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I should like to start by thanking you, Mr. Speaker, for giving me the opportunity to raise the subject of funeral expenses. Highlighting the vexed questions surrounding making a claim for social fund funeral expenses is not regularly debated in the House, so I am particularly grateful. I might also add in my preliminary comments that for fairly obvious reasons this is not a subject with which people easily or willingly engage, but it is none the less a serious issue that, in my view, requires Government intervention.
I have an excellent working relationship with councillors representing my party on North Lanarkshire council. Indeed, the council has introduced an outstanding best practice initiative on claiming funeral expense payments, which I will describe later. My friend and colleague Councillor William Hogg and I have had extensive discussions about how constituents on low incomes cope with bereavement and, in particular, with funeral expense payments.
Councillor Hogg represents the former mining community of Moodiesburn, and we will never forget the enormous sacrifice miners made over many decades to the economy, as their health was severely damaged and they contracted diseases such as emphysema, pneumoconiosis and silicosis. We will never forget the darkest day ever suffered by our community, the Auchengeich disaster in which 47 men lost their lives back in 1959. The people of that community will never forget that day, when so many men were killed, women became widows and mothers lost their sons.
That brings me appropriately to my introductory point: we can fix almost anything where there is a determination to do so, but death is final. When a person dies, people are saddened; when a relative or a close friend dies, we are emotional—in many cases, absolutely devastated. When we are in such a state of shock and there is no money for a burial or to pay for a cremation, we do not have time to grieve properly because we are anxious to avoid the embarrassing humiliation of a funeral without dignity. There is, of course, a safety net in the shape of the social fund, but I am sorry to say that public understanding and knowledge of that fund is not as widely known as it should be.
There are three specific areas that I aim to cover in the course of this debate: accessibility, eligibility and funeral payments. On accessibility, I want to be constructive and positive in sharing with my hon. Friend the Minister information about a pilot programme that was introduced by North Lanarkshire council. The initiative was designed to help people access social fund funeral expenses. The partnership between the Department for Work and Pensions and the council resulted in benefit packs being made available in registration offices—a perfectly reasonable proposition, given that when a family is bereaved, one of the first places it has to visit is the local registry office in order to register the death.
Customer feedback was greatly encouraging, as one woman was quoted as saying:
"Absolutely fantastic service, this partnership working helped to ease the transition of being widowed".
Another woman said that
"it was nice to know people cared".
If constituents on low incomes need to claim funeral benefit, we need to ensure that the service is easily accessible. The service provided by North Lanarkshire council ought to be seen as best practice when it comes to communication, but even when it is known that such provision exists, making a successful claim can be difficult for those who are eligible. A local funeral director told me:
"The biggest problem is when the relatives actually think they are entitled to a payment but don't qualify. It then turns out they are responsible for payment of the total funeral account. In these situations the demeanour of families can be aggressive towards Funeral services staff.".
Establishing an accurate record of the position in regard to eligibility, nationally and locally, has not been without difficulty. When preparing for the debate, I wrote to my local DWP office on
However, I wish to record my appreciation to the funeral directors in my constituency whom I consulted. I wanted to learn of their experiences in dealing with members of the public who had made applications for social fund funeral expenses. I was impressed by the professional responses that I received from Co-operative Funeralcare. Donald McLaren, a member of the National Association of Funeral Directors, Joseph Potts and Mr. Flannigan, who represents Lanarkshire and is incredibly well informed on the subject, could not have been more helpful. Funeral directors are very important: they have a wealth of knowledge as well as experience. Although I consulted them about the generality of what happens, I am certain that they have much more to offer by way of detail, which could make the process a little less painful for bereaved relatives.
Let me give just one example of what is happening to some bereaved families. According to Rights Advice Scotland, some funeral undertakers—not those whom I have mentioned—demand a down payment that can range from £440 to £675 before they will take a deceased person's remains into their care. Despite my references to my constituency and to Scottish organisations representing low-income families, my hon. Friend the Minister can be assured that I have no intention of being parochial, and I do not wish to pretend that problems associated with funeral payments are peculiar or exclusive to my constituency. The complexity of funeral payments, from accessibility to eligibility, spreads throughout Great Britain.
Let me make one more point before I turn to the main theme of the actual level of funeral payments. If I can be entirely open, people are not comfortable about discussing matters relating to death. I fully understand their reluctance to do so, as nothing is more emotive than bereavement. Making funeral arrangements is not a simple task: it is complex, but, more importantly, it is costly, and ever increasingly so, and it is that aspect that was the catalyst for this debate.
External research shows that it costs an average of almost £6,000 to die in Britain, after the cost of a funeral rose by 10 per cent. during the past year. The average cost of a funeral is now £2,390, with cremations, which account for 72 per cent. of funerals, costing about £2,160 and burials costing £2,620. The funeral is only the beginning of the costs families face when they lose someone, however, with about £229 typically spent on flowers, £98 spent on a death notice in a newspaper, and a further £149 paid for a funeral notice. On top of this, people also spend an average of £341 on catering, £612 on a memorial such as a headstone and £2,107 on the administration of an estate, bringing the total cost to £5,923.
The cost of funerals looks set to continue to rise, with charges estimated to increase by a further 38 per cent. between now and 2012 to average £3,299. Unsurprisingly, the cost of dying is highest in London, where it averages £8,020. A consultant who studied the industry said:
"Funeral prices alone have risen faster than inflation."
I cannot find a funeral director or a constituent who will confirm that the current funeral payment made via the social fund is sufficient. The Social Security Committee in 2001 cited evidence from funeral directors who said that
"they find it very difficult to offer dignified funerals to claimants at this level of the Funeral Payment".
The social fund is the main political concern within the funeral industry. Funeral directors believe that it is unfair to include their fees in a price cap that is frozen for uncertain periods of time with no formula in existence to increase the cap or reflect the increase in inflation. Moreover, the £700 price cap, which has not increased since April 2003, does not take into account the cost of a simple funeral. There is uncertainty over what "Other Funeral Expenses" includes, and the industry, together with the Churches Funeral Group, believes it is wrong for the minister's fee to be included in the £700 price cap. Allow me to cite the reasons for the funeral industry's concerns: the retail prices index has increased by 16.4 per cent. since April 2003, and the average cost of the NAFD simple funeral in March 2007 was £1,050.70.
There are a number of solutions that the Government could introduce to resolve the current situation, and I shall cite some examples. They could immediately increase the £700 price cap in order to reflect the cost of a simple funeral. They could index link the price cap to ensure fairness. They could provide clarity to the funeral industry, Department for Work and Pensions staff and the bereaved as to what is included in the price cap.
I respectfully urge the Minster to conduct a review of the present rate of funeral payments awarded through the social fund, and then to draw a comparison with the average funeral costs. It would be extremely beneficial to consult local authorities, and particularly the NAFD. Only by engaging in such a meaningful process are we likely to ascertain the true scale of difference and then, and only then, can we begin to bridge the gap in the evident shortfall.
Before I conclude, it would be remiss of me not to pay a justifiable and warm tribute to my hon. Friend Mr. Olner, who is the chair of the all-party group on funerals and bereavement. His experienced and skilful leadership of the group is much admired on both sides of the House, particularly for his decorum and vision. Let me also mention Mr. Alan Slater, chief executive officer of the National Association of Funeral Directors, who is to be commended for his outstanding role in representing the valuable contribution of funeral directors throughout Britain.
This Government have an absolutely first-class record of helping people out of poverty, examples of which I will not weary the House by giving at this time of the evening, important though they are. The Government also have ambitious plans effectively to address decades of inequalities, and those plans will result in a more equal and fairer society. In that spirit, I urge them to end the shameful feelings suffered by relatives who may have had the most unfortunate experience of having a member of their own family—a loved one—who was too poor to die.
I congratulate my right hon. Friend Mr. Clarke on securing this debate on an important, but—as he rightly says—not always easy subject. I endorse what he said about my hon. Friend Mr. Olner and Mr. Slater, both of whom I meet reasonably regularly to discuss the issues raised in this debate.
I am aware that my right hon. Friend wrote to the Jobcentre Plus office in Springburn and that there was some delay in providing him with the information that he requested. I am sorry that it took some time to get back to him, but I am pleased that he has now had some information.
I hear the concerns that my right hon. Friend expresses, but I am sure that he will be aware that those claiming a funeral payment in his constituency do at least as well from the scheme as those claiming in other parts of the country, and sometimes actually do better. We do not have statistics at constituency level, but only at Jobcentre Plus budget area level. His constituency is covered by the Jobcentre Plus delivery centre in Springburn. In 2007-08, 5,980 claims were received in that delivery centre, of which 3,870 received an initial award. That compares with 65,000 claims nationally, which resulted in 35,250 awards.
The success rate for applications in Springburn is 64.7 per cent., which is higher than the overall national rate of 54.2 per cent. Of the 3,870 initial awards, 97 per cent. were partial awards, which is a little above the national average. The initial refusal rate for claims made to the centre in Springburn was lower, at 35 per cent., than the national figure of 42 per cent. For Springburn, the percentage of all awards as a percentage of applications processed was nearly 69 per cent., compared with 61 per cent. nationally. The total expenditure for Springburn last year was £4.65 million, out of a national gross figure of £45.9 million. For the geographical area covered by Springburn, the average award was £1,133, a fraction less than the national average of £1,162.
On my right hon. Friend's final question about the amounts of money paid out in respect of social fund funeral payments in each of the past three years, we do not have complete figures because of office mergers, as he has said. During 2005-06, when his constituency was covered by the Lanarkshire and East Dunbartonshire Jobcentre Plus district, the figure paid was £1.24 million. We have only partial figures for the next year from April to December, when the figure was £880,000. Last year, expenditure was £4.65 million.
As I have dealt with the figures that my right hon. Friend sought, let me now turn to the operation of the funeral payments scheme as a whole. Last year, 40,000 social fund funeral payments were made at a gross cost of £46 million. I say gross cost because there was some recovery from the estates in many instances. In that way, the funeral payment scheme has continued to provide towards the cost of a simple, respectful, low-cost funeral—that is, to provide for the necessary costs of burial or cremation in full plus a significant contribution towards the fee levied by a funeral director. That fee, as he knows, is currently £700.
Those payments are made to recipients, and the partners of recipients, of income-related benefits and tax credits, thus ensuring that the payment is as widely accessible as possible for people with lower incomes. It is worth looking at the list of qualifying benefits, because for funeral payments it is a long one: income support; income-based jobseeker's allowance; pension credit; child tax credit; working tax credit; housing benefit; and council tax benefit.
It will perhaps come as no surprise to the House that approximately 50 per cent. of funeral expenditure goes to pensioners. Furthermore, last year 55 per cent. of initial awards were paid to the partner of the deceased person. I am confident that the funeral payment scheme provides those who have lost a loved one in circumstances where no provision had been made to cover funeral expenses with a means of meeting what they see to be their obligation.
Although funeral payments do not operate in a cash-limited budget, resources are finite. Although the scheme provides for the full necessary cost of burial or cremation and a significant contribution towards funeral costs for those who need that help the most, I hope that my right hon. Friend will agree that we also have a responsibility to keep public expenditure under control in this area. For that reason, the qualifying criteria are stringent to ensure that payment is made only when it is reasonable for the applicant to have taken responsibility for the cost of the funeral. It is interesting to note that even as far back as 60 years ago, regulations to limit who could receive payment, in what circumstances and what the payment should provide for were considered necessary. Those concerns have been carried forward in the current scheme.
The qualification criteria for who might qualify were tightened several times in the 1990s in an attempt to tackle the issue of people taking responsibility for a funeral and claiming when other members of the family were better placed to do so. Primarily, those changes were a reaction to a steady year-on-year increase in expenditure which had reached nearly £63 million by 1994-95. As a result, the number of funeral payment awards dropped and expenditure dropped back to about £42 million.
Let me return to the current scheme. The provisions are encapsulated in the Social Fund Maternity and Funeral Expenses (General) Regulations 2005 and, as my right hon. Friend will know, established conditions must be met. The scheme allows for the full necessary cost of burial or cremation plus £700 for other funeral expenses. In addition, allowances can be made where appropriate for additional necessary transportation costs and the necessary costs of a return journey for the responsible person, either for the purpose of making arrangements or for attendance at the funeral.
I am of course aware, from the meetings I have had with the all-party group and from a large amount of ministerial correspondence, of concerns that the amount allowed for funeral directors' fees does not meet the full cost. However, as I have already pointed out, the scheme does provide for the full necessary cost of burial or cremation, despite the wide range in those costs, particularly for burials, in different parts of the country. The costs vary widely, and cremations generally cost less than burials. Burial costs can range from £774 to as much as £2,750. For cremation, the range is smaller—between £311 and £530. The average amount included in a funeral payment last year for burial costs was £852, and £495 for cremation costs. The average funeral payment last year was £1,162. That reflects the position after deductions have been made to take into account any moneys held by the deceased or insurance on the life of the deceased that is then available to the responsible person. However, the average payment differs significantly around the country. Last year, the average payment in south-east Wales was £952, while in London—to which my right hon. Friend referred—the figure was £1,550.
The cost of the components of a simple funeral, excluding burial or cremation, also vary significantly for different parts of the country. My officials recently looked at the costs across a number of different geographical areas. In some of those areas, including north Lanarkshire, a simple funeral could be obtained for around £1,000, while the lowest cost of £798 was to be found in Newport, Wales. On the other hand, the most expensive simple funeral, at £1,600, was in Edinburgh. I have to say that it is not entirely clear to me why the costs of a simple, dignified funeral should vary so much from one funeral director to another.
From those figures, one can see that the total cost of a simple funeral including a burial in Edinburgh would be in the region of £3,300. At the other end of the spectrum, in Cardiff the cost would be £1,572—half the Edinburgh figure. Nevertheless, I am satisfied that the amount available as a funeral payment still represents a significant contribution to the cost of a funeral.
Funeral directors must take some responsibility for ensuring that they can take account of a customer's circumstances before taking a contract to provide a funeral whose cost is clearly beyond the means of that customer, even if a social fund funeral payment is to be made.
As I said earlier, I have regular meetings with the all-party parliamentary group, and I also receive correspondence from the industry trade associations. I value the feedback that comes to me from these quarters. I am pleased to say that we recently introduced the facility for funeral payments to be made directly into the bank account of funeral directors. The industry had been keen for some time to have that.
I accept there are big regional variations in add-on costs and that currently there is considerable complexity in the scheme that makes it difficult for those claiming a funeral payment, or their funeral director, to work out what they might be entitled to, or indeed even generally navigate the system. I am keen to try to address those concerns. I have asked my officials to consider over the summer how we might better target the help available.
Although the social fund funeral payment scheme has its detractors—my right hon. Friend listed some continuing issues with it—I believe that it plays an important role in social security safety net provision. It is right that we exercise control on expenditure in this area, but it is also right that we continue to provide, for most customers, a funeral payment that meets the full costs of burial or cremation and goes a significant way to meeting funeral directors' costs. As I have said, I accept that there are some weaknesses in the scheme as it currently operates. My right hon. Friend alluded to them, and I am examining ways of addressing them. I hope to be in a position to say more about that in the not-too-distant future.
The motion having been made after Seven o'clock, and the debate having continued for half an hour, Mr. Speaker adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at twenty two minutes to Eight o'clock.