What assessment he has made of the effectiveness of councils’ use of discretionary housing payments in this financial year.

Details of how local authorities used discretionary housing payments in the first half of this year were published on 20 December. That report gives an early indication of how that funding is supporting people, including disabled people living in specially adapted accommodation, and of the type of choices that people are making in response to the changes, such as seeking to move to alternative accommodation or looking for work.

Does the Minister agree that councils should use all available funds provided by his Department to offset the ending of the spare room subsidy for those who are disabled and have a clear need for two bedrooms or more, and those who cannot find smaller accommodation? Will the underspending this year affect next year’s allocation?

I entirely agree with my hon. Friend that the funding being made available to local authorities for cases where it would be inappropriate for individuals to make up the shortfall should be spent. In addition, this Government have made available an extra £20 million, in-year, but less than a quarter of local authorities bid for that money. We want local authorities to spend the money being made available, so that those who can move do, but those for whom that would be inappropriate have the top-up that they need.

One of the worst cases that I have dealt with recently was of a homeless mother with a severely disabled child who receives disability living allowance. That allowance was taken into account in deciding their discretionary housing payment, which left the family with virtually nothing to live on. Will the Minister issue guidance to local authorities saying that they should not take into account disability living allowance when making DHP payments?

The hon. Lady is very knowledgeable about these matters, and she will know that local authorities make their decisions on a case-by-case basis. Clearly, they do not have to include income from DLA, but they are free to do so. If she believes that her local authority should not have done so in an individual case, she should make representations to it.

Following on from that question, the Minister must know that in assessing entitlement to income-related benefits, entitlement to disability benefits is not taken into account. The one exception to that policy is discretionary housing payments. It is specifically in the guidance that local authorities can take them into account and means-test them in the way that he described. Will he change and reissue the guidance, so that this one area where disability payments are means-tested is removed from the scene?

As the hon. Gentleman knows, the key is in the word “discretionary”. Local authorities can ignore DLA if they think that that is appropriate, but they have the freedom to judge on a case-by-base basis; that seems to be the right way to respond to individual need.