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Freud promises to fund new burdens

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Ministers have assured councils they will be funded for new responsibilities under the government’s welfare reform programme – but have warned any costs must be “reasonable”.

Welfare minister Lord Freud made the promise in response to claims from MPs on the work and pensions select committee that local government was “very worried” they would be asked to do “a good deal of work” supporting Universal Credit claimants but not receiving any funding.

More than a dozen councils are working closely with the Department for Work & Pensions on implementation of the new single benefit due to take place from October next year, but no agreement has been made on how councils will be funded to do such work in the long term.

Referring to the agreement which exists between local and central government on funding for new responsibilities, Lord Freud said: “We will, bluntly, abide by the new burdens doctrine. The costs will have to go there [to the bodies doing the work], albeit costs that are judged to be reasonable.”

Committee chair Dame Anne Begg (Lab) had asked Lord Freud and work and pensions secretary Iain Duncan Smith: “what assurances can you give local authorities that they will not be landed with a huge amount of extra work and there won’t be the money there.”

Lord Freud said it was “premature” to worry about funding at this stage. Mr Duncan Smith also played down Dame Anne’s concerns and said the department would talk to local government.

“I do not think there is an issue there,” he said. “We have to sit down with local government and identify what they think they can do, where the overlaps are with what they already do,” he said, in reference to the complication caused by the housing benefit work which is slowly transferring from councils to DWP while council tax benefit and the social fund responsibilities are transferred in the other direction. “We are working on the details with them.”

Ministers’ assurances come after LGA chairman Sir Merrick Cockell told the select committee that an immediate assessment under the new burdens doctrine was not appropriate because Universal Credit was to be implemented over several years.

As reported by LGC at the time, he said: “It has got to be evolving and the cost implications must be worked out over the implementation period rather than a figure be plucked out and allocated under new burdens.”

 

Staff transfers

Ministers were also asked about legal advice which they have cited in arguments against the TUPE transfer of local government employees to DWP employment in order to avoid redundancies within councils.

When the advice was originally referred to in a letter, local government expressed frustration that DWP had not shared the detail of the advice, and Mr Duncan Smith was asked whether he would reconsider the withholding of the information.

He told the select committee: “I am not inclined to share that advice. It is a matter for us to discuss with local authorities.” He added: “We never share that information and I don’t think it is necessary to start.”

When Sir Merrick appeared before the committee he expressed frustration with the DWP’s stance that council employees should not transfer to DWP employment.

“It seems rather perverse to lose people with those skills [needed to implement Universal Credit] and go through the cost of redundancies when people should at least be given the chance to move across to the new system,” he said.

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