Select Committee on Social Security Minutes of Evidence

Examination of Witnesses (Questions 240 - 259)



  240. That would be ticked off as a success in the evaluation?
  (Mr Smith) Yes, in the overall evaluation, certainly a programme would be credited as an achievement. Or similarly, for disabled people, putting them in touch with community day centres, bearing in mind that quite a lot of the clients we are talking about here can be remarkably isolated in the community right now. So I see added value coming through these interviews in those other ways as well.

Mr Flight

  241. Could you give one or two very specific examples of the type of thing that you are looking to learn and evaluate from these various pilot schemes? So far it has all come across to me in rather broad terms.
  (Mr Smith) Speed and accuracy in payment of benefit, rate of movement into jobs, client satisfaction, cost effectiveness.

  242. Client satisfaction?
  (Mr Smith) They will be surveyed and compared with the control areas which do not have the ONE service approach.

Mr Healey

  243. When we started this inquiry, we had a very useful session with our advisers and your officials. What emerged from that was information about the projected client flows. It became clear that 70, 75 or 80 per cent of the flow of clients were likely to be Jobseekers, JSA claims. How would you support the observation that, in effect, we are perhaps just setting up an elaborate and expensive way of reaching Jobseeker Agreements and then enforcing them?
  (Ms Eagle) We are not. 30 per cent of this clientele are people who, in the past, have been put on a benefit and left. They have never been contacted again particularly. We are seeking to assist them. Often they are people who want to work and who might well be able to work if they were given support and assistance and a strategy for moving towards independence and employment. So that is a very big difference.

  244. So 30 per cent are non-JSA claimants?
  (Ms Eagle) Yes. I also think that we are looking at the way in which we can deliver access to the welfare system which, in the past, has been very static. It has been a question of the system moving you around for its convenience. We have all talked to constituents who have been sent from pillar to post, filling in very long forms. Having to give repeat information because the local authority housing benefit system does not share information with those who are applying for income support. Frustration levels rise. More mistakes are made. It takes a long time to come to an assessment of benefit entitlement. Once that entitlement in that snapshot is given, that is how it is left. It is then up to the individual to report changes of circumstances, but they are basically left. What we want to do is to have a much more helpful, proactive, individualised service for everybody. That includes JSA clients as well. They have the extra labour market conditions to put into effect and they have the Jobseeker's Agreement, but we want to be able to assess people for their benefit entitlements much more rapidly and much more accurately; really redirect the resources of the benefit system into being more pro-active and more dynamic in helping people deal with their situations, and hopefully move away from, they are either away from the labour market or closer to it. So it is totally a novel approach from the point of view of the systems we have had here. I think it will be more efficient if we can get it right; more accurate; and customers and clients will be happier with it. There will be more trust in the system. We hope we can deliver a better, more modernised service.
  (Mr Smith) You asked about whether those on Jobseekers Allowance will be eligible. We will expect value added over and above the present reality of the initial Jobseeker's Agreement and interviews. I was struck, when we met young unemployed people on the initiative called the Real Deal, when we were consulting young people themselves, how many of those who had gone to the New Deal said: "I wish I had had the quality of interview I had with my personal adviser when I very first became unemployed." Of course, that is what the ONE service aims to achieve. We will also be wanting to help people into jobs, where we can, before they enter the benefit system.

  245. May I pursue that because recently on New Deal, Andrew, you announced the development of a new diagnostic tool focusing on the individual, helping to assess their individual strengths and barriers to employment. What sort of diagnostic tool can we expect the ONE service to be using in this context?
  (Mr Smith) As part of exploring the barriers to employment, we would expect advisers to use a variety of diagnostic tools. I certainly would not rule out using the sort of approach which we are still developing within the New Deal, if that proves to be effective there.
  (Ms Eagle) Another one, which is often overlooked, is what we are calling the better-off calculation. We have made this neo-classical assumption in what is an increasingly complex benefit system: everybody a priori knows before they make a decision to take a part-time job that they will be better off or worse off if they do it. The system has never been geared up to giving them a calculation so that they can make a logical decision. What you find is that most people are quite pessimistic about whether they will be better off in work. They come to assume they never can be and they will lose their housing benefit. Actually, many people do not realise you can get housing benefit in work. Therefore, there is imperfect information out there—not surprisingly, I might add—about the benefit system and what the entitlements are. So one of the most important diagnostic tools that we are developing is this better-off calculation. Before somebody makes a decision—if there is a job, say, part-time in prospect—they will be able to sit there with their personal adviser and have a calculation as to whether they will be better off taking the job or worse off taking the job. Then they are in a much better situation to make a decision.

  246. From the logic of what you have both been saying, one might expect this type of service, the ONE service, to replace the New Deal.
  (Ms Eagle) No, it is at the front end of the system, whereas the New Deal is for people who have become disadvantaged since they have been out of the labour market for six months in a variety of sets of times, or if they are in a particular group of people. Everyone who applies for benefits will go through the ONE service to start with.

  247. With respect, there are groups of eligible clients within New Deal who are eligible from day one, and this front end that you are describing is rather like the front end of the New Deal: the personal adviser and the gateway programme.
  (Mr Smith) The best way of seeing it, as Angela has said, is that this is the front end. Clearly, the New Deals, to varying degrees, depending on the eligibility conditions, are sort of downstream of the gateway. For those who are eligible from day one, then we will need to integrate the two quite closely. It is certainly our aim over time to move towards closer integration of the New Deals and the ONE service. The obvious issue that arises is: do you maintain continuity of support from the same personal adviser? Other things being equal, it would be desirable to do so. You also have to take, in a commonsense way, account of the fact that people have specialist needs, where it may make more sense—either for part of their participation in the programme or even for their primary caseload—to pass them on to somebody else. These are the sorts of things we will be exploring as the ONE service develops. This does give us the opportunity of saying that it is very important to our getting this up and running satisfactorily from day one. This is such a powerful idea, the integration of this gateway, that there is a great temptation to say: can we add on this? Can we do this straight away? Can we integrate it with that? But the critical path analysis looks terrifying enough as it is without complicating it still further. It does not mean we cannot do these things—bringing on-stream diagnostic tools with the other New Deals—but we do have to proceed in a measured way with it, not least to avoid overloading both the ability of front-line staff to cope with the change and our managerial capacity related to performance.

Ms Buck

  248. Andrew, New Deal has generally been a striking success but, as you said, there is little correlation between the success of the New Deal and the issue around the wider labour market. What is apparent in areas like London is that there are very resistant pockets of high unemployment, which it has been very difficult to break into. Looking at your pilot areas I wonder, given that there is not a very high correlation between the selected pilot areas and deprived areas, particularly deprived inner cities, how can we be confident that we are learning about the complexities and difficulties which exist in those areas? Just a couple of examples which do not appear to have been picked up in the pilot areas: the issue, with one or two exceptions, of high ethnicity, particularly high varied ethnicity and issues such as homelessness, where across London we have 50,000 people who are homeless. However, if you look at your 50 local authorities in the pilot areas, I do not think that would hardly feature at all.
  (Mr Smith) If you look across the pilot areas you will see that they do replicate, in a pretty representative fashion, the varying conditions you would get in different parts of the country. They were certainly intended to do that. Certainly in parts of Lea Roding, which is sort of north east London and south west Essex; certainly parts of Clyde Coast and Renfrewshire; certainly Leeds; Calderdale and Kirklees; these are certainly areas within which you would find areas of acute deprivation, problems of homelessness, and relatively high concentrations of ethnic minorities. So we are assured by the statisticians that they are sufficiently representative for us to be able to draw reliable conclusions in a variety of circumstances.
  (Ms Eagle) On the issue of homelessness, we are liaising with the rough sleeping people who are doing all of that, to see how we can particularly cater for those who are homeless in the ONE service. By definition they move around and you cannot always capture them geographically. There are certainly particular issues to do with those who are homeless and how we might be able to pick them up and help them through these pilots.

  249. I am very pleased to hear you say that. It does concern me a little bit. There are 50 local authorities in the pilots and only nine of them would feature in the hundred most deprived local authorities. I certainly accept that there are deprived and complex areas within the list but it does cause me a little bit of concern. Obviously it is very pleasing that the homeless connection is being recognised, but if we can seek further assurance on issues like the particular range of needs of a multi-ethnic population and the issue of asylum seekers, which is very highly concentrated and has very, very specific needs. I think some of the figures that the pilots have been working on, they are drawing from the 1991 Census, but in areas of London in particular and in some of the other cities, there is this issue of the fundamentally changing population since 1991, so that there is a need to look very hard at the way changes have come about and, in particular, the measures which have been put in place to deal with them.
  (Mr Smith) I can give the assurance that we will be looking very carefully at those factors. I would expect that in north east London, in particular, within the boroughs we have covered, we would have sufficient numbers of clients from that background, (whether asylum seekers or whatever), to be able to draw some useful conclusions.

  250. Barking and Dagenham, for example, has the lowest ethnicity of any borough—it cannot be a London borough—but it has one of the lowest levels of ethnic community minorities.
  (Mr Smith) It has got Ilford and Walthamstow in it as well.

  251. It clearly does, but there is just a concern that if we draw too much from one area, when actually the range of needs is so very varied and complex—
  (Mr Smith) As I say, I can assure you that we will pay our best attention to it.[2]

Mr Brady

  252. The Minister talked about the efficiency of delivery of benefit and benefit outlay, and also the movement into work as being aims of the new scheme. One thing that concerned me was the comment that Angela made about the better-off test. Whilst it may be of assistance to some people, who are in a position where they could not afford to take work because they would lose benefits, are you concerned that this might actually institutionalise an unhelpful attitude that there is an equal choice to be made between benefits and work? Is it not the case that by saying: this is what you would get on benefits, this is what you can get in work; there may be a danger that you would deter people from taking that first step on the job ladder, which may lead to better prospects?
  (Ms Eagle) No, I think they are deterred now. They will be deterred often by thinking wrongly that they would be worse off if they were going to work. As I said earlier, there is an enormous (although not surprising) amount of confusion about what benefits are available in work and what benefits you can carry forward. Housing benefit is the classic example of that. You have to remember that people get very pessimistic when they are in this situation. If they establish themselves, even at a low level of income which is secure, they tend to cling on to that. What we are trying to do is to coax them out of that. One of the ways we will do that is to reassure them about the prospects of their being better off in work. That will come as a revelation to people who have made pessimistic assumptions about whether they could be better off in work. You have to combine that with some of these other policies in making work pay, particularly to the move to the Working Families Tax Credit and childcare issues which are available. It is a way of communicating that to people and actually motivating them to make what often feels like the step over a cliff edge. The personal adviser is there, I hope—and I hope we will find this—really to be able to assist them and manage them through that. I also think we need, as policy makers, to learn what some of the barriers are. The system is very complex. I know, for example, on housing benefit. You can get housing benefit for four weeks after you have gone into work to tide you over, but the way the rules are at the moment is that you have to know about that in advance and apply for it in eight days. We are looking to see whether we can make some of these payments more automatic. A personal adviser would ensure that an individual knew that they were entitled to that. It all helps to build up the push to say: "You can do this. You can make this move. You are going to be able to survive in the interim." The linking rule on the extension of two weeks of income support into work, which the Chancellor announced in the last Budget, is another example. We hope to learn from some of the feedback we get from our personal advisers what some of the benefit barriers are. We know what some of them are but there are very practical things that go on in that space—whether you think you can go into work or stay where you are, safe but on a lower level of income—which we do not fully understand. We want that to inform our policy making in a way which will redesign the benefit system so that it will create a more dynamic corridor through which people can go. That is what the aim of this is. I hope that some of the lessons we will learn from the pilot will illuminate some of these difficulties for us and help us to see how we can ease some of these barriers.

  253. So are you saying that at present there is an instance where the better-off test would lead to the conclusion that somebody would be better off not taking a job?
  (Ms Eagle) No, of course not. I am not saying that at all. What I am saying is that at the moment many people pessimistically assume, without any evidence, that they will be automatically worse off taking a part-time job. Also, they cling to what they know. I cannot blame them. I am not blaming them. They cling to what they know, which is a regular income. If they have their housing benefit paid for, for example, they know that they have a roof over their heads. It is very difficult if you are isolated. You are out of the labour market. That get-up-and-go has got up and gone quite a few years ago. What you have to try to do is to motivate people. There may well be some instances when a job comes along which does not pay what is needed. Therefore, the personal adviser can say: "We will see if we can find you something else or get you a training opportunity that might be able to enhance your earning power," or "Can we tide you over while you make further progress." We have to have these discussions because people make decisions without the information now and usually for pessimistic reasons.

  254. But you say that the personal adviser may say: "Can we find something else which will pay." Would it not also, in many cases, be appropriate for the personal adviser to say: "You may be worse off in the short term going into this job but it may still be the right option for you."
  (Ms Eagle) The personal adviser may well say that but we have to leave it up to the individual. We are not introducing compulsory jobs here. We have to leave it up to the individual to make a choice and have a discussion about what their options are, and perhaps have a strategy for improving their earnings potential in the future if it is not good now. It is a more dynamic process. We are not trying to be prescriptive. We are trying to give people information and help upon which they then can make their own way into employment.
  (Mr Smith) It is about shifting the culture of basically doing nothing to doing something. Now that "something" has to be assessed with the client in the light of their circumstances.

  255. The emphasis is on encouraging but not forcing them to take the job?
  (Mr Smith) The emphasis is on tackling the barriers to employment to taking jobs, yes, but also moving forward in other ways to create an independence. We must not forget that there is a delicate balance to be struck on how we project this and the balance between rights and responsibilities. This is because we have to remember, at the same time, that it is entirely right—and I have been strongly in favour of it for a long time—that there will be people having these interviews who do not have an immediate prospect of work: either because they have caring responsibilities, which it is generally accepted should take priority where they want them to; or because they have an illness, or some other physical condition, which makes work a remote possibility. Now, the projection of this has got to be sensitive to their needs as well, which is why I talk in general terms about movement towards greater independence and doing something depending on the circumstances.

Kali Mountford

  256. The answers we have heard—this is a truly exciting concept and I very much want to see that able to happen—but it will very much depend on how the integrated approach works. Andrew's answer to Derek's right at the beginning about the integrated co-operation (I think you called it, Andrew) between Departments, and also at local implementation team level and local authorities as well, is going to be crucial to delivery. One of the things that we found when we went to Calderdale and Kirklees was that although there is a huge willingness at implementation team level, there are some restrictions especially because job descriptions vary between Departments, let alone local authorities. Are we going to move towards a single (shall we say one) job description, one grading system, one pay structure, so that there can be a truly integrated ONE team?
  (Ms Eagle) This is an evolutionary process and I regard the pilots as pilots. They also give us a chance to see what the scope for evolution and integration is. I do not think we can wade in and impose a single job description and pay bands. We are getting three different organisations to work together in a way they have not done before. We have to learn to walk, even crawl, before we run. So we have always, as Andrew said earlier, this very exciting idea which generates enthusiasm, but we have to keep it in perspective at the beginning so that we can get it up and running and not just succumb to the temptation of throwing absolutely everything into it right at the start. There are certain prospects where we will be able to make some moves in that direction, but I would not sit here and say that we could achieve one integrated pay band, job description, etcetera, one management, straight away. That is not necessarily a bad thing.

  257. I am quite interested in that flexible answer, shall we say, a possibility for growth. Another problem that seems to be there at present—bearing in mind the pilots have not actually started yet and there is time for improvement—but, for example, Rita Petty from Kirklees Council said that their council had a "can do" culture, and that they sometimes felt frustrated when they went to Benefits Agency and Employment Service because they had accountability problems they had to deal with. While the implementation teams were very keen to be up and running, they sometimes felt there were perhaps managerial strictures further up the line. Are there steps along the way where that can be opened up? And might it, given your previous quite flexible answer, eventually mean that there would have to be a ONE team, perhaps separate and distinct in its own right?
  (Ms Eagle) I have not made any decisions really about the shape of that: how it might evolve and what it might look like at the very end of the process. We want to discover, first of all, how we can get more integrated working. We do not talk in terms of takeover. ES has not taken over BA. BA has not taken over ES. The local authorities are not being swamped by Next Steps Agencies. We have to try to create a co-operative "can do" dynamic space, where people can do what I think are going to be very rewarding new jobs. I have often been told by BA staff that this is what they joined the service to do: that is, some of the things we are talking about now. So there is a degree of enthusiasm but I think it is up to us to temper it, so that we can direct it in a way which will deliver our services, and then see what the possibilities are for the future.

Judy Mallaber

  258. You talk, rightly, about learning lessons from the pilots. It may be that because you are in your Government Departments, that you are missing out on learning some of the lessons which are already there from some of the innovative work which has been done by local authorities, in developing and integrating One Stop Shop systems across a range of council and other services. I am quite surprised that you are only looking to the private and voluntary sector. That seems to be your main emphasis in looking at new innovations. Is there any reason why there was not a variant to allow local authorities, in the light of that experience, to show what they can do in terms of integrating services and benefits? Alternatively, was there any particular reason why they could not have put in their own tenders for the private and voluntary variants, because that could possibly have built on the experience that some of them had been able to develop themselves in precisely this area of integration?
  (Mr Smith) First of all, we recognise the high level of work which many local authorities have done, as far as One Stop Shops are concerned. We took the view that local authorities should be an integral part of this anyway and represented at different levels of the project from the national team to the local teams. Each area should have a full opportunity to be involved, obviously starting from where the particular contribution they bring to the ONE service on the council and housing tax benefit is concerned, but also contributing more generally. From day one of the pilot, some of the premises used will be local authority premises. Some of the staff will be local authority staff. As Angela said earlier, we have also built into the way in which this is being developed the opportunity to phase in greater local authority involvement. This was something which a number of local authorities, as they were consulted in each of the pilot areas, actually said to us: that they were all behind it, they were really keen to be involved, but they might need to work to a slightly longer timescale than the ones we were working to in June and November. So rather than saying: "You have got to be totally involved in June or in November," we said: "Your involvement can be stepped up over time." Yes, we do have to spend time in our ministerial offices but we have also, both of us, been visiting each of the pilots and holding meetings at local level with local authorities as well as with staff, with trade unions, and, of course, with the general public and interest groups involved. We are garnering ideas from that process all the time.
  (Ms Eagle) Could I say also we visited the One Stop Shops and some of the more famous local authority ones—the Leeds one is an obvious example—and there is a particularly fine one in Wirral in my own local authority. We have despatched officials off to see the best practice in some of these as well. We are quite open about the fact that some of the pioneering work for this has been done at local authority level. I hope we are reflecting some of the experiences they have had in our planning requirements.

  259. Are you monitoring if there is any potential impact, in terms of cutting across some of those areas, which are already integration-led by local authorities, sometimes in different areas which will include welfare services? Are you monitoring whether there are going to be any implications in terms of the integration which is present and, indeed, how they might be brought together at some stage in the future?
  (Ms Eagle) We would expect them to point this out if they had a particular problem in the pilot areas. We have talked extensively to all and are in regular touch and so far we have not had a problem in this area flagged up. I think you will find that a lot of the One-stop shop services local authorities do at the moment do not actually involve housing benefit, they are about other council services and they do not stray at the moment directly off and into that particular area which is the area of overlap with the ONE service.
  (Mr Smith) I would say more generally in relation to welfare rights' advice, citizens advice bureaux, employment centres and so on, that we see this as another part of the shift in culture, if you like, the way in which the ONE service will relate to these bodies. We have been stressing in the local consultation and in the communication of what the ONE service is about that we want the network of these bodies locally to be involved so that they have got the opportunity to feed in ideas but also so that there is a better working relationship than sometimes in some areas existed in the past between agencies and those groups. There will always be an important role for the independent representation of clients but it can make things so much easier if the person in the citizens advice bureau or the welfare benefits advice bureau knows that they can just pick up the phone and talk to a personal adviser and help get things sorted out. We see that as an important part of the shift in culture as well.

2   See Ev. p.118. Back

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