MR JON CUNLIFFE, MR MARK NEALE, MS SARAH MULLEN AND MR CHRIS MARTIN

29 MARCH 2006

  Q260  Mr Love: Can you tell us whether any of those sector-by-sector negotiations are discussing the current pension age that people would retire at?

  Ms Mullen: The framework agreement that was reached in October dealt with the issue of the normal pension age and the agreement was that new entrants would move to a normal pension age of 65, but existing members would not be compelled to move to that pension age, and that is the context for the negotiations, so that is not under discussion.

  Q261  Mr Love: So that is the basis on which they are negotiating?

  Ms Mullen: Yes.

  Q262  Jim Cousins: Could you tell me what additional measures are in place to guarantee that the Government achieves its target of reducing child poverty by 2008?

  Mr Neale: The Budget makes a number of provisions to continue the progress that has been made on child poverty. One is obviously the commitment to increase the child element of the child tax credit at least in line with average earnings through to the end of this Parliament and there is   also further support, including employment measures supporting lone parents, aimed at helping us to deliver the lone parent employment target, and that will also make an important contribution.

  Q263  Jim Cousins: Actually looking at the section of the Budget Report which deals with the measures to assist lone parents, I also notice that there is a proposal from June of this year to have the fortnightly job reviews coupled with a power for the adjudicator to sanction those who are unable to demonstrate that they have undertaken sufficient job search.

  Mr Neale: That is right. These provisions would bear on unemployed people rather than lone parents.

  Q264  Jim Cousins: Yes, but some of the unemployed people will of course be responsible for children.

  Mr Neale: They will.

  Q265  Jim Cousins: I was just wondering how a policy in which people on jobseekers' allowance with family responsibilities are subject to those sanctions contributes to the target of relieving child poverty.

  Mr Neale: First of all, the objective of this measure is to help people claiming jobseekers' allowance make the quickest possible transition back into work and it is designed to help underwrite the existing provisions of the jobseekers' allowance arrangements which expect claimants of jobseekers' allowance to apply for jobs.

  Q266  Jim Cousins: How many of these sanctions are you expecting to be applied from June?

  Mr Neale: I cannot answer that question, I am afraid.

  Q267  Jim Cousins: Can you let the Committee know please?

  Mr Neale: Yes, we can let you have a note about that.

  Q268  Jim Cousins: Can you provide us with an estimate of how many people on jobseekers' allowance in fact have child responsibilities?

  Mr Neale: We can also let you have a note about that, but I would make one further point and that is that where sanctions are imposed, there are provisions to protect dependants and vulnerable people.

  Q269  Jim Cousins: That is good to know. It would be useful to have that spelled out, and it is actually quite complex, is it not, that policy which puts sanctions on people and then you say, "Oh woops, some of these people have childcare responsibilities, so we'll build something into the sanctions which will put right some of the damage we have done by imposing them", but that is the sort of task for the Government which is a bit beyond me?

  Mr Neale: Sanctions are very few and far between, but we will let you have a note on them.

  Q270  Jim Cousins: Child poverty after housing costs are taken into account is much higher than child poverty before housing costs are taken into account and the figure is about one million higher, so clearly housing costs are having a big impact on child poverty. Could you tell me how the Government's proposals for housing benefit reform will impact on the achievement of the child poverty targets?

  Mr Neale: Yes, the objectives on housing benefit are to simplify the system greatly. As you know there are pilots in place that are trying out a housing allowance for people who are renting their accommodation in the private sector. This is very different from the current system in which a rent officer is involved in judging whether the rent that is being paid is reasonable. What this does is greatly simplify the process and speed up the process and remove some of the uncertainty that people face when they claim housing benefit. That helps the labour market and reduces child poverty because it removes the disincentive to take a job and, therefore, to have to reapply for your housing benefit.

  Q271  Jim Cousins: Could it result in less housing benefit being paid?

  Mr Neale: As I understand it the current measure is designed not to affect the levels of payment.

  Q272  Jim Cousins: Of course, that is the measures being applied in the pathways, which are experimenting with this scheme. Are you saying that that provision which applies to the pathways, which is that there should be no net reduction in housing benefit expenditure, will apply to the national roll-out?

  Mr Neale: You are right that I am talking about the pathways. We will have to see what the proposals are on the national roll-out.

  Q273  Jim Cousins: So there is nothing in the Budget Report which guarantees that the national roll-out will have the same protection measures as the pathways?

  Mr Neale: The Budget contains no provisions on the national roll-out.

  Q274  Jim Cousins: So we are back to my original point. Could a reduction in housing benefit expenditure impact upon the achievement of the Government's child poverty targets? Has that been taken into account when looking at the future of housing benefit?

  Mr Neale: There are no proposals here to reduce levels of housing benefit.

  Q275  Jim Cousins: I see. We know that 30% of children in poverty are living in households which are owner-occupied. What measures does the Government have to assist low cost owner occupation where children are involved?

  Mr Neale: People in owner-occupied accommodation with children are eligible for the full range of support that Child Tax Credits and other Government support provides.

  Q276  Jim Cousins: The level of child poverty after housing costs is very much higher than the level of child poverty before housing costs. That does imply to me that additional measures are required in the housing cost arena to deliver the Government's target of a reduction in child poverty.

  Mr Neale: I think if you look at the child poverty figures you will find that child poverty is very disproportionately concentrated in the rented sector, both the private rented sector and the social rented sector, rather than in the owner-occupied sector.

  Q277  Jim Cousins: We have just been through the private rented sector and you will have understood my concerns that if the national roll-out of local housing allowances does not contain the protective measures that are in the pathway pilots there could be a considerable impact on children living in poverty in the private rented sector. You will have understood that and you will have understood the implications of your own answer, which is that there is nothing in this Budget that provides that guarantee.

  Mr Neale: There is nothing in the Budget that has a bearing on the roll-out of housing benefit reform nationally.

  Q278  Mr Todd: I want to return to the efficiency savings. You have already commented on the NAO Report. Among the concerns they have is both establishing clear baselines of where we start from and also determining the proportion of cashable and non-cashable savings that have been achieved. Can you throw a bit more light on what has actually been done on the £6.4 billion that has been identified in claims so far?

  Ms Mullen: On the point about the £6.4 billion that we have reported in the Budget, all of the efficiency initiatives that are contributed to that will have baselines. We do not count savings that have not got an established baseline.

  Q279  Mr Todd: The proportion with a baseline, according to the NAO, is relatively low, is it not?

  Ms Mullen: I think over the Efficiency Programme something like 85% by value of projects have a baseline.