Examination of witnesses (Questions 40
- 62)
WEDNESDAY 3 JUNE 1998
DR PETER
KENWAY, MR
GUY PALMER
and MS CATHERINE
HOWARTH
Ms Hewitt
40. I want to pursue the question of income
and what income measurement there should be. Have you had a chance
to look at the evidence that the Minister for Welfare Reform gave
us when we had a very useful discussion a few weeks ago about
the use of below average income? The Minister was expressing forcefully
the view that it is not a useful measurement, not least because
of the housing costs problem. Does increased expenditure on housing
costs, over which you have no level of control, affect the level
of business or not? What view do you take of that?
(Dr Kenway) That is the pre- versus the post-
housing costs problem. I do not accept the argument, which I think
emanates from the Institute for Economic Affairs, that because
of that difficulty those measures are useless. It is true that
you have a disparity at the bottom: if you take income pre- housing
costs, incomes have risen, whereas if you take them post- housing
costs they have fallen slightly. I would be quite happy to take
an average: whether you look at one or the other they are both
such a different outcome from what has happened on average, which
is a rise of about 40 per cent, or from what has happened at the
top, which is a rise of about 60 per cent. Whether it is minus
three or plus eight per cent at the bottom, in terms of the narrative,
makes no difference to the terms of the message. Whichever one
you want it is clear that the gap has opened up. Let me stop there.
41. That is helpful and I have some sympathy
with that view that you pick a measurement and stick with it because
it is the change over time.
(Dr Kenway) There is a clear story there irrespective
of technical difficulties.
42. This issue you raise about a possible
imbalance between performance measures and impact measures, either
kind, that have to do with the specific work of the DSS, particularly
incomes, versus broader issues of health and education, do you
not think that in order to measure the success of this Government's
stated objectives on welfare reform you actually do have to look
at those broader issues to do with health and education and people's
real ability to participate in the wider society and economy?
You seem to be suggesting these proposed measurements are going
too far into the territory.
(Mr Palmer) No, I do not think that is quite what
we meant to say. What we were trying to say was that at the moment
they look like something of an afterthought in the document and
either one should incorporate those wider issues wholeheartedly
in the scope of this particular Green Paper or one should leave
them up to the relevant departments. The worst thing in the world
would be to do them in passing or superficially.
43. What is your own approach to that? I
have only had a chance to go fairly briefly through your own outline
indicators. At first buzz you have actually got very little on
health. I think the key one is underweight babies, an absolutely
key indicator of child health, and you have got the respiratory
disease and suicide and drug addition for young people. Have you
tried in your own selection of indicators to get the balance that
you think the Government should be getting between health and
education and work and income indicators? Is that what you are
trying to get at here?
(Ms Howarth) Yes we are trying to get that balance.
We have got the three health indicators for children. Rather less
for young people but they are healthier. And we have got three
for adults and a couple for pensioners so I think we have tried.
Rather than have one indicator or two or three that try to look
at all those groups, we have tried to pick specific issues that
affect people of that age because obviously in health in particular
the problems vary as you get older.
(Mr Palmer) Can I add one more detailed point
which is we are still struggling on health and old people. Basically
the types of statistics we would like to collect do not seem to
be available.
Mr Wicks
44. What is wrong with mortality as a socio-economic
outcome? Birth and death are pretty conclusive ones.
(Ms Howarth) We are using that. That is there.
It is in the adults age 25 to 59 or 64, depending on the retirement
age of the different sexes. It is in early mortality where you
see the greatest difference opening up between socio-economic
groups so that is the age where the data shows the most interesting
results.
(Mr Palmer) In these health areas we are trying
to choose statistics where there is a differential between, if
you like, the average and the less advantaged socio-economic groups
so that we are trying not to measure the Health Service, if you
like, and those sorts of trends.
Ms Hewitt
45. Sure, you are looking at real outcomes
which is what one does have to look at. On this specific question
of pensions and financial services I would be interested in hearing
more of your views on what the Government is proposing in the
Green Paper. You have talked a bit about the guarantee of the
income in retirement for all and the need for that to be more
precise if it is to mean anything. What is your view of the others
they propose? In number 2 they are suggesting an increase in the
amount of money going towards savings and insurance. Number 3
is an extension in high-quality second-tier pension provision.
Number 4 is an increase in public confidence in the quality and
regulation of private sector savings. Those three overlap. It
is unlikely that you are going to have 2 if you do not have 4
unless it is simply compulsory and even then the compulsion will
not be accepted unless there is some faith in the institutions.
Number 3 and number 2 overlap because if there is an increase
in second-tier provision there is going to be an increase in money
going into it. Have you started disentangling this?
(Dr Kenway) No we have not. I think it is fair
comment that 2, 3 and 4 overlap. One might add that 2 itself is
almost two measures in one or a statement about what the Government
will not do and a statement about what the public will do. One
might even wonder whether this blanket claim that we should be
insuring more for foreseeable risks is actually appropriate. I
think I would accept what you have said there but the point I
would make about these is the pensions indicators in here, perhaps
uniquely, look to us like an overall sensible set. We know what
they are after achieving, providing they define it as we were
saying a moment ago, and they also say how they propose going
about achieving it. I think that comes over quite strongly from
those other three measures. I think pensions is the only area
within the paper where you have what looks to us the right sort
of balance between the impact and performance indicator measures.
I think we would agree with the criticism that perhaps those performance
measures overlap and perhaps you could do away with one of them.
46. Let me just pursue that for a minute.
In your little table where you classify performance versus impact
measures, of the four potentials only one is an impact measure
and the other areas by and large have got more impact and less
performance. I thought you wanted more impact and less performance
but now you seem to be saying the pension thing is rather good
and you have got three performance and only one impact.
(Dr Kenway) We do say somewhere there wants to
be more performance than impact but the impact needs to be longer
lasting. I am struck when thinking about pensions that we are
exactly between 1976 and 2020 and if you had written this in 1976
I suspect you might have had the first impact measure but almost
three completely opposite ways of going about it at that time.
So we think it quite possible that over time for whatever reason,
experience and disappointment and so on, that those performance
measures will have to change because we will decide we need some
new policies and not all of the policies we were pursuing work.
One would want to allow that to happen without losing sight of
the overall goal which is summed up in the impact measure.
Mr Leigh
47. I am having some difficulty with this
morning I must admit because I do not really understand the point
of it. I am sorry to ask a naive question. On the one hand we
have this Green Paper from the Department of Social Security where
my colleague, Miss Kirkbride, was saying the annex on success
measures is so unbelievably woolly, it is so "motherhood
and apple pie" as to be meaningless. For example: "A
reduction in the proportion of working age people living in workless
households", or, "At the end of the process of reform,
there should be a guarantee of a decent income in retirement for
all", or, "An improvement in the health of the population
as a whole by increasing the length of people's lives ..."
I think this is completely valueless and measureless and pointless.
You have that on the one hand. On the other hand you have your
paper. I have been trying to grapple with this and it seems to
be the worst kind of sociological, academic, meaningless jargon,
frankly. For instance, you have in paragraph 25: "While about
half the measures relate either to pensions and other non-work
incomes or to work, the set of measures as a whole covers the
full extent of the welfare state. This feels an uneasy combination
of depth and breadth; intuitively, one would expect that if health,
housing, education and rights are to be there at all they should
be represented with an equal weight to the non-work incomes and
work." I have tried to read that about five times and it
is completely meaningless to me. I do not see the point of all
this.
(Mr Palmer) Your question is what is the point
of all this?
Mr Leigh: I am sorry
to be rude. I think I understand what you are trying to do, to
create a new science but you cannot measure this because it is
unmeasurable, it is vague aspirations and you are creating a model
that just does not work.
Chairman
48. I understand what Edward is driving
at. It would help if you just took a moment to flesh this out.
I had to read the bit about impact versus performance and I think
I am getting there slowly. It might do us all a service to step
back. Your approach is quite different from the Green Paper and
it would be good to know just how much importance you attach to
that way of looking at things after you have crystallised what
you mean by your own approach of looking at impact versus performance.
(Dr Kenway) Can I answer that. There are two parts.
One is we are saying we think this is a useful way to look at
what the Government suggests and then to ask of any success measures
that they are putting out this question: is it really relating
to something that people will feel, see, recognise——
49. You mean makes a difference in people's
lives?
(Dr Kenway) If you like, makes a difference in
people's lives compared with ——
50. An example of that would be what?
(Dr Kenway) An example of that would be an increase
in the number of working age people in work. I think that is measurable.
While we may not all be directly affected by it, I think that
is reasonably concrete. Let me give you an opposite example: greater
transparency about entitlement and costs. That is a lot harder.
I am not knocking it. If I was allowed to knock one it would be
the introduction of a better model for tackling effectively the
linked problems of the most deprived neighbourhoods. It is not
clear to us. That really seems even by our obscure academic standards
to be way out, the sort of thing we would have written if we had
had the chance to but fortunately we did not.
Ms Hewitt: That one,
if I may comment, is not a success measure. It is a statement
of how you might achieve something recognisable as success which
is the most deprived neighbourhoods either being objectivity or
feeling subjectively less deprived. It is not impossible to measure.
Miss Kirkbride: It
depends on whether the sun is shining or not!
Ms Buck: The regeneration
strategy is based on exactly that. It is just we have not had
proper mechanisms to do that. Public policy has been directed
towards that under the last successive governments.
Chairman
51. The shorthand writer has to make sense
of this. We can always adjourn for a private discussion. There
was a point Catherine wanted to make and then Gisela.
(Ms Howarth) It is a very quick point just to
refute what you said about many of these things being unmeasurable
because they are measurable. You can measure the number of workless
households compared to the number of households where one person
is in work or both people are in work. You can measure the increase
in life expectancy or the mortality rates of people in different
areas, for example. So the fact that you think these things possibly
could not be measured is probably an indication of the fact that
we need to get some of that information better transmitted out
into the public arena, because it is actually very informative
and instructive about what is going on.
Ms Stuart
52. First of all in defence of what Edward
would describe as immeasurable. The National Commission on Retirement
Policy say: "National retirement policy should be designed
to enable Americans to enjoy a reasonable standard of living in
their retiring years."[2]
You could also accuse that of being "motherhood and apple
pie" but I would see this as a device between holistic thinking
which is then put out as sequential approaches which is what policy
needs to do. I have no difficulty with your success measures on
pensioners. Coming back to the time-scale which worried me earlier
on, the result of the number of pensioners being on means-tested
benefit, which is something alone we want to reduce, the decisions
in people's life-span which will lead to this will be literally
30 years removed from this success measure. What is slightly missing
in what I can see now is that sense of how do we relate these
success measures then to the individual because someone earlier
made reference to the feelgood factor which is an accumulation
of events which impact on your life and we are measuring these
bits individually, housing, health, education. I think it is a
wonderful way of looking at things. How do all these things get
into the individual's life experience? How does this add up? I
do not get a feel for that.
(Mr Palmer) We are still going back to something
we were talking about earlier. It does seem to me that one of
the things one can fairly do is ask people questions along the
lines of the feelgood factor. People's perceptions are genuine
statistics.
53. On the time factor, let's go back to
pensions. You can measure something now but the decisions 30 years
ago led to this. How are we going to get this into the frame?
(Mr Palmer) In terms of measuring achievement
in a couple of years on this thing, I basically think on pensions
it is impossible to do.
Chairman
54. Just to come back to Edward's frustration
again. Is there anywhere else available a model for how other
countries, communities do this kind of thing? You said earlier
that you were reviewing some of the academic evidence. Is there
somewhere else in the world, a country which has looked at anything
like this to establish whether your idea of impact versus or performance
or the Government's idea in their memorandum is the way to proceed?
Are there any other alternatives available to us that we should
be looking at?
(Ms Howarth) There is for example in the United
States an annual poverty report which indicates the number of
people who are below an absolute level of poverty which is defined
by the resources people, the need to eat and some other fairly
limited criteria. The advantage of having that annual report is
that it is very predictable, people watch it, it has got quite
a high profile, and in that sense we think that is a very promising
model. It is an annual report that people refer to and that is
quite well recognised. We would not, however, go along with the
very limited methodology that they have. We think it is important
to look at other issues than income and certainly to look at relative
as well as absolute income. There are examples of that in other
European countries. In Sweden for example they have been collecting
social statistics for a very long time and the European Union
has recently, in the last three or four years, started a new survey
that will enable us to compare different countries in Europe across
that kind of range and breadth of aspects of poverty and social
exclusion. So it is really starting to happen and we have some
models elsewhere. I think the United Kingdom would probably be
leading the field in some way if we adopted an annual or regular
report with indicators across poverty and social exclusion.
Chairman: Your paper
raises some of the difficulties. I think Paul Goggins has got
some questions in that area.
Mr Goggins
55. A general comment. I do not deny some
of the 32 success measures are very general. I think it is different
to say they are very general than to say they are meaningless.
I think the opportunity we have had to contribute to the process
of sharpening up success measures is a very important one and
a constructive one and I think the evidence helps us to do that.
All this debate about performance measures and impact measures
is a bit confusing. The way I see it is that at least part of
the explanation is to do with timings. If we take the example
of truancy, there is a general feeling of concern about truancy.
That becomes a performance measures about reducing truancy which
eventually becomes an impact measure about how much do we want
to reduce truancy by. To some degree it is about the process of
timing. The more interesting differences in the Green Paper are
the differences between the DSS measures and the non-DSS measures
which Patricia referred to. It is interesting as well that in
your analysis of performance and impact the DSS has far more performance
and other departments have impact. You may want to comment on
that. I think what the Green Paper does is take some givens from
other departments, education and health and so on, and then it
adds its own in which are about incomes and families with children
and so on and so forth. I want to ask you a question about whether
you think this process can work. It may work for the first time
but can it work in the long-term for the DSS to take the givens
from other departments and add in its own or should it just concern
itself with DSS targets or do we need to have a new system to
co-ordinate this?
(Dr Kenway) You say it takes things from other
areas. It does not for example, take all of the targets from other
processes such as Our Healthier Nation. It is quite surprising
that it does not do that. I do find it very difficult to see how
one could really do this properly, taking health on board properly
and taking education on board properly. You would have such a
huge area of Government activity being examined. I suppose the
Select Committee could have joint sittings or something, but it
would be unmanageable and in terms of the processes they perhaps
need to go down to a smaller level. Having said that, we have
to be careful. If we just break the process down by department,
that will mean you do tend to focus on the performance measures.
I think the area of health here is a very good one: if we are
actually looking at health, we need education in there as well
and we need environment in there, whereas if one just allows it
to be a Department of Health thing then maybe one is much more
going to be looking at Health Service measures. I think that to
try to summarise this answer, the orocess needs to be broken down
but perhaps not by department.
56. It just seems to me that one of the
things we ought to explore is whether there are things within
the remit of the DSS that it ought to concentrate on more rather
than taking this broader view. I am being the devil's advocate
here in asking that question. For example, we had the Benefits
Agency here giving evidence a couple of weeks ago. We talked about
the accuracy of Income Support claims and the way the Benefits
Agency was failing to meet its targets. That would be a very useful
impact measure that could be in but that is not mentioned in the
Green Paper. Equally we have a target to get Income Support for
the million pensioners who are eligible for it but do not claim
it. Again you could have an impact measure there. Do you think
it should be more specific about its own remit rather than more
general and bringing on board other departments?
(Dr Kenway) It does include reduction in the number
of incorrect payments which perhaps picks up your first point.
I think we do need those sorts of performance measures. We are
not saying you just need impact measures like `everyone must have
a decent income forever'. We do need the measures that are going
to help you decide whether or not what the Government is doing
to try to achieve that is actually working out or not. That is
why we take this view that there wants to be a very small number,
perhaps one or two, measures of overall impacts and then committees
such as yourselves need to concern yourselves with the performance
of the system. We are not downgrading performance measures but
we are saying they are probably not of interest to the public
but they are of interest to you and they are of interest to the
Government.
(Mr Palmer) Can I give an alternative answer.
As we wrote in paragraph 5, our preference is for the DSS and
therefore this Committee not to deal with health and education
and all those areas but just to concentrate on the areas closer
to its remit. Our argument for that is partly you will be taking
on much too much but also in some sense what does the DSS know
about health, so to speak? If people in the Health Department
have been thinking through Our Healthier Nation it is people
like ourselves looking at the differences in health between the
average and the less socially advantaged, I cannot see an argument
why the Department of Social Security should get too much into
all that.
57. Is not one of the positive things about
the way the Government policy has gone in the past year the way
it has joined up different areas of policy and to see how one
impacts on the other?
(Mr Palmer) We argue that we ought to take all
those subjects in the round but centring all that in the Department
of Social Security is more problematic. Our particular suggestion
in paragraph 8 is maybe the Social Exclusion Unit.
(Ms Howarth) It is one of the reasons why we are
recommending that a poverty and social exclusion report should
be published regularly by an authoritative organisation which
is somehow at least a bit independent of Government and is able
take a cross-departmental view. One possibility for that would
be an independent ONS (and there is a Green Paper out at the moment
about that). The Social Exclusion Unit is another possibility.
To get into depth in all the different areas, which is necessary
if you are going to a get a sophisticated view of the links between
areas, would be awkward for one department, as Guy says.
Chairman: Could we
move briefly and maybe finally to the question of your own model
and ask Malcolm Wicks to open up questions on that. It is an interesting
contribution and something we want to look at quite carefully.
Mr Wicks
58. Feel free to tell us more about your
own model but I have found this a very interesting session, a
lot more interesting than I thought it would be, although one
of my colleagues seems slightly sceptical! I feel more enthused
because I do think we have got to hang on to what the objectives
should be. My own view, for what it is worth, as I indicated (no
pun intended) at the beginning, is alongside the economic indicators
of the day (and they do change—I notice in Wilson's era
people used to lie awake at night worrying that sterling had dropped
a couple of points against the dollar and now there are different
indicators) if we had not 40 or 50, although we might need those
as background measures, but five or six social and environmental
indicators that related to people's real worries about asthma
affecting their children or poverty or worklessness or other health
indicators, then I think that would be a goal worth striving towards.
But my question is this: are there certain fundamental measures
that we should be trying to unearth? To take the example again
of school expulsions or exclusions. It may be that in some instances
the number of expulsions in a school is its own indicator. It
may just be that the school has not yet learnt how to handle naughty
boys whereas other schools can cut out the problems earlier on.
In my experience it may relate to other things. It may relate
to some family strife because the child is not getting on with
its mother or father. When you talk about it with the family other
things are going on. The family has a lot of worries. They are
in debt, they do not know where to turn to financially. Dig a
little further, not that much further, and it is about poverty.
That poverty however may be caused by the fact that the man may
have lost his job. He is a skilled man out of work and his self-esteem
is suffering as well as his bank balance or it may be the father
has walked out on the family and there has been a family breakdown
or it may be that the father was not there much in the first place
and a very vulnerable family has been created by the birth of
a child out of wedlock. Do you see what I am getting at? If we
simply go for school exclusions then departments sensitive to
that can tell schools not to do it. It might result in more disruption
in the classroom if you have the naughty boys still there. There
must be—and I know it is difficult—some fundamental
social indicators we should be striving for and some of them may
relate to DSS and some of them may relate to other things. That
is the Holy Grail to search for, these five or six key things.
Discuss!
(Dr Kenway) One thing it is strongly suggested
we do in our work is to try to identify no more than ten. Your
very persuasive story there indicates how difficult it is. You
are completely right what you say about school exclusions. Catherine,
do you want me to drop you in it and suggest what you think? You
are talking about something on income, you are talking about something
on work, you are talking about some two things or something on
health at probably very different points in life.
59. I might be talking about something even
more controversial called family insecurity which is a difficult
one as well.
(Dr Kenway) Yes. You catch us divided on that
one. You could have some sort of measure of family break up potentially,
certainly contentious.
(Mr Palmer) You could go for this feelgood type
of thing. It is an area which we have debated long and hard in
the evenings and have not come to a firm conclusion on. It has
obvious disadvantages and obvious advantages. The thought of having
one statistic which had the same headline value as the inflation
rate or something has an awful lot of attractions. The fact it
would be either an obscure composite of all sorts of other things
or a subjective thing you asked people from a survey makes it
in our view not the right way to go at the moment.
(Dr Kenway) Can I be so bold as to come back yet
again. We have described what we are producing as a model or prototype
and the reason we are doing that is we do not believe you, people
at large, can judge whether there are indeed seven or at most
ten indicators that really do feel fundamental until they are
actually put in front of you; not put in front of you as a list
and a jargon-ridden document, but hopefully in an accessible and
well-argued piece that takes on board some of the situations you
have just been describing. People can say yes this does look like
the seven we can watch. You might decide it is and you might decide
it is not. Putting something out that yourselves and everybody
else can take a view on is in a sense a fundamental aim of our
project.
60. I think technically and so on it is
all very complex and interesting and difficult stuff but my guess
is either you or someone else should have a go at the end of the
day chancing your arm and saying here are six crucial things.
All the pressure groups and interest groups will be upset theirs
is not there. I would be upset if winter mortality for old people
is not there, for example, which is an interesting indicator.
It may be at the end of the day it is not that difficult. Yes
it will always be controversial but something about worklessness,
some measure of poverty which will be controversial, something
around birth, differences between social classes or birth weight,
something to do with mortality, who dies young in terms of socio-economic
groups, a couple of others. Throw them out and say what is wrong
with those and go and debate those.
(Dr Kenway) That is the aim; you will judge it.
(Mr Palmer) We started out with 500 and worked
our way down to 50. We have actually issued a report which went
to a whole bunch of people on consultation (which in effect is
currently being consulted on) which is altering the statistics
we are using. I completely agree with the aspiration if it is
possible.
Ms Stuart: This goes
back to the earlier comment on housing costs before or after.
You said it does not matter which one you take. Start with a base
and say, "This is shifting. Why is it shifting?"
Chairman
61. Can I take a different view from Malcolm
on the particular question about eligibility and take up of benefits.
You said you were looking at vast numbers and you have distilled
them down to the ones you have put in your prototype. Is eligibility
and take up rates of benefit something that you think should be
a Benefits Agency or Next Steps target level rather than a fundamental
indicator?
(Ms Howarth) We had it in originally and it has
come out because it is not a fundamental indicator of low income,
partly because many people eligible for a benefit may be on a
very similar level of income as those taking up benefits. It would
be slightly misleading in a lot of ways to take that as an indicator.
That said, those sorts of figures and statistics on an issue like
the proportion of people eligible but not actually taking up benefits,
is material we would draw on in the narrative because that is
a really important part of the surrounding story but we decided
against it as a key indicator of poverty or social exclusion.
62. Finally, finally I asked you about international
models and you said we could be breaking new ground in this country
if we move in this direction. What about getting some movements
towards figures that are internationally useful by way of comparison?
What role would you see for Eurostat and OECD and organisations
like that because we often get arguments traded about what is
happening in other countries. Is there anything from this project
or piece of work that you think can be used to move in that direction?
Or is that taking things a wee bit too far to be meaningful?
(Ms Howarth) No I do not think so. I mentioned
earlier that Eurostat in the last five or six years have started
a European household panel survey. There are a lot of technical
problems with it at the moment and they are not releasing it.
There are real problems with getting it out there and making it
useful but it has great potential. One of the reasons is that
the statistical departments in the different countries have basically
boycotted different sections of it but they are now coming together
and co-ordinating. There is great potential in that area. Where
possible we will choose indicators that are internationally comparable
because it is one of the best benchmarks. We talked about history
as a benchmark but the other really important comparator is what
is happening over the water in Ireland or France and so on. I
forgot to mention Ireland earlier as an example of a country where
they have taken a commitment that was actually also made by the
United Kingdom government at the Copenhagen UN summit to monitor
progress on eradicating poverty and they have produced a national
anti-poverty strategy. Part of that is producing regular indicators
of progress and as such a regular report in this country would
be part of, if the Government chose to go down that line, an anti-poverty
strategy. It would be a useful monitoring tool for such a strategy.
Chairman: Well, can
I say thank you very much on behalf of the Committee. We are all
struggling. This is new territory and I am sure Edward's frustration
is mirrored in all of our minds trying to make sense of what the
Government is trying to do. I am sure, as you make clear in your
paper, it is the right thing to do if we can get it right. We
are at an early stage in the process. Your memorandum and your
evidence this morning have helped crystallise a lot of these thoughts
and we are very grateful to you not just for coming but for doing
a lot of good work in your own project. I declare the public session
closed.
2 The National Commission on Retirement Policy, The
21st Century Retirement Security Plan, May 19, 1998. Back
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