Select Committee on Social Security Minutes of Evidence



Examination of witnesses (Questions 300 - 319)

WEDNESDAY 29 JULY 1998

DAME ANN BOWTELL, DCB and MR STUART LORD

  300.  But would it pay special attention to the two-way flow of information? I just want to highlight a particular issue which is that I made an enquiry about RATs in Birmingham, or remote access terminals, and I was assured that we did have RATs in Birmingham, but what struck me as absolutely bizarre was that we have a system whereby the Benefits Agency would tell the Housing Department when someone was on income support when they claimed housing benefit, but the system did not work the other way around when they came off income support that they would tell the Housing Department because the official answer I got was that this was the individual claimant's duty to do so, which seemed a bit optimistic to me, so are you paying attention if we tell an agency that someone is on benefit that we will also tell them when they come off it?
  (Dame Ann Bowtell)  I may have to give you something on this, but I think the Benefits Agency are running some pilot studies to develop RATs in a rather more—basically the basic RATs stuff, all you can do is look things up and see what is going on, and I think there is something with a more positive exchange of information going on, but it is probably better if I give you a note on that,[
2] but your point is well taken. I am sure we ought to be doing that.

Chairman

  301.  Can we move on to PRIME and maybe you can tell us briefly how the project is going and the timetable.
  (Dame Ann Bowtell)  Well, the transfer of our estate to the contractor happened in April, so since April our estate has been with the contractor who is now called Trillium and not only are they providing buildings to us, but they are also providing a range of services connected with buildings, so they are also providing the maintenance and the security guards and things like that. So in terms of their actually doing anything with the buildings, we are in fairly early days, but what they are contracted to do is to bring all our accommodation up to statutory requirements within two years, and then we have agreed a long-term programme with them of maintenance and upgrading of the accommodation we are staying in, and of course they will begin the business of disposing of some of the surplus accommodation which is part of the deal, so it is very early days to see how the building business is working. In terms of the services, they are all in there and there have been the inevitable teething troubles in some local areas because of course this is a service right around the country to all of our offices. So basically the thing seems to me to be working okay and we have got arrangements in there so that there are penalties on them if they do not deliver the services to the agreed standard and there is a detailed specification agreed with them. I have got a contract management group who are managing the relationship with them, so it seems okay so far.

Mr Wicks

  302.  When they dispose of property, where do the resources or where does the money go?
  (Dame Ann Bowtell)  There is an arrangement for sharing the development gain. I am not quite sure to which properties that applies, but there certainly is an arrangement for some of the properties.

  303.  I am wondering about the origin of the name "Trillion", you see!
  (Dame Ann Bowtell)  It is with an "m" at the end.

  304.  But some of the money might come to the taxpayers who own it?
  (Dame Ann Bowtell)  Yes, and indeed they paid £250 million up-front to start with and we are saving quite a lot.

  305.  They paid £250 million?
  (Dame Ann Bowtell)  Yes.

  306.  It would be fascinating to see how much they make from the property disposal.
  (Dame Ann Bowtell)  Well, the property that they got which is surplus which is about, I think, 9 per cent of the estate is in little bits. It is property we could not get rid of basically, so the stuff which is actually empty is probably no big deal.

Chairman

  307.  Have there been any difficulties about the rationalisation of the sites? You have obviously had to close some sites, but has that inconvenienced some of your customers to any noticeable effect?
  (Dame Ann Bowtell)  Well, before we close any site, we go over the position with ministers very carefully and what the alternative arrangements are and so on, so we will try not to close places without putting some alternative facilities in place. Inevitably if people have not got the familiar place they were going to, it is always going to be awkward for some people, but where an office ceases to be economic from our point of view, we always try to put some alternative arrangements in place for people to be able to go for example into the local authority instead.

  308.  Have you got a mechanism available to you to consult customers on an issue like that? If you have got an option of which benefit office you would prefer to close, is there a mechanism available to you to test that question?
  (Dame Ann Bowtell)  We would always expect the local management to be consulting with people locally, so we would certainly expect them to be talking to the local Citizens' Advice Bureau, the local authority and people like that and that is part of the arrangement for closure.

  309.  And presumably you do consult Members of Parliament as a matter of course?
  (Dame Ann Bowtell)  I think so. I am sure.

  310.  That sounds as if, apart from the usual normal glitches that you would expect, the project is running to expectations.
  (Dame Ann Bowtell)  Yes, so far.

Chairman:  Can we now turn to staffing levels because there were some reductions, I think, announced recently.

Mr Leigh

  311.  There was a question from Ian Bruce to Mr Field on the 13th July saying that between the general election and the 31st March, the Benefits Agency saw a reduction of 4,289 permanent posts from 71,642 to 67,352, including, I presume, Mr Field's post, but I do not know. Could you just tell us a bit more about the reduction in staff in the Benefits Agency? Which part of the Agency has seen a major loss of these posts, have any redundancies been compulsory and how have the redundancies been achieved?
  (Dame Ann Bowtell)  We had quite a big squeeze on our administration costs over the last three years and these reductions are a part of that, so we had less money to run the organisation with, and some of these reductions have come about because the Benefits Agency has made some quite substantial changes in the way in which it has actually managed the organisation. It has done quite a lot of centralisation of functions and there have been some mergers of districts, so they have done a lot of work across the way in which the organisation is managed and that is where quite a lot of these posts have come out from because they have actually been managed in a different kind of way. They were all voluntary redundancies and at some grade levels it was quite considerably over-subscribed, so we had to do some choosing among people who wanted to go and we have done that choosing on the basis of the needs of the business and the value for money.

  312.  Has there been any impact on services to the public as a result of these voluntary redundancies?
  (Dame Ann Bowtell)  Not that we can detect in terms of changes in performance because they were mostly done in the way in which we actually organised the management of the offices and we have not been able to detect that there has been any difference in the front-line performance.

  313.  Have any areas of the Benefits Agency been ring-fenced so that they do not have redundancies or has the whole Agency been involved in this process?
  (Dame Ann Bowtell)  These would have been widespread across the Agency and indeed the squeeze on the Agency was such that it had to examine every part of it, so it would have been spread across all areas of the country. There may be some individual units which are doing specialist functions, but broadly I do not think there were any off limits when the Benefits Agency began to look at how it would deal with the situation.

  314.  Apart from saving money, are there any benefits accruing to the work of the Department in having further redundancies or not?
  (Dame Ann Bowtell)  I think that what the Benefits Agency has done is probably produce a more tightly managed organisation and I suppose, because these posts were coming out at the slightly more senior levels, one of the things it will do eventually is provide some room for staff who have not had many promotions for quite a long time, for us to be able to bring them through. I have been quite worried in the Benefits Agency because they have had very little promotion for a long time and you have had people soldiering on and you have had no outlet, so when this settles down eventually, this will leave room for some of the younger people to come through and that must be good.

  315.  Is there any reason for the slight increase in the staff in the Contributions Agency in a similar period?
  (Dame Ann Bowtell)  I think that was a spend-to-save in that they actually got some extra money in order to do some exercises to produce more investigations at the forefront, so it was quite a specific extra chunk of staff in order to save money.

  316.  Although there have been these reductions, a staffing level of 67,000 must make this one of the largest employers in Europe. I think to the layman it must seem a staggering number of people.
  (Dame Ann Bowtell)  It is a doing a staggeringly big job.

  317.  Well, I know that.
  (Dame Ann Bowtell)  When you look at the 20 million customers of benefits and the Agency is paying not the whole £100 billion, but a fair chunk of it, this is a very big and very complex job. These are staff who are spread all over the country doing this job. I think the Inland Revenue is not far short of that if you look at other organisations—I think the Inland Revenue have got 50,000 odd staff. I think our staff do a very good job in very difficult circumstances.

  318.  There is obviously then no magic formula and we cannot look to the coming years for some significant reduction, although there may be further reductions, or perhaps you can explain to us what might happen in the next year or two or a longer period.
  (Dame Ann Bowtell)  Well, any manager has a constant search for ways of running the business more efficiently and we shall continue to do that and the new IT may make lots of things easier to do when it comes on-stream. But, on the other hand, as the Chairman was saying, we also have another thrust which is towards a more active service, a service which will get staff more involved in case-working and in dealing much more face to face with clients and that is liable to be a staff-intensive activity, and it is the intention to develop the service in that way. That is not going to save staff. Things which deal with people face to face are very staff-intensive. JSA, for instance, has really high administrative costs compared to other benefits because it involves staff talking to people and spending time with them.

  319.  What incentives are there on senior management to reduce staff whilst retaining efficiency?
  (Dame Ann Bowtell)  The big incentive is in the money that we get for our administration costs. That is always a big squeeze on the public sector and that is why you have such tough disciplines from the Treasury, because we do not have the same disciplines at the other end that the private sector gets of the bottom line, as it were. There is also the attitude that the whole management of the organisation takes towards that. It is a question of what you reward in your managers and what your managers expect to do in order to fulfil their objectives, so to set the organisation in the direction in which it is improving efficiency is important and we will continue to do that and I am sure the Treasury will continue to squeeze our administration costs.


2  See Ev pp. 90-91. Back

 
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