House of Commons Hansard Debates for 27 Nov 1996 (pt 6)

Mr. Deputy Speaker (Mr. Michael Morris): Order. We must move to the next debate.

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Benefits Agency Offices (Wales)

11 am

Mr. Ieuan Wyn Jones (Ynys Mon): On 15 November, the Wales management board of the Benefits Agency published a consultation document on what it rather grandly called the agency's blueprint for the future. The document contains plans to close 14 of the agency's main offices and 39 public caller and one-stop offices and to reduce its staff by 715. As it was put to me this morning, such plans could well be a blueprint for disaster.

The document was produced in response to the "Change" programme announced by the Secretary of State for Social Security on 28 February. The proposed reforms of social security administration are intended to produce savings of 25 per cent. over three years. The Wales board is the first to respond to the Secretary of State's announcement: we are to be the test bed for change.

When the programme was first announced, dire warnings were given about the consequences of such drastic action. On 21 March, the Parliamentary Commissioner for Administration warned that civil service staff cuts would lead to a worse public service and more mistakes. His annual report, published on the same day, showed that he had received a 28 per cent. increase in complaints from hon. Members during the previous year. He said:

"There is a risk that fewer staff will lead to both a slower service to the public and to more mistakes . . . I doubt whether automation and technology will compensate fully for cuts in human resources."

We should all take that warning seriously.

A letter that I--and, presumably, all Welsh Members--received from the agency's director for Wales, Mr. Ian Watson, sought to justify the plan in two statements. The first I regard as rather spurious and the second much closer to the truth. First, the director said that the plan

"is consistent with our commitment to high quality customer service and the long term interest of our staff."

How can closure of offices and a 20 per cent. reduction in staff possibly be consistent with that statement?

Secondly, the director stated:

"The proposals also respond to the need throughout the Agency as set out in our Change Programme to drive out significant economies and efficiencies."

That statement is the real reason for this outrageous plan. The Secretary of State for Social Security has told the agency to cut costs by 25 per cent. The Wales board has simply done the Government's bidding, irrespective of the damage that it will do to the service that it provides for the people of Wales.

Let us consider the unique challenges that the agency faces in delivering services in Wales. Our country's geography represents a number of challenges. There are large urban populations located primarily in the south and the south-east and in the area around Wrexham and Deeside. Then there is the very large rural hinterland, where the population is much lower but where there are high pockets of unevenly distributed unemployment, and the valleys of south Wales, where even the agency accepts that there are areas of deprivation. In addition, there are demographic and other factors which are relevant to the debate. Wales has an aging population, and the percentage of people of pensionable age in many Welsh constituencies is above the United Kingdom average.

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Mr. Dafydd Wigley (Caernarfon): Does the hon. Gentleman accept that one of the most essential aspects of the service that is particularly important to pensioners is the ability to call in at the office to discuss problems and receive assistance with filling in the ever more complicated forms that are coming on stream? If that facility is withdrawn, pensioners and widows in particular will find it extremely difficult to cope with the social security system, resulting in a lower take-up, which must be contrary to what we want.

Mr. Jones: I am obliged to the hon. Gentleman for that helpful intervention, which clarifies a number of the issues that are worrying us in relation to pensioners. About 150,000 pensioners in Wales qualify for income support, but only 100,000 of them claim it. It is more than likely that the changes will make it even more difficult for the elderly to get the benefits to which they are entitled. In many of the areas in Wales where the proportion of elderly people is higher than the Welsh national average, there will no longer be an office to which they can go to discuss their entitlements. Pensioners are the least likely to use the telephone or gain access to a Benefits Agency office.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney): To illustrate the hon. Gentleman's point, I can tell him that the Merthyr office has 150 callers a day. Presumably, that service will be abolished in one form or another. Such a service is currently being provided from a brand new office that has all the best possible facilities in order to be able to receive such callers and has only recently opened.

Mr. Jones: Yes, that is the kind of number of callers that offices throughout Wales receive, as I am sure we shall hear during the debate.

Wales suffers some of the worst health problems in western Europe, with a higher than average dependency on sickness and incapacity benefit. It is also an area of low pay, with the lowest average incomes in the UK. According to the family expenditure survey in 1994-95, household incomes in Wales are about 75 per cent. of the UK average. A key reason for that is the number of households that are dependent on social security for income. According to the Low Pay Unit, 22.5 per cent. of household income in Wales is derived from social security, which is the highest proportion of any county or region in the United Kingdom.

I must comment on the language used in the consultation document, which is full of the worst kind of late 20th century management jargon. The document has adopted the language of privatisation, referring to claimants as "customers", talking of the need to make a "success of the business", mentioning the introduction of the concept of purchaser/provider and referring to exit policies instead of redundancies. In short, it creates an organisational structure and management philosophy that is only one step removed from a completely privatised service.

The document claims that a better service can be provided by centralisation in a number of locations, the better use of technology, and by customers, as it describes them, being willing increasingly to use the telephone as a means of "doing business".

Mr. David Hanson (Delyn): The hon. Gentleman talks about centralising. In my area, for example,

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the centralising of the Rhyl and Flint offices will mean that Denbighshire and Flintshire--two large counties in north Wales--will have no personal caller office. How can my constituents and those who use the two offices depend on a centralised service when there are no bus routes, many do not have telephones and two major counties will not have a service that is currently provided by the Benefits Agency?

Mr. Jones: I totally agree with the hon. Gentleman.

The document says:

"By 1999, the primary means for customers to contact us will be using the telephone."

The agency claims that 75 per cent. of its customers contact them by telephone. I dispute those figures. One must discount calls to offices where the services are currently centralised. As the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) suggested, a survey of individual offices that are currently processing a range of benefits would show, I suspect, that less than 75 per cent. of people are making contact by telephone. I know that that is true in my constituency. Obviously, many people resort to using the telephone only when there is no alternative. In any event, those figures do not tally with the figures quoted to me by the agency in June this year. I was told that there are about 5.75 million contacts with the agency annually, of which 4 million are by telephone and 1.75 million by personal call. Even on the agency's figures, the proportion of callers is much higher.

Let us examine the proposals on what the document calls "customer interface" in a little more detail. The document states that the changes will give

"the BA Wales greater control in determining the appropriate method of customer interface on a case by case basis."

What do those words mean? The customers, including some of the most vulnerable people in our society, will have no choice about how their claims are dealt with. So the aim of delivering high-quality customer service falls at the first hurdle. When challenged on that point, one of the managers was heard to say that the agency would have to teach the customers to use the telephone. Indeed the document states:

"BA Wales controls the contact, and therefore the costs".

Three telephone call centres are to be established in Porthmadog, Swansea and Blackwood. They will become the first point of contact for all customers. There will be no facility, at those units or at the processing units, for customers to walk in and be seen. Although the facility for appointments is built into the system, it is clear that they will be discouraged.

One section of the document states:

"Criteria will be set to help staff determine whether an appointment is appropriate, although customers who express a determination for a meeting will be accommodated".

Later in the document, the following comment is made: