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Social Fund (Funeral Expenses)

Part of Petition – in the House of Commons at 7:27 pm on 9th July 2008.

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Photo of James Plaskitt James Plaskitt Parliamentary Under-Secretary, Department for Work and Pensions 7:27 pm, 9th July 2008

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.

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