Skip to main content

Local Government Finance Bill

Volume 739: debated on Monday 16 July 2012

Committee (4th Day)

My Lords, should there be a Division while we are sitting, we will adjourn for 10 minutes.

Clause 9 : Council tax reduction schemes

Amendment 72

Moved by

72: Clause 9, page 5, line 11, at beginning insert “From 1 April 2014,”

My Lords, I shall also speak to our other amendments in this group. The amendments would defer the requirement on local authorities to introduce a council tax reduction scheme by one year so that it will be made no later than 31 January 2014 to come into effect on 1 April 2014. I am delighted to see that this has the support of both parts of the coalition, or at least I think it does since noble Lords have put their names to it, but perhaps things have changed. We should recognise that the Secretary of State has a power under the Bill to defer the introduction of these requirements, but seems intent on rushing ahead with the current timetable. This amendment is not designed to be a wrecking amendment. We have made clear our preference for any council tax support scheme to be part of universal credit, or at least for there to be a national system. However, should this preference not prevail, what is to be put in place must be properly thought through and consulted on, be capable of implementation and be fair.

Designing a council tax support system is not to be taken lightly. Council tax benefit, despite its relatively low take-up, currently offers support to nearly 6 million recipients: by definition, the poorest and the most disadvantaged. The Bill provides only the framework for what is required. The detail will come with the regulations and we are told that these will definitely be with us before Report, but that could be October. We have the statement of intent, but it is not the definitive position and an addendum is promised, and perhaps we can inquire when that will be forthcoming. As I say, designing a benefit or support system is never straightforward. People do not all live straightforward and routine lives that can easily be categorised and encompassed within a simple set of rules. The Government’s own timeframe, in designing and implementing universal credit, is in part recognition of this. It is new territory for local councils. Administering a system is one thing; designing one is something else, especially as the design is supposed to encompass clear work incentives and to sit alongside both the universal credit and the existing benefit system for some years to come.

The current council tax benefit system is hugely complex and no doubt this is one of the reasons for low take-up, but it has a whole raft of components that are there for good reasons. This is not an exhaustive list, but the matters catered for include a basic applicable amount, disabled child premiums, disability premiums, enhanced disability premiums, severe disability premiums, carers’ premiums, the ESA support group component and the ESA WRAG component. There is a disallowance of certain benefits that we compute in income, which include attendance allowance, child benefit, constant attendance allowance, and DLA care and mobility components. There are income disregards at different rates, deduction of income for childcare costs for lone parents, permitted work rules, the second adult rebate alternative, the backdating of claims and the run-on provisions. Moreover, the interface with universal credit is complex, and we will debate that in more detail in subsequent amendments.

This is not only about deciding whether universal credit will feature as income in a council tax support scheme. There are related allowance issues, embedded in the current system, which might be otiose or need to be supplemented: the treatment of unearned income, childcare costs and passporting. Currently, I understand that some two-thirds of council tax benefit recipients are passported on to 100% benefit. Having to means-test all these will present a major administrative burden for local authorities. Of course, we have not yet had the final details of universal credit. These are not due, we understand, until the autumn. Perhaps the Minister will confirm that that is his understanding.

What is the current expectation of when all the detail will be known? How confident is the Minister that local authorities have a full understanding of the intricacies of the possible interactions between universal credit and the existing system? What is the current understanding of the volumes that will flow on to universal credit next year? Which features of the default system reflect the interface with universal credit? We know that universal credit is going to be taken as income, but that is just one component.

We are told in the statement of intent that in prescribing the requirements of those who have reached the qualifying age for state pension and for the default scheme, the requirements will replicate as far as possible the existing provisions. Can we be advised of the detail where the provisions are not replicated? I am happy to have that by letter if it is not available this afternoon.

Of course, the risks for councils are huge. The system is no longer to be demand-led AME-funded. Financial risk passes to local authorities together with the 10% cut—or indeed more—in central government funding. As London councils point out, the focus in the short term may be the 10%, but there is a need to consider the sustainability of any system in the longer term. Increased demand and take-up will add to cost.

The need for local authorities to have more time should be obvious. If the Government want local authorities to have regard to local factors and to have schemes that deliver positive incentives to work, those local authorities need the capacity to do the job properly. To have to do this in short order at a time of considerable turbulence, when staffing levels are under pressure, budgets are being cut, system and organisational changes due to housing benefit are being rolled into universal credit—

Sitting suspended for a Division in the House.

My Lords, I was explaining that to have to do this in short order at a time of considerable turbulence—when staffing levels are under pressure, budgets are being cut, and systemic and organisational changes due to housing benefit being rolled into universal credit are being contemplated—is simply unreasonable. At this point, perhaps I should refer to the report of the Local Government Chronicle from 16 February this year. It says:

“More suppliers have joined in the criticism of the government’s welfare reform timetable that risks leaving councils to foot the entire bill for a £480m gap in council tax benefit funding. With Capita having already labelled next year’s deadline ‘impossible’, other suppliers have confirmed they have raised the issue with the Department for Communities and Local Government. As previously reported by LGC, Capita wrote to more than 150 customers in January telling them: ‘It will not be possible to put new systems in place by March 2013, when councils are due to set up their own council tax benefit schemes incorporating a 10% cut in funding’”.

If local authorities are to fulfil the task of taking account of local factors, and in particular to deliver positive work incentives in drawing up a draft scheme, they must know the detail of the universal credit, which will come into existence in 2013. This is especially so given the need for consultation. The statement of intent requires a billing authority to consult any major precepting authority that has the power to issue a precept to it, then to publish a draft scheme, and then to consult such other persons as are likely to have an interest in the operation of the scheme.

What is the latest time at which the Government think that consultation can proceed under these provisions? As for major precepting authorities, it has yet to be determined how funding is to be allocated between the tiers. Although the final say is with the billing authorities, any disagreement on the draft at this point might have considerable impact on the timing of the publication of a draft scheme. Those others who are likely to have an interest in the operation of the scheme could be a very wide group of people.

We discussed last week that it should certainly include local precepting authorities, which will bear part of the cost. When the Government have felt fit to remind local authorities of their responsibilities under the Equality Act 2010, making it clear that they will have to consider how a scheme might affect people who share a relevant protective characteristic, they will certainly need to consider the impact of their scheme on disabled people.

Local authorities have a specific duty under the Child Poverty Act to work with local partners to reduce and mitigate the effects of child poverty. They will be required to take into account their local child poverty needs assessment in designing and developing localised schemes. They will also need to have regard to the position of those at risk of becoming homeless. The statement of intent makes it abundantly clear that inadequate consultation could lead to judicial review, a matter to which we will return shortly.

The Government know that they are putting local government in an extremely difficult position by this timetable. That is why they are validating consultation commenced before the passing of the Act and why they are implicitly encouraging a consultation period of less than the 12 weeks encouraged by the code. This simply will not do. The statement is clear about the prescribed pension credit age scheme, and the Government have been clear that, in developing local council tax reduction schemes, vulnerable groups should be protected. They declined to define further “vulnerable groups”, but we will press them on that later.

Vulnerable groups should be protected and are clearly entitled to be consulted in a meaningful way. The Government are offering or insisting on one they made earlier, in the form of a default scheme. This is designed to be equivalent to existing arrangements. Of course, for those tempted to take this up or who are left with no practical option but to do so, that comes at a cost, because they will have to find the 10% cut in funding. Those who cannot live with the default system are encouraged to adopt a system using the same factors as present, as that would reduce the amount of time and expense in changing the IT systems. That is hardly a principled base on which to build a council tax benefit system.

If local authorities are to play the part required of them, whether we agree with it or not, it must surely be right for them to be given time to do the job properly. We are well aware that councils are working hard to meet the exceptional challenges that this legislation brings. Local government has a strong history of delivering the near impossible, but the timetable must be judged not by the pace of the quickest and the best resourced—those who have a ready pool of extra resources from second homes and empty properties—but surely by the least well resourced, who run the risk of having the default scheme imposed with the 10%-plus hit on services.

We are aware that there is a view that if there is to be a year’s deferral, the Government will extract their 10% by some other means. The Government seem to be adept at finding money here or there for a waste collection scheme or change in fuel duty. However, this is fundamentally about fairness; the Government are asking a lot of local authorities. A chance to do the job properly in the interests of the poorest and most disadvantaged is not unreasonable. I beg to move.

My Lords, I added my name to some of these amendments. I do not need to go quite as far back as 16 February, which was the date of the Local Government Chronicle article from which the noble Lord, Lord McKenzie, quoted. I go back to a meeting held on 28 May for London Councils, which that body asked me to chair and which was attended by a number of your Lordships. It was addressed by senior officials of London Councils and it aroused in me considerable apprehensions about the timetable to which the noble Lord, Lord McKenzie, referred. At that time, it was clear to those officials that a number of councils in London would have difficulty in adhering to the timetable. That caused me some alarm. My noble friend Lady Hanham will remember that I came to see her and expressed some of the anxieties that had been voiced on that occasion. My noble friend undertook to take account of them and asked that the bodies write to her directly because she had not had quite the same message from the officials in her department, and they did.

However, since then it has become apparent that quite a lot of councils have taken the bit between their teeth. They have realised where they are, and that they will have to devise and adopt schemes for council tax support, as required by the Bill. I am sure that many of them have no wish to be involved in a default scheme, although that is always a fall-back. They have got on with it.

Indeed, when I consulted the Local Government Association—I do not think I need to declare my interest again—its members’ view was made clear to me. Given, as the noble Lord, Lord McKenzie, said, that £500 million savings have to be found in any event, and one remembers that actually the commitment for that goes back to the initial statement in 2010, the dangers of postponement exceed the dangers of trying to keep to the timetable. In putting my name to the amendment, I wanted primarily to raise the anxieties that had been expressed by London Councils, recognising, as does the noble Lord, that this is not a universal view of local authorities.

The main problem that London Councils saw in implementing the date in the Bill is that it would be nearly impossible for councils to be able to achieve what they wanted to achieve by the due date, given the administrative problems with which they would be faced. More particularly, they would be faced with IT problems. Councils, as everyone knows, use a great deal of IT in drawing up their budgets, devising policies and administering the results of their decisions. Much of that is quite properly outsourced to expert providers. At that time, back in May, London Councils saw that there would be some difficulty in getting those providers to come up with the necessary changes.

However, as I said, it now becomes clear that a good many councils are getting on with it. It is to the credit of local government that they are not sitting back, holding up their hands in horror and saying that they cannot deal with it. They do not wish to be where they are, but they have to accept that the Government have set the timetable and they are jolly well going to do their best, as the representatives of the people in the area for which they are councillors, to go ahead and get on with it.

However, the difficulties remain. As the noble Lord said, part of the difficulty is the time lapse that there will be before councils know all the details of the regulations with which they will have to comply. My noble friends have given undertakings that this will all be available by the time we reach Report in October but, in the mean time, councils have to get ahead with the work. It is becoming quite difficult for them to devise their schemes, given that they do not yet know all the details. I am saying that the case for a delay may not have been wholly made but that there are still considerable anxieties in local government over how well it will be able to cope.

I do not want to get involved in arguments about the universal credit. After all, the main principle of that was settled during the passage of the Welfare Reform Act. The only difficulty is that local authorities must take account of what will be the outcome of the decisions that Parliament took then. Like the noble Lord, I will be interested to hear my noble friend Lord Attlee’s response as to how far local authorities will have that information. They recognise that this is not now part of universal credit, however strongly that case may have been argued by some on the other side of the Committee.

We know very well the views that have been expressed, particularly by the noble Baroness, Lady Hollis, who, as always, expressed herself extremely forcefully. However, the fact is that, as my noble friend Lord Tope said on an earlier date, that is now water under the bridge. It has been decided. Parliament has agreed that council tax support is not part of the universal credit and I see no purpose in continuing to argue that we must somehow reverse the decision. It will not happen. However, I understand that it has to be taken into account. That is why it is important that we get a response to the very pertinent questions asked on that point by the noble Lord, Lord McKenzie.

It is to the credit of local government that it has seen what is required of it and is getting ahead with it. Some authorities may find it a great deal more difficult than others, but there is no doubt that responsible authorities—the vast majority of them are very responsible—see which way the wind is blowing and that they must get on with it. Nevertheless, I say to my noble friend Lord Attlee that there are still considerable anxieties and they need to be set at rest if local government is to produce sensible schemes that take account of all the other things that are going on. Part of the problem is that at the same time as they have to deal with council tax support, local authorities must also deal with the normal annual process of budgeting and setting a rate, and other reforms that are happening at the same time. There are strains here and I emphasise that, whatever the ultimate outcome, local authorities are in for a difficult time over the next few months. I hope my noble friend will be able to give them some comfort that the Government understand this and will do all in their power to make it possible for them to do what the Bill requires in the timescale laid down in the Bill.

I rise simply to refer to the points that the noble Lord, Lord Jenkin, made. I attended the excellent meeting that he convened with London Councils. Its views on the problems of the lead-in time for dealing with IT have been corroborated by the views of the Institute of Revenues Rating and Valuation. Larger authorities might well have significant IT capability in their own right, but that cannot be said of all authorities, and I think that the noble Lord, Lord Jenkin, was saying that while some authorities are clearly getting on with the work, others will lag behind until a package is available to them. That is where the fear is.

In the period leading up to when an authority has a useable IT system, there is a question of a brief, and possibly of tendering and commissioning. A programme has to be written, or there has at any rate to be some sort of alteration to an existing programme, which has to be tested, and the staff have to be trained. At the moment, we are right on the edge of the summer holiday period when a lot of people are likely to be away and capacity in all areas of commercial endeavour, not least in the IT world, will be challenged. I simply echo what the noble Lord, Lord Jenkin, said and ask the Minister whether any investigation has been done on the realities of preparing the IT, bearing in mind that all local government finance is heavily dependent on it. What reassurances can the Minister give the Committee?

My Lords, my name originally appeared on Amendments 78 and 79, and I am concerned that it still appears on Amendments 85 and 88A. That was a mistake. To the extent that I may have had a part in that, I apologise to your Lordships. I do not support postponement and had never intended my name to appear on amendments in this group. I want to say why. I am pleased that we are having the debate. This is important, so a debate on the amendments is necessary.

Had the Government been minded in, say, May or April, while the Bill was in the other place, to postpone the implementation day, I would not have been too unhappy. Indeed, I would probably have been happier if they had abandoned this part of the Bill altogether, but that was not to be. I might have been happier for that to happen provided that the £500 million reduction was also going to be postponed. That, of course, was never going to happen—and we knew that. I have therefore always been at best ambivalent about postponement. That was certainly an earlier view generally across local government. I do not for one moment claim to speak for all local government, but that of which I have any knowledge and contact broadly does not support postponement, for some of the reasons that the noble Lord, Lord Jenkin, alluded to when speaking to the amendments in his name.

Let us deal first with the issue of software. Back in February, when the Local Government Chronicle article was written, there was certainly considerable concern, not least among the suppliers, about whether the software could and would be completed in time. We all know that the record on IT systems has not always been perfect. I hope that the Minister, who must be better informed than me, will be able to comment on this, but my understanding—both from my direct knowledge of my own authority and one or two others that I know a bit about, but more particularly through the LGA, which has been in discussions with the software suppliers—is that that concern is considerably less now than it was in February or more recently. As much as anyone is brave enough to be confident before these things are done, there is no longer the level of concern and alarm about the issue that there once was. However, I speak only with limited knowledge and not with any personal authority. I hope that the Minister can assure us on that very particular point.

The other concern, quite rightly, is whether local authorities would have all the information that they needed before preparing and consulting on their draft scheme. I hope, as the noble Lord, Lord McKenzie, said, that the Minister will reassure us about the information that is not yet published. Much of it is already published and more is to be published this week, perhaps even today, but I have not been able to keep up with that. The noble Lord referred to the autumn. Let us say that by the time we return in October, all the necessary information will have been published as completely as it can be before enactment.

In view of that, we once again look at being where we are rather than where we might wish we were. Quite a number of authorities, including my own, have accepted that it is going to happen in April and have drawn up a consultation scheme. My own authority agreed its consultation scheme in June with all-party agreement—which, in my authority’s case, is both-party agreement—and is now out to consultation on that scheme. Later, our neighbouring authority of Kingston did the same and drew up a slightly different scheme, and that scheme is out for consultation.

I know that many other local authorities are in a similar position—we might wish we were not, but we are. The process is now under way. The considerable work under pressure that has been alluded to, quite correctly, is now under way. My personal view, and the impression I have from those with whom I am in touch, is that at this stage we would not welcome postponement. We might have done a month or two ago or even a few months ago, but at this stage we are so far down the road that we need to accept that this is going to happen. There are different views about that, but we are well down the road on it and we need to get on and make the best we can of it.

Local authorities of all political persuasions generally have a very good record of coping with what is often thought to be impossible, or certainly very difficult, whether that is the front-loading of the budget reductions that we have all experienced or the many other difficult measures. The fact that local authorities quite rightly protest when these measures are proposed and implemented, but when the time comes have to buckle down and deliver, does not mean that they were wrong to protest in the first place. It simply means that local government actually has a very good record of achieving these things. I therefore hope that if this is going to happen in April and proceeds with few, if any, problems, it will not be thought by central government that local government is again crying wolf. It is not; local government is actually getting on and delivering in the way that it always has.

Local authorities’ experiences are very different around the country. For example, if you are a smaller council and you are a district authority, which has to have two stages of consultation, you cannot make the deadline work. The latest information I had from Norfolk was that one local authority had a different supplier from the other six. The other six had their supplier coming through with their package only in the third to fourth week in June. They will probably have to spend four to five weeks cutting and slicing the stats to see what the implications will be for different permutations of the discount scheme, which will take them until the end of July. August, to some extent, is a fairly dead month. Once they have come up with the scheme, possibly in early September, it then has to go to consultation with the precepting authority, the county council, which will take perhaps a month, given that it has a committee cycle of six weeks or sometimes longer. That comes back to the district council, which has to amend its scheme. By this time it is the middle of October.

After the scheme is amended, which may take until the end of October, it goes out for consultation perhaps in November. Three months’ consultation takes it into February. It is a pity that it has to go into the financial estimates in December. In other words, it cannot be done if the district council is squeezed, through no fault of its own, on the one hand by software suppliers not producing the package until late June and on the other by having to have two rounds of consultation—perfectly reasonably—with the county council above all as well as 12 weeks with the public. I do not see how the deadline can be met.

I do not have to take my name off the top of this amendment because it was never there. However, I share the natural anxieties of the noble Lord, Lord Jenkin, whose name is to one of these amendments.

The argument put forward in these amendments is to put off till tomorrow what should be done today. There is never a good time to do this. Putting it off will not solve this or help in any way. The argument put forward by noble Lords is that we need a greater lead-in time. The Olympics had a great lead-in time for security but there was still a mess at the end. There may be a mess at the end of this and there may be a mess at the end of the Olympics, but greater lead-in times do not necessarily solve problems.

As other noble Lords have said, local authorities have put in a lot of work. As the noble Baroness, Lady Hollis, says, some are further advanced than others. A district council is, by nature, a smaller authority than a London borough, so size should make it easier to deal with IT, benefits and the like. However, you still need a scheme, although the amount of money involved may be vastly different. I worked with a district council and I am still a London borough councillor, and it is different. The answer to the noble Baroness, Lady Hollis, who makes a very valid point, must be that we need to find a way in which those district councils and other councils that are not that far advanced can be assisted. That is why the Local Government Association, London Councils, neighbouring councils such as Norfolk council, which the noble Baroness, Lady Hollis, described, and the regional authorities have to help those councils through the experience of others. A small district authority should not have to reinvent the wheel.

The problem is that in a district council—a billing authority—you have two rounds of consultation to go through. There is the precepting authority. Then you amend your scheme. Then you go out to the public for three months. Then you amend your scheme again before it is accepted. That, as much as the software, is the problem. I entirely take the noble Lord’s point about co-operation.

I agree with the noble Baroness, Lady Hollis, that there have to be different consultations. An authority may have a £500 million revenue expenditure, as Barnet authority has, but you have to focus your mind within that authority and, even if there are two or three levels of consultation, it has to be done. There is a short time in which to do it, but there is time.

The noble Lord, Lord Tope, talked about there being a difficult time over the next few months. I agree. Central government and local government, the Olympics and all sorts of organisations are having a difficult time, but local authorities have a history of rising to the occasion. I believe that they are doing that and that they will continue to do so. Therefore, I am against postponement.

The difference between this round of change and a general round of changes is that hitherto we have had to cope with a national scheme. There has been the shift of national and domestic rates, the introduction of the poll tax, and the introduction of the council tax—and they were national schemes. One factor in the present round is that consultation has been meaningful and that people will naturally want to see what is happening in their adjoining authority. The authorities may well consult, but as the whole purpose of this misguided legislation in my view is to create variety across the whole country, and no doubt even within county areas, presumably people will want to know how their scheme, as a resident, compares with the scheme in the adjoining district or in another district at the other end of the county.

These decisions will be very difficult for councils to make and, I would have thought, equally difficult for their residents to understand. They will certainly be concerned—it is the intention of the Bill—if they come up with a wide range of options that will then be exercised. In this very tight timescale, how will the citizen or the organisations that will act as advocates for groups of citizens—we shall come on to some of those in more detail later—be able to contribute meaningfully to this consultation process? There will not be time to weigh the implications of one scheme against another. This is a third dimension to the problems that my noble friends have outlined, and I do not think that they have been taken into account in the way in which the Bill has been drafted and the way in which the Government are proceeding.

I remind the noble Lord, Lord Palmer, that the Olympic Games’ security problems were caused because of the outsourcing of security. As the noble Lord, Lord Jenkin, reminded us, much of the council tax administration is also outsourced, so that may not augur well for us to get a successful conclusion.

I was interested in the point made by the noble Lord, Lord Tope, about his authority already being out to consultation. I question whether the timing is right. Amendment 73 proposes a change to the consultation, and other amendments might come through, so that the consultation that his authority has undertaken might not be the right one when an amendment is passed. That is the danger of rushing it too early.

I would welcome from the Minister in responding to the debate, in addition to answering the questions asked by my noble friend Lord McKenzie, a timetable for the publication of the Government’s default scheme. That would be helpful.

I agree with the noble Lord, and frankly I was surprised when I saw it in the committee papers back at the beginning of June. However, the way in which my authority worked—and I played no direct part in this—was on the basis that the scheme had to be finalised by the end of January. Therefore, working back from that date, given the committee system that we have now adopted thanks to the Localism Act, it was necessary for the draft consultation to be agreed in committee in June. I am not arguing that it is desirable, and I accept that in the course of the consultation there may well be changes. I am quite sure that at the end of the consultation there will be changes as a result of the consultation, never mind any other changes, but unless local authorities start to get on with it now, they will get into difficulties with the timing. I say to the noble Lord that he may need to look at the timing in Wigan as well.

The phrase keeps going through my mind, “More haste, less speed”. It is no criticism of local authorities, but we have to remember that devising a means-tested benefit scheme is very complicated. As the Institute for Fiscal Studies pointed out, councils face a difficult task in squaring a number of circles in devising schemes—and my noble friend Lord McKenzie outlined some of those circles and squares earlier. They have little experience or expertise in designing means-tested support schemes, and very little time to do it. It worries me that we are requiring local authorities to rush this process when they have to take account of so many factors in working out their means test, balancing all the different vulnerable groups that they are supposed to take into account while having their latitude squeezed by having to protect pensioners.

My noble friend Lord McKenzie pointed out that councils will have to take account of their child poverty needs assessments because they have a duty under the Child Poverty Act. A recent survey by 4Children found that fewer than half of English local authorities have a child poverty strategy in place, and 35 of those without a strategy do not even have a needs assessment, so presumably before they can work out their council tax benefit scheme they will have to do a child poverty needs assessment, which will slow things down as well. We will go on to talk about some of the other factors that they need to take into account—disabled people, carers and so forth. It really worries me that, all right, they may have schemes in place, but they will then have a year in which local people will be finding all sorts of holes in those schemes. It will not be us who suffer but local people in need.

I want to add one brief comment. If I understood correctly, the noble Lord, Lord Tope, suggested that the Committee should not try to press amendments that would delay the scheme because local authorities have already begun to consult on it. I do not want to overly stress the importance of Parliament, but surely the point of this exercise is for us to get the Bill right. If the Government have placed local authorities in a position where they are asking them to start the scheme so early that they are required to consult before Parliament has finished scrutiny of the Bill, surely that is a problem for us, not for them.

I do not want this to turn into too much of a dialogue, but I said that I welcomed the amendments because it is important that we have this debate. Personally, I do not support them. They will not come to a vote today, but in the unlikely event that they come to a vote in October, which will be a bit late, I will not support them. I am not urging people to press them or not press them. As I said, I actually welcomed the amendments so that we could have the debate. I expressed a view on it, as we all do.

My Lords, we have had an interesting discussion on the timing of the implementation of these reforms. As the Committee knows, this reform is about delivering real decentralisation and contributing to deficit reduction—a contribution that must start from 2013.

The funding for the scheme is also a key component of the new business rates retention system. We are not reinventing a whole new system but providing flexibility and not necessarily complexity for councils to deliver a saving and to tailor schemes to their own circumstances with minimal prescription.

In answer to many Members of the Committee, we are building on our statement of intent and we are today publishing two key sets of regulations, particularly about prescribed requirements. Those regulations are coming out today in draft, which will allow councils to press ahead with the implementation without looking over their shoulders to central government prescription. That is why I am confident in saying that councils will be ready to implement these reforms for April 2013.

We need to do everything that we can to allay any concerns. It is interesting to note that experts in local government on this side of the Committee seem to believe that these changes can be implemented, including with the necessary consultation. The noble Baroness, Lady Hollis, told the Committee that district councils cannot meet the timescale because they need to consult twice.

I am sure that other councils may have had their software packages back in May, but from the county about which I have a little knowledge, I understand that the majority of councils use the same software supplier and it did not come through until nearly the end of June. That means that the proper consultation could not be gone through until councils had already decided on the scheme. That is the dilemma. Both factors were operating: the late supply of software through no fault of their own, and the fact that as a billing authority and not a unitary authority they in effect have two rounds of consultation. Again, that is perfectly proper, but you have a pincer movement on the timetable.

My Lords, I will carry on for a moment.

Just to be clear, all billing authorities required to bring forward a scheme must consult with their precepting authorities and with the public. That is as much the case for London boroughs or unitary councils as for district councils. Taken together, Amendments 72, 78, 79, 85 and 88A would delay the start for localised council tax reduction schemes by a year, pushing back introduction from 2013 to 2014. I am sure that noble Lords only intended to test the Government’s policy and, like my noble friend Lord Tope, welcome the debate.

Let us be absolutely clear. The saving scored in the spending review has to be found, as pointed out by my noble friends Lord Jenkin of Roding and Lord Tope. This is a key element of our deficit reduction plan that we must meet. Delaying the implementation of localised council tax reduction schemes would come with a cost.

The noble Lord, Lord McKenzie, skilfully queried what we would use these cost savings for. He talked about refuse bins. However, he will be aware that my right honourable friend the Secretary of State for Transport has announced a major programme of investment in our railway system. We can either spend money on council tax benefit or take a little cut on that and a little cut elsewhere, then put it all together in order to spend money on developing our infrastructure and promoting growth in the United Kingdom.

Will the noble Earl remind me of how much is being devoted to deferring the increase in fuel duty?

My Lords, that is always the danger of straying from local government affairs. My point is that the 10% cut in council tax benefit is painful, and I do not deny it, but we have very good projects to spend the money on.

Localising support for council tax is an important localist reform that gives local authorities a greater stake in the economic future of their local area and stronger incentives to get people back into work. It helps to make local authorities fully accountable for decisions over council tax levels and strengthens the incentives to drive down fraud and error. Localisation also has the advantage of giving local authorities real control over how a reduction in funding is managed. It will enable local authorities to offer council tax reductions that match local circumstances and local funding while supporting local policies. Local authorities will take different approaches to managing the reduction, but that is localism in action. Local authorities know their services, their taxpayers and their vulnerable groups, and are best placed to take decisions that affect them.

Delaying localisation does not mean that there will be no saving. There will still be more than £400 million savings to find in 2013-14. Funding for council tax support makes up a significant amount of the local share in the retained business rates system. Not giving local authorities control over this funding from the outset will significantly reduce the funding in the local share and so reduce the incentive that retained business rates are intended to deliver. I know that many noble Lords are supportive of the proposals to enable local authorities to keep a share of the proceeds of growth and would be keen to see local authorities benefit even more from growth. Not localising council tax support would have the opposite effect.

Concerns have been expressed about local authorities’ readiness to implement the schemes. I should like to remind the Committee of the number of significant steps taken by the Government to ensure that local authorities are well placed to press ahead with the development of their local schemes. We have paid £30 million of initial funding to help meet the costs of planning and analysing draft schemes for both billing and precepting authorities. We have provided a free online calculator to help local authorities analyse the potential impacts of their proposed schemes. We have published statements of intent, setting out the details of what will be covered in secondary legislation. We have issued a consultation setting out provisional funding allocations for all authorities. We have published guidance to ensure that local authorities understand their existing responsibilities in relation to vulnerable groups, which I know was a very important point for many noble Lords. We have published guidance setting out the general principles of supporting work incentives to help local authorities design support.

The Government have been clear that local authorities must ensure that they are on the front foot in preparing for this reform. There are things that councils should be doing to help in their preparations: understanding the circumstances of those in their area who currently claim support; ensuring that elected members are aware of the decisions they will need to take; engaging with precepting authorities, such as police and fire authorities; and preparing for consultation.

My noble friends Lord Jenkin and Lord Tope, the noble Lord, Lord McKenzie, and the noble Baroness, Lady Hollis, talked about IT issues. Noble Lords are right to suggest that local authorities and IT suppliers are already getting to grips with the problem. However, there is no need to go for a new and complex system in year one. I would add that if I was an IT supplier, I would point out initially how difficult and expensive it will be because it would be a sensible thing to do in order to try to encourage delay, but noble Lords know that we cannot delay.

The Bill was amended on Report in the other place to make clear that local authorities are able to consult precepting authorities, produce a draft scheme and consult more widely—all before the Bill receives Royal Assent. This was intended to support local authorities in their preparations. I am pleased to note that some local authorities, including that of my noble friend Lord Tope, have already embarked on a public consultation on their schemes.

The noble Lord, Lord McKenzie, talked about the complex matters that LAs will have to take into consideration. However, it seems that LAs are already getting stuck into their work and that it is not an insurmountable obstacle. Local authorities are best placed to take decisions about who should receive support with their council tax. Councils should have the flexibility to manage the reductions in central funding that are crucial to our plans for reducing the deficit. Local authorities should also have a strong incentive to grow their economy by bringing as much funding as possible into the retained business rates system as early as possible and giving them every reason to go for growth.

The noble Lord, Lord McKenzie, asked whether the universal credit details will be available. He is right to suggest that they will be available in the autumn. He also touched on the default scheme. LAs could opt to use the default scheme, but perhaps with some amendment to secure some easy savings. Local authorities could choose to develop a more sophisticated scheme later, but that is a choice that they will have to make.

My Lords, I thank the Minister for his response and all noble Lords who have spoken in this debate, particularly my noble friends who spoke in support of the proposition. The noble Lord, Lord Jenkin, and the noble Earl, Lord Lytton, passed on their concerns about the apprehensions that still exist out there over the readiness of all local authorities to deliver.

I shall comment first on the contribution of my noble friend Lady Lister, who made a crucial point. Designing systems of benefit can be complex. People’s lives are complex. How does the Minister deal with the point that my noble friend raised about the lack of child poverty strategies? The Government themselves have issued literature that says that councils should have regard to their obligations under the Child Poverty Act. However, here we are, knowing that there is a big gap in the system but the Government want local authorities to press ahead irrespective of that. That issue alone opens up the prospect of judicial review in a whole raft of cases.

No one is arguing—I certainly am not—that local councils are simply sitting back and ignoring all this. I accept that local councils have a strong track record of delivering in very difficult circumstances. However, in something such as this, surely the key point concerns the time capacity of all councils to be able to deliver. The consequence of councils not being able to deliver, particularly those that are less well resourced, is that they are more likely to have to fall back on the default system or to have it imposed on them. That is a double whammy for them: not only do they not have sufficient opportunity to look at local needs but they must pick up the 10% funding tab. That seems particularly iniquitous.

My noble friend Lord Beecham made the point that we are not dealing here with a national scheme. Local authorities that are dealing with the process will perhaps want to weigh one scheme against an adjoining scheme. My noble friend Lady Hollis talked about the issues of timing in two-tier authorities. My understanding is that in that first round of engagement, even though there does not have to be formal agreement between an upper tier and a district or authority, there is meant to be a meeting of minds and a process by which it can take place. That has to be a real process and it takes time. That is a different process from reaching a conclusion and then consulting widely among a range of people on its outcome. I suggest that that requires something much more substantial.

We recognise that deferral would mean that the so-called localisation of council tax could not deliver the saving that the Government are looking for in that way for 2013-14. I simply reiterate the point that the Government have been adept in other ways in finding funding for this or that project. Looking across the whole of government, I find it difficult to believe that something of an equivalent scale could not be delivered in this case.

I object to the characterisation of what is happening as a little cut here and a little cut there. We are talking about reductions in support for some of the poorest people in our communities. I would not characterise that as a little cut here and there.

The Minister said that nobody was required to reinvent a whole new system, but the reality is that we have a whole new system coming down the track called universal credit. We are not arguing here that council tax should be part of that, although the more one goes into the detail the more blindingly obvious becomes that argument. But that is not what this amendment is about—it is trying to probe the interaction and relationship between universal credit and any revised council tax benefit system. There are lots of points where it ought to interact, if we want to have issues around work incentives properly structured.

The IFS booklet—and what on earth would we do without the IFS?—has a complex chapter on this. But if the details of universal credit are not going to be known until the autumn, which the Minister has confirmed, how can local authorities properly take the detail into account in devising their schemes and consulting on their schemes? It is a practical impossibility. Quite apart from the time needed to understand and test what those interactions with that system should be, it seems entirely wrong to say that it is irrelevant to the timing when it is fundamental.

The Minister did not answer the point about what components of universal credit were at the moment incorporated in the default scheme that the Government are going to impose. We know one aspect of it—that universal credit will take account of income—but that is just one of the possible interactions. What are the consequential changes to the allowances, the housing component and a range of other things? Presumably, the Government have taken a view at least in respect of the default scheme. It would be helpful to know the detail.

The noble Lord, Lord Palmer, said that we should not put off until tomorrow what we could do today. I do not disagree with that, but we are not asking for time for local authorities to sit back and do nothing. We are asking for some local authorities that will struggle the most to get a meaningful system in place to have a bit more time to get it right. So we do not judge this by the well resourced and bigger councils that do not need to worry about the cost of it because they have plenty of second properties on their patch and can generate extra revenue from that. The smaller and more challenged resource-constrained are the ones that we particularly speak for in this amendment.

I see that we will not have a meeting of minds on this across the Room this afternoon—

My Lords, I am grateful for the opportunity to contribute again. The noble Baroness, Lady Lister, talked about the complexities of the scheme. Yes, I understand that it is a very complex area and there are lots of factors to be taken into consideration. However, if a local authority wants to have a complex scheme, it can have one in later years, and it can go for a simple scheme perhaps based on the default scheme in year one.

The noble Baroness raised a very interesting point about the child poverty strategy. We are merely stating that there are existing strategies that councils need to consider in developing schemes. However, she raised a very interesting point about absent child poverty strategies. I will look into the issue and come back to her.

I thank the Minister for that. I was talking about the absence of a needs assessment in particular, because if you do not have a needs assessment you cannot assess the needs of the people whom your scheme is supposed to help. I should add that there is no such thing as a simple means-tested scheme.

I was just about to say that the absence of these schemes is no reason not to go forward with the scheme.

The noble Lord, Lord McKenzie, was concerned about universal credit details not being available until the autumn, but I am confident that local authorities will have all the information that they need from the statement of intent that we have already made and the regulations that are coming out in draft today.

My Lords, I have received an e-mail that tells me that a factory employing 100 people on my patch is going to be closed, so that will give me more problems with the council tax benefit. Local authorities have got into trouble over reductions in expenditure in local authorities through legal challenges. Usually, consultations have not taken account of the equal rights of all groups of people, and that is really important. We need to make sure that we do not fall into this trap and create a minefield. Could the Minister give us a timescale for when the department intends to produce the default scheme? I think that might be helpful.

Today, yes. I remind noble Lords that, in respect of the difficulties of devising schemes, we have provided £30 million for local authorities.

I pick up on the point about complexity. I do not think that local authorities are anxious to devise complex schemes; they are trying to devise relevant schemes, particularly those that are focused on poorer members of their communities. It is good news that the default scheme details have been issued today, but I struggle to see how they might be comprehensive if some key aspects of the universal credit are not going to be available until October. Surely how those two things sit together is pretty important for the development of schemes.

The Minister said that the regulations issued today would cover issues about the protected arrangements. Perhaps he could answer a specific question. How does the protection given for pensioners apply to households with two people entitled to state pension credit if one person has reached that age and the other is below that age?

On the point about universal credit, we are aware that the approach in the regulations needs further refinement, and we will continue to work with the DWP on the detailed approach to be able to set this out for LAs in the autumn. However, we believe that that provides a clear general indication of how we intend income to be taken into account in the default scheme, which is intended as a legal back-stop and not a model scheme. While LAs will be free to adopt or build on the approach taken in the default scheme regulations, they will not be compelled to do so if they bring forward their own scheme. I hope that that helps the noble Lord.

I understand the point. If the details of the universal credit that we know can be taken account of only generally in relation to the default scheme, which may or may not help the authorities that want to rely on that, surely it is equally the case for any other tailored scheme that a local authority may wish to devise. How can it consult on something that inevitably is incomplete? We are trying to get an answer to that point. I am not sure that we shall succeed this afternoon. We have given this matter a good airing. I believe that the noble Lord, Lord Tope, said that we should make the best we can of this. Frankly, that is not good enough when we are devising detailed benefit schemes. We ought to have a higher standard than that. I think that is being denied to some local authorities by this timetable. For the time being, I beg leave to withdraw the amendment.

Amendment 72 withdrawn.

Amendment 72A not moved.

Amendment 73

Moved by

73: Clause 9, page 5, line 26, after scheme insert “, and consult their staff on its effectiveness,”

My Lords, as this is the first time I have moved an amendment in this Committee, I declare my interests. I am not a vice-president of the Local Government Association, but 22 years ago, which seems quite a long time ago now, I was president of NALGO, which at the time was well known as a local government-related trade union.

I wish to probe the Minister about the steps that the Government are encouraging local authorities to take when consulting their staff on the effectiveness of the scheme. I would like to see that written into the Bill, as too often local government staff are forgotten when it comes to major changes of this kind. Earlier in Committee, the noble Lord, Lord True—I am sorry he is not in his place—asked that consultation between local authorities and the Government should be genuine and should not just go through the motions. I believe that the same applies to genuine consultation between local authorities and their staff. The noble Lord, Lord Jenkin, paid credit to local government for getting on with the job in hand. I endorse that view. I add that that credit would be due to local government staff and the work that they do on these schemes.

The importance of involving staff—I am not just talking about the local agreements that take place—is that they have local knowledge and professional expertise to ensure that we have the best possible schemes. I shall be brief as I believe this speaks for itself. As a former chair of ACAS, who constantly urged consultation as a matter of course, as it was proven time and time again that it improved the motivation of staff and buying into a particular scheme, I hope that the Minister will be able to give me a reassurance that the staff will be fully involved in these schemes. I beg to move.

My Lords, I suppose there are two aspects of effectiveness that councils will need to address. The first is the sheer practicability of the scheme and how it can be delivered. We have heard some of the problems that councils face, but assuming that the software goes all right and the mechanical side of the process is, as it were, addressed, there is another issue on which I would have thought it would be very desirable for local authorities to engage with their staff, and that is the assessment of the impact of different proposals within the schemes. The Government are rightly saying in the context of this Bill that councils will need to address the equalities issues and we have heard some of those raised this afternoon, but they will also need to weigh the interests of one group in the community against another group.

That is not a matter for officers in the finance department, with all due respect to them. It should involve the relevant officers and, of course, the elected members dealing with the different groups in the community. It might be social workers looking at the needs of the disabled or children’s services, or welfare rights officers or other officers dealing with different groups in the community—the Armed Forces covenant might apply, for example, to which the Government draw attention. There needs to be collaboration on the policy side rather than on the purely administrative side, as was implicit in my noble friend’s amendment.

Bearing that in mind, I wonder whether the Government have actually had any discussions beyond the consultation process in general with relevant bodies in the professions about the way in which these changes might impact on particular client groups and particularly on the equality duties to which they are at pains to draw the attention of local authorities. Both at the individual local authority level and at the national level where people are professionally engaged with these issues, I would have thought that a proper consultation is needed in order to assess the impact of the various possibilities that will be canvassed and allow the best possible informed decisions to be made at local level, given that the cost of any concession will be borne by other groups within the pool of people eligible for council tax relief. This is a transfer of a burden from the taxpayer as a whole to other council tax payers in the community, particularly those receiving the benefit. These are very complex matters that have to be taken into account, and they should be informed, as I said, on the basis of the experience and knowledge of those working with the groups particularly in that vulnerable category to which the Government draw attention.

My Lords, I thank the noble Baroness, Lady Donaghy, for her explanation of her amendment. I strongly agree with her sentiment but I cannot agree with the amendment, which would require local authorities to consult staff on the effectiveness of the scheme. Front-line staff involved in the administration of council tax and council tax benefit will have important insights into the delivery of these services and awareness of the people affected by them—a point made by the noble Lord, Lord Beecham. I would hope that all managers, as a matter of routine, would seek the views of staff when taking decisions about services. This is important for ensuring quality services and it is important for staff morale. This is as true for local authorities as it is for any other organisation. From my experience, if you do not consult effectively, you will not lead effectively and therefore you will not have desirable outcomes.

The noble Lord, Lord Beecham, asked whether the Government have consulted professional bodies. I am sure that there is a wide network of contacts between my department and the relevant professional bodies.

However, I do not think it appropriate to make this consultation a requirement on local authorities in relation to council tax reduction schemes. We have to move away from hand-holding and we have to trust that local authorities have the insight to consult their staff, as I am confident that they have. To impose this requirement would add another administrative burden on local authorities that would be nothing other than unnecessary red tape. I therefore hope that the noble Baroness will feel free to withdraw her amendment at the appropriate point.

I thank the Minister for his reply. Naturally I am disappointed that he is not willing to put the proposed amendment into the Bill. However, I welcome his very positive statement about consulting staff and I think that that will be seen as some reassurance. In that spirit, I agree to withdraw my amendment.

Amendment 73 withdrawn.

Amendment 73A not moved.

Amendment 74

Moved by

74: Clause 9, page 5, line 31, at end insert—

“( ) In exercising its powers under subsection (2)(b), the authority must have regard to the impact of the scheme on work incentives for those persons in the area, including for those who are in employment or actively seeking employment.”

It bears repeating that council tax benefits are in-work benefits. Nearly 750,000 people are non-passported recipients of council tax benefit and in work. It is the most comprehensively claimed benefit, despite the fact that a large number of eligible older people do not claim. People who do claim are in low-paid and often part-time work.

It is government policy to rationalise work incentives, which is why universal credit is being introduced. I realise that there is a genuine debate to be had about whether council tax support should be an integrated part of universal credit or whether it should be localised, as the Government are proposing, but it must be accepted that allowing council tax support to vary throughout the country and introducing it before universal credit undermines any simplification and will make it impossible to judge how well work will pay.

The DCLG advice to councils is:

“The system”—

that is council tax support—

“should not be too complex as to create a disincentive to work”.

The noble Earl said earlier that the Government had given the councils minimum prescription, but that is one of them: work incentives should not be undermined. That statement is the only reference to work incentives. Like TIF 1 and TIF 2, which we discussed the other day, this important topic is not on the face of the Bill. The purpose of my amendment is to ensure that it is central to any council tax support system, so that one government department does not undermine the intentions of the whole Government.

Bearing in mind what the noble Lord, Lord Tope, said about not making Second Reading speeches, I believe that there are at least seven disincentives to work contained in the many council options papers that I have seen. Working people need more transparency and more certainty and I believe that by pointing out these seven work disincentives I am offering an opportunity for the Government to avoid them.

The first is the 10% cut, which noble Lords have already spent considerable time on, so I will be brief. Let us take for example Rossendale, with 44% of pensioners and 56% of adults of working age. A 10% cut will lead to a 20% cut in council tax benefit. Once vulnerable groups are defined and exempted, the cut will be “in excess of 20%”.

Being presented with a council tax bill or an unexpected increase in that bill could be the pivotal point for some working families in deciding that work does not pay. Where are the greatest numbers of working people who will be affected? In County Durham, there are 5,810 working recipients of council tax benefit, more than 8,000 in Manchester, more than 6,000 in Liverpool and 3,500 in Wigan and Salford each. Those are some of the poorest areas in the country. Yet South Bucks has only 420 and the City of London 40. That is a redistribution of wealth which is shameful and which will have consequences for employment and the administration of justice when we see the courts being clogged up chasing large numbers of puny arrears.

The second disincentive to work is an interesting illustration of the mixed messages that we get from the Government. I do not know if it is muddled thinking, doing insufficient homework, the left hand not knowing what the right is doing, speaking before brain engagement, plain doublespeak or a combination of some of the above. Frankly, I do not care, but let us take the option being considered of non-dependant deductions being further exploited. In the June 2010 Budget, the Government decided to upgrade non-dependant deduction rates in three stages. They had been frozen since 2001-02. The intention was to reduce fiscal deficit and, according to the impact assessment by the DWP, to,

“provide an expectation that adults make a reasonable contribution towards their housing costs”.

One objector said:

“If a family living on benefits wants their adult child to stay living at home they are actually penalised—as soon as that child does the right thing and goes out to work. You get what’s called a non-dependant deduction, removing up to £74 off your housing benefit each week. I had a heartrending letter from a lady in my constituency”—

there is a hint there—

“a few weeks ago who said that when her son leaves college next month, her housing benefit will drop significantly, meaning her family may have to split up. This doesn’t seem right”.

The objector was the Prime Minister in a speech only two weeks ago, but councils are considering making this worse as one of their options.

The third disincentive would be by increasing tapers, let us say to 30%. I know that we have had some discussion of this already. Anyone on housing benefit and council tax support will have a marginal tax rate of 95%—65% taper on housing benefits plus a 30% taper on council tax support. In other words, they would keep 5p of every extra £1 pound that they earned. That is not very encouraging, is it?

The fourth disincentive being considered is to remove working tax credit income disregards by varying amounts. One local authority has said:

“Government wants us to incentivise work so this would be against their policy intentions. However, the Working Tax Credit income disregards in UC are sufficiently generous as to allow for a reduction in the earned income disregards applied to local CTS”.

That particular authority estimated that working people could lose between £2.21 and £4.43 per week.

The fifth disincentive is to make workers with income greater than needs contribute more through increasing the rate of withdrawal from 20% to, say, 25%, 27.5%, or 30%. All working people in this category would lose between £0.64 and £1.12 per week.

The sixth disincentive is capping support at the level for band D, E or F. That would have the greatest impact on the older worker and those with children. The asset-rich older person of working age may have to downsize to make ends meet. The difference could be a reduction of £3.72 to £4.10 a week.

The last disincentive, the Committee will be pleased to note, is that everyone pays something, usually 20% to 25%, which is a return to the poll tax but without anything included within income support, jobseeker’s allowance or ESA to cover it. That would hit the poorest hardest and add to local authority billing costs as they clog up the courts with chasing bad debts.

No one is claiming that dealing with poverty-trap issues is easy. Neither is it easy to be clinging on to the job market by your fingernails, trying to raise a family and provide a roof over your head. When I arrived in Westminster two years ago, I was shocked by the ease with which this world swallows its own propaganda. In my world, I have close family members whose job prospects are grim and friends who rely on Mr Beeston’s payday loans, where one unexpected event tips the balance between managing and not managing. The Government have to show that they are serious about keeping low-paid working people afloat and I hope that the Minister will accept my amendment in the spirit in which it is intended. I beg to move.

My Lords, I thank the noble Baroness for explaining her amendment, which she has done with some useful detail. I have plenty to say, but perhaps I will have to write to her on some of the detail after consulting my officials.

Amendment 74 would require local authorities to have regard to the impact of their scheme on the work incentives for those in work or actively seeking work. The noble Baroness is right to point to the importance of local schemes supporting incentives to work. It is of the utmost importance that people get more overall income in work than out of work and that people should get more overall income from working more and earning more. It will not be in the interests of local authorities to design schemes that discourage work, locking their residents into low aspiration and poverty. Making local authorities financially responsible for the provision of support gives them a real stake in getting people back into work.

To aid local authorities in designing schemes that support positive work incentives and the objectives of universal credit, we have already published guidance setting out the key design features that could support work incentives and which local authorities will want to consider in designing their schemes. The guidance considers the main design features of local schemes that can be used to support work incentives, including how income from universal credit is treated, how other income is treated and the point at which support is withdrawn. It also considers other factors that can influence decisions about work, including how the scheme is administered and communicated to applicants.

Data sharing related to universal credit between the Department for Work and Pensions and local authorities will be an important way in which local authorities can ensure that their schemes work with the grain of universal credit. The Department for Communities and Local Government and the Department for Work and Pensions are working together to ensure that the necessary data-sharing arrangements can be put in place. We want to ensure that, where possible, local authorities continue to have access to the same data on claimants of existing benefits and will be provided with a breakdown of the full universal credit award before the application of any tapers or sanctions, together with the final amount that the claimant receives.

Furthermore, the Government are doing everything in their power to reduce the risk of potentially unhelpful interaction between local schemes and national universal credit. Indeed, changes have already been made to the proposed design of universal credit to increase some income disregards. These changes will help to reduce the risk of “dual tapering”, where council tax support and universal credit are withdrawn simultaneously, leading to higher marginal deduction rates—the rate at which the gains from increased earnings through work are reduced by the withdrawal of benefits and increased tax—and will help to ensure that the incentives to enter work remain strong.

Finally, as I have already mentioned, we are today publishing draft regulations that set out how we propose to treat universal credit income under the default scheme. We will continue to work with the DWP on the detail of the approach, but we believe that it provides a clear general indication of how we intend to take UC income into account in the default scheme. Local authorities will be able to consider whether to take this or a similar approach. With those explanations, I hope that the noble Baroness will feel able to withdraw her amendment.

The noble Earl referred to data sharing, in particular to help in the transfer of people who otherwise would be in receipt of 100% benefit under the existing system. I think that all the documentation we have seen talks about the Government working on these matters. Can the noble Earl say when that process is going to be completed? Will the arrangements for data sharing definitely be in place by 1 April 2013? I think that he also said that the Government are doing “everything in their power” to ensure a sensible outcome so far as universal credit is concerned. One would dispute that because the phrase “everything in their power” could include putting council tax benefit where it belongs as part of that. But the noble Earl said specifically that they have addressed the issue of income and how that is to be dealt with—I think we understand that, because we touched on it in an earlier session. What other adjustments so far as universal credit and its interrelation with other schemes are concerned are currently being contemplated? Will the Government be publishing any thoughts, analysis or guidance?

Is the Minister saying that, in the default scheme, UC will be counted as income? He has had the advantage of seeing the regulations. We have not seen them so I just wanted some information. Is he assuming that UC will be included?

My Lords, the answer to that question is, I understand, yes. My answer to the noble Lord, Lord McKenzie of Luton, is that clearly the arrangements for data sharing will have to be in place by 1 April, otherwise it will not work. We are working to ensure that the data-sharing arrangements are in place at the appropriate moment. Universal credit will come in next October.

Is the Minister saying that the appropriate moment by which the arrangements have to be in place is October?

My Lords, I think that this revises my initial comments. Universal credit will come in next October.

Perhaps I may press the Minister on that point because it was originally understood that in October next year all new claimants would be claimants for universal credit. There seems to have been some change to that and this issue is obviously important because local authorities have to assess the volume of claims that they will deal with. Can the Minister confirm that the arrangement is that all new claimants coming through from October 2013 will go straight into universal credit and not into JSA, ESA or income support?

The noble Lord asked some complex questions. The noble Baroness mentioned legacy claims. It will be best if I write in detail on all those points, including the noble Baroness’s point about legacy claims.

I thank noble Lords who have contributed to the debate and the Minister for his reply. It was beginning to feel a bit like Google Earth, whereby you home in on one house that will be in receipt of universal credit next October. It will be interesting to see exactly how many are in receipt of it by next October. I am disappointed of course that the Minister is not willing to put these provisions in the Bill. I think that I understand why, because it is a contradiction in terms to call this scheme a work incentive scheme. All the points that I have raised exposed that. Nevertheless, I realise that we are not going to have a meeting of minds on this and I beg leave to withdraw the amendment.

Amendment 74 withdrawn.

Amendment 75 not moved.

Amendment 76

Moved by

76: Clause 9, page 5, line 31, at end insert—

“( ) In exercising its powers under subsection (2)(b), the authority must have regard to the impact of the scheme on disabled people in the area.”

My Lords, I shall also speak to Amendment 76A in my name and that of my noble friend Lady Lister of Burtersett. I am grateful for a briefing from a variety of voluntary organisations, including Scope and Carers UK.

At present, national rules are clear, if not simple, on the treatment of disabled people and carers within means-tested benefits. These two amendments are designed to try to draw out for the greater understanding of the Grand Committee how those two categories of people will be treated under the new regime. At the moment, the equality impact assessment published by the Government suggests that nearly half of all council tax benefit is paid to households that may contain an adult claiming a disability-related benefit. The figure could be higher if it included disabled children. We are therefore talking about a significant proportion of the caseload now in receipt of council tax benefit and who may be presumed to be receiving council tax support in the future. This is not simply a marginal group.

At present, if someone receives income-related employment support allowance, they are passported on to maximum council tax benefit. If they have to be means-tested, some benefits and allowances are ignored completely—for example, the DLA care and mobility components, constant attendance allowance, exceptional severe disablement allowance, severe disablement occupational allowance paid because of an injury at work or a war injury or, indeed, mobility allowance paid under the war pensions scheme. In other words, the current council tax benefit makes significant provision to ensure that disabled people are given adequate support to enable them to meet their council tax liability.

I am sure that other noble Lords will be aware that there is considerable concern abroad among organisations that work with a variety of disabled people about what is going to happen in the future. The uncertainty out there is very worrying to disabled people and their families.

I anticipate that the Minister may reply that this is a matter entirely for local authorities. I base my predictive powers on his previous answers, but I may be completely wrong and I shall be delighted to be so. He may simply say that it is entirely up to local authorities how they should go about doing that; they have total freedom to decide how they treat disability in the council tax support schemes. However, I would like to test whether there are any limits to that freedom. To that end, I have some specific questions for the Minister. The various DCLG documents on localising support have been kind enough to remind local authorities of their various obligations under the Equality Act and other legislation such as the Disabled Persons (Services, Consultation and Representation) Act 1986; under the Chronically Sick and Disabled Persons Act 1970, which includes a range of duties relating to the welfare needs of disabled people; or, indeed, under the Housing Act 1996, which gives local authorities a duty to prevent homelessness, with special regard to vulnerable groups.

However, these documents are a little light on advice about what kind of scheme might meet the requirements of this assortment of legislation. We turn to the matter of guidance on what constitutes a vulnerable person at a later amendment, in the name of my noble friend Lady Hollis, but meanwhile can the Minister advise the Committee to what extent disabled people currently entitled to council tax benefit are protected under equalities legislation? Do local authorities have to continue existing full exemptions or can they modify as they see fit? If they can modify as they see fit, would the Minister be content if some local authorities, for example, were to count DLA as being income for the purposes of council tax support, while others were not? If that were all right, we could find two people with identical conditions, identical incomes and identical circumstances, living in neighbouring boroughs whose entitlement to council tax support would differ solely because of which side of the line they came from. That may be true of other categories as well.

I want to explore the implications of that for a minute. We have all read the marvellous IFS report on the scheme. The IFS looks at the potential incentives that this change could give to local authorities in a variety of ways. In doing so, it identifies what the incentives could be, although it does not suggest that authorities would necessarily act intentionally based on those incentives. It suggests that the change could give an incentive to a local authority to discourage low-income families from living within its borders because it would be more expensive.

I wish to look at what the implications could be in this area. Let us suppose that there were a difference in entitlement to council tax support for someone receiving DLA on one side of the border compared with the other. The difference in cash may not be huge but may make a significant difference to the income of the person concerned. Would that constitute an incentive for disabled people in that circumstance to live on one side of the borough line rather than on the other? If it did, what might that do to other costs that might follow? I am thinking, for example, of the social care costs that might then be a liability to one authority rather than to another because of a desire of someone in that situation to live in one authority rather than in a neighbouring authority. Is that a policy consequence? If that were to happen, would the Minister be content with that? Is that simply part of what happens in a free market of local authorities determining what kind of support they give? Have the Government considered that? Perhaps the Minister could tell us.

Thirdly, what assessment have the Government made of the cumulative impact on disabled people of the variety of changes and cuts to benefits and services that have preceded this? In that respect, I wonder where the Minister thinks disabled people should go for advice on these schemes and where the best place would be for them to go to understand the implications of changes in council tax support.

Finally, the Government made it clear on the initial consultation that the rationale for seeking no change in council tax benefit payments for pensioners was that they would not expect them to seek paid employment to increase their income. However, the original consultation document I think went on to explain that there were other groups to whom the Government may wish to ensure that local authorities offer support, and that these groups might not be expected to increase their income through work. Given that certain benefits are given to people who are not expected to work by definition, could the Minister comment on the appropriate distinction for a local authority to choose to give full support to pensioners but not to someone who receives a disability benefit that says that they are not expected to work?

The implications of this could be significant. The local authority plans, as my noble friend described just now, to take potentially 20% off the top of the modest disability income of someone who has no ability to increase their income through work and has never been expected to pay council tax in the past. The implications for that individual and for the authority trying to collect money from that individual, through a range of enforcement mechanisms available to it, are only too easy to imagine. If any noble Lords have a failure of imagination, they may recall various noble Lords’ speeches about what happened with the poll tax when local authorities tried to extract money from some very poor families who were suffering a variety of problems.

Amendment 76A relates to carers. This is an area in which again I need some help from the Minister. Council tax is paid at a flat rate, regardless of how many people live in a property, but if only one person lives in a property, or no one who is treated as such, a discount can be applied to the bill. Noble Lords will realise that a number of people are disregarded and treated as not living in the property when calculating council tax. At the moment, a category of people are seen as carers who can be disregarded entirely when working out whether someone must pay council tax and, if so, how much should be paid. At present, to be disregarded as a carer, someone must provide care for at least 35 hours a week, live in the same property as the person they are caring for, and must not be the spouse, partner or parent when caring for a child aged under 18, and the person being cared for must either receive the highest rate of the care component of DLA or the higher rate of attendance allowance or constant attendance allowance.

I hope that I will be forgiven for reading all this into the record, but I want to understand what happens. Will any change be made to council tax liability for carers in that category when the new regime comes in? I am not referring to council tax support but to liability for council tax itself. It may be in the documents, and I apologise if I failed to find it, but otherwise I hope that the Minister will be able to explain the situation.

I could go on great length about the other implications for means-tested benefits and carers, but I shall put just one more specific question. How should local authorities treat carers’ allowance in deciding what council tax support should be available? The Minister may want to reply only in respect of the default scheme, but, as I say, I have not had an opportunity to look at it. How will carers’ allowance be treated in assessing entitlement to council tax support under the default scheme?

Carers are a group of people who have been struggling a lot over recent years. A Carers UK survey of over 4,000 heavy-end carers conducted last year showed that four in 10 were already in debt as a result of caring, that the stress of money worries was affecting the health of half of them, and that many were cutting back on essentials such as food. What assessment have the Government made of the likely impact on carers and the people they care for, and what will the costs be of providing social care should carers find that they are not in a position to carry on as a result of this change?

Finally, I should point out that I had originally considered tabling amendments that would try to draw out the impact on a number of categories of people. I could have tabled a similar amendment on the impact on child poverty, which my noble friend Lady Lister raised. I could have tabled an amendment on the impact on homelessness. I could have tabled an amendment on the impact on larger families. I mention this because it is easy to say that the Government want to protect certain categories of people, but, as my noble friend has just explained, if councils are to be encouraged to protect those in work, on whom should the burden fall?

I live in Durham, where the council is doing its absolute best to see how it can address the scheme well, but half of the current recipients of council tax benefit are pensioners, so if it did nothing else, it would mean a cut of 20% for the rest. Once the council takes account of higher levels of disability—in a very poor county—what should it do then? Should it try to protect those who are not expected to work? If so, who should pick up the benefit? If one takes into account the impact on child poverty in the area, again a very poor one, the council might feel that it has to take other steps. If we are not careful, we will end up with one family in Easington paying the entire council tax liability for the whole borough. I make a joke only to make a point. There will be a stage by which only so many circles can be squared.

There is a problem with simplicity. The Minister sought earlier to encourage us by saying that councils could set up simple schemes; they do not have to make complex ones. However, in welfare benefits, simplicity and fairness pull in opposite directions. When the Welfare Reform Bill was being considered in Grand Committee, I commented then that the best example of this is support for children. Child benefit is very simple but it is not fair. If it were the only kind of support, it would not be fair. Tax credits for children are very fair, but even I would not say that they are simple, and I was involved in designing them. I just said that child benefit is an example of something that is simple, but thanks to the recent changes it is going to be less simple. However, noble Lords will take the point. That is the difficulty in dealing with all these different categories. If a county council is to try to be fair to all these groups, not to mention protecting itself from potential legal challenge under the variety of legal instruments I have described, it is going to be difficult for it also to be simple. If it is going to be simple, it may struggle to deliver that by next April. I beg to move.

My Lords, I have not participated in proceedings on the Bill so far, but we have now come to the clauses on disability. I refer the Committee to my interests in the register, particularly in respect of autism. I want to add to the initial remarks of the noble Baroness, Lady Sherlock. I hope that the Committee will forgive me for singling out autism, but it is the only disability that has the benefit of statute, through the Autism Act 2009. I believe that that is the only piece of statute that relates specifically to a particular disability.

I have to inform my noble friend that I am becoming rather disconcerted as various pieces of legislation that relate to disability, particularly on the question of council tax benefit, come forward. I worry that Ministers are not consulting, particularly with the Department of Health, which has responsibility for the Autism Act. It is a relatively new piece of legislation on the statute book. The will of the House was to be taken forward in what Parliament intended to be an improvement in the lives of autistic adults in particular. At its heart, the Autism Act was to enable more adults with autism to lead independent lives. It is worrying that, through legislation such as this part of the Bill, there may well now be problems with localism to the degree that certain councils may not be fully aware of—or may ignore—their need to take account of the autism strategy that is associated with the Autism Act.

My first question to my noble friend is: what discussions have his department had with the Department of Health in drafting the clauses on disability and local authorities’ ability to implement and make progress on the autism strategy? I draw the Committee’s attention to the strategy Fulfilling and Rewarding Lives, which states that adults with autism should live in accommodation that meets their needs. That is what we hope the strategy will bring forward. It states:

“Local authorities are required to take account of the needs of adults with autism when considering housing provision”.

It also states that local authorities need to fulfil the equality duty by taking account of the needs of adults with autism in respect of housing.

I seek reassurance from my noble friend that the Autism Act has been discussed and will, even with the choice of localism, continue to be implemented by local authorities that now have that statutory duty under a different piece of legislation. I hope that my noble friend will accept that, while I single out autism because it has the protection of other statutes, I share the concerns outlined today by the noble Baroness, Lady Sherlock, over disability in general. The people who are in receipt of disability benefits—who are already subject to a lot of change and disruption—will find council tax eligibility being added to quite a long list of changes in their lives. Not only will the process cause them distress but it will affect them financially, which could ultimately affect that very important ability to live independently.

My Lords, it is always a pleasure to follow the noble Baroness, Lady Browning. What I have to say follows on very well from what she said. My noble friend Lady Sherlock asked some searching questions of the Minister. I want to pick up on the one about cumulative impact. Ringing in my ears are the words of the late Lord Newton, who reminded us in proceedings on several Bills that we have to look at these pieces of legislation together, not separately—yet we always look at them separately.

I have just been reading two relevant reports, which I would like to bring to noble Lords’ attention and which emphasise the question of cumulative impact. One is from Demos and Scope, and says:

“Disabled households are not benefits recipients—they are parents, employees, students, home owners, older people and citizens. They rely on the same diverse range of services as everyone else, but the Government’s failure to grasp the whole picture beyond the welfare reform agenda can lead to an underestimation of the cumulative impact these hundreds of individual cuts can have on each multi-service-using household”.

We are now potentially adding to those cuts, which is why it is so important that there is a proper impact assessment that takes the cumulative impact into account.

The other report, by Citizens Advice and the Children’s Society, says:

“We are very concerned that the scale of the cuts in support for some groups of disabled people has not yet been properly understood, because the changes have been viewed in isolation”.

Again, the danger is that we view the changes here in isolation.

The other point that I want to make refers to carers, who tend to get overlooked constantly. I was slightly bemused because the impact assessment referred to carers as one of the vulnerable groups that local authorities need to take into account, yet the DCLG document, Localising Support for Council Tax Vulnerable people—Key Local Authority Duties, does not seem to mention carers as a group whose needs need to be taken into account. Could the Minister explain which of the two documents local authorities are supposed to take account of, and why there is this inconsistency in the reference to carers as a vulnerable group?

I will make three very brief points on these two amendments. The first is simply to acknowledge that, given that council tax support is to be localised, it should therefore follow that local councils have the responsibility for deciding what their schemes entail. That seems a very important principle. We will debate later the role of the Secretary of State in defining any exclusions at all.

Secondly, a scheme agreed by a local authority would be inappropriate if it did not have regard to disabled people and carers, not least for the reason that it would not meet the need of an equality impact assessment if due regard had not been given. However, the list is not exclusive, and we shall shortly go further into the definition of vulnerability. One weakness of the Bill at the moment is that it does not actually define vulnerability adequately.

I agree absolutely with the noble Baroness, Lady Lister, on the cumulative impact and the Government’s understanding—and this is not a particular criticism of this Government, because it has always been the case. Governments are not very good at seeing the cumulative impact of their legislation and the whole picture. A number of us have become very reliant upon the Institute for Fiscal Studies and the Joseph Rowntree Foundation for pointing out some of these things to us, sometimes one would hope before the event but occasionally after the event as well. Governments should be smarter at understanding the cumulative impact of what they are doing.

However, in all this there is another option for local councils, which is to maintain their current schemes effectively and to make the cost of that a general charge on council tax. I might come back to that when we talk about vulnerability, because, where council tax will be localised, vulnerable people will have to be protected. How nice it would be if we had more than one additional band in the council tax banding—not just band I but maybe some further ones—because there is a real risk of redistribution occurring from those who are less well off to those who are better off, as the IFS and the Joseph Rowntree Foundation keep pointing out to us.

Sitting suspended for a Division in the House.

My Lords, I rise to say a word or two about the disablement issues; that is why I have come for this part of the Committee. It seems to me that we have not covered the point properly. We have talked about the lack of thinking in the round, but we have not talked about the fact that it becomes more important given the circumstances that we are in at the moment. My 35 years as a Member of Parliament led me to have some pretty grave doubts about some of the claims that people made. You had only to sit in your surgery to see with what tiredness they came in and with what alacrity they left, complaining about some illness or other in the mean time. It was one of those sad things and it was a real problem. The Government—perfectly rightly, in my view—have approached that, and in doing so they have reminded lots of people that some people have claimed invalidity or impairment of one sort or another improperly. The difficulty with that is that it is necessary to put things right, but that creates an atmosphere that can be extremely deleterious to people who genuinely are disabled or in real need of help.

The points that have been raised on both sides of this Committee are very important at this time in particular. It is extremely important to get the balance right and to remind people, particularly local authorities—and some still do need reminding—of the very considerable difficulties in which many disabled people live and the need for them to treat these issues with a degree of sensitivity that I am not sure is found universally. I want to look at that background just for one moment.

Secondly—and I address my noble friend the Minister very carefully—it really is time that the Government got out of their problem; and it is genuinely a problem of all Governments. After all, the Government are telling everybody, rightly, that we should have joined-up thinking. We have pathfinder operations to try to get people to have joined-up thinking about property locally, local councils and government property and to try to get various organisations to work out their problems together. So we have a Government very keen on reminding people about this, and yet they still have not dealt with the central issue that we still have silos when it comes to this kind of issue.

I am interested in the comment that we all have to look to the Joseph Rowntree Foundation, the Institute for Fiscal Studies and others—it is hoped before but certainly afterwards—to see the real impact. The question that I really want to ask my noble friend is: will he take back to the Government, in his own inimitable way, the request that it is about time that they learnt from these outside bodies? Why have we had this kind of discussion for as long as I can remember in politics, both here and in the other place? There is nothing new about this. It has always been true.

Why is it so hard for Governments ever to learn a lesson such as this? I remember the difficulty when I was Secretary of State for the Environment of trying to get government offices to have all their area offices and headquarters of other offices in the same town so that you could actually get a job done. You often used to have to go to five different towns to make any kind of decision, and then you would discover that the area covered by each department was different, as far as that region was concerned. We got over one or two of the more extreme cases, but the thing that really worries me is that the conversation that we have just had—which, after all, has been most amicable and agreed on both sides—is one that we have had too often.

I wonder whether this Committee might be the one in which we could say enough is enough and that this is a matter for governments seriously to deal with. Otherwise, it does not matter who is on which side. We will go on having this discussion. If it is not about disability, it will be about something else where as similar problem arises—where the Department of Health, the Department for Work and Pensions, the department responsible for local government and everyone else have not really got together to see how their various concerns impact on particular individuals.

This is the effort of a long-time Member of Parliament and a very long-serving Minister to say that having failed myself, and being honest about that, do you think that we could on this occasion bring it home to someone who is very much above the pay grade of anyone in this Committee? This is something that the Government have to take seriously. It is very boring, constantly, to have this conversation, with good-hearted people on both sides of the House saying the same things and, in the end, knowing very well that it will not have the effect that we really want.

My Lords, this has been an interesting debate with some extremely perceptive contributions. I very much welcome the contribution of the noble Lord, Lord Deben. He and I occasionally crossed swords during his tenure at the Department of the Environment, as it then was, but he was right to say that we need a balance in the view of claimants that is so often the focus of public debate in the media and, sometimes, by politicians. There are always some who abuse the system, but they are not by any means in the majority. There are many people who do not claim who should claim, whether it is for disability or other things. That reference to balance is highly desirable.

However, I am slightly nervous about his reference to government offices because there certainly was a problem and the Government have certainly solved it—they have closed them. There are now no government offices for people in the regions to go to. It has all been centralised. However, his fundamental point is right. The Government need and have failed, so far as one can judge in connection with the Bill, to look across departmental interests and the client groups that may be represented by various government departments.

It is interesting that there is no specific mention of disability or any other particular category in the impact analysis, although it is a significant element in the Bill, the Government illustrate only the impact on pensioners and other age groups. The analysis does not refer at all to disability as a specific issue and yet, as we heard from the brilliant forensic analysis by my noble friend Lady Lister, there is a huge problem that affects a variety of people with different disabilities and conditions, and of course their carers, which clearly must be taken into account.

The noble Baroness, Lady Browning, referred to the specific statutory category of sufferers from autism. I am bound to say I was not aware that there was a statutory provision and it is timely of her to bring it to our attention—certainly to my attention, but other noble Lords may have been aware of it. It is an illustration of a particular acute need that can so easily be overlooked in the developing pattern of varying schemes up and down the country.

The problem is that the Government are effectively raising expectations among various groups, but not specifying, except in the case of pensioners, that there should be a particular protection and talking about vulnerable groups in general terms. They are referring to the possibility of schemes being made and reminding councils, as we have heard more than once, of their duties under the equality legislation. But they are not willing or providing the means to meet the legitimate expectations of those groups in this context.

Referring again to the impact analysis, when we look at the answer to the problem of reduced funding for council tax support, it is a little much for the Government to say that councils will be able to choose the design of their schemes to see whether some awards could be reduced, thereby increasing the amount of council tax that the authority collects from current welfare claimants, or that they could,

“choose to realise the saving in other ways. This could be through reconfiguring funding for other services through efficiency savings”,

as if that thought had not occurred to councils, has not already been implemented on a massive scale, and is continuing to be implemented. Or councils could use “reserves”.

One of the consuming passions of the Secretary of State is apparently the use of reserves and the fact that councils should simply dip into them. But of course reserves are under pressure. As we have discussed in Committee before, one of the consequences of this particular piece of legislation is likely to be greater pressure on reserves which will encourage councils and council treasurers in particular to advise that they should be built up because of the potential shortfall in collection. That is let alone the potential increase in demand that we again debated at length in this Committee, particularly in relation to pensioners who are more likely to claim because of the change of the character of the benefit from a benefit to support. That is something that all of us very much welcome and some of us have been advocating without great success for some years. That is also likely to put pressure on reserves, so reserves are not a reliable recourse for councils.

Or—the noble Lord, Lord Shipley, hit on this one—councils could use “flexibility over council tax”, which presumably means increasing council tax, except that the Government have made it clear that council tax will be subject to a cap. If any council proposes something in excess of what the Government suggest, a referendum would be called. I do not know whether the noble Lord, Lord Shipley, is in this case in favour of referendums—he may not be in terms of other constitutional matters—but at any rate it is hardly a recourse that will be accessible to many local authorities. This is an inadequate response to the real difficulties that councils would face. However, the noble Lord, Lord Shipley, is right to point to the cumulative impact of all of these measures as something requiring the cross-departmental view that the noble Lord, Lord Deben, referred to.

We are left in a position in which the public, disabled people and their carers will be told, presumably, that their councils can decide whether or not they continue to have the benefits that are currently available—whether having a property altered to accommodate the disabled person's needs means the reduction of a council tax band, although you cannot go lower than band A.

In all events, it is fairly modest, but that will also disappear unless it is retained. If it is retained we come back in a vicious circle to the fact that it will be retained essentially at the expense of the working poor, whom, I say with due respect to the noble Baroness, Lady Hanham, we constantly hear that this whole scheme is designed to incentivise. That mantra is wearing a little thin. It is absurd to imagine that the whole burden can simply be borne by those people. It may have to be, if the Government require councils to do it or if councillors feel obliged to do it, because it is unlikely that they would be able to fund any move towards meeting the needs of this or any other group.

However, it is clear that authorities should consider the impact of the scheme on disabled people in their areas. I would like to know whether the Government have conducted any kind of analysis and tried any kind of modelling, with or without the assistance of individual local authorities on how this might work in practice. If they have not, frankly, that would be disgraceful. They may have and, in that case, I commend them. But there is no evidence in the impact analysis that anything like that has happened. In a matter of this significance, for this group in particular but not only for this group, that is simply not good enough.

At all events, these amendments at least focus some attention on the issues. They have the disadvantage of not supplying the answer in terms of the financial resources to meet those needs—and again one would have to go back to the Government. When it suits the Government, money can be found. As I implied in the question to the Minister, who is not departmentally responsible for these matters although he is something of a transport buff, money has been found to fund the deferment of the increase in fuel duty. There may or may not be good reasons for doing that—perhaps there are, but it was found. Apparently, the somewhat hapless Treasury Secretary believes that there was significant under-spending across government from which that money was drawn. Perhaps some of that money might have been used to moderate the impact of these provisions. Again, there was the other obsession of the Secretary of State about weekly bin collections, for which £250 million was offered. I gather that not much of it has been accepted, so there may be a saving there. As my noble friend pointed out earlier this afternoon, that money might be used either for the purposes of delay, which does not seem to be likely to commend itself to Ministers, or at least to help meet the needs of the very groups which they will apparently be advising local government to protect as far as possible.

The Government need to be honest about this. If they are not going to provide resources, they should acknowledge that local authorities will find it extremely difficult to do so. They should not be raising expectations that it will be done easily, if at all. That would be a shabby way in which to proceed, and I know that the noble Earl, Lord Attlee, and the noble Baroness, Lady Hanham, are not politicians of that stamp—absolutely not. But those with greater responsibility than, unfortunately, lies within their powers, need to demonstrate that that is not a course that they wish to pursue.

My Lords, I thank the noble Baroness, Lady Sherlock, for the explanation of her amendments. Noble Lords have asked a number of questions about specific groups and local authorities’ responsibilities in relation to those groups. I want to be clear that the legal requirements that established those duties, which your Lordships have already considered as part of legislation, will remain. As accountable public bodies, local authorities will need to continue to take account of all relevant duties. I am grateful to noble Lords for bringing some of those duties to the attention of the Committee.

The noble Lord, Lord Deben, asked me some interesting questions about the organisation of the machinery of government. I am confident that I know how to exercise that machinery but it is rather above my pay grade to try to change it by addressing the issues that he raises. The noble Lord used the term “above my pay grade” after I had drafted my speaking notes on his contribution.

The noble Lord, Lord Beecham, talked largely about financial issues. It is important to remember that, across local government spending, this is only a 0.4% reduction in the budget.

The 0.4% refers to these specific reductions.

The noble Lord, Lord Beecham, tested us on the overall government policy. I am fully signed up to all government policy, as the noble Lord will know.

Amendment 76 would require local authorities to have regard to the impact of their scheme on disabled people in their area. This is an important consideration and local authorities already have responsibilities in relation to disabled people. These include their responsibilities under the public sector equality duty in Section 149 of the Equality Act 2010 which requires authorities, in the exercise of their functions, to have due regard to equality between people who share a relevant protected characteristic and people who do not share it. Equality legislation explicitly recognises that disabled people’s needs may be different from those of non-disabled people. Therefore, public bodies should take account of disabled people’s disabilities when making decisions about policies or services. This might mean making reasonable adjustments, or in some cases treating disabled people more favourably than non-disabled people to meet their needs.

The Department for Communities and Local Government has already published guidance reminding local authorities of the statutory framework in which they operate and their existing responsibilities to people in vulnerable situations, including responsibilities under the equality duty. Therefore, I do not believe that an additional duty to have regard to the needs of disabled people is needed, especially when local authorities have an already established and understood framework of responsibilities.

Amendment 76A would require local authorities to have regard to the impact of its scheme on carers in the area. I was asked several questions about carers, including whether we would change existing relief for them. There are no plans to make any changes to the existing relief. I was also asked how the default scheme takes carers into account. The default scheme preserves the current CTB regime as far as possible. CTB makes provision for carers through a specific income disregard.

Before the Minister leaves that point, I want to be sure that I understand what he has just said. I specifically asked how carers’ allowance would be treated in the default scheme. Could he tell me how carers’ allowance is to be treated? Is he saying that there will be no changes from the current treatment under the default scheme?

My Lords, I expect I shall get some inspiration on that point in a moment.

My noble friend Lady Browning asked how local authorities should have regard to the Autism Act. She raised local authorities’ other responsibilities, particularly in relation to the Act. That is precisely why we have not proposed a new and potentially cost-cutting definition. Local authorities have a range of duties that they will want to consider. My noble friend is right to point to the Autism Act as one of the key matters that needs to be considered.

The noble Baroness, Lady Lister, claimed that there was no reference to carers in the guidance. The guidance is not exhaustive. It highlights some key legal duties.

Surely the Minister will accept that if it does not highlight carers, the chances are that carers’ needs will not be taken into account.

My Lords, they are already taken into account. We are not saying that carers should not be taken into account. A competent local authority will take the needs of carers into account. Why would a local authority not? That is part of its duties.

I was asked whether pensioners and other vulnerable groups are protected. Low-income working families in an area will face a cut in support. Local authorities will have choices about how they manage the reduction in funding. They will be able to choose whether to pass the reduction on to council tax payers, using their flexibility over council tax, or to manage the reduction within their budgets. I know that noble Lords do not like hearing it, but that is the fact.

My Lords, council tax support is part of the total rate retention support. Local authorities can make arrangements for their scheme. They do not have to rely just on the funds relating to council tax benefits.

I wonder whether the Minister could help me on one further point. He talked about pensioners being protected. Can he deal with the point about the circumstances in which one member of a couple may have reached state pension age but the other has not? Is that household protected under the Government’s proposition?

I understand that the Minister will have to write. Could he pick up the point about one of the problems being that different presumptions and rules are associated with the range of benefits that we currently have when couples straddle the pension age, and will he say what is proposed for universal credit? As I am sure the Minister will know, if one of you is below pension age, both of you will be treated as though you are below pension age. That is not the situation now. There are in effect two sets of schemes, according to whether you are a newcomer into UC or a legacy claimant, and cutting across that will be a CTB discount scheme, which is supposed to embrace both. Perhaps the Minister can take on the issue of this complexity when he writes.

It may help the Committee if I explain why I am experiencing such difficulties. The proposed amendment talks about disability in very general terms. If noble Lords table an amendment that deals specifically with their concern, I can address that concern specifically, but I am struggling to answer these very technical questions, which are too detailed for me to answer at the Dispatch Box. If I had a more detailed amendment, I could do so.

I would like to say a few more words about carers. Carers provide a vital role in society, and I expect that local authorities will want to consider what provision to make for this important group. Currently council tax benefit makes provision for people who are carers through a specific income disregard and a premium towards their applicable amount. Local authorities will be free to do so under localised council tax support.

The Department for Communities and Local Government is working with the Department for Work and Pensions to ensure that local authorities will continue to receive data on current benefits and universal credit. This could include data that would help local authorities to identify carers so that they are able to provide support in the future if they choose to do so under the terms of their schemes.

My Lords, I thank all noble Lords who have contributed to making this a very interesting and useful debate. I have learnt much from it.

I am slightly smarting from the Minister’s criticism that my amendment is too general. By referring to disabled people in general, I was seeking to avoid detaining the Committee by tabling a whole succession of amendments dealing with a full range of disabilities, which I might reasonably have done; but I have learnt my lesson for the future. I shall look forward to visiting the Public Bill Office with more regularity in future.

I asked the Minister at least eight questions, and I do not think that I got answers to any of them, since “inspiration” did not arrive in time. I was not trying to ask technical questions; I was trying to draw out, so that the Committee could understand, what the implications of these changes are for some of the most vulnerable groups in our country in order that we might understand whether we needed on Report to seek to take any specific steps to protect those groups. Given that, I would be very grateful if the noble Earl, when his team has had the opportunity to reflect and to give him all the appropriate advice, would agree to pick up specifically the range of questions that I mentioned when he comes to write. I would add that, even though it might have sounded general, the point about the possible unintended consequences of having neighbouring authorities with different regimes and what that might do to drive both differential costs between authorities was particularly important. Although it might sound like a debating point, it was intended to try to find out to what extent the Government had modelled for that.

I urge the Government to reflect very carefully on the points raised by all noble Lords in this debate, but, this being Grand Committee, I beg leave to withdraw the amendment.

Amendment 76 withdrawn

Amendment 76A not moved.

Amendment 77

Moved by

77: Clause 9, page 6, line 8, at end insert—

“( ) No regulations under paragraphs 2 and 4 of the new Schedule 1A to the LGFA 1992 shall be made unless a draft of the instrument has been laid before and approved by resolution of each House of Parliament.”

My Lords, this is a brief and, I hope, straightforward amendment that I trust the Minister will accept in principle, if not in its detailed wording.

Schedule 4, as we are all now well aware, introduces a new schedule to the Local Government Finance Act 1992 and hence the framework for the council tax reduction schemes. However, regulations under paragraph 2 of the schedule can cover a range of matters, including stating who must or must not be included in a scheme, maximum and minimum reductions, and what might be included to mirror existing arrangements. Paragraph 4 covers regulations for a default scheme. The Delegated Powers and Regulatory Reform Committee, in its fourth report of the Session, reviewed the powers of the Bill and concluded:

“The change from national rules to local schemes is not an insignificant one in an area of law that the government acknowledges must secure appropriate support for vulnerable individuals, and the constraints and requirements imposed by regulations under paragraph 2 will form an important feature of the local schemes. It seems likely that some authorities may model their own schemes on the ‘default scheme’ established by regulations under paragraph 4. In the light of that, we recommend that the Bill should require the affirmative procedure for regulations under paragraphs 2 and 4 of new Schedule 1A”.

This is what the amendment seeks to achieve. I beg to move.

My Lords, the effect of the amendment would be to make regulations prescribing the requirements for a local scheme and prescribing a default scheme subject to the affirmative procedure. I fully recognise that these regulations will be vital to the operation of local schemes and that provisions in the default scheme could influence the decisions that local authorities take about the shape of the scheme that they wish to operate for working-age claimants, which will generally not be covered by the prescribed requirements.

It is because of the importance of both sets of regulations that the Government published their statements of intent in May, setting out in great detail what they intend to cover in these regulations. Importantly, the statement of intent made clear that with a very few limited exceptions the effect of these regulations would be the same as those currently in operation in relation to council tax benefit: that is to say, local schemes will be required to include provision in respect of pension credit-aged claimants that is the same as the current council tax benefit scheme. For the default scheme, regulations will recreate the current scheme for all claimants.

We are today publishing the draft regulations for the local scheme—which in the main will set out the requirements relating to those of state pension credit age, and which I will refer to as the pensioner regulations—and the default scheme. This will put beyond doubt that our intention is to recreate the effect of existing council tax benefit regulations in the default scheme and to require equivalent provision to be made for those of pension credit age in all local schemes.

Council tax benefit regulations have been in force in various forms for a number of years. Local authorities understand their operation and effect. It is not our intention to bring in significant new untested processes and procedures, and by publishing draft regulations well in advance of the regulations actually coming into force, and ahead of Royal Assent, there will be considerable opportunity for scrutiny by local authorities, Members of this House and the other place.

The default scheme is not intended to apply generally, but only in those authorities who fail to adopt a scheme in time, and for the first year of the localised scheme. Thereafter, any scheme in operation in a local authority will in effect be its adopted scheme, and it will be able to review and alter or replace it for 2014. I understand that the Delegated Powers and Regulatory Reform Committee has indicated that additional scrutiny is needed because local authorities may choose to model their schemes on the default scheme. If they choose to do this, they will in effect be choosing to model their scheme on the existing regulations. The changes that we will be making in bringing forward our own regulations will be limited and largely confined to taking into account changes in other parts of the welfare system. While local authorities may choose to model their schemes on the default scheme, they will not be required to do so.

In relation to the pensioner regulations, government may from time to time need to amend the regulations. This may be needed to amend cash values in the means test, or to reflect future changes to the welfare system. It would not be a good use of parliamentary time to require a debate each and every time an amendment is required.

In conclusion, I am not persuaded that it is sensible to make subject to the affirmative procedure regulations that will recreate provisions that have been in operation for a number of years and that will be published in draft form for consultation while this Bill is still before the House and well before Report. This will give noble Lords ample opportunity to debate the regulations, and I am not clear what value there would be in further parliamentary debate at the point where they are made. In publishing draft regulations now, noble Lords will nevertheless be able to consider while the Bill is still before Parliament what, if any, provisions in the draft regulations differ sufficiently from the existing regulations to warrant making the regulations subject to the affirmative procedure. I therefore suggest that the noble Lord withdraws his amendment.

My Lords, I thank the Minister for his reply. I must say that I am a bit taken aback. I thought that it would be pretty much routine to accept the recommendations of the Delegated Powers and Regulatory Reform Committee. I thought that the reasoning was a bit spurious. It is welcome that regulations have been published now and welcome that we will, I hope, have some chance to debate them when we get to Report, although debating at that stage is not necessarily the iterative process that we could have in Committee.

Can my noble friend recall any other instance in the past 10 years or so when recommendations from the Delegated Powers Committee suggesting that we go for an affirmative rather than negative procedure have not been followed by the Government?

I cannot. I can remember one occasion as a Minister when I was minded not to take the advice, but Ministers always did if it was pressed upon them. I am truly shocked by what the Minister says. We have other business to debate tonight so I am not going to prolong the thing, but this is something to which we will come back on Report because I do not think that the answer is satisfactory. I beg leave to withdraw the amendment.

Amendment 77 withdrawn.

Amendments 78 and 79 not moved.

Clause 9 agreed.

Amendment 79A

Moved by

79A: After Clause 9, insert the following new Clause—

“Council tax discount: vulnerability

The Secretary of State shall issue guidance to all local authorities determining who shall be considered vulnerable for the purposes of eligibility for council tax discount.”

I was hoping that we would get to this amendment tonight, so we decided that it was not wise to spend time debating Clause 9 stand part.

The amendment would require the Secretary of State to issue guidance as to who is vulnerable. After the sequence of amendments and discussions that we have had, I think that we need that. At the same time, I want to raise the deeper issue behind it, and I assure the Minister that this is in no sense a technical issue but an issue about policy. I therefore look forward to his reply. On his complaint that we sometimes raise things that are technical, that is of course what Grand Committee is for compared, with Report or Second Reading. If we cannot explore the technicalities here, where can we? I take it a little amiss to be reproved for asking about things that are technical and that cannot therefore be answered in this Committee.

The need for this amendment has now been established. Localisation is based, in my view, on a deep confusion of language. Obviously, a need arises in a locality because all people, whether in need or not, live in a locality. However, that does not make their need local. On those grounds, the whole of social security would return to the place where claimants live, as it did when local authorities ran the Poor Law in the 1930s and for very sensible reasons it was subsequently nationalised. Need is local and perhaps should be met locally only if it is generated locally, if the disability or the lone parent poverty is in some sense particular to a specific local authority, or if it is caused by that local authority.

If that is not the case—and of course it is not—then need is individual and entitlement should be universal. I therefore ask the Minister the same question that I asked him a week ago: what aspect of need is local, as opposed to individual, for the purposes of council tax benefit? I know I am repeating myself, but I hope that, with the extra week, he will be able to give us the three examples that I asked for. I am sure he can help me now.

What is specifically local about being vulnerable because you are disabled, or vulnerable as a lone parent when you and your young children are below the poverty line? My noble friend Lady Sherlock explored this very thoroughly. Why, if you are in Plymouth in a wheelchair because of advanced MS, you have the identical income, the identical disease, at the identical stage, and with the identical family structure as someone in Portsmouth, is your council tax discount thought to be somehow local? It will therefore mean that your council tax discount will be different in Plymouth, where, say, there may be full protection, from, say, Portsmouth, where there will be a 20% flat rate cut on it or vice versa. Will the Minister tell me why that is a local issue that is to be determined locally, when the rest of the benefit system assumes correctly that there is an individual entitlement to national benefits for disabled people who are scattered unequally and randomly across the country?

There is such a misunderstanding of what is local. Confusing locality, which is where people live, with localism, which is who decides what they get, infects the range of schemes for council tax discount that I have studied. This is no criticism of local authorities; that is what they are being asked to do.

Most authorities include disabled people, as they have to, as identified by IB, as my noble friend Lady Sherlock said, but they disagree as to whether they should count DLA as income. That can make a substantial difference to the council tax benefit that they get. As my noble friend also said, and as was flagged up by the noble Baroness, Lady Browning, all those with mental health problems—for example, with depression or autism, neither of which may be externally visible in the sense of the wheelchair or the white stick—may not be considered by councillors and the local population as disabled, particularly when some forms of learning disability give rise to antisocial behaviour and are too often dismissed by ill-informed neighbours as welfare scroungers. Will such people be overlooked?

A couple of authorities, as my noble friend Lady Sherlock said, include carers, but others do not mention them at all. It is by no means clear whether carers’ allowances, as with DLA, will be included in income for council tax discount schemes or not. Accordingly, it will affect the amount of money that a carer will get. It is a nationally defined benefit, with a nationally defined number of hours for care and a nationally defined degree of disability. Why should that need suddenly become a local need to be assessed by local people because you happen to live in their locality? You may get council tax discount in one authority, a reduced council tax discount in another, and no council tax discount in a third, and possibly face a nasty postcode lottery? Will the Minister explain why being a carer is a local need and not a national need for which people happen to live in a locality?

Child poverty, not mentioned in any impact analysis, could be made worse because some local authorities will count child maintenance, child benefit or child tax credit as income. Others appear willing to disregard them. Two poor children, one living in Doncaster and the other in Durham, with identical family and financial circumstances, may be treated differently. Why is their need local as opposed to the fact that they live in a particular locality? Will the Minister tell us?

What is so distinctive about council tax discount or benefit, as opposed to the whole array of other benefits, that it should be singled out for localisation? It is not because the need is generated locally; that need would exist wherever claimants lived. It is merely that no needy people live in its locality. I have been puzzling about why council tax discount is thought to be different from all the others. Earlier the noble Earl, Lord Attlee, suggested that because the precept of council tax is locally determined and varies from council to council, it is therefore right that the discount should be locally decided as well, and thus vary from council to council. It is a sort of son of the poll tax.

I accept that in unitaries, where billing and precepting authorities are broadly the same, council tax rebates will be decided by the same councillors who determine the council tax and the one may press down on the other. But for half of the country that is not true. Those residents unlucky enough to live in two-tier authorities can make no such connection because 85% of the council tax comes from the precepting authority, mostly the county council, which is different from the billing authority. Money levied in south Norfolk or Norwich will be spent by Norfolk County Council, entirely properly, on pensioners’ social care 40 miles away in north Norfolk because it has more pensioners and greater social care needs. Can the Minister tell me in what sense will the residents of the billing authority in south Norfolk and Norwich, who are responsible for around 15% of the bill, have levers over the council tax levy in its totality? They absolutely do not. Just because council tax is raised locally, it no more means that council tax benefit should be local than housing benefit, where rents are raised locally and differ regionally, should be national. I hope the Minister can explain why housing benefit is being treated as though it is different from council tax benefit.

This is a mess, and we do not make it less of a mess by calling it localism. No one will know what they are entitled to. In Norfolk there will be seven different schemes of varying degrees of generosity. That generosity will have nothing to do with local knowledge and local needs, but everything to do with the demographic profile—how many pensioners, how many second and empty homes which may bring in modest additional revenue, although only 15% will be kept by the billing authority—and the political take on the part of councillors, offering more or less generosity to those who are on 100% benefits. As one of my colleagues said earlier, a move to the wrong side of the street could in the future make a difference of £20 or £40 a month to those on tiny incomes. With no common criteria and no common definitions, we may be sending vulnerable people and families into deeper poverty. My noble friend Lady Donaghy mentioned that.

Like other Members of the Committee, my former council ward has a food bank in a church hall. Every day, kind church people bring in cakes, as well as offering comfort and friendliness. A couple of weeks ago I dropped in to find a wraith-thin couple in their late fifties devouring a huge plateful of fresh scones. Four days before they had had to pay an energy bill for their council flat, which was just 100 yards away in Northumberland Street. They had no savings and they had used up what was left in their cupboard. By that point, they had not eaten for two days. Finally they turned up at the food bank where, as I said, they were met with warmth and help. They carried home tinned tomatoes, tinned tuna and dry pasta to keep them going for three more days. That is in 2012 Britain. They stand to get their council tax benefit cut.

To avoid the confusion and disparity built into schemes; because need may exist in a locality, but not arise from it just because it occurs there; to protect individuals such as those who go to food banks; to help local authorities have a common definition of who is vulnerable, and thus protect them from the possibility of legal challenge—the source of a subsequent amendment by my noble friend Lord McKenzie; and so that for them and their vulnerable poor there is a level playing field, I urge the Minister to ask the Secretary of State to issue guidance that says that local authorities should not just take vulnerability into account but, as the noble Lord, Lord Shipley said, define exactly who the vulnerable are for these purposes. That should not be based on the perceptions of local councillors about the deserving and undeserving poor.

Council tax discount should go to those in need, who may be unattractive, invisible or concealing mental health or learning difficulties, and are thus labelled as scroungers by their neighbours. It should not just go to those whose need is visible and acceptable. That is the point of national rules and a national bureaucracy. You do not have to be appealing or attractive to get the help you need. Without such laws, I suspect that local voters would often prefer donkey sanctuaries to get more cash and support than troubled families. That is the nature and the limitation of localism. That is why I urge the Secretary of State in all fairness—because that is what this is about—to define eligibility so that some vulnerable people are not denied help in the name of the postcode lottery that has falsely been called localism, just because they happen to live in the wrong locality. I beg to move.

My Lords, I have added my name to this amendment because it is a very reasonable request to the Government. The noble Baroness, Lady Hollis, has made a compelling case to do with the individual, as opposed to the locality. If we are about anything in this place, surely we are about how legislation affects the individual. The consequences of not taking the impact on the individual into account are profound, not least in an area where there is, as we have discussed, a lot of other legislation and the cumulative effect could have unintended consequences.

I was very grateful that the Minister’s office sent me a paper, Localising Support for Council Tax: Vulnerable People—Key Local Authority Duties, which I have studied. I was rather concerned to see from the introduction that the Government, despite having,

“been clear that, in developing local council tax reduction schemes, vulnerable groups should be protected”,

none the less go on to explain, in paragraph 1.3, that, with the exception of,

“applicants of state pension credit age … the Government did not intend to prescribe the protection that local authorities should provide for other vulnerable groups, but would consider what guidance was needed to ensure local authorities were able take into account existing duties in relation to vulnerable groups in designing their schemes”.

It would be helpful to hear how the Government intend to put that promise into practice and to have a better understanding of how the Government define vulnerable people, particularly those who come under the category of disability. The Government have prayed in aid the equality duty by which all local authorities are bound. The relevant protected characteristics are covered by the equality duty. Disability is just listed as “disability” but there are other vulnerable groups there. It is important to get more clarification of that vulnerability.

I say to the Committee that you could write my knowledge of local government finance on the back of an envelope; it is very much based on my 18 years as a Member of Parliament, dealing with constituency casework. There are certain things that I spent a lot of time dealing with but others that are quite a mystery to me. However, one thing that is clear throughout the country is that you have district authorities that will administer council tax, as will unitary authorities, but a lot of the vulnerability of the individual is not actually dealt with by a district council but by a county council. You could argue that unitaries should have an overview of the whole shooting match and a better understanding of it, but as regards disability and the individual’s needs, a social services department will have a lot of knowledge and awareness of what those needs are, but you could not expect the district council administering the council tax to have very much knowledge of them at all. I cannot see an obvious tie-up between the two.

Some members of the Committee will have a lot more knowledge of how councils work than I do, and I bow to their greater knowledge, but so much of what happens today, and so much legislation, falls down a black hole because of a lack of communication and exchange of information between the relevant agencies and authorities. Unless this guidance is put into the Bill by the Minister, many people will fall down that proverbial black hole because there will not be that important exchange of information about why they are vulnerable in the first place.

I therefore say to my noble friend that I hope that this matter can be reconsidered, that we can have more clarification and that this reasonable request receives a favourable response.

My Lords, I am so often in agreement with the noble Baroness, Lady Hollis, that I hesitate to intervene, but this is entirely the wrong way round and I deeply disagree with her. This is a very important aspect of what we are doing because the problem with localism is that everyone who has ever been concerned with centralism will find on every occasion that it will be better done by those clever people at the centre. What was behind the noble Baroness’s comments was to say, “The vulnerable will be protected only if we at the centre make sure that no one has any input on this at all in case they might make a different measure and balance, given their available resources”.

I must say that I really wonder what I would say if I had been a local councillor and had heard her comments about what was likely to happen if the local council had made these decisions. The noble Baroness represented a Labour council that decided that in local terms it would bilk the Government’s policy on the sale of council houses. It said, “We have a right to do this”. My noble friend was the one who had to stop the council doing that because it was a government policy, but the council took its own view. It was against the law. It actually broke the law in order to uphold localism as it saw it.

My Lords, we did not break the law. I actually won the first round for judicial review. It was only when subsequently it was clear that it would cost the local authority a lot of money if we went to appeal—against Lord Denning—that I decided that we would negotiate. What then happened was that the regional officer was sent in to run the sale of council housing for us and, after six weeks—I was deposed as housing chair—he came knocking at my door saying, “Could we discuss this?” He was hidden behind a huge bouquet of flowers. I said “Of course, of course”. He said, “No one will work with me because when I’m gone, you will still be there”. I said, “Oh, dear me”. We negotiated and six weeks later, he went off to Africa as a chaplain and we went back to where we were.

As we are going down memory lane, I will just remind the noble Baroness that no other local council thought what her council thought about the law. Everyone else accepted that the law was as it was, and indeed it was the law of the land. I am not blaming her for it; I was cheering her on. In those days, she did think that localism mattered, even in a matter so clearly a national policy. My problem with everything she has said is that I have heard it again and again, but normally from officials. Normally it is central government civil servants who sit there and say, “Better not, Minister. If you allow people down there to make decisions, you never know what might happen”. I would say this to her: you have got to start somewhere. Why can we not start here? After all, council tax is a local tax. It is ludicrous to say that the tax is local but the arrangements for the tax rebate should be national. I find that unacceptable and therefore I hope very much that the Ministers will not read out a concession or a helpful comment. I want the Ministers to be tough about this and say, “This is a matter for local authorities”. If local people don’t like it and think the local authority has not been generous enough or has not used the extra funds from something it is able to control—I hope that local authorities will be controlling more and more because I believe in localism—those local people have in their hands the ability to change the authority. This is exactly what has destroyed local government over the years, and my party has been as guilty of it as others. We are always frightened about giving local councillors the real decisions about things.

I do not want to go too much into the detail, but I can also argue that not all reasons for local council tax rebates are central and national. I can cite a lot of examples where the pressures and the concerns about vulnerability are different in some parts of the country from others. Rural areas have different demands with regard to vulnerability from close-knit communities. I merely say that one could go through a list of those.

I come now to the thing that really made me stand up. It was the use of the phrase “postcode lottery” by the noble Baroness. It is a Daily Mail argument that she should never use.

We want postcode decisions, not a postcode lottery. We want local authorities to make their own decisions about their own communities and their own priorities. What has been wrong in this society for too long is the use of this ridiculous argument.

The noble Baroness says, “You may be on the wrong side of the line”. Well, frankly, that depends on what you think is the wrong side of the line. It may be that in a particular locality, scarce resources are used in a different way from the neighbouring locality. That does not mean to say that you are on the wrong side of the line, it means that you are on the wrong side of the line as defined by the noble Baroness. That is the trouble. Central government has always believed that defining these lines is the business of central government and never of anyone else.

When I was Secretary of State for the Environment I remember addressing a local government conference. When I said that I believed we should do nothing in Brussels that we could not do in Westminster, but what we had to do in Brussels we should do well, and we should never do anything in Westminster that we could do in county hall, but that anything we do in Westminster should be done well, I was cheered. When I went on to say that we should nothing in county hall that we could not do in district council offices, I was cheered again. But when I said that we should do nothing in district council offices that we could not do in the parish council, I was booed. Why was that? It was because everybody believes in subsidiarity—up to there. The moment you talk about subsidiarity below them, all hell breaks loose. The world will fall apart and vulnerable people will be totally stamped on—because we are the only people who know.

That was a very good example of “the man in Whitehall knows best”. It was always the purpose of centralists to claim that no one else could make decisions. I have been longing to say this about the postcode lottery and the moment has come, because it is exactly that which we are fighting against. I must say to my noble friend the Minister that, if she gives way on this, she will be taking away the fundamental element of proper localism; that is, you risk local people making decisions that are different from those that you would make. That is the challenge of localism. The noble Baroness has given us the opportunity to take the most difficult example and say, “No, here we stand”.

How then would the noble Lord explain why council tax benefit was originally included in universal credit and the White Paper, why all the planning assumptions were based on that and why it was only subsequently extracted in a deal between departments? How does this have anything to do with localism as a principle?

It is because the Government have not gone far enough yet; that is the whole point. I would have a different structure, but the noble Baroness must not ask me to answer for the Government. I am lucky enough to be formerly a Minister and to be able to say one or two things which need to be said. I disagree with the noble Baroness, but she will find on other occasions that I am stalwart in support of some of the things that she says which this Government do not agree with. However, on this occasion, I beg my noble friend to stand firm.

I must admit that I enjoyed that. I even agree with one or two points that the noble Lord, Lord Deben, made. I look back to the days when local government had real power and it would be good if that happened again. Given the more centralist-inclined Governments that we have had during the past 30 years, that is probably not very likely.

As your Lordships will see, my name is attached to the amendment. That was a mistake; it was a case of mistaken identity. When the noble Baroness, Lady Browning, went to table the amendment, my name was put down instead of hers. I cannot imagine why, but I was very happy to keep my name on it even though I did not put it there. Incidentally, on the same day, having sorted out that one to our satisfaction, I sat down and found that my name had been added to a debate in the main Chamber on the misuse of alcohol. I was considerably more worried about that.

I thought that there might be some misunderstanding, so I went to the office to sort it out and realised that it was the noble Lord, Lord Donoughue, who was supposed to be on the speakers list and not me. However, since then, my post box has been full of mail from organisations urging me to carry on my campaign against misuse of alcohol. That was to add a little to the fun.

I understand that the amendment, to which my name is attached, is to some extent a contradiction in terms, which is what I accused the noble Earl, Lord Attlee, of doing earlier on. If we get a national description of vulnerability, it will go against the spirit of imposing these varying cuts on different people. However, the whole point of the amendment is to show how difficult it will be to make judgments about who is vulnerable in different areas of society. I come from a town where, in the case of some kinds of vulnerability, people are treated very badly in the streets, being knocked over, booed, spat at and all sorts of things. There is not much understanding there. The local council may well attract quite a bit of support if those people are all cut from local council tax benefit.

Making judgments about what I would regard as a human right is a serious issue and should be compared with making judgments about, for example, the right of a local person to vote in or vote out their council. There is a worry there. What we are expecting at the moment is that councillors should do more and more for less and less resource, which is very much what Governments have been doing for quite a long time. This is the basic Hobson’s choice, with councils being asked to do an impossible job impossibly. They are going to be making decisions about work incentives, as I said earlier; they are being told to exempt pensioners, who in some areas are the majority of those who enjoy this particular benefit, and they are being asked to identify those considered vulnerable but given no guidance about it. All I have to say is that I am very glad that I am not a local councillor. It must be a horrible job to have to do. But if we are going to have a debate about centralism versus localism, let it at least be a comprehensive issue and not just a rather enjoyable debate of this kind. It should be one where we can genuinely ask where those decisions should be taken. When they interfere with people’s basic human rights, I think that there is a difficulty.

My Lords, I would not agree that being a local councillor is a horrible job, but it is quite often more difficult than people imagine. I have two fundamental questions that I want to raise arising from the amendment tabled by the noble Baroness, Lady Hollis.

In relation to what my noble friend Lady Rumbold said—

My noble friend Lady Browning, I am sorry. The noble Baroness is being mixed up with everybody today. I have been mixing them up for many years. I am coming to the view that perhaps we should close down this Grand Committee and go home, but we shall struggle on.

On the points that my noble friend Lady Browning made about local councillors, I believe that they will be able to make a good fist of this, but the problem is, as the amendment says, they will be making it on the basis of different criteria and views in different places. The question is whether that is a legitimate argument in favour of localism so well put forward by the noble Lord, Lord Deben, or whether it is a step too far.

The noble Lord attacked the postcode lottery, and I, too, cringe when I hear that phrase. It is an attack on localism and local decision-making by centralists everywhere, whether they are in the Daily Mail, the Labour Party or anywhere else. It is not a phrase that I would ever use, and it is something that I attack all the time. However, we do not want everything done at parish council level. I can imagine a situation in which the next time this country decides to go to war and invade a country such as Iraq the Army will be raised in a traditional manner by people going round and rounding people up whom they find in the fields and streets. Each parish council will be allowed to decide whether people should be rounded up from its parish, or not. That may be the way in which the Army is going with its cuts—that is the future—but I doubt it.

I am making a very important point, which the noble Lord, Lord Deben, made, that there are levels of government. I am a passionate localist and believer in subsidiarity, but I am also a federalist in the sense that there are different layers of government. The important thing is that each layer of government and democratic control should be responsible for those things appropriate to that layer. The noble Lord mentioned the European Union and Westminster, local authorities and parishes. The principle should be to push things down to the relevant levels. That is what I believe in. The argument is not whether everything should be done at parish level or even district council level—although I would be delighted with that, as long as we had the funding. The argument is what the appropriate level is to push things down to. The argument we have here is whether the council tax reduction—the council tax benefit, as it is now—should be a national benefit under which people in the country are all treated the same or whether that itself is appropriate to localism. On balance, I come to the view that it should be a national benefit decided at national level, precisely for the reasons that noble Lords have put forward. I do not think that that makes me any less of a localist.

The problem with the amendment was raised by the equally passionate speech of the noble Baroness, Lady Hollis, in moving it. She was speaking to the question of the level of the council tax reduction which will take place, whereas the amendment is about something more fundamental. The noble Lord, Lord Deben, explained the difference: it is about eligibility, not the level of the benefit. None of us have any hope of persuading the Government on the level of the benefit. I think that they are absolutely determined that it will go ahead on the basis that local authorities will make their own decisions. However, it ought to be possible to persuade them that the amendment has merit, particularly if the guidance was made on the basis not that it was government guidance of the traditional sort, which is actually an instruction which you disobey at your peril, but genuine guidance, where local authorities could improve the protection for disabled people—in other words, if the government’s guidance was an accepted minimum. Discussion might take place around that idea.

My second point was to go back to the 1930s. I am conscious that when I picked up the point made by the noble Baroness about the 1930s last week, Hansard thought that I had said the 1830s. Let me make it clear that I am talking about the 1930s, but the system was very much the same in the 1830s. The reason why the system of benefits was nationalised and the old localised Poor Law was abolished is that too many places were being too mean. The local position with the workhouses, and so on, was in some places unacceptable and therefore had to be raised to a standard level for everyone. The danger is that if you allow local authorities to decide on the level of benefit or, as we are now discussing, eligibility, some will behave in an appalling manner. That results in the wheel turning and rules and regulations having to be set out to prevent them doing that.

However, that was not always the case. There was at least one instance in the London Borough of Poplar in the 1920s, when it was run by a man called George Lansbury, when the local authority started to behave in a very generous manner and, in particular, started giving out relief—in other words, benefits in cash and kind that meant that people did not have to go into the workhouse but could continue to live in the community. The local authority was taken to court and to judicial review and was prevented from being too generous.

I say to the Government: be careful what you wish for, because the time will come, when economic growth resumes in this country, when it is easier for local authorities and other bodies to develop new schemes. Local authorities will have been given a power of general competence and at some time—who knows when?—there may be resources for local authorities to do things that central government think are outrageous because they are being too generous, not too mean. As I said, be careful what you wish for.

The noble Lord, Lord Deben, gave us a rousing speech, but I did not hear him address the argument made by my noble friend Lady Hollis, which is that the needs arising from vulnerabilities are not locally determined, they are the same, regardless of where a person lives. I wonder whether the noble Lord would argue that the Government were wrong to protect pensioners from above, because for some reason, pensioners are being treated as part of a national scheme whereas people below pension age, who may be just as vulnerable, are not being treated as part of a national scheme.

I thought that I made it clear that the assessment of vulnerability does not necessarily have to be central . I do not happen to think that if it were local it would be any less unpleasant or pleasant than if it were done centrally. As to the comment about whether the Government are protecting this group rather than another, I was suggesting that this is at least one step in the direction in which local people can have some real control over what they want to do.

The idea that they will all be less generous than the Government seems to be rather rude about locality and it shows that in the end people do not believe in localism because they always think that people at the top will make a better decision than people at the bottom. I just happen to think that Suffolk County Council does it much better.

I certainly do not want to be rude about local authorities. Some things should be locally determined, but this is not one of them. I am sure that my noble friend Lady Hollis will return to that much better than I could.

I want to raise one point that I know will cut absolutely no mustard with the noble Lord: the position of people who move between local authorities, which some government policies encourage them to do. If there is no national guidance on vulnerability, they will not know how they will be treated when they move from one authority to another. The researchers in the report that I quoted earlier by Demos and Scope, said that they were struck by an “oppressive sense of uncertainty” that many disabled people were living with which,

“clearly jeopardised their emotional wellbeing”.

Without clear guidance, that uncertainty will be aggravated.

It is not only disabled people who feel uncertainty; it is part of living in poverty. There is a sense of insecurity and uncertainty. At least national guidance would allow people to know how they would be treated when they moved from one authority to another.

Perhaps I may raise one issue that we have not pinned down yet: whether the failure to define “vulnerability” may prove to be a legal issue that could be challenged through judicial review? I would appreciate the Minister's guidance in reply as to whether the Government are really happy that the failure to define “vulnerability” may actually prove to be a difficulty.

I think that vulnerability includes the working poor. They may not immediately be regarded as a vulnerable group, but in terms of all the benefit changes in welfare reform that are being implemented, they may prove to be seriously vulnerable. The Secretary of State should issue guidance on what “vulnerable” means. I think back to several long debates in the Localism Bill about what “sustainable development” meant. It actually mattered that we reached a common understanding. Without a common understanding between different local authorities acting in the spirit of localism, which I applaud, I fear that you may end up with judicial review from organisations that believe that their council has not properly considered the definition of “vulnerability”. It would therefore be much better if the Secretary of State issued guidance. That guidance could be advisory as opposed to statutory, but there needs to be a government view about this. Otherwise, we will head for some difficulty in the months ahead.

I would like to pick up where the noble Lord, Lord Shipley, left off because he made the point that I was going to make. I want to add just one thing. Irrespective of the debates about where the decisions should be located in general, the point about vulnerability is one that the Government brought into play. He said that the Government made a decision and said, in their own documentation:

“The Government has been clear that, in developing local council tax reduction schemes, vulnerable groups should be protected”.

The Government have put this issue out there, so it is not unreasonable for a local authority to say, “What do you mean by ‘vulnerable’?”. I spoke to one local authority last week that was extremely concerned that, almost irrespective of what definition it chooses, it will end up being subject to legal review because it will exclude some people, and it cannot imagine any way in which it could do that that would not have that consequence. In responding, the Minister may point out that a local authority could choose to adopt the default scheme and therefore the legal responsibility would lie with the Government, but that would work only if the authority has the resources available to be able to make good the difference. It does not apply to any other scheme or variation of it that it could take on.

I am very much with the noble Lord, Lord Beecham, who pointed out that there is a very real risk, in addition to the legal point, that the Government are raising expectations by reassuring everybody that vulnerable groups will be protected without explaining what that means. That makes it even harder for local councils to justify whatever decision they take that is short of the total quantum of vulnerability that could be defined out there.

I will make one final point, triggered by something that the noble Baroness, Lady Browning, said. One of the difficult areas in policy and one of the reasons why some decisions should be made centrally is that some kinds of vulnerability are not seen on a sufficiently large scale in an individual area for local councils to be expected reasonably to understand them and make prescriptions about them. It is analogous, perhaps, to health policy where, in commissioning, there will still be certain kinds of rare conditions that are dealt with centrally. Sometimes there are good policy reasons, even if one is being localist, to have guidance coming from the centre so that people can reasonably be expected to understand vulnerabilities that they may not encounter every day. Can the Minister perhaps address that as well?

My Lords, I have found this debate and the ones previously on Amendments 76 and 76A fascinating. I need to remind noble Lords that I am still leader of Wigan Council. Therefore, for me, this is not a theoretical debate. I will have to determine a scheme within my authority, with colleagues, that will decide who is eligible, who is not eligible, which group will be regarded as vulnerable and which group will not be regarded as vulnerable. It will not be easy. I was going to say that it is not a zero-sum game, but I remind noble Lords that it is not even a minus 10% game; it is a minus 20% game if we exclude pensioners. So we are lucky in that sense.

I find myself agreeing with much of what the noble Lord, Lord Deben, said about localism. I recognise what he said and I agree with it. Where I would differ from him and what we need to recognise is that local authorities come at this with very different needs in terms of the number of people who are receiving council tax benefits, as has been said earlier, and the potential changes, as I mentioned earlier. I already know from being in this meeting that I have 100 more people who will be regarded as needing council tax benefits as a result of their factory closing this afternoon. So these things are changing all the time, and we need to recognise that.

I have had some interesting solutions to my dilemma from various quarters today, such as applying reserves. The noble Lord, Lord Beecham, is absolutely right. My treasurer is already coming to me to say, “You are going to lose probably £500,000 on your council tax collection because these people are not going to be able to afford to pay the cost, so you have to think about that”. We have talked about the problems of increasing demands on council tax benefits as it becomes a local thing, and I think that the noble Lord is right that we will do it much better than it is done at the moment, so that probably will encourage more people who do not claim at the moment to start to claim.

Earlier in this Bill we talked about the problems of business rates and the fact that they will have some risk element, so we will have to put that in. We talked about the flexibility of council tax, which is a very interesting phrase. Perhaps the Minister could let me know whether he means by “flexibility of council tax” that he is going to allow me to put the council tax up and is not going to require me to hold a referendum. I cannot believe that anyone sensible is going to say that they are going to have a referendum to put council tax benefits up: “Please vote for it and you will pay more council tax”. We would never win that, so it is not going to work.

We have heard that we should make further cuts. In my authority I am planning £66 million of cuts over four years. The Government thankfully gave me some warning and we have them in place. If I now have to make more cuts to accommodate all this—probably between £2.5 million and £3 million-worth—where are they going to come from? What have I got to do that I am not already looking at? I need to remind noble Lords that it is the vulnerable groups who rely most on councils’ services. If I cut services to vulnerable groups, they suffer. I can put up daily charges or raise the qualification for receiving social care. All these things affect vulnerable groups and there is no easy solution.

The difficulty for me is this. Presumably all the people we give council tax benefit to are regarded as vulnerable people, otherwise we should not be giving them that benefit. If we start to define vulnerability—here I echo what the noble Lord, Lord Shipley, said, as well as the comments of other noble Lords about the needs of different groups in communities—the danger is that we will define who are the deserving and the non-deserving poor. In the future, there will be people who get council tax benefit support and those who either get less or nothing.

A lot of vulnerable groups have strong lobbying sectors, but the ones who do not get that kind of support are the working poor. I remind the Committee that we are talking about a marginalised and alienated group in our society made up of people who do not vote very much at the moment. But they could be tempted to vote by extremists who say, “We will listen to you”. It is happening in certain communities. People are listening to those who are giving them false promises. We know that Respect, which was mentioned by the noble Baroness, the BNP or whatever group it is will offer things that they cannot deliver. The result of this Bill and the way we will have to design the council tax support scheme will drive more and more people to the political extremes. Are we doing a good job here?

My Lords, I am provoked to give a short preview of the amendments tabled in my name that are to follow—but not tonight. However, I thought I might briefly whet appetites because they relate so closely to what we are talking about. I see that noble Lords are all agog.

These amendments are about more localism. They are about removing some of the inhibitions on councils deciding precisely how they want to raise the funds that will pay the £400 million the Treasury is waiting for. They are about whether pensioners are included or not included as a vulnerable group being decided locally. This is the point made by the noble Lord, Lord Deben. In my full and unamended speech I will say that there are many grounds on which pensioners might already be treated slightly more favourably than some of the other vulnerable groups. I will contend that in respect of the groups that are considered to be vulnerable, local authorities should have greater discretion, and suggest that local authorities should also have greater flexibility in how they raise council tax, not only in respect of the current discounts for empty and second homes, but in respect of single person discounts. I will explain that if local authorities were allowed to vary the single person discount, currently fixed at 25% and set centrally by diktat from Whitehall, some might choose to reduce that discount across the board to 20%, meaning that all those who currently receive it would have to pay another 46 pence a week. It is not a vast sum, but it would raise more than the £400 million across the piece and make it unnecessary for us to define vulnerable groups and get ourselves into all kinds of tangles in reducing support for the very poorest in our communities. In advance of moving those amendments and in the context of this debate, I thought that noble Lords might like to hear the preview.

My Lords, we have had a longer and more entertaining debate than many of us thought we would have. We had the Browning versions, two of them, and we have had an interesting conflict between Norfolk and Suffolk. I hesitate to arbitrate between those two counties. In relation to the remarks by the noble Lord, Lord Deben, from time to time, I have been tempted to form a society for the preservation of the postcode lottery. In some areas of policy, it is absolutely the right line to take. We have had too much regimentation and prescription nationally about what should and should not be done.

However, we are not talking about policies here but about the people’s basic right to a minimum income. To take the point made by the noble Lord, Lord Deben, to its logical conclusion, we would have differential benefits across the piece. We would have different benefits for disabled people, pensions, child benefit and whatever up and down the country, determined locally. The noble Lord shakes his head, but where is the difference? The difference that he advances is that council tax is raised locally, but that is an irrelevance to the person looking at his disposable income that he has to deploy in support of his family. Where the localism part should come in—not the faux localism of the Poor Law—is that you would have a national basic minimum entitlement which, if the local authority thought it right, you could increase and enhance benefits. That would seem to be a reasonable application of localism because everybody is guaranteed a national minimum and locally the community may decide to augment it but, in our view, it should not be in a position to reduce it.

One of my noble friends, or perhaps the noble Baroness, Lady Browning, referred to Localising Support for Council Tax Vulnerable People. Paragraph 3.4, about equality information and engagement, states in connection with child poverty that:

“authorities will be required to take into account their local child poverty needs assessment”.

That is fine.

“Local authorities should be able to design localised council tax reduction schemes in a way that best suits local circumstances, tailored to what child poverty looks like”—

looks like—

“in the local area”.

I will tell you what child poverty looks like in any area. It is the undernourished child going to school, perhaps dependent on free school meals. These days, he may have to go to a breakfast club to get a breakfast. According to a recent survey, 50% of teachers are going into schools with food that they can distribute to the children. Child poverty is children going badly clothed, living in fuel poverty so the house is cold, and perhaps with dysfunctional families, although that is, of course, not simply a financial matter. This can occur anywhere. These children can be found in the city that the noble Lord, Lord Shipley, and I have represented and led and in the city that the noble Lord, Lord Smith, still leads. They can be found in villages in Suffolk, I guess, and in Norfolk, and in Kensington and Chelsea for that matter. They can be found anywhere. As my noble friend said, it is not locality that determines the character of poverty. It may possibly exacerbate a basic condition of poverty, but locality is not the determining condition, and it should not be locality that determines the basic support given to children in poverty or, indeed, to any other vulnerable group. To say that this is somehow an issue of localism is to pervert the proper definition of localism. The noble Lord has advanced a weak argument—from the best of motives because, in policy generally, he has a strong point. But in this area it is entirely misconceived.

Let us take child poverty of the kind that the noble Lord described which is certainly true in some of our villages in Suffolk. It is up to the local authority to decide whether it is going to spend its resources making sure that those children all have a hot meal and all have breakfast rather than by having a special element in the council tax arrangements to deal with that. If the noble Lord feels that there is not enough elbow room for local authorities, I wish he would listen to his noble friend’s comments, because it seems to me that we should be pushing for many more opportunities for local people to have the resources to do the things that matter. How you deal with poverty in very distant rural areas is very different from the way in which you deal with it in Limehouse.

With respect, a decent basic family income is needed. That is the starting point. I entirely agree with him about the other things. Matters for local concern include how much should be put into the school meals service, what price should be charged for school meals, and how you promote the take-up of these benefits. That is a strong function of local government, particularly as the Government, as I said in a previous debate in Committee, declined to say, in answer to a parliamentary Question of mine, that they would make efforts to increase the take-up of benefits. The £1.8 billion of unclaimed council tax benefit—much of it, by the way, due to owner-occupying pensioners—is a matter that local councils could and should be promoting.

In my authority, I helped to initiate the welfare rights service in 1974, when I was chairman of the social services committee. Under administrations of different political colours, it has been a very successful authority in promoting take-up of one kind or another. However, that is not the same thing as having a sound basic income. Of course, some authorities have been looking at options. I have here 13 pages of options about local council tax support and one of them is to remove child benefit income disregards. At the moment, that is a national provision. That is one option that they are considering and no doubt they will be consulting, along with the other 40 or 50 recommendations, in the short time that they have before they have to implement them, as we heard earlier. The effect of that on 2,025 families would potentially be an average difference per week of £3.09. That is not a lot to anyone in this room but for people who are living on the margins, that £3 a week is quite significant. That is something that, under the dispensation of the noble Lord, Deben, that particular council has on the table, although I am not saying that it will choose that. I do not think that this is at all acceptable.

We are debating this matter in the Moses Room. We have Moses and the “Judgment of Daniel”. It occurred to me that the judgment of another of my co-religionists might have been relevant in these debates, the judgment of Solomon, as that is what we are looking at. We are looking at utterly impossible decisions about how you carve up—not in this case a child—child benefit or many of these other benefits. That is not acceptable in a modern society.

To return to the remarks made earlier this afternoon by the noble Lord, Lord Deben, there is certainly a balance between local and central. The Government are offloading responsibilities to localities in a way that is absolutely irrelevant to the needs of the people who most need that basic entitlement which, thank God, has been extended to them since we got rid of the Poor Law and that kind of local decision-making which was in the hands of a minority of people which so damaged the lives of generations of our citizens.

My Lords, I refer to the comments just made by the noble Lord, Lord Beecham, and by one or two other Members of the Committee about the present situation. The noble Lord has defined people in poverty and children in poverty and what is happening now under a national scheme. It is not a scheme that is operated by local authorities but one that is operated nationally. I am sure that the noble Lord will have known of many people who have looked for disability allowance and carers’ allowance, who have not been granted them. Do not start by thinking that the current scheme is brilliant because it is not. There are certainly disparities across the country where there are different needs. There may be different needs in cities or in rural areas for children in poverty and children in need. It is for local authorities to decide where those vulnerable people are. There will be more disabled people and pensioners in one local authority than there will be in another. Would it not be right for that local authority to have the right to make the decisions on what is required and make a scheme according to what it knows and who lives in the area? We have had a long dissertation today on vulnerability but it actually turned out to be yet another go at the scheme itself.

The fact of the matter is that the council benefit scheme was removed entirely from universal credit and there is therefore not the slightest point in trying to equate the two and include the scheme again. We are dealing with a situation where localism and local authorities are going to deal with council tax benefit, otherwise there would not be any such benefit—or else there would have to be some form of top slicing to enable the money to be raised. Let us get real about this. Let us be absolutely clear what we are talking about. We are talking about putting the scheme locally because we believe—I accept that the Opposition does not—that local authorities can be trusted to develop schemes that are relevant to people in their areas.

The noble Baroness and one or two others talked about the dividing line between what happens regarding those schemes in Hammersmith and Fulham, Kensington and Chelsea, Rotherham and Preston. Local authorities are already administering schemes. They make decisions daily on criteria regarding who is eligible for one scheme or another. They do that in relation to children, old people, health and public health. They are making decisions all the time. Why say that they cannot make decisions on this? Of course they can and they consider what schemes they should put together.

The noble Lord, Lord Beecham, produced 20 options. If I was putting together a scheme such as this, I would expect at least 50% of the options to be totally unacceptable. I would know that they were totally unacceptable and that they would never get further than the discussion stage. However, you have to look at those options and take them into account. We need to shift this discussion on to the basis of looking at what local authorities are doing and what they need to do. The council tax benefit scheme is already there with its criteria and all its ramifications. Local authorities know what the current scheme involves.

I simply do not accept the arguments that have been put. I very much thank my noble friend Lord Deben for one of his rare but gallant performances, and for providing some sparkling entertainment between him and the noble Baroness who moved the amendment. The whole discussion turned into an interesting event.

I have screeds of notes that I can tell you all about. Let us start with the setting of guidance on vulnerability, which the noble Baroness, Lady Browning, asked to be included in the Bill. I do not know of any guidance in a Bill, but I know that guidance can be positively directed. The guidance is out today and people can look at it to see what it involves. There is no definition of vulnerability, which needs to be dealt with at a local level. Local authorities are already working within the definitions and they know what they are. Noble Lords look sceptically at me, but if local authorities do not do that, they are not very good local authorities and it is time that someone took a decision about having them changed. Local authorities are well aware of their responsibilities and the guidance will help practitioners to understand the statutory framework in relation to vulnerable people because that is already there. We discussed that earlier when my noble friend Lord Attlee was answering from the Front Bench.

The guidance will remind local authorities of the statutory framework in which they operate and their existing responsibility in relation to people who are vulnerable. Those responsibilities are also included in the statutory duty. Local authorities will have to take account of the equality duty; that is very relevant to the point made by the noble Baroness, Lady Lister, about disabled people. They have a statutory responsibility to look at that in making local schemes and to have due regard to the need to advance equality of opportunity between people who share the relevant protected characteristics. That is there and they will have to look at it.

I am sure that everybody here knows the relevant characteristics covered by the equality duty. They are age, disability, gender reassignment, pregnancy and maternity, race, religion or belief, and sex and sexual orientation. The disabled fall very clearly within those criteria. The equality duty is not prescriptive about the approach a public authority should take in order to comply with its legal obligation. However, authorities do have to think consciously about the need to do the things set out in the aims of that duty. I am sure that local authorities will not want to be found wanting under those circumstances. Carers are already covered under the legislation—I think it is this legislation. They will have to be taken into consideration in the same way as part of this.

Under what legislation are carers to be taken into account? I am not sure what the noble Baroness is referring to.

Oh crumbs, I will stop swinging from the lights. The council tax benefit regulations take carers into account and I am sure that local authorities would want to do that.

I apologise to my noble friend, who is doing rather well. In what context will council tax benefit regulations apply when council tax benefit is abolished?

I suspect that they will stay in place, but I will answer that later. I will write to my noble friend. I do not want to be wrong because I am doing very well here.

It seems unlikely that council tax benefit regulations will apply once council tax benefit is abolished, so rather than prolong the Minister’s agony, perhaps she will write to us as to what statutory authority will ensure that carers’ needs are taken into account as part of the vulnerability guidance.

I do not want the noble Baroness to think that any of this has put me into agony. We will write about council tax benefit; but it is all there under the default scheme.

I was asked a number of questions—in fact, there have been a number of stirring speeches—and I have already responded to my noble friend Lady Browning: I do not think that guidance will be in the Bill, but the guidance is there now and she can see what it is.

I am sorry that I cannot remember who asked the question, but I think it was the noble Baroness, Lady Hollis, about how the precepting authorities and the precepted authorities will work. There will be a requirement to consult: the billing authority will have to consult with the precepting authority to make sure that their policies are aligned. That seems to be the most sensible way of doing it and, presumably, if there is a great difficulty between one and the other, they will resolve it themselves.

We all know that resources are scarce, but local authorities will need to make the very best use of those that they have and make decisions about how they raise and support them. There are a couple of things in my notes that I cannot read, which is not very helpful, but I will ensure that I will write if there is anything that I have not resolved.

The noble Lord, Lord Greaves, asked about the criteria for vulnerability. They are likely to be different from the ones that are there already. The noble Lord, Lord Shipley, talked about how the possibility of the failure to define could lead to judicial review. If the guidance is clear, that should not be a problem.

This has been a very long debate. I have enjoyed it, but I hope that some of the following amendments will not be quite so lengthy. If I have not replied to any specific point, I will ensure that I do so subsequently.

My Lords, this is not a formality: I thank everyone who has taken part. In a way, the Committee caught alight on this, and it is good that that was on such an important issue.

The noble Baroness, Lady Browning, was right when she said that there was an issue about precepting and billing authorities, which the Minister referred to at the end: the knowledge is on one side and the billing authority is constructing the discount scheme on the other. The lesson that I suggest to the Minister that we take from that is a different one: that you should certainly consult and should have time to consult. She should therefore think again about her response and that of her colleague, the noble Earl, Lord Attlee, to my noble friend’s amendment about the ability to delay, because I assure her that it just will not be possible to get the schemes in alignment and, having done that, to move them out to public consultation all within the financial cycle, ready for introduction in April. That will not work. The Minister, as well as the noble Baroness, Lady Browning, has made our point for us in spades. I hope that as a result she will be able to review the Government's position on the amendment in due course.

I have the greatest admiration for the noble Lord, Lord Deben; on many issues we have been side by side and he was the Minister who, above all, stopped planning in local authorities being subject to the free market, a legacy bequeathed by his colleague Nicholas Ridley, a former Secretary of State for the Environment, which allowed many of us to protect our historic buildings, streets and centres. The noble Lord is in the book of the almost very good in most local authorities, and I am sure that he would want to keep that reputation intact.

No one doubts that planning is a local decision. Obviously there are inspectors and so on, but none the less it is local. However, when you have a number of elderly folk who need care and support and the local authority—rightly, in my view—makes a decision about whether it is more appropriate in its area to go for residential care or, possibly because it is a rural area, to go for extended domiciliary services, it is right and proper that one local authority should differ from another according to the geography and nature of the locality. The noble Lord and I have no differences about that; I was not in local government for 25 years to knock localism. That is why I bothered with it, as do many people in this Room today.

However, it is not a matter of centralism versus localism when you come to the individual entitlement to income. It is simply a different category. In planning, the planning authority is acting as umpire between local residents and car drivers. In residential care, it is a case of deciding how a particular type of need is best met, and many flowers may bloom. However, individual entitlement to income is a basic human right and not part of the proper territory of debate between centralism and localism. This is not about the clever people in the centre knowing best, to copy the noble Lord’s words—that really is an absurd statement—but neither do local people know best. Will the noble Lord argue equally that, because joblessness rises in a locality, unemployment benefit should be locally determined? I await his reply.

Unemployment benefit does not relate to a local tax. We are talking about a local tax, and in a locality it would be sensible for a local council, for example, to say that the way to deal with child poverty in this area is to spend the money on providing the means for them to be fed because it had discovered that by doing it in another way the children did not get the food because the parents used it elsewhere. That is a perfectly reasonable thing for people to decide.

We could have another argument about whether to have cash or benefits in kind, but the point about income is that it is a national entitlement. We have accepted that for unemployment benefit, I think. Even though the lack of a job may arise because of the peculiar distinctiveness of the locality, we do not then say that, as a result, that should determine the level of unemployment benefit. Equally in housing, rents and policy are determined locally. Is the noble Baroness going to argue that housing benefit should also be a local benefit as opposed to a national one? I do not think so. The main argument that he has used is that because council tax is levied locally, council tax benefit should be structured locally. That takes no account of the fact that half the country is in two-tier authorities where they have no control over what the precepting authority may levy on the billing authority, yet the billing authority takes the problem, cost and moral responsibility for the discount scheme that runs. As a former MP for an area with a rural district council in Suffolk, the noble Lord will know that as well as anyone. His argument does not run in two-tier authorities—it cannot, because the council tax is not generated by the billing authority that is constructing the discount scheme, and any toughness in the scheme to impress on people what their value for money is does not relate to that particular billing authority.

They do have control over it—they have an election. If they do not like what the county council has done they can vote against it. If the noble Baroness is really saying that the only system that people can understand is a single-tier system, she is making a mistake that is very much wider than this. Many people know which do what, and, if they do not like what one of them does, they vote against them in the local election, as we all know.

Does my noble friend agree that although there is a significant reduction in the amount of central government support for the benefit, it is still approximately 90% government funded? So it is going towards a council tax, but the funding is still essentially central. Unfortunately, some more of it will fall on the locality as a result of what the Government are doing, but the greater part is still centrally funded.

My Lords, that is absolutely true, even more so in two-tier authorities where 75% of the expenditure that falls on local residents is through the county council precept. The precepting authority does not have to do the same as the billing authority, which has to devise the discount scheme.

I understand the noble Lord, Lord Greaves, on the postcode lottery, because I would defend local decision-making as far as possible. The point here is that what a local authority has in terms of resources will depend on the accident of the demography of its particular locality. If only 30% of its population are pensioners, it will have to find a lower degree of cut on people’s working age than if 60% of its population are pensioners. That is an accident of demography. Equally, when anybody seeks help with their council tax discount, it will be determined not by their own efforts, their willingness to vote or the resources of the local authority, but by how many pensioners and other vulnerable people are ahead of them in the queue. That is not localism; it is rationing by queue, with central government having already determined that certain constraints, such as the number of pensioners, shall be imposed on the system. In that sense it is random—you need not call it a postcode lottery, but it is one. The size of cut that your locality will face is accidental, and it will not necessarily bear a resemblance to your particular need. Even though it may be identical in the neighbouring authority, it will experience a different income because the demographics will be different. That is not reasonable.

I suggest to the noble Lord and the Minister that if there were no proposition to find £500 million of cuts, there would be no such scheme about localising council tax benefit before us today. This is not localism; it is the exporting of cuts to localities by central government and then dressing it up in the fancy clothes of localisation issues, even though people’s needs have not originated by virtue of the locality and the random demography of that patch will determine who gets what. That is not localism. It is exporting cuts without any constraints, which will be experienced differentially by vulnerable people who happen to have been unlucky in the lottery of living in one authority rather than another. I regard that as deeply unfair.

As my noble friend Lord Smith said about where the cuts will fall, it is not about centralism versus localism but about the centre exporting its cuts. The noble Lord, Lord Best, may speak to his amendments on a subsequent day in Committee. The noble Lord, Lord Shipley, was absolutely right. Given this distinctiveness between local authorities, there will be judicial reviews. Mencap will run them if CPAG does not, according to how they are treated. They will probably have a very good case.

The Minister said that local authorities should, in her words, develop schemes that are relevant to their authorities. That challenges the core of my argument. She assumes that vulnerability and poverty are so peculiar and distinctive to a particular local authority as to justify separate local schemes. I simply do not accept that for one moment. Whether you are autistic, have a disability, are a carer with an elderly mum or are a child in poverty, it is not generated by your locality although it may be experienced in your locality. Given that it is not distinctive to your locality, it is not relevant to your local authority. Therefore, there should be a national scheme.

I leave the Minister with two questions. Who will she exclude from the scheme? We know that pensioners are automatically covered. Unfortunately, we have not had the pleasure of seeing the guidance because it did not come out on Friday but on the very day when we are sitting. Therefore, we cannot cross-refer to it, which is shame. The Minister says that vulnerable people will apparently be protected. The working poor will also need to be protected, so who is not? That is 100%. Who is not protected? Who does the Minister think should see their council tax benefit cut, given that pensioners, vulnerable people and the working poor and their incentives are protected?

Secondly, if there was no £500 million cut, does the Minister think that any local authority in the land would seek to establish its own distinctive council tax scheme and to pull it out of universal credit? She knows that would not happen. I have put two questions to her. She is welcome to respond to me—to tell me what is wrong with council tax benefit, who is already covered but should be excluded and whether, if we did not need £500 million of cuts, any local authority would touch this scheme with a barge pole. I think everyone in this Room today knows the answer to all those questions. They are not answers that enforce the Minister’s argument.

I have answered the questions that the noble Baroness has asked me today if not on previous days. I am sure we will return to them. We have had an extremely wide debate today, although we are not over our time. I repeat that local authorities know very well who their local people who need help and support are. That is a very localist issue. The noble Baroness may not agree with me but those are my words on the subject. She gave me the opportunity to say so.

My Lords, I simply disagree. According to the knowledge of the local authority—or not as the case may be—individuals may see their entitlement to income support decreased. However, the time is late; I beg leave to withdraw the amendment.

Amendment 79A withdrawn.

Committee adjourned at 7.58 pm.