off. What families are left with at the end, as well as their grief, is debt anxiety, which does not allow people to grieve properly as they ought to be allowed to do. There is also wide disparity in pricing. People can find out that in another part of the country, the funeral might not have cost quite as much as they paid for it.
Far too many families on low incomes face the brutal reality that they simply cannot afford the sudden death of a loved one. Of course, there is the option of life insurance, but to people struggling to put food on the table for their family, it too often seems like an unnecessary luxury. In certain circumstances, local authorities step in to provide a public health funeral, but recent research shows that the demand for such funerals is rising and many local authorities are struggling to cope. Funeral plans have been mentioned, but we have evidence that some companies offer over-50s plans to provide for their funeral, which can lead people on low incomes to pay thousands upon thousands of pounds without their families ever recovering the full amount paid in, because they paid in more than the funeral costs.
It is unacceptable for a bereaved family coming to terms with the loss of a loved one to have to go through the turmoil of worrying how to afford a funeral. Many Members have spoken about Scotland. The power to deal with funeral payments is due to be devolved under the Scotland Bill. Currently, the social fund is the mechanism that can, where conditions are met, help individuals in such circumstances with certain one-off payments, but as we know, the social fund has become another victim of the Government’s austerity cuts, and more pressure is being placed on families. The fund has failed to keep pace with the true cost of funerals, leaving some families with substantial debts. To illustrate further, the social fund reported a 35% increase in the number of clients facing funeral debt in the year 2013-14.
Tribute has been rightly paid to the social fund in this debate, but the issues I have raised have led some groups to take a more direct approach. I hope that we can all pay tribute to the Quaker Social Action group which, along with a network of not-for-profit organisations, has established the Funeral Poverty Alliance, dedicated both to raising the profile of funeral poverty as a social justice issue requiring the attention of Government decision makers and to ensuring that the public and the funeral industry alike are aware of the options available and the wider challenges. Such developments further elucidate the seriousness of the issue of funeral poverty.
I will wind up. I have not had time to say all that I wanted to say, but I shall end by saying that we know that many people in our country struggle to make ends meet. They can barely afford to live; now it would seem that they cannot afford to die either. We have spoken about the distress and the lack of dignity into which funeral poverty plunges families and the deceased. Let us hope that the Government are listening.
It is a pleasure to serve under your chairmanship, Sir David, and to appear opposite the Minister. We have crossed swords before, and I look forward to doing so again. I commend the hon. Member for Blackpool North and Cleveleys (Paul Maynard) on raising such an important issue: the chance to hold a dignified funeral in our society. I also commend the speakers who have contributed to this debate, particularly my hon. Friend the Member for South Shields (Mrs Lewell-Buck), who introduced a ten-minute rule Bill in the last Parliament and has campaigned tenaciously on the issue. I thank the hon. Member for Rugby (Mark Pawsey) for his contribution, particularly for the way in which he spoke about debt; the hon. Member for Strangford (Jim Shannon) for his words on funeral poverty; the hon. Member for Newark (Robert Jenrick); and the hon. Members for Coatbridge, Chryston and Bellshill (Philip Boswell) and for North Ayrshire and Arran (Patricia Gibson), all of whom contributed significantly to the quality of this debate.
It was that famous Welsh poet, Dylan Thomas, who said:
“After the first death, there is no other.”
It illustrates that people always react to death very differently. Each funeral is different and unique, a point made powerfully by my hon. Friend the Member for Walthamstow (Stella Creasy) in her earlier intervention.
None the less, funerals serve common purposes. They are not only a celebration of a life lived; they offer symbolism, the public expression of farewell and the marking of loss. That is why it is absolutely right that support is available to bereaved families to provide dignified funerals and why the rise in funeral costs, described very well by my hon. Friend the Member for Hornsey and Wood Green (Catherine West) in her intervention, is so worrying.
I impress on the Minister today the need for a strategic approach. My hon. Friend the Member for Makerfield (Yvonne Fovargue) made that point in her contribution. Central to that is the availability of information to inform a strategic approach. In a parliamentary answer on 29 June, the Minister stated that, of the 52,500 applications to the social fund for funeral payments, only 32,000 were approved. An explanation of why nearly 20,000 were rejected would be useful. It would also be useful if the Department for Work and Pensions published other specific data. What, for example, is the total number of people who cannot afford a low-cost funeral? What is the average cost of a funeral? How many bereaved families fall into debt? I could go further and say that it would be useful if the Minister committed today to seeking and consulting on a definition of funeral poverty that could be used in future.
The hon. Member for Blackpool North and Cleveleys spoke powerfully about budgeting loan applications in his contribution. Budgeting loans have been available since May 2012. An indication of the likely award would be useful, because ex post facto awards create an extra complication for the family at a time of bereavement. It would be useful, when looking at this policy area, if the Government distinguished between maternity and funeral expense applications in the statistics.
Those elements taken together would provide a more strategic approach. I urge the Minister today to turn his attention to this issue and focus on it. It is difficult to think of a more noble cause than providing people with a dignified funeral, regardless of their income.
It is a pleasure to serve under your chairmanship, Sir David. I congratulate the hon. Member for Torfaen (Nick Thomas-Symonds). I have enjoyed debating with him on previous occasions, and I thought that his suggestions and his decision to focus on a strategic approach were sensible and practical. It was a helpful contribution.
The debate was secured by my excellent colleague, my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), whose proactive, thoughtful and knowledgeable work in this area highlights what an important issue funeral poverty is. The debate has raised important questions today. I also pay tribute to the hon. Member for South Shields (Mrs Lewell-Buck) and her work on the ten-minute rule Bill. I am interested in her point about a national conversation, and I will come back to that. I will have to whizz through some of my points, but I will do my best to cover as much as I can in the limited time available.
Before I focus particularly on the comments of my hon. Friend the Member for Blackpool North and Cleveleys, I want to say to my hon. Friends the Members for Rugby (Mark Pawsey) and for Newark (Robert Jenrick), who both raised constructive ideas about overall costs and planning for costs in the future, that we will need to look carefully at those points. The question from the hon. Member for Strangford (Jim Shannon), who has left the debate, is relatively easy for me to answer because the powers have already been devolved to the Northern Ireland Assembly; he will need to relay his questions there. In answer to the hon. Members for Coatbridge, Chryston and Bellshill (Philip Boswell) and for North Ayrshire and Arran (Patricia Gibson), the powers will be devolved. I will take a particular interest in what new innovative ideas Scotland will try. If there are areas that work well, we will have to look closely at them. I wish them the best of luck. As policies are developed, my teams will continue to be supportive through sharing information on what we have learnt in the past.
Losing a loved one is one of the most difficult things that any of us will experience. My hon. Friend the Member for Blackpool North and Cleveleys is right to highlight the fact that, in addition to the significant emotional cost, dealing with a bereavement brings practical challenges. Although the Government have never taken responsibility for meeting the full cost of funeral arrangements, they provide support to help the most vulnerable people with funeral costs, and rightly so.
For people in receipt of universal credit, income-related benefits and tax credits, the social fund funeral expenses payments provide a significant contribution towards the cost of a simple, respectful, low-cost funeral. The scheme meets the full costs of a cremation or burial, including: the purchase of a grave; necessary burial or cremation fees; for cremations, the cost of any medical references or removal of active implanted medical devices, such as pacemakers; reasonable costs if the body has to be moved more than 50 miles; and the cost of a journey for the applicant to arrange or go to the funeral. A funeral payment is paid in about 7% of deaths in Great Britain.
In 2014-15, 32,000 funeral payments were awarded, worth about £44 million. Other costs, such as the coffin, church and funeral director fees, are limited to a maximum payment of £700. Members questioned whether that is the appropriate level. The majority of claims exceed the £700 limit, which is why in May 2012 we made interest-free social fund budgeting loans available for funeral costs, in addition to the funeral payment. The average budgeting loan award in 2014-15, for all purposes, was £413. Applicants can claim up to a maximum of £348 to £812, depending on their circumstances. Crucially, the introduction of budgeting loans is a vital part of removing the need for bereaved families to turn to high-cost lenders or credit cards, and removes the worry of meeting the funeral director’s bill. The National Association of Funeral Directors welcomed that move, and we need to promote it further.
I will try to answer as many points as I can in the remaining time. What steps can the Government take to improve Department for Work and Pensions data collection to help improve transparency? What figures on the use of budgeting loans for funerals can the Department share? The shadow Minister also raised that point. The Department collects and publishes, via the social fund annual report, comprehensive data on applicants, application and award volumes, expenditure and processing times. That allows the Department to monitor the operation of the scheme. Extra data beyond that could be collected, but we must consider the costs of doing so; the scheme costs about £2.6 million to administer for a £44 million benefit to the most vulnerable, so we must strike a balance. We will continue to look at the situation. The Department does not currently collect data on the take-up of budgeting loans for funeral costs, but we are exploring options to produce those data, so I welcome hon. Members’ comments.
Will the Government look again at index-linking the cap? It is a balancing act. It is important that the scheme does not influence or inflate the prices charged by the funeral industry for a simple funeral. I know my hon. Friend said that he struggled to get his head round that point. The cap for funeral director fees means that we can continue to ensure that the system remains both sustainable and fair to the taxpayer, and to help a large number of benefit recipients with funeral expenses. Although the £700 cap is not index-linked, there is no cap on the necessary costs category. On the points about inflation and funeral costs exceeding people’s rise in wages, the year-on-year rise in average payment amounts reflected that. The average award increased by 27% between 2006 and 2014-15. We will continue to work on that. I am conscious that I do not have much time left in the debate, so I will whizz through the points.
Ensuring better understanding of eligibility pre-application is probably the most important point. When I looked at the figures, I was concerned about the number of people applying, because of the time that it takes to go through the applications, and the people who do not get an award. I have asked whether there can be pre-eligibility checks. It is complex. We are looking at it, but at the moment, we do not feel confident that we can do it because we do not want to give somebody a 100% assurance and then not approve the application. There is a lot more work to do, but we have made progress. The proportion of successful applications has increased from 55% to 63% over the past five years.
Baroness Altmann is the Minister responsible for the policy. I will suggest a round table discussion with me and Baroness Altmann for hon. Members who have spoken today to explore the issue further, because it is crucial. We are committed to getting to 16 days. We have made progress and want to go further. The round table discussion will explore that as well.
The “tell us once” scheme was promoted in the coalition Government by the former Minister. We want to ensure that the service communicates well. If Members have specific examples of where it has not worked, please raise them.
The debate has been practical, proactive and constructive. I am conscious of the time constraints. I look forward to the round table discussion with those who are interested.
Motion lapsed, and sitting adjourned without Question put (Standing Order No. 10(14)).