If there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.

Clause 13 [Action plans in connection with work-focused interviews]:

[Amendment No. 74 not moved.]

Clause 13 agreed to.

Clause 14 [Directions about work-related activity]:

On Question, Whether Clause 14 shall stand part of the Bill?

This is a new month but a continuing Committee stage. What I am about to produce is, I think, a new point.

Clause 14, which is entitled “Directions about work-related activity”, is treated rather shortly in the Explanatory Notes, which state:

“Clause 14 provides a power for the Secretary of State to direct that a specific activity in the case of an individual is not to count as work-related activity. This is intended to stop claimants seeking to satisfy the requirement to undertake work-related activity by undertaking activity that is considered inappropriate for their circumstances”.

We will come to an amendment in a few minutes’ time that addresses some of that. If we were discussing this matter as an Oral Question, I would ask the Minister a very brief question, such as “How?”. The reason is that I do not understand what this clause is doing. Will the Minister give us an example of how this would work? Although I suspect that it is a sensible provision, I should like that to be confirmed.

I am happy to confirm that this is a sensible provision.

Clause 14 will permit the Secretary of State, through personal advisers, to direct that a given activity is not to be treated as work-related activity. I am aware of the concerns that have been raised outside this House on this clause and I hope that I can reassure noble Lords that we cannot and will not force customers to do a particular activity or unfairly deny them opportunities.

Clause 12(7) defines work-related activity widely as activity that will make it more likely that a customer will be able to obtain or retain work. This could cover a very wide range of activities and therefore allow the individual to choose the right ones for them. This is fundamental to a tailored approach that is based on choice for the individual.

Regulations under the clause will set out the circumstances where directions can be issued. We believe that there will be cases where it is wholly inappropriate for individuals to pursue certain activities, even though these activities would meet the definition of work-related activity. In particular, we are thinking of the situation in which someone is provided with support to enter a particular type of job but states that he does not want to take up the job after finishing the course. I do not want to be too specific on this but it is effectively a failsafe mechanism if people are intent on trying to thwart the provisions. Given that we start with a wide definition of work-related activity—necessarily, because it is a key part of the process—we need to build in possible protections about its misuse.

I do not believe that in these or similar circumstances a customer should be able to meet a work-related activity requirement by taking the approach that I have just outlined. It would not be fair to other customers who were endeavouring to overcome potential barriers and, where it incurred any cost to the Exchequer, it would be unfair to taxpayers. I believe that these cases will be extremely rare but it is right that we have the powers to deal with them where they arise.

Any directions made under this clause will of course be subject to a right of appeal. Furthermore, when a direction has been made, the customer can undertake any other type of work-related activity to meet the work-related activity requirement.

If a customer who had been issued with a direction in respect of a particular activity failed to undertake another type of activity and did not have good cause for this, his benefit would be liable to a sanction. However, he would also have a further, separate right of appeal against the decision under Clause 12 that led to the imposition of the sanction.

Although we firmly believe that a collaborative approach with customers should be the norm, it is necessary to be able to act where a customer is undermining the principle and intent of the support that we are offering. I hope that I have provided sufficient clarity to the noble Lord and that he will now be able to support the clause.

I am delighted to hear that the provision is basically designed to stop the “thwarting”—I think that that was the word that the Minister used—of the purposes of the Bill by a customer claimant. I readily understand that. I am sure that the Joint Committee on Human Rights will be delighted by the two rights of appeal which the Minister has just highlighted. That is extremely helpful. I will study what he said as usual, but, for the moment, I am more than content with the clause.

Clause 14 agreed to.

Clause 15 [Contracting out]:

moved Amendment No. 75:

We return to the fray this afternoon with a somewhat depleted team on this side of the Committee. There are currently only two of us here; we felt that we perhaps had an unfair advantage yesterday. I apologise on behalf of my noble friend Lord Addington, who is speaking in the Olympics debate but will join us shortly.

Like the noble Lord, Lord Skelmersdale, we do not object in principle to involving either the voluntary or private sectors in this way. We are possibly even more sceptical than the Conservatives about how it will work in practice, however, and possibly more concerned to see effective safeguards. The parallels with the National Health Service are quite strong, where the Government have had an ideological drive to privatise, and that is no doubt the background to these proposals. We clearly see the cheap, easy and quick-win operations and procedures of the private sector there and the parallels with the more difficult problems and people, particularly those with mental health difficulties, as the noble Baroness, Lady Meacher, so movingly described last night, being left to the state. We will be scrutinising this closely and we want a great deal of reassurance from the Minister that that position will not arise out of the Bill.

We have already talked a good deal about commercial confidentiality in the Committee. Will the Minister give us the strongest assurance he can that, when these arrangements have been set up and Parliament properly wants to scrutinise how they are working in a year or two’s time, the Government will not hide behind this commercial confidentiality mantra? To be honest, when we have probed it in other areas, it has often proved to be just a cover to avoid embarrassment for the department; the commercial companies have often said that they have no objection to revealing that information.

I do not propose to rehearse the detailed questions of the noble Lord, Lord Skelmersdale, which seemed very proper. I look forward to the Minister’s reply.

I am grateful for the broad acknowledgement that using providers as envisaged has support in principle. I well understand the need for noble Lords to have detail and reassurances on some areas.

The contracting out of the functions of the Secretary of State in Clauses 11, 13 and 14 is an important part of our strategy to help those with disabilities or health conditions back into work. Contracted providers have a wealth of experience and expertise in delivering employment support to this group of customers. In addition, contracted organisations may be able to reach customers with whom the Government have difficulty engaging. We also want to ensure that we deliver flexible and tailored support, and providers are well placed to adapt their provision to suit the needs of individual customers. These advantages apply to delivering mandatory elements of the ESA conditionality programme as well as to voluntary support, and we should take advantage of them.

Having a single organisation responsible for the delivery of a majority of functions makes the programme simpler for the customer to understand and engage with, and helps him to build a better relationship with his adviser. It also makes clearer the connection between the support that we are making available, and the responsibility of the customer to engage with the process—a principle at the heart of these reforms.

Of course, we need to ensure that standards are adhered to and that the legislation relating to work-focused interviews, action plans and directions will apply equally to contractors as to Jobcentre Plus. The same rights of appeal and review will apply. We will work closely with providers to ensure that they understand their responsibilities and that there is consistency in delivery.

Would the noble Lord kindly repeat that? I missed about three words in what he has just said.

I shall try again. Bids for Pathways to Work contracts for potential providers should include details of the skills and experience which would enable them to address the specific needs and barriers of all customers. Bids will be assessed against that information. In any funding regime on outcomes, there is a risk that providers will concentrate on the easiest to help. However, we intend to mitigate that risk as much as possible by reviewing providers’ performance to ensure that this is not the case.

The noble Lord, Lord Skelmersdale, asked about what happens if a customer moves into work but subsequently reapplies for ESA, and whether providers get a second outcome payment if he finds work again. If a customer returns to Pathways to Work after a spell off benefit contractors can only claim another outcome-based payment for him if they have claimed a sustained payment in between. Providers cannot simply get people into short-term jobs and continue getting outcome payments for them.

The noble Lord asked about the instalments of a 30 per cent service fee. The service fee is 30 per cent of the contract value. It will be spread over the lifetime of the total contract and paid monthly.

The general issue of the nature and structure of payment arrangements was raised and whether there could be payments based on distance travelled. Obviously, a small movement in one customer’s employment prospects would represent a far greater distance travelled than a larger movement in another customer. Setting interim targets can make the distance appear further to some customers. We need also to bear in mind that the ultimate goal here is to enable customers to enter employment with all the financial, social and health benefits that it can bring, and it is, therefore, right that, however far away it may be, employment is the visible goal.

I hope I have addressed each point that noble Lords raised, but I am happy to have a second go if I have not.

I beg forgiveness from the Minister and the noble Lord, Lord Skelmersdale, for missing the earlier exchanges on this important amendment. However, having listened carefully to the Minister’s reply, would he think further about two issues of concern in this area?

The first is the extent to which we can assure ourselves that the capacity exists for personal advisers in the marketplace generally. From my previous incarnation in the other place, I know that Ministers were honest enough to acknowledge at that stage, which was some time ago, that there was a risk that when work was needed to start, the number of people available to perform that crucial role was not then in place. Can the Minister reassure me that the contractors that we are talking about in this amendment will have access to a big enough body of professionally trained people? That is an important part and we have to be there by “A-day”; so maybe the answer is “not yet, but we are on track”. I would settle for that assurance—it is an essential part of this process.

More generally, given my experience of working with companies in the field, it will be difficult for a level playing field to be created for social enterprises generally and collective third-sector organisations. I would really love—and I tried to persuade some of my colleagues and friends in the third sector at the CPAG annual meeting last summer—them to band together to make a bid for one of these important contracts to see the quality that they could bring to it. There are conflicts between their advisory role, and their independence must be protected, but I would love to see a group of them getting together, because the clients and customers would, perhaps unfairly, feel much more reassured about being in a context where Citizens Advice was built into the provision of the services. The reason why that will be jolly hard is that the big companies—who, I must say, discharge their functions in a professional way and I have nothing against them—have resources behind them that are simply not available for not-for-profit enterprises.

The Wise Group, of which I am a director, is one of those. It lives from year to year on budgets that have to be carefully adjusted on almost a monthly basis, because the money is not there to provide the cushion and the buffer for investment and training. The companies that that organisation will be competing against for these contracts will be dealing in bulk, will have economies of scale, will have very deep pockets indeed and if it is left simply to the marketplace, it will be very difficult for innovative, creative, and genuinely interested new groups of people to try to enter this important area without large resources behind them. When I ask them what the Government need to do to put that right, they say they need development grants of capital, involving some shareholding in the company; I do not know whether that would work as it would be difficult for the Government to start buying interests in social enterprises.

However, there must be some mechanism. I would feel much more comfortable about this amendment if I was given some assurance that these problems were properly appreciated and that everything that could be done was being done to try to make this easier for social enterprises involving third-sector charitable organisations, which have a wealth of experience in these matters already. It is lying there on the shelf—if they cannot get access to that, it would be a great shame.

Perhaps I may follow up that point, and I hope that the Minister will forgive me if this issue has already been made clear. One way of opening up these contracts to not-for-profit organisations would be if there were a different contract value for some of the more difficult-to-place persons. I had in mind to ask the Minister that question anyway. For example, one can imagine that some of these people will need very specific work-related activities. Obviously, noble Lords will not be surprised if I mention evidence-based psychological therapy. But if contractors are to make that sort of vitally necessary support available, they will need a higher-value contract. That would also take account of the lack of basic resource available to the not-for-profit organisations.

It may be easier if I add to those two contributions. The relationship between the customer and the personal adviser will be absolutely vital, and it may well be that the individual in the contracted organisation will not be appropriate for a particular customer. On that point, there is likely to be a much better relationship with an individual customer who suffers from, say, mental health or stroke problems or whatever if the contract goes to someone with specialist knowledge, as we have said before. That is likely to come from the not-for-profit sector and not from the big commercial firms which have been mentioned. I do not know whether the Minister wants me to stop there but I also have questions about the contracts.

Perhaps I may respond to the points raised in what has been a helpful and valuable small debate on the important issues of capacity and engaging with groups. The third sector has specialist knowledge, great understanding and works with many of our customers on a routine basis.

I reiterate that we believe that, in terms of the provider contract, it is right for a single organisation to be responsible for the overall delivery of the functions. That is the starting point. The documentation relating to the invitation to tender has been placed in the Library and I hope that noble Lords have been able to access it. It sets out some of the key areas that we will be addressing in that process. In particular, providers will need to give details of the qualifications and experience of their staff and they will also need to provide details of the training arrangements for new and existing staff. So testing the capacity and experience of the organisation and its staff will play a key part.

I was asked whether we are forcing out smaller providers by contracting by district, but I do not believe that we are. We acknowledge that smaller providers may not have the capacity or experience to bid for large contracts, but we have encouraged them throughout this procurement process to form consortia in order to bid. We have also encouraged larger organisations to form links with smaller or niche providers, and we have published details of interested organisations on the internet to facilitate that. So the opportunity for smaller providers to become sub-contractors to the main provider is encouraged. Obviously, it is impossible and inappropriate to be too prescriptive about this up-front, because we want flexibility in these arrangements in order to be able to address the individual needs of our customer base.

I think that I dealt with the issue of training and the skills for which we are looking from providers. Capacity is an important issue, but we have already Jobcentre Plus and pathways into Jobcentre Plus in 40 per cent of the country and have proved that there are high-quality individuals out there who can and do participate in providing services under the arrangements, so we are optimistic, but it is important that we have capacity to deliver on this very important programme. We are confident that the processes and mechanisms that we have in place should enable that to happen.

This is an idiot question, because I am a newcomer to all this, but is there any relation between jobs for people with certain disabilities and people with mental health problems, in view of the fact that the latter are so difficult to place?

There is no requirement in any of what we are doing, even when we roll out the work-related activity components of the Bill, for anyone to go into any specific job. Access to payment by results will be based on people being in work for a certain number of hours over a period and not on benefits for a period, but the precise quality or nature of the job is not a key consideration. I am given reassurances from behind me on that point. I hope that that deals with the point.

I have another daft laddie question to complete this important debate, as the Minister described it. The case loading for the contract will be crucial. Is it too early to say what will be the range of the average caseload compared to the pilot projects? My experience is that if you ask personal advisers to deal with much more than 40 or 50 cases at any given time, that puts them under some pressure. Is there a target? That tracks back into the capacity question because if we do not have enough of those people, they will have to do more. Do the Government have any view about that or is it too early to say exactly where that figure will rest? Obviously, it will differ in different parts of the country, but any guidance on that would be helpful.

Again, the noble Lord makes an interesting point. It is too early; we really need to see what results from the bids that we are seeking. Then we will have an opportunity to consider these things more roundly.

That brings me neatly to my question about contracts. Presumably, they will be block contracts. I am interested that the Minister says that the department will encourage consortia to form; that will make provision for specialist providers and the sort of people whom I have just said that I believe will be able to set up a far better relationship with the individual customer than might otherwise be the case.

Does the Minister envisage those large commercial firms—as most of them are likely to be—subcontracting to the not-for-profit sector in particular cases? He talked about the contract document in the Library, but I saw nothing in that covering that point. It strikes me that it would be a good idea but I am not entirely sure that the department could force on contractors as part of the contract. If the noble Lord could respond to that, I should be happy to withdraw the amendment.

Yes, I hope I can. It is probably right to say that it would not be right to specify subcontractors in contracts, because that would assume upfront the nature of all the client/customer needs with which the provider would have to deal. However, as I said earlier, we would encourage organisations to consider being subcontractors to the main providers. Presumably, part of the main providers’ bids will have to say how they will be able to access specialist knowledge and input so that they can cover the full range of customers with whom we will ask them to deal.

That is extremely helpful. This has been a useful discussion on a rather complicated area. I am grateful to the Minister for his several responses to the amendment and I thank all noble Lords who have spoken. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 76:

We support Amendment No. 76. I shall speak to Amendments Nos. 77 to 81 tabled in my name and that of my noble friend. I propose to focus my remarks mainly on Amendment No. 76 because it raises very important questions. While I stand to be corrected, I do not think I quite understand the assurances that the noble Lord believes have been given by the Minister. Our amendments are really just to ensure that in areas such as disability discrimination and so forth, the outside contractors are properly controlled and operating in the same way as the jobcentre staff would.

On the basic question of sanctioning, we read carefully the various assurances given under pressure by the Minister, Mr Murphy, in the Commons. I am bound to say that I was, again, taken with what the Conservative Member for South West Surrey, Mr Hunt, said. He was talking about the concern expressed by private and voluntary sector organisations that it is fundamentally against their ethos to be judges; they want to support and help someone who is trying to engage in the world of work. If we were talking about sanctions, that would be a fundamentally different role, and that seems to me to be very important.

My colleague, Danny Alexander, pressed the Minister to say under what circumstances Ministers would seek to give the private and voluntary sectors the power to make decisions about whether someone’s benefit should be sanctioned. The Minister gave a series of replies, none of which was satisfactory. I hope that, having taken account of that, the noble Lord, Lord McKenzie, will be able to go further and to be more specific than Mr Murphy was in the Commons. He said, first, that, as the capacities of the private and voluntary sectors evolved, decision-making could be passed down to them. He then talked about considering changing the location of the benefit-entitlement decision-maker. He then very firmly said:

“It is important to retain the power in the Bill for further introduction as welfare provision evolves throughout the country”.—[Official Report, Commons Standing Committee A, 31/10/06; col. 332.]

In summing up that discussion, I think it would be fair to say that the Minister was effectively saying, “We have no plans to outsource benefit cutting or sanctioning for the foreseeable future but we are going to defend to the death our right to do it”. That, to me, is wrong. Either they are planning to do it or, if not and if they have no plans for the foreseeable future, that provision should not be in the Bill and a further Bill should be brought forward in due course in a few years’ time if that is what they want.

We have had a good deal of discussion in this Committee, particularly about the problems of mentally ill people and the difficulties that they already have with the system, but are we seriously prepared to give Ministers the power to let private contractors cut benefit for mentally ill people? We on these Benches believe that that would be an unacceptable abdication of responsibility by the Government towards their most vulnerable citizens. I look forward to the noble Lord reassuring us better than the Minister was able to do in the Commons.

I want to make a couple of points in relation to Amendment No. 79, which focuses on the need to eliminate discrimination and to promote equality. If is of interest that this amendment is supported by a lot of organisations: Rethink, Mencap, the National Autistic Society, the Royal National Institute for the Blind and the Royal National Institute for Deaf People. I think that that gives some idea of the degree of concern about the likelihood that those groups of people might experience the regime as discriminatory, although I am absolutely sure that that is not at all the Government’s intent.

Clearly a lot of these worries centre on the contracting-out of this work and the use of payment by results in the contracted-out environment. This again takes me back to the issue of the Pathways pilots being undertaken in-house, as I understand it, yet they have not managed to achieve what I am sure they were hoping for these most disadvantaged groups.

Does the Minister have any indication from the pilots that have not proved to be successful of different ways of working which could then be incorporated into the rollout? He referred to the importance of training and ensuring that people are trained, yet yesterday he implied that my reference to a particular jobcentre manager might not have been representative and he said he was sure that all these people are trained.

These are difficult questions. I am anything but convinced that Jobcentre Plus people, whether in Pathways or outside it, really have the necessary training to provide a service that gives real equality of opportunity for these very disadvantaged groups compared with the easier-option groups. I find it very difficult to envisage that this Bill could come into operation across the country when, as I see it, we simply do not yet have a model that we know can work for these very disadvantaged groups. I say that with certainty. I know that the Pathways evaluation has not been published but there is enough evidence around to show that we just do not have a model. Can the Minister give me any assurance at all that these groups will not feel discriminated against and will feel that they have equal opportunities to achieve what they all—or the vast majority of them—want to achieve; that is, a job?

There has been a great deal of interest from noble Lords and those in another place on the possibility that we will contract out decision-making that could lead to sanctions. It is important that we do not dismiss the possible benefits of such an approach. Contracting-out of decision-making could reduce hand-offs between two organisations, which in turn would speed up the process and reduce the potential for miscommunication.

We should also bear in mind that the decision on whether to contract out decision-making has genuinely not yet been taken. The fact that it has not yet been taken is not a reason for not having the provision in the legislation should we decide to do so in due course. We need to ensure that the basic ESA and Pathways structures are in place and working before we embark on further change, and there are still a number of issues to be explored around the process involved. For example, we envisage that there would need to be a separation of roles between the decision-maker in an organisation and the personal adviser—the noble Lord, Lord Skelmersdale, raised that point—and we need to discuss with providers and stakeholders how we could make this and other processes work in practice.

We do not accept that providers will use their own decision-makers to sanction inappropriately in order to get better results. The same decision-making standards, regulations, safeguards and rights of appeal would apply regardless of whether a decision-maker is located in Jobcentre Plus or in a contracted organisation. We would also ensure that decision-makers receive the training they need to enable them to make decisions properly and with consistency.

We have accepted the Delegated Powers Committee recommendation on Clause 15(2) and tabled amendments accordingly. We debated these yesterday and, as noble Lords will be aware, this means that regulations made under Clause 15(2) relating to decision-making that could lead to sanctions will be subject to agreement by both Houses of Parliament. There will be a chance for Parliament to scrutinise.

I turn now to Amendment No. 77, which would remove the ability of the Secretary of State to authorise providers to supersede decisions. This would mean that while providers could be authorised to take decisions and revise those decisions, they could not supersede those decisions. The effect of that would be that the removal of a sanction would be a slower process requiring additional hand-offs to Jobcentre Plus, and this would clearly not be in the interest of the customer.

I turn Amendments Nos. 78 and 80. I fully understand the concerns that noble Lords have raised regarding the training and skills of potential providers. I again hope that I can reassure them as to our intentions. There will already be a need to demonstrate a certain level of skill and experience. One of the criteria on which we will assess a contractor's bid in provider-led Pathways areas will be that they have the experience and skills needed to deliver services properly. I dealt with that in the preceding amendment. In addition, contractors will be assessed in respect of training arrangements for both new and existing staff and on their approach to ensuring year-on-year improvement in performance.

We must recognise that in many cases providers actually have greater expertise in these areas than government, particularly when a customer has specialist or complex needs. This is precisely why we want to engage with providers in this way.

Providers will also need to put in place diversity training plans, equality and harassment policies—a point particularly focused on by the noble Baroness, Lady Meacher—and, as part of the contract, will need to comply with these policies. In addition, all providers will need to be accredited before any contract is awarded. This accreditation is done by an independent organisation. Momenta will do that for the current Pathways to Work procurement. The accreditation ensures that the provider is compliant with all statutory requirements—for example, health and safety, equal opportunities policy, the Sex Discrimination Act and the Disability Discrimination Act.

Amendment No. 80 also includes a power to prescribe that specialist support for customers with specific impairments must be secured before a provider can be authorised to undertake functions under Clause 15.

A key principle underpinning provider-led Pathways to Work, on which support under ESA is to be based, is that providers should be flexible in the provision that they deliver and be free to take account of local needs and priorities. Prescribing what support must be available is in direct opposition to this principle. Again, we have dealt with this in the earlier amendment.

It would be unreasonable to ask providers to ignore the highest priorities in their local areas to concentrate on those with specific conditions that we prescribe nationally. We would also be in danger of creating a league table of health conditions where, however good our intentions, priority will be given to some customers before others. That would simply create the cherry-picking that we are all keen to avoid.

As regards Amendment No. 79, Clause 15(7) provides that in most cases any act or omission of contractors in carrying out functions is to be treated for all purposes as an act done or omitted by the Secretary of State. That means that the Secretary of State remains responsible for ensuring that these functions are carried out in a way that is compatible with the Disability Discrimination Act and disability equality duty. For example, Pathways contracts will have clauses that prohibit discrimination and harassment on grounds of disability, among others. The Pathways specification will also require providers to provide reasonable adjustments, to ensure customers can participate fully, and to promote equality of opportunity. We are currently reviewing and updating the Pathways contracts to ensure that providers are specifically bound to have regard to the individual strands within the disability equality duty in providing their services.

Amendment No. 81 seeks to ensure that providers give us management information broken down by impairment. The amendment is unnecessary. We would already collect information about job entries, sustained outcomes and who has started work-related activity. That will be done as a part of the funding and payment arrangements. Jobcentre Plus will also hold data on the medical condition of customers and, as part of the evaluation and monitoring of provider-led Pathways to Work, we will be able to break down outcome information by condition.

Is the Minister saying that everything that the amendment asks for will be done anyway? On that basis obviously we would be happy to withdraw it.

Yes, I believe that would be the practical effect.

I will try to deal with some of the other questions. The noble Lord, Lord Oakeshott, said that some providers would not want to take on the task of sanctioning, but we know that some providers want these powers. Shaw Trust and WorkDirections have indicated that they do—and they obviously do not believe that it will undermine their relationships. It is important that there are processes and arrangements in place to ensure that it does not.

The noble Baroness, Lady Meacher, asked what evaluation of Pathways to date we can incorporate. That evaluation is ongoing. One of the advantages of getting voluntary and private sectors involved is that they can be more flexible and innovative. But all providers will be reviewed regularly. It is an ongoing, developing process. It is important that we recognise that, which is why we should not rush into enabling sanctions to be passed to providers until we are clear about the total direction of our proposed programme.

I think that that I have dealt with the question whether decision-makers will have to be separate from personal advisers. We certainly envisage that there would be some separation of these roles, just as there is in Jobcentre Plus, but there is a great deal of work that we need to do with providers to determine how this could work in practice and how to deal with this in the contracts.

I hope that I have dealt with the concerns of noble Lords, but I stress again that regulations on sanctions would be affirmative if we were to move forward with them. There will be an opportunity for your Lordships' House and another place to debate them.

I thank the Minister for his detailed replies to our amendments—they were helpful—and I hope that, in proposing them, we have helped firm up some of the control ideas that the DWP might have had in any case. I am happy to accept most of what he said on those points.

On the fundamental principle behind Amendment No. 76, I am not reassured in the slightest. As I feared, and as I summed up what I thought was the position in the Commons, no decision has been made and the Government want to contract out the functions whenever they like. I do not see that having the ability to look at unamendable regulations—

It is an unfair representation of the Government’s position to say that we want to do it when we like. I have tried to outline that we want to see the progress that Pathways and the ESA when introduced will make to understand the evolving situation with which we are faced. The reassurance for noble Lords is that the regulations will be affirmative. That is a substantial reassurance: it is an opportunity for Parliament to scrutinise.

I apologise to the Minister—I was quoting directly from the Commons when I said that no decisions had been made—but I was about to say that affirmative, unamendable regulations do not provide an adequate safeguard. We on these Benches oppose this provision in principle. It will not be satisfactory for us just to say, “Well, we’ll vote against an order when it comes”. We are not happy with the provision. If it is the Government’s intention to proceed with it, we would like to know rather more about the conditions under which they will do so. We are very unhappy about the provision.

I hope that I have shown during the course of the Committee that I am a fairly tolerant individual, but the Minister’s response horrified me. The Bill started in another place on 4 July last year. We have now had the results and critique of the first pilots, but the Government have still not come to a conclusion. We have also had the comments of the Joint Committee on Human Rights on this matter, which states:

“We remain concerned that, generally, contract compliance will not provide effective protection for the Convention rights of individuals where the functions of public authorities are assumed on a day-to-day basis by a private commercial or voluntary organisation. We draw this matter to the attention of both Houses”.

That is exactly why the noble Lord and I tabled this series of amendments. I am now much more concerned than I was when I introduced the amendment.

It is inevitable that, since different contractors will exist in different parts of the country, a postcode lottery will develop, with different providers applying the regulations in different ways. We are concerned also by the degree of accountability that would be available in such integral decisions were they to be contracted out, although the Minister tried hard to satisfy us on that point.

Those decisions which will have a direct impact on the level of benefit that an individual receives should be maintained within the decision-making structures of the DWP and the delegated powers of the Secretary of State, as I said when I introduced the amendment. I am far from satisfied on all this. I will certainly come back at the next stage of the Bill.

The noble Lord referred to the criticism by the JCHR. I emphasise that the effect of Clause 15(7) is that anything done by a contractor on conditionality functions is treated as done by the Secretary of State for the purposes of the Human Rights Act; there are few exceptions to this. The Secretary of State consequently remains responsible for ensuring that these functions are carried out in a manner compatible with the Human Rights Act. I am conscious of what the noble Lord, Lord Oakeshott, says—that we will be returning to this at a later stage—but I have been as clear as I can.

I know that the Minister tried to provide comfort with that small speech, but I am afraid that the situation has gone from bad to worse. I am even more reinforced in my view that I should bring the matter back on Report than I was only seconds ago.

If we are seriously now saying that a vulnerable, perhaps mentally ill, claimant who has had his benefit unfairly cut off by a private sector contractor must rely on the Human Rights Act, things have come to a pretty pass.

That is really an unfair representation of what has been said. If we are to deal with this properly, we must deal with it objectively and on the basis of facts. If sanctions were to be contracted out, I have already outlined that all the safeguards that exist under current arrangements would be in place. The proposition that, should someone have their benefits unfairly cut off, they would have to go through Human Rights Act procedures to get redress is simply not right. If I may say so, the noble Lord is out of order in putting things in that way; it does not help our debate.

I appreciate that the Minister has been trying hard to satisfy us, but I remain unsatisfied. Clearly, I cannot insist that the Committee divides on this, and therefore I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 77 to 81 not moved.]

Clause 15 agreed to.

Clause 16 [Income and capital: general]:

moved Amendment No. 81A:

Clause 16 provides that the income and capital of a person claiming employment and support allowance shall be determined in such a manner as prescribed in regulations. Subsection (3)(a) of the clause provides that a customer may be treated as possessing income or capital which he does not possess. The measure is designed to prevent abuse of the system. For example, a person could deliberately spend all their capital in order to qualify for benefit or they could get close friends or family to hold it for them. That would clearly be unfair on others and would undermine the principles of a means-tested scheme. It enables us to say that they still have that capital and thereby not award them benefit. Similar provisions already exist within income support and other social security benefits.

There is nothing new about this concept. It is absolutely right that the protection is there and, as is usual, customers would have a right of appeal to an independent appeal tribunal where the power was used. That is the provision’s purpose; it does nothing different from what is already in the regulations for income support, housing benefit, council tax benefit and other parts of the system.

I am grateful to the Minister, but the Bill has a wide title. Later this afternoon, the noble Lord, Lord Kirkwood, will be talking about the Social Fund, which of course is not in the Bill. There are other matters that go much wider than straightforward benefit alterations. In certain parts, the Bill amends the Social Security Administration Act 1992. Given that this measure already exists in part in social security law, it would be much more sensible to extend it to the whole of social security law by amending that Act.

I realise that I have rather bounced the Minister with that suggestion, but I hope that he will consider it and perhaps write to me before the next stage of the Bill. In the mean time, unless he desperately wants to speak—

To deal with this a little more fully, the provisions are here because we must deal with regulations under this Bill. To be more specific, subsection (4) provides a power to make regulations prescribing how income from capital holdings will be taken into account in calculating ESA. Normally, capital will be deemed to have an assumed tariff income for the purposes of assessing entitlement. The intention is that a tariff income of £1 a week for every £250, or part thereof, will be applied to capital over £6,000, or £10,000 for those in residential care and nursing homes, up to and including £16,000. That is the way that income from capital assets is determined for other income-related benefits, such as income support and income-based jobseeker’s allowance. We shall simply roll forward the current arrangements in benefits legislation, but we need to do it specifically for ESA because of its income-related component.

I was suggesting that this should be included as a more general power, and therefore it could be taken out of the individual Acts of Parliament, such as that set up by my noble friend Lord Fowler on income support. I should still be grateful if the Minister would consider that. I am of course referring specifically to subsection (3). I have nothing further to add but, in the hope that the Minister will write to me, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 16 agreed to.

Clause 17 [Disqualification]:

[Amendment No. 82 not moved.]

Clause 17 agreed to.

Clause 18 [Pilot schemes]:

[Amendments Nos. 83 and 84 not moved.]

moved Amendment No. 85:

Our amendment in this group is designed to prevent current and future pilot schemes coming under the same sort of criticism that the schemes piloting the PCA now face. As the Bill went through another place, issues were raised on the level of funding. The pilot schemes were considerably better funded per head than the rollout was going to be. We have also heard serious concerns expressed about the size of the pilots. With fewer than 100 claimants piloted, doubts have arisen as to how representative the data gathered can be, especially in the field of mental health.

Pilot schemes are always subject to some difficulties. They tend to be voluntary, as they were in this case, which makes piloting conditionality almost meaningless, yet the criticism reserved for these pilots has been considerably stronger than might have been expected. It has been argued that not only were the numbers of claimants inadequate for any kind of meaningful analysis but they were also heavily weighted towards those with physical disabilities. As the mental disability assessments are the newest and least familiar part of the ESA—a point that I made yesterday—this is surprising. Why did the Government not ensure that there was more representative piloting—or, indeed, is the current piloting more representative?

We have also heard that some organisations have been unable to see crucial parts of the assessments in advance. For example, the computer system is apparently not available for studying due to copyright restrictions. Given the Government’s appalling track record on managing computer systems, would it not be sensible to allow as many involved parties as possible to test and comment on the new system? Further, why have the Government not retained joint copyright over the system rather than allowing the company from which they commissioned it to retain all rights?

As regards the other two amendments in this group, I have a great deal of sympathy for the amendment tabled jointly by the noble Lord, Lord Oakeshott, and the noble Baroness, Lady Meacher. The amount of criticism that has been levelled at the pilot schemes would suggest that some fairly strong measures will be needed to restore confidence in them, and I hope that the noble Baroness the Minister—in the terms of the Interpretation Act, Peers are unisex; I must never forget that—will consider these proposals carefully.

Independent research has already demonstrated the success of Pathways. We touched on the question of research yesterday. A publicly available report produced by the Institute for Fiscal Studies, Early quantitative evidence on the impact of Pathways to Work pilots, in June 2006, showed that for new customers, there has been an estimated increase in employment after 10.5 months of over nine percentage points. That is in the public domain and we have already discussed that report to some extent.

The Department for Work and Pensions produced a working paper on Pathways performance in January last year and published Pathways statistics in December; these will be updated quarterly and this is what the department calls administrative information. We have so far published 10 important externally commissioned research reports as soon as they were available and will continue to do so as reports are commissioned in due course.

Any future pilot made under this Bill will be subject to similarly rigorous research and we are committed—I stress that we are committed—to publishing any results as quickly as the analysis of the data will allow. The key to our continued success is to continue finding out what works. That means tailoring support on the basis of sound evidence from constructive and appropriate pilots. Any attempt to prevent any pilots until such time as there is a final report on Pathways would severely restrict the department’s ability to innovate and test future improvements in provision, although I fully understand the sentiments behind the amendments. It would also misrepresent the true nature of evaluation, which is a continuous process, feeding back valuable lessons learnt from experience to further refine the service for customers. The current programme of research and analysis is anticipated to continue until 2009 for Jobcentre Plus areas and until 2011 for provider-led districts.

As we are committed to the further use of pilots where necessary, we also consider that subsection (7) must remain as it stands. It is an invaluable tool for ensuring that a pilot scheme can be extended beyond 24 months, if required. I can reassure noble Lords that all pilots, including extensions of pilots, are subject to the affirmative resolution procedure providing the House with the opportunity to debate in full and approve the proposals before implementation. That will not only give the House the right to know what is happening, but will give stakeholders externally the right to see, comment and have a handle on how the research is progressing.

Our record shows that the reporting regime for pilots is already appropriate, that the proposed amendments are unnecessary, and that the effect of leaving out Clause 18(7) is unwelcome.

Amendment No. 91 deals with Clause 24(6). This clause was included to allow us to roll out implementation of regulations under any of Clauses 10 to 14 gradually across the country, if this proves necessary. Perhaps I may return to some of the points made by the noble Lord, Lord Kirkwood, yesterday on the need to be practical about rolling out the new policy initiatives and we have to be careful that we do not do things too quickly and we do them in a phased manner. That will not be possible without these provisions.

This is the approach we have taken with Pathways to Work provision, which is rolling out in stages, starting with the original pilot schemes in October 2003, towards full national coverage by April 2008. The option to roll out such new provision in stages allows lessons to be learnt from each stage of the evaluation which can be fed into subsequent phases; ensures that measures are appropriate and effective; and that, at all times, the needs of the customer are put first.

For example, we envisage that it may be necessary to roll out the work-related activity requirement area by area—this picks up on the point made by the noble Baroness, Lady Thomas—so that we can offer the best possible customer experience by not attempting to implement too much too fast. We will need to ensure that such a rollout of provision does not lead to any unfair treatment. By restricting Clause 24(6) solely to pilot schemes, the amendment would prevent us from taking that steady approach but would not alter the functioning of pilot schemes themselves, as provision is already made in Clause 18 allowing pilots to apply only in specific areas.

On the research record of the DWP generally, I emphasise that, in the first place, the PCA was reviewed by the technical working group to which reference has already been made. The Minister for Employment and Welfare Reform in another place gave a commitment that we will continue to use the independent technical working group to evaluate the revised PCA after it is implemented. It would be appropriate for the first evaluation to take place during 2009, once the revised PCA has been in use for some months. We will make the result of that evaluation publicly available—including to both Houses. It is important to emphasise that for the Committee.

On the question of the noble Lord, Lord Skelmersdale, about the computing system, following yesterday's debate we have consulted. Stakeholder groups have had the opportunity to view the computer system, LIMA, which Atos Origin uses, and will have the opportunity to view again. It is very important that Atos Origin has the opportunity to learn from the feedback from interested stakeholder groups. I am advised that it will offer Peers the opportunity to view the LIMA project.

Yes please!

I am sure that there will be a strong take-up for that.

I do not want to labour this point, but the DWP has a strong record of investing in independent research, which is published academic research undertaken by a number of social research units around the country. There is also a huge amount of administrative data which the department collects and which are published quarterly and are available to social researchers, parliamentarians and all those concerned about the issues. The department is showing a strong commitment to learning by doing and by piloting. The Committee should welcome that. Although the amendments give us an important opportunity to have this discussion, they would not achieve what they are intended to and I hope that the noble Baroness will consider withdrawing her amendment.

I, for one, put up an invisible hand to accept the invitation—as did the noble Lord, Lord Kirkwood—that the noble Baroness just made to view the computer actually working. But viewing it is not quite enough. The noble Baroness said that interested organisations had already viewed or had the opportunity to view the computer, but their complaint is that they, unlike myself, often have the knowledge to be able to test it. That is rather different from viewing it. As I said, I would certainly be extremely interested to see it and make up my own mind, but that is different from testing it.

I want to make a further point. I agree that the department does have an extremely good record on evaluating research, which is a continuing process. However, the pilots cannot be expected to go on for ever. Sooner or later there will be a 100 per cent rollout across the country of the whole ESA. It is that point which our advisers are currently worried about because however good pilots may be, when there is a 100 per cent rollout the situation in some areas is bound to be different. That is our continuing worry.

Perhaps I may clarify that point. I accept that it is important to evaluate the whole of the ESA journey. It is intended for that to happen, and it will be done by looking at the programme right from the beginning and even through to the appeals process. The evaluation will be published and made available to Members of both Houses and stakeholders. However, we must have the ESA up and running before a real evaluation can be undertaken and thus answer the questions that interested parties will have in the future about how the ESA is actually working.

The Minister has produced the thought that I was trying to articulate in very much clearer language. We are at one on that point.

This has been a useful debate, not least because we have had the very kind offer to see the computer system at work. Members on these Benches will be pleased to take up the invitation; it is exactly what we wanted. I was also pleased to hear the noble Lord, Lord Skelmersdale, make the point that the evaluation of the pilots has been useful so far, but we know that comparatively few people have been involved in the pilots and—this is perhaps one of the major worries—that they have been per capita the subject of a much better rate of funding and one that may be unrepresentative. While the pilots have given some clues as to what is going on, they have not been particularly clear about what is happening with regard to mental health problems, and this is the greatest worry. The early quantitative evidence from the Institute of Fiscal Studies is just that: early evidence, so we will have to watch this carefully. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 86 not moved.]

On Question, Whether Clause 18 shall stand part of the Bill?

I apologise for being a little slow this afternoon, but with the permission of the Committee I shall now ask a question which I would have asked on Amendment No. 83 had I been quicker off the mark. I want to call attention to the worryingly high number of appeals—over 50 per cent according to citizens advice bureaux—that are successful under the current regime and to give the Government an opportunity to explain what they intend to do to improve those results the first time round.

We understand that many of the successful verdicts are a result of new evidence being submitted for consideration. While this is a very valid reason for reconsidering a decision, it would suggest that the Government urgently need to think about some way of allowing new evidence to be considered, without going through the time, expense and stress of a tribunal. I would be grateful for any indication of government policy on this.

The clause is obviously apposite to the purposes of the Bill, Pathways and everything that we have been discussing heretofore, but could it not be used for a slightly broader purpose? We should always remember that these important proceedings are focused finely on—to use horrible, inelegant jargon—the inflow, as opposed to the stock, of claimants who are on incapacity benefit. The pilots and Pathways to Work have all been focused on new people coming into the system, approaching it for the first time and being handled under the new regime. However, in spite of our best endeavours, nothing much is being done directly to deal with those claimants who are already in the system. Many of them have been in it for a long time and many will either sadly retire or go to the great Parliament in the sky before better arrangements can be made for their support.

This mechanism is an essential step change from anything that we have seen previously in 20 years of public policy in this area. Therefore, if it works, as I hope it will, it should be applied more broadly to anybody who is on the stock at the time so that they might take advantage of what is being made available to first-time claimants under the new regime after A-day in 2008. I know that some provision in the system has already been made for that, but if the power is broad enough to enable a little creative thinking while we are waiting for A-day, and we can look at how the mechanism can be made readily available to the claimants on the stock, that would be welcome.

I am certainly persuaded by my experience with my other colleagues who are work providers that a positive and helpful mechanism should not be restricted, as they would see it, merely to the inflow of new claimants. It is of course understandable that we need to get it up and running, that it has got to start somewhere and that this is a big enough task, but if there is to be some creative work with new pilots, can Clause 18 admit of some work that could be done between now and 2008 to see what other, new access can start to be made by those people who are marooned on the stock of incapacity benefit?

I admit to being slightly unsure of where we are procedurally. I think that I am speaking in favour of Clause 18 standing part of the Bill, and I shall say a few things that I would have said in response to an earlier amendment which was not moved.

Noble Lords are absolutely right that the appeals process is a cornerstone of any effective benefit system. The noble Lord, Lord Skelmersdale, highlighted the questions surrounding the success rate of appeals. The department takes the success rating of appeals very seriously. We talked yesterday about it having issued new guidelines to decision-makers to improve the preparation of information for the appeals process. They specifically ask decision-makers to be more careful, and perhaps more effective, in gathering information from customers and identifying those who should be going through a reconsideration process because information about their claim has come to light which the decision-maker had not been aware of. They also improve the process of requesting further information from medical services and generally ensure that the communication of decisions to customers is more effective, making it clear that if there is any information that they feel should have been taken into account but was not, it should be passed to the decision-maker as quickly as possible. There has been an active process of advising decision-makers so that the concerns voiced about the appeals rates can be tackled.

Before the Minster leaves that point, as I expect she is about to, does she have any figures on how many appellants appeal on their own behalf, rather than through organisations such as the National Association of Citizens Advice Bureaux, Macmillan Cancer Relief or what have you? The request for the required extra information would often be better directed to those organisations rather than the appellant themselves.

That is an interesting point, and I shall write to the noble Lord about it. We are extremely indebted to organisations such as the National Association of Citizens Advice Bureaux and Macmillan Cancer Relief, who provide an invaluable service to customers, supporting them with information and advice. I would be happy to look into that and come back to the noble Lord.

The noble Lord, Lord Kirkwood, perhaps broadens our horizons and makes us think slightly more ambitiously about the potential impact for the success of these programmes. He refers to inflow and the customers already on incapacity benefit. We have not touched on some of the important work in understanding what can be done for current customers. I shall share with noble Lords the experience of seven of the original Pathways areas which are looking at how it can be extended to existing customers. The extension’s aim is to obtain experience of whether the Pathways approach is equally effective with existing IB customers.

The regime is different from that for new claimants in two major respects. First, existing customers attend three mandatory work-focused interviews, as opposed to six for new or repeat customers. Secondly, personal advisers have the discretion to award a job preparation premium of £20 a week, payable for a maximum of 26 weeks, to existing customers in these areas if it will help them plan a return to employment and undertake work-related activity. The initial extension from February 2005 to March 2006 focused on those customers who claimed up to two years before the start of the pilot—so people on IB for some time. From April 2006, the mandatory work-focused interview regime has been further extended to IB claimants who began claiming between two and six years before the start of the pilots. Somerset officials will go deeper into this group by seeing all the incapacity benefit caseload within a district. That is valuable work for precisely the reasons the noble Lord has already stated. It is so useful to be able to work in such an evaluative action research-led way. If the results are positive that could be incredibly important in managing the migration of existing customers across the country.

Clause 18 agreed to.

Clause 19 [Relationship with statutory payments]:

[Amendment No. 87 not moved.]

Clause 19 agreed to.

Clauses 20 and 21 agreed to.

moved Amendment No. 88:

This amendment refers back to points I made on the first day—as the noble Baroness has said—indeed, on the first amendment. I hope the Committee will forgive me if I reiterate some of those questions on which, on reading Hansard, I feel that the Minister could expand.

The amendment makes clear that the continuation of benefits, such as an exemption from prescription charges, can make a very large difference to some people. Other passported benefits of a similar nature include the right to free school meals, free eye and teeth inspections and so on.

On our first day, I understood the noble Lord, Lord McKenzie, to confirm at col. GC 5 that these passported benefits will continue for those on income-related ESA, as the noble Baroness has said. Will the Minister answer my question as to whether these benefits will be included in the 13-week assessment phase, or whether they will be paid only after eligibility has been fully assessed.

I agree with the noble Baroness, Lady Thomas of Winchester, that once you are on ESA it really does not matter whether you arrived by the route of the income assessment or by the contribution assessment. You are in exactly the same position and are likely to be just as poor. Therefore, if it is right for one strand to have these passported benefits and not the other, the Minister must be able to produce a very good reason for not treating them in the same way.

The noble Baroness, Lady Thomas, talked about the low income scheme for prescriptions, which exists for those who are not entitled to passported free ones. That scheme is not widely known about. Has the department considered advising people of its existence when they receive their first benefit cheque?

I thank the noble Baroness for raising an important issue with her amendment. Income-related benefits are important to our customers, not only because of the income they provide, but also, as she pointed out, because they often act as a passport to entitlement to other benefits.

We expect the income-related strand of employment and support allowance to offer access to the same benefits that have already been discussed as income support currently does. The range of support includes, as the noble Lord, Lord Skelmersdale, pointed out, free prescriptions and remission from other NHS charges, but also includes other benefits such as free school meals and smaller, yet important, schemes such as school uniform grants.

Additionally, customers of the income-related strand of ESA will be passported on to full housing benefit and council tax benefit, which, as noble Lords know, can make a huge difference to families’ income. We do not currently provide an automatic passport for someone who only receives contributory benefit. That is because entitlement to contributory benefits is not usually based on a person’s level of income—and the schemes we are talking about today are targeted support, meant for those most in need.

If someone has a low income, and is receiving incapacity benefit, or, in the future, the contribution-based strand of ESA, they may qualify for help with free NHS prescriptions and help towards other NHS charges through the low income scheme. There is a difficult balance to be struck. The noble Baroness pointed out that there is a fair amount of form-filling and inconvenience for our customers, and spoke of the risk that some may lose out on entitlements which are rightfully theirs.

The current system is designed to identify what other income people have so help can go where it is needed most. The challenge is to find a way of identifying those who are on low income, whether they receive contributory or income-related benefit, without the need for all the forms and processes, and ensuring that the information that we have is up to date as people’s circumstances change, without our being overly bureaucratic or intrusive.

As has already been commented on, the Government’s response to the Health Committee’s report on NHS charges gave an undertaking to explore the possibilities of access to free prescriptions without the need to make a separate low income scheme claim. This will be looked at as part of the overall review of prescription charges. The Government will report the outcome of this review by this summer.

Additionally, to make it easier for customers to meet the cost of an annual payment certificate, I am pleased to say that the Government have already agreed to make available the option of payment through monthly direct debits from July 2007. This has been debated for many years and many organisations have campaigned for it. At the same time, four-month prepayment certificates will be replaced by lower-cost three-month prepayment certificates.

I stress the difference between the income-related and contributory ESA. For a person to receive income-related ESA, an income assessment is made of them. For contributory ESA, no income assessment of that person will have been made. They could be very wealthy and receive ESA on a contributory basis. That is the rationale for a requirement being placed on them to fulfil a low-income test to get free prescriptions.

I said that the amendment related to those who received either strand of ESA as their only household income and who satisfied the savings threshold for means-tested ESA. I presume that that would not be someone who is very wealthy.

I appreciate that point. I was trying to make a distinction; namely, that to obtain free prescriptions, a claimant or patient would have had to have gone through a low income test, whereas someone who receives the contributory part of ESA would not have done so. If the noble Baroness’s criteria were fulfilled, that would in theory be the case, but the person would still not have been through the low income test which is required for free NHS prescriptions.

However, we are looking at the matter, particularly given our desire to reduce bureaucracy and form-filling and to promote uptake of free prescriptions for all those who are entitled to them. I assure the noble Baroness that the Department of Health and the Department for Work and Pensions take the matter very seriously, and discussions are under way. We look forward to the outcome of the review in the summer. I hope that noble Lords will withdraw the amendment on the basis of this discussion.

I thank the Minister very much for that very encouraging reply. She said again that she “expected” access to other benefits. I look forward to the review in the summer. This is the first time that we have heard that such a review will be carried out in the summer. Did I understand correctly that it is to occur as a result of conversations on the issue between the Department for Work and Pensions and the Department of Health?

The Department of Health is carrying out a review of prescriptions, but the Department for Work and Pensions has been in discussion with the Department of Health. Obviously there are a number of passported benefits, and the Department for Work and Pensions needs to be absolutely clear that the regulations are appropriately handled to ensure that the technicalities of accessing those passported benefits are in hand. I can assure the Committee that that work is under way—although it will mean a great deal of work for a statutory instruments draftsman.

Will the Minister emphasise to the Department of Health that there are 750,000 people who, Citizens Advice tells us, for reasons of poverty, do not get their prescriptions dispensed? That is a very serious matter. It will make the Pathways programme harder if these people do not realise that they can get help. It sounds as though the lower income scheme, while useful, is of limited use because of the vast number of forms that have to be filled out. I beg leave to withdraw the amendment.

Amendment, by leave withdrawn.

Schedule 2 [Employment and support allowance: supplementary provisions]:

[Amendment No. 89 not moved.]

Schedule 2 agreed to.

Clause 22 agreed to.

Clause 23 [Interpretation of Part 1]:

[Amendment No. 90 not moved.]

Clause 23 agreed to.

Clause 24 [Regulations]:

[Amendment No. 91 not moved.]

Clause 24 agreed to.

Clause 25 [Parliamentary control]:

[Amendment No. 92 not moved.]

moved Amendment No. 93:

Perhaps I may speak very briefly to Amendment No. 93. I am extremely tempted to say “no”, for the reasons that I gave on the group of amendments in which we discussed the government amendment. Of course if I did say “no” it would not stand part of the Bill at the end of this Committee stage.

On mature consideration—at least I hope it was mature—I have decided that I will not do that, but I put the noble Lord on notice that if in my consideration after the Committee stage as a whole I come to the conclusion that this amendment needs to be re-amended, that is exactly what I shall seek to do on Report.

I note what the noble Lord has said and look forward to our possible debate in due course.

On Question, amendment agreed to.

[Amendment No. 94 had been withdrawn from the Marshalled List.]

moved Amendment No. 95:

moved Amendments Nos. 96 to 102:

moved Amendment No. 103A:

In speaking to the amendment, I shall speak also to Amendment No. 104, standing in my name and that of my noble friend Lord Addington. First, I thank the noble Earl for stepping into the breach left by the noble Lord, Lord Best, and, if I may mix my metaphors, doing much of the heavy lifting for me on this amendment. He made the case in principle very well indeed, very strongly relying, as I do, on the advice and expertise of Shelter and Citizens Advice.

On Amendment No. 104, we took the view that in order to have a full debate in Committee it would be a good idea for both amendments to be considered. Our option is slightly stronger, to abolish this unfair and discriminatory legislation completely; but the noble Earl’s amendment is certainly half or three-quarters of a loaf and we are essentially singing from the same hymn-sheet.

As it stands, the Bill will provide tenants under 25 with a considerably lower rate of housing benefit than everyone else. If the single room rent were abolished, which our amendments would achieve, we would finally have a situation where everyone, no matter what age, had access to housing benefits on the same basis.

In Standing Committee in the Commons, the Minister, Anne McGuire, was asked how the Government could continue with a housing benefit regime that created shortfalls that were so severe that young people faced rent arrears and eviction. In her reply, she said,

“local authorities have the discretionary housing payment scheme that allows them to give additional financial support when a person’s situation is not covered by the local housing allowance”.—[Official Report, Commons Standing Committee A, 2/11/06; col. 426.]

That is no answer. It almost accepts that the position is unfair, but effectively states that there is a sticking plaster solution and the sticking plaster in this case often runs out well before the end of the financial year in many authorities. The noble Lord, Lord Skelmersdale, has already referred to a postcode lottery in other areas and there is certainly a postcode lottery here.

Ms McGuire went on to acknowledge that the LHA had done nothing to increase the supply of accommodation that young claimants were supposed to live in. She said:

“All hon. Members who have spoken have said that they are concerned about the supply of shared accommodation. I confirm that in the pathfinder areas the supply of shared accommodation has not changed in any respect”.—[Official Report, Commons Standing Committee A, 2/11/06; col. 428.]

I touched on a little bit of history in my Second Reading speech, but it is equally relevant now. This restriction—single room rent—was introduced in October 1996, just before this Government came to power, in the face of combined opposition from Labour and the Liberal Democrats. It was made quite clear by the then Labour Front-Bench spokesman that the response of landlords was,

“likely to be to withdraw from providing accommodation for young people”.—[Official Report, Commons, 5/6/96; col. 622.]

Just for the record, Tony Blair, John Prescott and John Hutton were among those who voted against the proposals.

The single room rent means that young people who lose their jobs are almost immediately faced with the prospect of losing their homes. It forces them to focus their attention on finding a new place to live, when their time would be much better spent trying to find alternative employment. Rather than acting as a work incentive, the single room rate is actually a barrier to dealing with youth unemployment. We agree. We do not believe that that is what the Government want and we invite them to end this gross injustice.

I am delighted to be able to join the deliberations on the Bill. If this change of voice also changes the harmonics of the debate, I guess that it is only temporary. On this side of the Grand Committee we find ourselves in tune with the Government’s proposals and we are unable to support the amendments. Despite strong lobbying from many organisations such as Citizens Advice, we hold to our view that it would be a damaging state of affairs if at the margin young people on benefits such as housing benefit were able to afford a standard of living, such as being able to live alone, that many employed younger people who are their peers and who have lifted themselves above the benefit threshold, cannot enjoy. In our view, both the amendment of the noble Lord, Lord Best, passionately moved by the noble Earl, Lord Listowel, and that of the noble Lord, Lord Oakeshott, run counter to the thrust of the Bill, which aims to build on Pathways to Work.

Of course, the circumstances of a 24 year-old can vary hugely, as do their housing requirements. We have tabled a later amendment to address one of these unusual circumstances. But very few young people start their independent employed life living alone, rather than with family or friends. These amendments could provide a significant disincentive to seek higher wages, a better job, or even a job at all, by offering a housing benefit that would be lost by taking such action. Self-interest and self-motivation would be working in opposite directions—this at a time in life when we should be encouraging people to seek independent living and freedom from the system.

I welcome the noble Lord, Lord Taylor, to what I think is his first duty on the Front Bench on this Bill. I do so specifically as his first duty is to support the Government’s position. I urge him to continue in that Front-Bench role for as long as he possibly can. I am pleased that the noble Earl, Lord Listowel, is back among us and speaking, as ever, with passion on the cause of young people.

I am grateful that we have the opportunity to contribute to an important debate on the future of the single room rent, or the shared room rate as it will become under the local housing allowance.

I shall deal with the two amendments separately. In essence, Amendment No. 103A would seek to restrict the application of the single room rent only to those aged under 21. It is, in a sense, a compromise amendment between the status quo and the argument to completely abolish the single room rent.

The proposed change to the upper age limit for the single room rent might seem small but, in fact, it attacks the root of the principle behind the single room rent. The single room rent applies for those aged under 25 and not for those who are older, because there is a clear split between those aged 18 to 24 and those aged 25 and over.

The aim of the single room rent is to set a level of housing benefit that enables a customer to access accommodation of a type similar to that of their working peers. This is therefore not a compromise based on evidence; with respect, it is purely arbitrary. For example, we know that those aged 18 to 24 have average earnings of about two-thirds of those aged 25 and over. That means that generally there is a real difference between the accommodation which a working person under 25 can afford and that which a working person aged 25 and over can afford. It is therefore only fair that we reflect that in housing benefit levels.

However, there is no such difference in the average earnings of those aged 18 to 20 and those aged 21 to 24. There is, therefore, no logical reason why those aged 21 to 24 should not have their housing benefit restricted by the single room rent but those under the age of 21 should. I suggest that there is an inconsistency in the approach. This arbitrary compromise runs counter to the spirit of the rest of the Bill of weighing an individual’s rights and responsibilities relative to their capabilities. If we were to accept this amendment, we would simply create a band of people aged between 21 and 24 who would be able to afford accommodation that many of their working peers would not. There is no evidence-based reason why the single room rent should end at 21; there is, however, such a reason why it should end at 25.

Amendment No. 104 would remove any age-related restriction on a customer’s maximum housing benefit. In particular, the amendment would abolish the single room rent, as the noble Lord, Lord Oakeshott, made clear.

As the debate on the single room rent has developed, the accusation has been levelled that the Government are sticking to the principle of the single room rent at the expense of the realities of life for customers of the benefit. We disagree with that view and we stand by the principle of the single room rent.

Three-quarters of single young people without children who pay their own rent and receive no housing benefit currently live in shared accommodation. We have a responsibility to ensure that taxpayers’ money is always spent in a way that is not only fair but also reflective of the realities faced by all people, not just those on benefit. So when three-quarters of the same group who do not receive benefits share, I do not think that it is unreasonable to ask the same of those who do receive benefit.

However, just because we are strongly wedded to the principle of the single room rent, that does not mean that we ignore the needs of the more vulnerable customers who receive that rent. It should also be noted that young people who are severely disabled and certain young people leaving care under the age of 22 are exempt from the single room rent restriction. Those who are in supported accommodation or social housing are also not subject to this restriction.

For some people, it will be hard for them to share a house, but perhaps I may draw a parallel here with an earlier part of the Bill. For some who have been on incapacity benefit or who will be on the new ESA, it will be hard to move back into work. Hard, I suggest, but not impossible. In the past, those for whom it has been hard to move into work were just written off. But in Part 1 of the Bill we are making efforts to change this and bring them back into the mainstream, to bring them out of exclusion. Since 1997, this Government have had unprecedented success in improving the prospects for young people. Through the New Deal for young people nearly 700,000 18 to 24 year-olds have been helped into work. With the single room rent we have a choice: do we go against the grain of all this success by exempting them from it, increasing their out-of-work income and so extending the poverty trap? Do we say, “It is hard for you to make the bonds and social networks to learn to live in shared accommodation, so you do not have to try”? That, I suggest, would push them out of the mainstream and reinforce the path to exclusion. Or do we include them and ask them to participate in a way of living that is so common to their non benefit-receiving peers? We believe that this is the path that provides them with the best chance of escaping the trap of benefit dependency.

I should like to pick up on one or two specific points that have been made. The noble Earl, Lord Listowel, asked about the cost, and cited the figure of £10 million. I suggest that this is a minimum. If customer behaviour were to change as a result, the costs could be many times that. Certainly I am happy to meet with the noble Earl, together with officials or otherwise. We must set that in train before we reach the Report stage. I shall ask for that to be followed up with urgency. The noble Earl also referred to the UNICEF report. This may not be the occasion to debate it in depth, but it is clear that quite a lot of the data on which that report is based are somewhat out of date. We are not complacent. Indeed, the noble Earl did acknowledge the progress the Government have made in helping young people, particularly on long-term unemployment rates which for young people are almost extinct.

The noble Lord, Lord Oakeshott, spoke as though there was no possibility of anyone in receipt of the single room rate being able to access shared accommodation. The single room rate, as the local housing allowance, will be set by rent officers based on the actual situation in the particular locality. It will be set at the medium level. Logically, therefore, it would be possible for at least half the accommodation in that population of opportunities to be available to people in receipt of the single room rate. I accept that there is an issue generally about availability both for those on the single room rate and for those on the housing allowance in any event, but I do not think it is right to assume that no one receiving the single room rate would be able to access accommodation in the way he suggested. I will not quote the detailed figures in terms of the difference in earnings levels, but I think I have touched on that.

The noble Lord also referred to discretionary housing payments and said that the system is a postcode lottery. In fact, since their introduction, the discretionary housing payment budget has never been used completely, so on that basis I do not think it could reasonably be said to be a postcode lottery.

Unless I have misunderstood the noble Lord, is it not cash-limited within each local authority? When local areas run out of money, is that not it before the end of the year? That is certainly what is suggested in my briefing.

The noble Lord is absolutely right to say that it is capped within each authority, but in aggregate the budget has never been exceeded.

That is exactly the point I sought to make. Perhaps the Minister would care to withdraw his response to my comment that it is a postcode lottery. Clearly it is a lottery as to whether you happen to be living in an area where the budget has run out before the end of the year. Perhaps he could confirm that.

I should like to study the detail, but I shall reflect on the point made by the noble Lord so that I can respond to him more effectively. Given the comments that have been made and notwithstanding the strength of feeling that lies behind the amendments, I would ask noble Lords not to press them for the reasons I have outlined.

I wonder whether the Minister can help me just a fraction. I note from a Written Answer in another place on 15 May last year, at col. 637W of Hansard, that the number of housing benefit recipients assessed under the single room rent scheme in Great Britain has been dropping quite staggeringly over recent years. I accept that in the past three or four years the figure has levelled off at between 10,500 and 12,000; none the less, can the Minister give any reason for that, and can he say whether the figure of £10 million, which the noble Earl produced, is the department’s understanding of what the amendment would cost?

The noble Lord is right. In 1997, something like 33,000 people were accessing single room rent and the figure is now about 12,000. That is roughly the magnitude of the change. There is some evidence that it is partly attributable to the fact that we have many more young people in employment. That is testimony to the success of the Government’s economic policy, which has helped many more young people into work and of course has led to their not needing to access the benefit.

The cost was correctly stated by the noble Earl, provided that customer behaviour does not alter as a result of the change. If it did change, we consider that it could be many times that figure. That needs to be put in context.

I thank the Minister for his replies. I also welcome the noble Lord, Lord Taylor, to a speaking part for the first time this afternoon. I notice that he has a very fetching daffodil in his lapel—celebrating St. David’s Day, I assume. I am pleased to say that the noble Baroness is putting hers back on; it suits her even better. I hope that this is not a sign that the noble Lord, Lord Taylor, and the noble Baroness are going to be on the same side for the rest of the day.

There is obviously an issue of principle here, which we have discussed at some length. I shall leave the matter of discretionary housing payments to the noble Lord, but it is clear that the budget is cash-limited in each authority and that, in many authorities, the money runs out long before the end of the financial year. When he has had a chance to check, I should be grateful if he could confirm that to me.

Basically, as I said, we are talking about an issue of principle. I heard all the arguments that the Minister produced about the relative earnings of young people of different ages. I thought that he set it out very well. I should have thought that all the arguments, circumstances and ratios were exactly the same in 1996, when his party was completely against this measure, and I did not hear a single suggestion from him about what had changed since.

I thank the Minister for his considered replies to the concerns raised. It was good to be reminded how many young people have been taken out of unemployment; that is extremely good news. I am also grateful to the noble Lord, Lord Taylor, for explaining the Conservative Opposition’s position on this.

One question which I did not raise but which I know my noble friend Lord Best would have done concerns housing availability. We have 100,000 homeless children living in temporary accommodation in this country—perhaps the highest level since records of this kind began. There is a tremendous shortage of housing, but one area where there is some degree of over-capacity is in single rooms, where people have invested in housing and new build and it has not proved as popular as they imagined it would be. Would this provide a possibility for more young people to get accommodation?

moved Amendment No. 103B:

I may have chided the noble Lord, Lord Taylor, slightly on the previous amendment but on this one I think that he has raised some very fair questions. We support the thinking behind them and we look forward to hearing the Minister’s answer.

Amendments Nos. 103B and 103C seek to amend Clause 29. Amendment No. 104A is a new clause concerning non-dependant deductions. I propose to address Amendment No. 103C first, as both Amendments Nos. 103B and 104A are about the non-dependant deduction scheme.

Amendment No. 103C would effectively provide that certain categories of people could be eligible for an extra room under the local housing allowance. I certainly sympathise with the admirable intentions behind the amendment, but I hope to be able to reassure noble Lords that it is not necessary. From a legislative point of view, under Section 175(3) of the Social Security Contributions and Benefits Act 1992 we already have powers to exercise the regulation-making powers so as to make different provision for different groups of people. In the majority of cases, care for those who need it is provided by a person who is a permanent member of their household. In these cases, under the local housing allowance, the carer would already be included when the local authority calculated how many rooms the customer was eligible for.

Of course, customers who are disabled will often require more support with housing than customers who are not. I fully appreciate that. Disabled customers have a diverse variety of extra needs, and support must be tailored and be specific and responsive to an individual’s needs. I suggest that the local housing allowance structure is not the place to provide that support. That is why the department has a wide range of disability benefits, all designed to meet customers’ different needs.

It is also for this reason that we have the discretionary housing payment scheme. That is a matter that I hesitate to return to, and I commit to responding more fully to the point on which the noble Lord, Lord Oakeshott, pressed me. This is a more flexible system that enables a local authority to target more help to those customers who need it. Because it is discretionary, the local authority can tailor additional help to the level that the customer needs. Changing the local housing allowance so that it became a more complicated, specifically targeted benefit would undermine the aims of housing benefit reform.

Both Amendments Nos. 103B and 104A relate to non-dependant deductions. It has long been the established policy that adults who live in the household of a person in receipt of income-related benefits should contribute towards the costs of their accommodation. It is right that that should be so, because the taxpayer should not indirectly subsidise the accommodation costs of non-dependants. I think that the noble Lord accepted that point when he moved his amendment. Standard deductions are based on the non-dependant’s gross income level. This avoids subjecting the non-dependant to a detailed means test, which would be impractical for local authorities and the department to administer.

The amendments mean that some people who at present attract a deduction would not do so. Those who would not attract a deduction would be the following: anyone of working age who is 25 or over and in receipt of income support or income-based jobseeker’s allowance; anyone in non-remunerative work—that is, working less than 16 hours per week; and anyone in remunerative work whose income is under £101 per week.

Currently, non-dependants in receipt of pension credit and non-dependants aged under 25 who are in receipt of income support or income-based jobseeker’s allowance do not attract a deduction. For non-dependants on income support or income-based jobseeker’s allowance, the scheme reflects the fact that weekly allowances in those benefits rise at the age of 25, currently by £11.95, so it is reasonable to expect someone on those benefits to contribute towards household costs from that point.

Regarding non-dependants on pension credit, a review of the scheme was undertaken in 2005 and changes were made to reflect the needs of pensioners.

The second part of Amendment No. 103B would in effect impose a ceiling on the level of non-dependant deductions that could be taken from a person’s housing benefit. I appreciate that the intention of this is to limit the effect of non-dependant deductions on the tenant’s housing benefit, but it would also mean that the level of contributions expected from non-dependants on high incomes would be capped. That cannot be fair, especially to non-dependants on lower incomes, and indeed to the taxpayer, who would be subsidising the housing costs of those non-dependants.

On Amendment No. 104A, under the current scheme, dependants who are not in remunerative work and who are earning less than £101 per week attract a £7.40 per week deduction from the tenants' housing benefit and a £2.30 a week deduction from council tax benefit. It is not clear from the amendment what is the intention for non-dependants who are in non-remunerative work and are in receipt of income-based jobseeker’s allowance. I assume that the noble Lord intended no deduction to apply for anyone in non-remunerative work. If that is right, that would mean that a non-dependent who was on income support who was not working would continue to attract a reduction, but a non-dependent who was on income support and doing some part-time work would not.

Also, the lower-rated deduction in council tax benefit, assuming that there would be a read across, applies to incomes below £157. If the intention is to split the current lower income band in two, and the divide then being £101, that would mean that the current lower rate of deduction would apply to incomes between £101 and £157. If it is intended to move the current bandwidth from £157 to £101, that would mean that about 10,000 non-dependants with incomes between those figures would attract increased deductions up from £2.30 to £4.60 per week.

It is important to remember that the Government have frozen non-dependent reduction rates since 2000. Indeed, we dealt with that in the uprating just a couple of days ago, when they were frozen again for next year—although the income bandwidths, which determine the rate of deduction have been increased each year. That is beneficial both to householders and to the non-dependants themselves. Any reform of the scheme must take account the overall rationale for it. The Government's view remains that it is right to expect a contribution from non-dependants. The burden to the taxpayer must also be borne in mind.

I am conscious that a few complicated calculations and figures were flying around in that response, but I thought that it was important to put them on the record. I urge the noble Lord to withdraw the amendment.

We were just probing. The Minister rightly makes the point that there are difficult balances between the interests of taxpayers and the fairness of the system. I was grateful that, in his reply, the Minister acknowledged that there can be circumstances in which families are affected unsatisfactorily and I urge him, in the annual review of these processes, which he mentioned, to take account of the impact of the deductions.

For the record, I should add that I moved Amendment 103B and spoke to Amendment No. 104A, but I did not get on to Amendment No. 103C, although the Minister's reply started by referring to it. I should like the opportunity to address that at some point when we have concluded the debate on those two amendments. I apologise for not referring to Amendment No. 104A earlier.

Because no reference was made to it, I thought that the noble Lord was not going to highlight it but perhaps before we dispose with this group, he may wish to speak to it.

In my list, Amendment No. 103C is listed separately, but that list is one that we provided for ourselves, not the official listing. I apologise and I certainly have no wish to disrupt our proceedings but perhaps I may speak specifically to Amendment No. 103C.

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 103C:

Having already addressed the amendment and got my retaliation in first, I will not bore the Committee by re-reading my text. To emphasise, a member of the household is the carer for most who need and have them. They perform an incredibly valuable service for the community. They would obviously be included in the household and the evaluation that would be made of the type of accommodation, number of bedrooms and so on that should be supported through the local housing allowance. If it is a member of the household, that is already catered for.

Where that situation does not exist, there are a range of benefits. Discretionary housing payments might be a part of that, but I will not go through the whole list of benefits available for those with disabilities who need support again. That is the best way to do it, rather than a range of specific exemptions and changes in the new system. Notwithstanding that, one is obviously disturbed to hear the particular case that the noble Lord cited, and pleased that there was an outcome and that there are registered social landlords in the community providing the sort of service which was happily a solution to this problem. Local authorities are obviously active in doing that. I am conscious that this is a fairly general response, but the specific solution to the circumstances that the noble Lord has instanced should not be met by adjusting the approach to the local housing allowance.

The Bill gives us an opportunity to address the issue. The amendment would give people who are not particularly well equipped to trawl through the benefits systems for various allowances an opportunity to receive an exemption that would provide for their needs. The Minister seems to rely a great deal on the capacity of the system to pick up these people, who, as we well know, are often the most vulnerable in society.

I acknowledge that there is always more to do to ensure that people are fully supported, but it would not be right to adjust these provisions. Instead, we should ensure that people can access the benefits to which they are entitled. We had a general discussion about that yesterday and reported to the Committee on what is under way. That is the best way to tackle the issue. As ever, I shall reflect on the noble Lord’s helpful contribution.

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 104 not moved.]

Clause 29 agreed to.

[Amendment No. 104A not moved.]

Clause 30 [Loss of housing benefit following eviction for anti-social behaviour, etc.]:

moved Amendment No. 104B:

Amendments Nos. 105, 106 and 107 stand in my name and that of my noble friend Lady Thomas. The clause allows for pilots of measures to cut or stop housing benefit following eviction for anti-social behaviour. Let us be clear. We on these Benches are determined to deal with anti-social behaviour. There are many effective ways of doing so, some of which we have developed in our local authorities. We support effective ways of dealing with the problem, but this is not one of them. For us even to consider accepting the clause it must contain a sunset provision, as we have proposed in Amendment No. 107, which would ensure that regulations under the clause would cease to have effect after January 2012. A very similar amendment, with one change, was tabled by my colleague Danny Alexander in the Commons.

I shall address some key points raised by the Minister in Committee in the Commons, which we have dealt with in our rewording. He said that the Government,

“intend to commence the pilots for the proposal as soon as is practical—in the winter of 2007-08”.—[Official Report, Commons Standing Committee A, 2/11/06; col. 464.]

The Government were talking about two years only. Our amendment in the Commons, supported by the Conservatives, introduced a sunset clause that would take effect after January 2010. The Government said that the difficulty with that was that it left no flexibility on the start time. We were not entirely convinced by that argument, but in the spirit of compromise and taking the Minister’s objections at face value we have changed the date to January 2012, which offers the Government the flexibility that they need with ample time to conduct the pilots for this measure.

This has a history, does it not? It started in the housing Green Paper published in 2000, which acknowledged that it would be difficult to reduce or withdraw housing benefit from a claimant guilty of anti-social behaviour without it impacting adversely on innocent members of the family. I shall be extremely interested in the Minister’s response as to how that thinking has now changed.

These amendments seek to ensure that disabilities and health issues are taken into account before a household is served with a warning notice; to reduce the length and severity of the sanction; to ensure that support offered to the household is appropriate; to introduce a right to independent review of the actions set out in the sanction warning notice; and to ensure that pilots regarding the sanctioning of housing benefit end in January 2012.

Perhaps I may deal first with Amendments Nos. 105 and 106. We appreciate the concern that people with health issues should not be unfairly treated because their condition is not recognised or taken into account; hence, we already have sufficient safeguards in place to address this concern. Many health conditions will not affect a person’s behaviour or hinder their engagement with rehabilitation. The health issues that may be most relevant include mental ill health, alcohol and drug addiction. It is these health issues that may affect the person’s capacity to engage with support.

Post eviction, when support is offered and the household refuses to engage, an anti-social behaviour co-ordinator will consider whether a sanction is appropriate. This decision will be taken in discussion with relevant agencies. Exactly which agencies become involved will depend on the circumstances of the household and may include the police, social services, mental health agencies, children’s services, housing managers, education or the Family Intervention Project.

Amendment No. 105 would place a duty on local authorities to liaise with health services. This amendment is not necessary and is impractical. The term “health services” could encompass hospitals, GPs, psychiatrists, physiotherapists, dentists and many others. It would require local authorities to contact a large number of services in every case, not all of which would be relevant. To make the amendment workable and compliant with the European Convention on Human Rights and the Data Protection Act, we would need to limit liaison to relevant areas of the health service. In addition, the amendment places no duty on relevant health service providers to co-operate with local authorities. Medical confidentiality would preclude the sharing of this information without consent.

Amendment No. 106 would require any person who has responsibility for issuing a warning notice to have an understanding of disabilities or health conditions. It does not make clear how an anti-social behaviour co-ordinator would be able to demonstrate an understanding of disabilities or health conditions, and it is also not clear about the level of knowledge and experience that would be deemed necessary to meet the test. I do not doubt the importance of having medical input in the decision, but a wide range of issues need to be considered alongside health issues to best assess an appropriate course of action. Anti-social behaviour co-ordinators have a wealth of knowledge and experience in dealing with all the issues that can contribute to anti-social behaviour.

Amendments Nos. 104B and 104D seek to reduce the severity of the sanction. The intention is that the sanction should act as an incentive for households to take up support, and, to be effective, the sanction must carry weight. We want to send a strong message that the right to housing benefit comes with a responsibility to be a decent neighbour. The graduated increase in the sanction from 10 per cent for four weeks to 20 per cent for four weeks and then to 100 per cent gives an increasing incentive. If hardship were to be limited to a 10 per cent reduction, this graduated approach would be lost. We believe that the level of the sanction should be set in regulations. The regulations will be affirmative and therefore subject to approval by both Houses if they are changed. This is the way that sanction levels are set in other benefit regimes and it gives the necessary flexibility should changes to the rates of reduction be required.

Amendment No. 104C would remove Section 130B(4)(b), which provides safeguards for vulnerable groups by making housing benefit payable in certain circumstances even when all the conditions for the sanction are met. It allows the local authority not to sanction at all if it considers that it would not be appropriate in the circumstances of the particular household. Removing this subsection would undermine the safeguards built into the measures.

Amendment No. 104E would reduce the maximum possible length of a sanction from five years to 12 months. The starting point of the possible five-year period is the date on which the relevant order for possession is made. In practical terms, there may be a significant delay between the start of the five-year period and a sanction actually starting. For example, the order might be suspended and breached at a later date, leading to eviction; or, after being evicted, the household might live with family or friends for a period and would not therefore be in receipt of housing benefit. The intended outcome of the proposal is that problem households stop causing trouble within their communities. That will not happen overnight. Intensive support is often required. It is important that households are encouraged to undertake a full process of rehabilitation, and that can often take longer than 12 months. Having a sanction period of 12 months would reduce the effectiveness of the sanction and could in some cases render it unusable.

Amendments Nos. 104F and 106A are both concerned with ensuring that support offered to the household is appropriate. It is in no one’s interest for local authorities or rehabilitation service providers to provide support that is unsuitable. And it is not the intention that households should be sanctioned for not accepting support that is not appropriate to them. Households that have already been evicted for anti-social behaviour may have many and complex needs. The support they require must be carefully considered. Our intention is that rehabilitation service providers will work closely with the household when considering the needs of that household. The development of a support package would involve discussions with the household to arrive at a support package that was appropriate to them. As a further assurance, during the development of the pilots, officials will be working closely with support providers and other relevant stakeholders in producing guidance for developing support packages.

Amendment No. 104F would omit the words “or may provide”. The practical effect of the amendment would be that an authority would not be able to use a sanction unless it could provide rehabilitation services. I can confirm that the sanction will be available only where support services are available and where they have been offered and refused. That is explicit within the legislation and so this rewording is not necessary. Local authorities will need regularly to review all the circumstances of a case in considering whether to end the sanction. This will include a regular review of the appropriateness of actions being taken to address the problem behaviour. We will set out in guidance that regular reviews of cases must be undertaken. This is a sensible approach, which we will test through piloting.

Amendment No. 106A would allow an independent review to be requested at any time—perhaps many times in relation to one warning notice. It would not, however, prevent a sanction being imposed or continuing if a review were requested or was underway. Nor does it consider who might carry out such a review. Under these circumstances, the amendment would not be a helpful addition to the Bill.

Finally, I turn to Amendment No. 107. The amendment seeks to ensure that pilots regarding the sanctioning of housing benefit end in January 2012. It also seeks to ensure proper parliamentary scrutiny of any decision to roll out this scheme nationally by requiring that primary legislation is revised and new regulations made before a national rollout. As has been identified, a similar amendment was discussed and voted on in another place. We intend to commence the pilots for this proposal as soon as practicable. This will be in late 2007 or early 2008. I assure noble Lords that these pilots will last for two years, and for two years only.

I can also give an assurance about the level of parliamentary scrutiny that would be necessary before this proposal could be introduced nationally. Before national rollout, we are committed to producing a full regulatory impact assessment for the proposal. New regulations, both affirmative and negative, would also need to be made. This will provide sufficient scope for parliamentary scrutiny of the proposal prior to any national rollout.

I thank the Minister for that response. I was particularly keen on the emphasis that he laid on rehabilitation, because that must be the whole purpose of the exercise. We are aware of the difficult situations that can arise when households and families are involved and of the whole question of ASBOs, as well as of the evictions which might well follow from them.

These families need support. It appears that, despite the advice of local government agencies and others that sanctions would not necessarily be conducive to solving these problems, the Government have gone out on a limb, not in a small way but with a big stick in the form of these sanctions. Only in January 2004, the department said that in the light of concerns, particularly from local authorities which play a key part in preventing and dealing with antisocial behaviour and private and registered social landlords, it decided not to proceed with a housing benefit sanction at the time. Yet the situation appears to have changed in Government thinking. I welcome the fact that Parliament will have the opportunity to review these proposals because I regard them as extremely draconian measures. A 10 per cent reduction in housing benefit is a significant sanction on families that are highly dependent on public support. It is large reduction in their resources and is certainly an incentive for them to seek rehabilitation. The deepest concern on these Benches is that we cannot be absolutely certain that the Government have the resources in place for rehabilitation, which I accept is the most important element of the programme.

I hope that the noble Lord will also accept that I said that if rehabilitation services were not available in a particular area, a sanction could not be imposed. That is made clear and I want to put it on the record.

I am reassured by that statement. Nevertheless, what would be even more reassuring is the knowledge that rehabilitation services will be available wherever they are needed. That, I believe, is the Government’s intention here and noble Lords would be happy to support it. Where I suspect we are somewhat at odds is that we feel that the introduction of these draconian measures without having rehabilitation services in place rather puts the stick before the carrot.

Focusing on rehabilitation is rather to miss the point. If these resources are available, they should be applied to help people before we get to the desperate situation where they are actually being evicted. I question the whole structure of co-ordinators, evictors and respect areas we are now hearing about. What on earth is a respect area? Are we not meant to have respect in other areas? This is all about something dreamt up by the Government spin merchants and then trying to fit everything into that category. It will not have the effect of helping the people who need it.

On the specific point of Amendment No. 105, I was pleased to hear the Minister say that we would need to limit the coverage to specific areas of the health service. As he read out the list of the various members of the health service who would be affected as the amendment is drafted at the moment, it sounded like the definition of a healthcare professional we discussed yesterday. However, I fully accept it and I am delighted at the Minister’s offer of help. We would be more than happy to withdraw our amendment if he would like to bring forward a government amendment incorporating those changes.

I tried to cover in detail what the Minister in the Commons said and how we were changing our sunset clause to deal with that. However, I am afraid I did not hear him deal with what we consider to be a genuine attempt to bridge the gap with a compromise that would allow the pilot to go ahead but with the control still firmly held here, which we do not believe would be the case with the statutory provisions in regulations as he proposes. I did not hear him address those suggestions. I am bound to say that while I will withdraw the amendment now, I look forward to introducing something very similar on Report.

Much of what the Minister said could have been quoted almost directly from the housing White Paper of 2000. I asked him what had changed since then. I accept that he has talked of the increasing availability of rehabilitation services and such like, but I am far from certain that that is enough to withdraw all our objections to the clause.

To deal more specifically with that point, perhaps I should re-read the White Paper to which the noble Lord refers. The development of support services has clearly moved on, however, in communities up and down the country. Picking up on a point made by the noble Lord, Lord Oakeshott, rehabilitation support services are meant to kick in not only when people get evicted and are about to be sanctioned, but before that. We hope that that is the overwhelming result. Nobody wants to have to apply these sanctions; they will be a success if they are never used. We must all hope for that outcome.

Given the Minister’s comments, for the moment I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 104C to 107 not moved.]

Clause 30 agreed to.

Clauses 31 to 34 agreed to.

Clause 35 [Supply of information by rent officers]:

moved Amendment No. 107A:

We support the amendment. It seems to be a no-brainer. Why on earth would rent officers not want to be transparent and clear in their work? That is essential, given the interesting examples cited by the CAB and Shelter, covering places such as Barnet, South Dorset, Leeds and Conwy, which showed wide evidence of problems of affordability of housing and finding housing at the rents that rent officers are sanctioning. This seems to be a straightforward measure and I cannot see what rent officers have to hide. It would help people who are disadvantaged by the system to discuss it, look at it and understand what is happening. I would have thought that it was very much in the interests of rent officers around the country, so I cannot see why it would not be acceptable.

I think that the Minister has the Benefits and Contributions Information Guide 2006 in front of her. Not quite, apparently, but I have. We all know that at the moment, if a housing benefit claimant is a council tenant, the amount of rent due is reduced correspondingly. If the claimant rents from a housing association or has a private landlord, housing benefit is paid directly to the person entitled. New claims from private tenants, including changes of address, are paid in arrears. If the rent is eight weeks or more in arrears, housing benefit is automatically paid directly to the landlord unless the local authority has reason to believe that the landlord is not a fit and proper person to receive those payments. Lastly, direct payments to the landlord may also be made if the claimant requests or agrees to such payments or if the local authority thinks that they are in the claimant’s interests. New claims from private tenants, including changes of address, where payment is made directly to the landlord are paid four weeks in arrears.

Much of that will be changed by the Bill. It would be of use to the Committee to know exactly how much is staying and how much is going, not least to tie this amendment into the ESA, which we spent two and a half days discussing. Is the £20 earnings disregard to continue for housing benefit if the claimant is entitled to disability premiums, severe disability premiums and carer premium? I appreciate that I may not be speaking to the right amendment, but it would be extremely useful to have the answers before the next one.

I thank the noble Lord for bringing about this debate. I am trying to think of something amusing to say about standing here wearing my daffodil. I took it off momentarily to give it a drink, because it was starting to get a bit tired, so when the noble Lord, Lord Taylor, was congratulated on his, I had to pull mine up from under the table immediately.

On an amusing note, I have just been handed the most wonderful piece of paper that I have had so far in this Committee. It just says, “Yes”. We will come on to that.

The aim of the amendment is to clarify the role that rent officers will play under the local housing allowance. I welcome many of the aims of the amendment and understand the sentiments behind it, but I take this opportunity to assure noble Lords that it is unnecessary. Rent officers will have a pivotal role to play in the local housing allowance. They will be responsible, as has already been described, for setting the local housing allowance rates and the broad rental market areas in which those rates will apply. As we have already heard, that will be key.

Collaborative working between rent officers and local authority staff has resulted in an excellent partnership, ensuring effective administration of housing benefit. However, I appreciate that some of our stakeholders have found it difficult to understand the methodology employed by rent officers and exactly how they have fitted into a complex housing benefit system. We have an opportunity to make the role of rent officers, and the decisions they make, more transparent and open. I am grateful for all the work that organisations such as the Catholic Housing Aid Society in Kirklees have done to help identify some of the difficulties and propose practical solutions.

We accept that the rollout of the local housing allowance presents an opportunity to put in place the processes demonstrating that rent officers make the right decisions. However, the best and most flexible way to do this is through guidance rather than legislation. We must also ensure that, in improving transparency, we do not undermine rent officers’ ability to collect accurate information and evidence.

To calculate local reference rents and local housing allowances, rent officers currently use a wide range of evidence from the relevant rental market. To collect the evidence needed, rent officers use a variety of research methods and professional contacts, including individual landlords and lettings agents. Much of the information they gather is commercially sensitive and given in confidence. Requesting that rent officers publish this information would have two serious consequences, which I do not think that the amendments are intended to achieve. First, it would undermine the rent officers’ relationships with letting agents, and could lead to these agents withholding information that they do not wish to be made public. That would undermine the reliability of housing benefit rates. Secondly, it could result in stakeholders attempting to influence the rent officers’ decisions by providing additional but inaccurate market evidence.

With the national introduction of the local housing allowance, the rates and the broad rental market areas relating to a local authority will be published—and this is key—to allow customers to see in advance what the maximum level of housing benefit, for a certain size of accommodation, will be. This transparency is one of the key advantages of the local housing allowance.

As the Minister for Disabled People stated in the other place, we also want to take this opportunity to ensure that the way these rates and areas are set is as clear as possible. I give a firm commitment that rent officers will consult local authorities, both the housing benefit departments which noble Lords asked about and the wider housing strategy departments, when they are setting broad rental market areas to ensure that the areas accurately reflect the local housing markets and communities. The Rent Service in England will also put this into guidance for rent officers that will be published on the internet. We will work with rent officers to ensure that their role is aligned with wider government aims of encouraging mixed and sustainable communities, and that they deliver a consistent approach for all local communities. The planned two-year review of the local housing allowance will provide us with the opportunity to check that these processes are working effectively.

The noble Lord, Lord Skelmersdale, asked whether the £20 earnings disregard would remain following the introduction of local housing allowance. As I have said, the answer is “yes”.

I hope that I have picked up on the important concerns that were expressed about the need for transparency, the need for rent officers to work closely with local authorities, and the need for fairness and openness. I hope that the noble Lord will therefore feel able to withdraw his amendment.

I am happy to withdraw my amendment, because I was much reassured by the noble Baroness’s comments about the transparency of the process, which the amendment was seeking to establish. When the two-year review takes place, we should have the opportunity to see the demographic influence that the process may have had. Perhaps the biggest danger in setting this rent level is the possibility of our upsetting the mixed demographics of substantial communities. I hope that that will be part and parcel of the review. It should not look just at the efficacy of the system in providing rental cover.

I am not sure that I made it clear enough. The duty for rent officers to consult local authorities is important. Many stakeholders have argued that local authorities have a wealth of information and experience which is not being tapped into. Rent officers will be expected to have regard for the views of the local authority in setting the geographical area. That is an important development.

May I assume that this is on the basis of continual consultation?

Absolutely.

The direction of travel which the Minister has outlined is good. I still do not see why the amendment is unnecessary, but given that she has said that transparency will be improved, I am happy to support her.

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 35 agreed to.

Clause 36 [Payment of housing benefit]:

moved Amendment No. 108:

I have great sympathy with the concerns raised by the amendment of the noble Lord, Lord Addington. I have added my name to it. On these Benches, we have serious concerns over the Government’s intention to encourage customer claimants to handle their housing benefit rather than opting to have it paid directly to their landlord. Although we understand their aim of encouraging financial responsibility and are pleased that they are attempting to give recipients more freedom to manage their income as they see fit, we think that doing these things by this method is dangerous and is likely to lead to more harm than good. As a result, we want to have a stand part debate for the whole clause.

Currently, only 40 per cent of private housing tenants receiving housing benefits handle the money. Under the Pathfinders, we understand that the number has doubled to 80 per cent. Will the Minister reassure me that these figures are not being achieved by setting targets for local authorities but are really a reflection of the conditions on the ground?

As the amendment suggests, we are very concerned by the expectation that people unable to handle their own money must draw their vulnerability or unsuitability to the attention of the housing authority. It is unlikely that vulnerable claimants will identify themselves, and we feel that the housing authority should have a proactive role in seeking out those who might be unable to handle the benefits themselves, before they fall into debt, rent arrears or face eviction. Waiting until the problem is so far advanced before taking action will do nothing to improve the claimant’s personal responsibility and could cause significant hardship and distress.

We understand from Citizens Advice that the Government have removed the specific lack of an obligation to be proactive from the guidance. Is that the case? Will the Government therefore actively encourage housing officials to identify vulnerable claimants?

These measures are also likely to have knock-on effects on the housing market. The secure knowledge that their rent will arrive on time, and in full, is an important reason private landlords rent to benefit recipients. I am aware that recipients do not need to declare that they are receiving housing benefit to their landlord, but it is not in anyone’s interest to see the supply of private housing shrink to those who do. With greater uncertainty over the security of their rents, it is likely that private housing will become more expensive, more limited or both.

Finally, I would like to revisit a point made at Second Reading by my noble friend Lord Skelmersdale. If the Government are so sure that these steps will be beneficial for housing benefit recipients, why are they not extending the option to tenants of social sector housing?

I shall try to respond quickly to these points. One of the central objectives of housing benefit reform is to match rights with responsibilities. Clause 36 provides for powers prescribing the manner in which housing benefit is to be paid to all types of tenant. While I recognise the positive intention of Amendment No. 108 that seeks to protect the interests of customers who may have a higher level of need, I can assure noble Lords that this amendment is not necessary.

Under current legislation and regulations, housing benefit customers can be paid by way of rebate of their rent account, by payment to the customer—including someone on their behalf—or by a combination of both. Where the authority is not the landlord—that is, where the customer is in the private rented or housing association sector—it cannot rebate the customer and therefore has to pay the customer or someone on their behalf such as a landlord, or a third party.

In the local housing allowance Pathfinders, the proportion of payments made to tenants has increased from 50 per cent to 84 per cent after two years. The Pathfinder evaluation found customers to be, on the whole, good money managers who actively budget to ensure their finances are stable and take paying their rent very seriously. The minority who were initially daunted by the prospect of paying their own rent tended to be young people inexperienced in managing their finances or people who had pre-existing financial difficulties. With help and advice, many of these individuals developed the skills not only to manage their rent payments but also to improve their wider financial capability—an important step on the road to employment.

We therefore believe that excluding individuals from the responsibility of managing their housing benefit payments on the basis that they meet a pre-determined set of criteria would not be the right way to proceed. This approach would constrain the flexibility of local authorities to act in the best interests of the customer and could deny many capable customers the benefits of managing their own housing benefit.

However, we will not force this responsibility on to those who are genuinely unable to exercise it and will provide support to those who need it. Funding to support financial advice services has been set aside for the national rollout of local housing allowance. This is further supplemented by cross-government activity to increase financial inclusion, in particular to help individuals access appropriate banking services.

To protect vulnerable customers, safeguards are in place for the national rollout of local housing allowance. Regulations will ensure that payments can be made to the landlord where the customer is likely to have difficulty managing their financial affairs, where it is improbable that they will pay their rent or where payment has been made to the landlord previously during the award due to arrears of eight weeks or more. Payment will always be made directly to the landlord, subject to limited exceptions, where there are eight weeks or more rent arrears. Customers can also elect to have their benefit paid to a third party other than their landlord. Guidance will be available to help local authorities apply these safeguards. It will be informed by lessons learned from the Pathfinders and comments from the welfare organisations working with us.

With regard to the social rented sector, which the noble Lord, Lord Taylor, highlighted, I feel very strongly that tenants of local authorities and housing associations should reap the benefits gained by private tenants in the Pathfinders from managing their rent. Currently where the authority is the landlord, it effectively has a choice as to the manner of payment. Invariably tenants in these cases—that is, council tenants—end up having their rent rebated. In addition, fewer than one in 10 housing association tenants nationally are responsible for managing their housing benefit. In response to the welfare reform Green Paper consultation, we decided not to introduce the local housing allowance to the social sector at this time; however, this clause supports the extension of payment of housing benefit to tenants and, therefore, the principle of tenants’ responsibility to all housing benefit customers.

It is wrong to assume that social tenants are any less able to manage their housing benefit payments than their peers in the private sector. In fact, independent research from the Joseph Rowntree Foundation suggests that social tenants are just as likely to have the financial capability and the willingness to manage their housing benefit payments. At present, the rate of worklessness among social tenants is twice the national average. Encouraging more tenants to handle their own housing benefit payments is a step towards financial inclusion and greater readiness for employment. Not taking this responsibility risks undermining their self-reliance and could contribute to benefit dependency. Clause 36 provides for powers prescribing the manner in which housing benefit is to be paid to all types of tenants. This clause will enable us to require local authorities to make payments of housing benefit to their tenants so that the principle of tenant responsibility can be extended to all types of tenants.

Of course, any change to the rules affecting social tenants would, as in the private rented sector, include safeguards to protect those who are unable to manage their own affairs, as has been described so eloquently by the noble Lord, Lord Addington. Support for those who are less experienced in managing their rent should be available. We will proceed cautiously in the social sector. We do not intend to make regulations under this power or under our existing powers that will affect social tenants until we are confident that we have the right approach and the right support mechanisms in place.

I want to respond to a couple of points made during our discussion. I was asked how proactive local authorities will be in assessing a customer’s vulnerability when setting housing benefit. If a local authority receives notice that a claimant might be vulnerable, it must investigate whether that is the case. That notice could include, as has been suggested, the customer’s own representations. Further, the landlord will have the opportunity to be proactive and his representations would be accepted, as would representations from advocacy services such as a citizens advice bureau, social services, the GP and other healthcare professionals, along with organisations that act as representatives on behalf of claimants. If agreed, the amendment would place a requirement on local authorities to assess every single claimant and potential claimant for vulnerability. Our approach allows for customers who have the potential to fall into arrears and who may be vulnerable to be picked up proactively through other means.

I hope that the noble Lord will feel able to withdraw his amendment and that I have not rushed too quickly through this slightly more complicated issue.

Can the noble Baroness clarify the position regarding the period of time that must elapse before intervention would begin? She spoke of an eight-week period. However, my assessment is that many people would be out of their home within that time if they fell into arrears. Have I heard her correctly? I am concerned about the delay that may occur between people getting into difficulties and interventions to support them.

The point I tried to make was that, if a tenant falls into arrears of eight weeks or more, payments should be made direct to the landlord, subject to exceptions where eight weeks or more of the rent arrears are owed, in order to help customers to avoid eviction action. It would be sensible if I wrote to the noble Lord and set out the timings in clear detail.

I accept that offer and I am grateful to the noble Baroness for it. It is another example of something that runs throughout this Bill. The effectiveness of the legislation is going to depend on the degree to which the regulations are implemented sensitively and the degree to which those who are supposed to benefit from these reforms are given the help and advice on the process that they need. Can we be assured that such a scheme will not be rolled out unless proper help and advice are available both to the claimant customers and to the housing authorities, who should be fully equipped before this scheme is rolled out?

The Minister gave us a helpful answer. Am I right to assume that the type of support that is called for in this amendment—the advice and the financial planning—or something like it will be available? That is the implication that I took from her answer. Is it the case that it will not become a hard-and-fast rule that you will have to handle the payments yourself? If the noble Baroness could nod vigorously—

I could nod, but I should make it clear that we are building on the experience of the Pathways areas, which is where this approach has been very successful. I hope that I can offer the noble Lord reassurance that his concerns will be met by the regulations and guidance that will go with the Bill.

That is about as good an answer as you can get at this point, although you are always a little worried that you cannot see it. All we can say is that we hope the support comes forward, but this, once again, shows the weakness of relying on regulations. However, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 36 agreed to.

Clauses 37 to 39 agreed to.

Schedule 5 agreed to.

Clause 40 [Social security information]:

moved Amendment No. 108A:

I am grateful to the noble Baroness for introducing the amendments, which take account of part of what the Delegated Powers and Regulatory Reform Committee had to say on the matter. One thing not available to us in what I earlier called the little red book, but let us call it the large red book, was the draft regulation under Clause 40. I was interested to hear the noble Baroness say that the draft regulations will be available. The question, therefore, is: when?

On clause stand part, I was going to probe current practice of sharing information, to which the clause refers, and to explore exactly what the Government intend to change. I am curious that there appears to be no provision for the sharing of information for the purposes of preventing fraud in current legislation. If a claimant is defrauding one part of the benefit system, it is extremely likely that he or she will be defrauding another. It seems a basic precaution to alert the relevant people just in case that is happening. Can the noble Baroness explain why it has not until now been considered necessary to do that?

However, there is a limit to the sort of information that should be shared—a subject to which I referred on Second Reading. Information on fraud should certainly be shared, but much information that those who decide on disability benefits will hold on a claimant is confidential and should certainly not be shared lightly, nor without express permission of the person whom it concerns.

One must look at other happenings in the House. I do not know if the noble Baroness has been listening to any of the debate on the Serious Crime Bill but in that, the confidential nature of health information is appreciated, with patient data being disclosed only voluntarily. That should be true here. I am not sure that I heard the noble Baroness being as definitive on that point as she sometimes is on others. There is no need to share health data without the claimant's permission. To do so would be unacceptable. I am sure that she will tell me now that the Government have no intention of sharing such information. Should there then not be a safeguard in the Bill to prevent any future move away from that line?

From these Benches, we welcome the government amendment in response to the Delegated Powers and Regulatory Reform Committee. It seems extraordinary that the housing benefit and Jobcentre Plus offices are very far apart and that, although informally they speak to each other, they often do not do so officially. What the noble Baroness has said is extremely welcome.

The regulations referred to with regard to Clause 40 are in the Red Book on page 138. I apologise if that was opaque.

On the point made about information-sharing about fraud, I am informed that there is already a legislative gateway to share information to tackle fraud which has been in place for years, so there is no requirement for another gateway in the Bill. I therefore hope that Clause 40 can stand part of the Bill.

On Question, amendment agreed to.

moved Amendment No. 108B:

moved Amendments Nos. 109 to 110:

I have taken this opportunity to probe exactly how widely the Government intend this clause to extend. The definition in the inserted subsection (3) is extremely general, and could be taken to include numerous establishments to which the current, rather more specific, section of the Social Security Contributions and Benefits Act 1992 does not refer.

Can the Minister explain to me why this clause is in need of amending? What establishment does she intend to be covered that is not already covered by legislation? Some concern has been raised that this clause will cover sheltered housing and other private housing that has some small level of care, such as an on-call nurse, paid for by a fixed charge. Does the Minister not feel that this clause would be improved by a rather clearer definition of just what it is intended to cover?

I am grateful to the noble Lord, Lord Skelmersdale, for giving me the opportunity to explain the purpose and effect of Clause 59 and, I trust, give him the reassurance he seeks. The clause, and regulations to be made under it, will replace the current legislation governing the circumstances in which payment of attendance allowance or the care component of disability living allowance is withdrawn from care home residents. Its purpose is to provide greater clarity to the legislation, not to alter the circumstances under which the benefits are currently withdrawn.

Attendance allowance and disability living allowance are paid as a contribution towards the extra costs that severely disabled people may face because of their disability. However, people in care homes have their disability-related needs, except those related to mobility, met entirely by the services provided in the home. Accordingly, to prevent the duplication of provision from public funds, payments of attendance allowance or the care component of disability living allowance are withdrawn after 28 days where the care home accommodation is either provided by a local authority, or the costs of the accommodation are met in full or in part out of public or local funds, under specified legislation.

However, the current legislation in this area is confusing both to customers and their advisers for two reasons. First, it does not define what is meant by the “costs of accommodation”. It is generally accepted that, under the current legislation, the “costs of accommodation” include not only the cost of the accommodation and board received in a care home but also the costs of any personalised care received. The Social Security Commissioners have supported this interpretation whenever it has been challenged. But the fact that this interpretation has been challenged proves that the current legislation is far from transparent to our customers.

It really is extremely annoying that for the last few amendments of the Bill we are under such pressure of time. Had we not been I would have stopped the Minister very early on and given him the same advice that I gave to the noble Baroness, Lady Meacher, on her first amendment—for goodness sake to slow down so that what he says is comprehensible. I found that pretty incomprehensible and I shall have to read what he said in Hansard. On the whole I am prepared to accept that this clause is purely technical.

However, I will have to look more carefully at whether a supported living service that might not currently be considered to be a care home could conceivably be covered by the regulations brought in under this broader definition. I think the Minister referred to that in his rapid mode of delivery. Therefore, I will only press him—perhaps privately— later should I need to, having read what he said in Hansard.

After the noble Lord has had a chance to read Hansard, I will be happy to clarify any further points he has before we reach Report stage.

I am very grateful.

Clause 59 agreed to.

Clause 60 agreed to.

moved Amendment No. 111:

For the avoidance of doubt, does “healthcare professionals” mean anyone other than doctors, medical practitioners, nurses, psychiatric nurses and, I suppose, consultants? Our briefing says “and other professionals”, but that may not be right. Are we talking about just those categories?

The noble Baroness, Lady Thomas, is right to ask that question. We have been using the words “healthcare professionals” pretty loosely from the beginning of Clause 1 to just a few amendments ago. We were told that “healthcare professionals” were to be employed Atos Origin, but they will not necessarily be GPs, nurses, physiotherapists and so on. I am not entirely sure that these amendments cover that point. I shall have to study carefully what the Minister had said.

Since this is the last amendment, I thank the Minister and the noble Baroness, Lady Morgan, for being so tolerant with me and my noble friend, and our sometimes rather unusual way of discovering the Government’s intentions. I am extremely grateful.

The expressions I used were not intended to be exhaustive. The definition of “healthcare professionals” has bedevilled us a little in Committee, and we are already committed to write to noble Lords who have participated, to get some clarity of this provision and across the board. We will ensure that that happens.

Can I be quite clear on that? We raised this question yesterday, and I would have expected a little more today. It is obvious to everybody that doctors, nurses and community psychiatric nurses are healthcare professionals. What we are specifically asking—in a clear and straightforward letter—is who else qualifies as a healthcare professional. What categories? What professional qualifications, if any, must they have?

I listened carefully to the Minister; he spoke of the “legally qualified member of a tribunal”. Do they have to be medically or professionally qualified? We are talking about those who are not covered by the obvious categories, not those who are. We must have that specific detail, please.

I understand that point. I thought that we had already committed to write to noble Lords to make it as explicit as we can. I expect that what we say will also include the expression “this is not necessarily an exhaustive list”, but it will certainly clarify the points and areas—

I am sorry, but that is exactly the point: not “and other unspecified”, but that it must be an exhaustive list. That is the undertaking we are asking for. If there is a definition which has a lot of things left open at the end, that is not satisfactory.

I am well aware that the noble Lord and others are pressing for as much clarity as possible. I am advised that it is probable that we can give an exhaustive list. Perhaps we should test the water on that; we will write in as full a term as we possibly can. Doubtless, if, on receipt of that letter, if there are any qualifications that the noble Lord wishes to pursue, we will have a full chance to do so.

I am delighted. In that spirit, we follow the remarks of the noble Lord, Lord Skelmersdale. Both Ministers have done exceptionally well over the past three days, and I thank them very much for their help.

On Question, amendment agreed to.

Clause 61 agreed to.

Schedule 7 [Minor and consequential amendments relating to Part 4]:

moved Amendment No. 112:

moved Amendment No. 113:

moved Amendments Nos. 114 to 115: