Fifth Standing Committee on Delegated Legislation
Wednesday 8 November 2000
[Mrs Irene Adams in the Chair]
Draft Jobseeker's Allowance (Joint Claims: Consequential Amendments) Regulations 2000
The Minister for Employment, Welfare to Work and Equal Opportunities (Ms Tessa Jowell): I beg to move,
That the Committee has considered the draft Jobseeker's Allowance (Joint Claims: Consequential Amendments) Regulations 2000.
The Chairman: With this it will be convenient to consider the draft Social Security (New Deal Pilot) Regulations 2000.
Ms Jowell: I welcome you to the Chair, Mrs. Adams, and thank you and the hon. Member for Altrincham and Sale, West (Mr. Brady) for agreeing to take the two sets of regulations together. Our purpose today is to seek approval for them.
The regulations covering the new deal powers are almost identical to the regulations that we debated almost a year ago. The two programmes covered by the regulations clearly illustrate our commitment to tackling welfare dependency and to helping people to move into work. We already have record employment with more people in work than ever before. More than 1 million more people are in work compared with May 1997, when we were elected, and unemployment is at its lowest for more than 20 years. The new deals have helped almost 400,000 people into work, but too many people have been out of work for too long. We need to re-engage those for whom long-term unemployment has been a fact of life, because the labour market needs more people to fill the vacancies that our economic growth is providing, enabling enable them and their communities to share in our national prosperity. Unemployed people, wherever they live, have differing needs and need individually tailored help.
I turn to the background of the new deal 25-plus pilots, to which the first set of regulations relates. For two years they have been part of our efforts to tackle long-term unemployment and to help people who have been claiming jobseeker's allowance for a long time to get back into work. They have been operating in 28 areas since November 1998 and two time scales are being tested in relation to entry: some allow entry at 12 months and some at 18 months, but the majority allow entry at 18 months. More than 80 per cent. of unemployed people who have been in contact with the pilots are men; many are over 50 and face a variety of barriers to work, including lack of recent work experience, lack of relevant skills and, for those who have been out of work for a long time, low self-esteem and lack of confidence, which can be the biggest barrier to getting back into work. The pilots provide individually tailored, intensive help which identifies the obstacles to work and then addresses them whenever possible.
We have learned a lot since the new deal pilots have been operating. They have confirmed that the new deal model of a gateway and a period of intensive full-time help works. More than 16,000 people have already been helped back into work. Independent research by the National Institute of Economic and Social Research has shown that a direct result of the new deal for young people has been that unemployment is lower and employment is higher. The research also suggests that the programme substantially pays for itself.
The results of the pilots for people over 25 are also encouraging. Independent research found early pilot effects of higher numbers of people moving out of unemployment into jobs. That confirms our analysis, which suggests that the proportion of people leaving for work is 50 per cent. higher in respect of the pilots targeted at people who have been unemployed for 18 months or more than it is in areas where the intensive level of help does not exist.
On the basis of that evidence that the approach works, and of the lessons that we learned from the pilots, we have announced our intention to enhance and intensify the help that is available for unemployed people over 25. That will be introduced across the country with effect from April next year.
The new programme is designed to reflect the lessons that we learned from the pilots. We are retaining flexibility, ensuring that a range of help is always available and investing more in advisers to enable them to provide continued support. In my discussions about unemployment with the people who run the pilots, two phrases tend to recurintensity of help and flexibility of support.
The regulations renew the existing pilot powers, which, under the provisions of the Jobseekers Act 1995, can be in force for only 12 months at a time. They enable the pilots to continue to take people in until the end of March 2001, after which time the new national programme will be introduced. They also prescribe the categories of people who will be required to participate in new deal pilots and the impact on their benefit of not participating, and ensure that payments that they may receive as part of the pilot, including self-employed earnings, will not affect their benefit. The only substantive change to the regulations since we debated them last year is that they now define the date on which the last participant will join. Technical changes reflect the introduction of joint claims and the fact that some people will be entering the pilots for a second time.
The second set of regulations relates to the partners of jobseeker's allowance claimantsthe other side of the coin to tackling long-term unemployment. Ninety per cent. of partners are women regarded as dependent on the JSA claiman outdated view of modern relationships, given that 72 per cent. of women are now economically active. Until the introduction of the new deal for partners of unemployed people in April 1999, no specific help was available to those women. Consequently, families were locked in poverty, when we could have been helping the partner at the same time as the claimantand their 3 million workless households. Furthermore, we could have been expanding the labour supply by offering partners assistance in obtaining jobs. That is why the new deal for partners of unemployed people is important.
Let me give a brief word on progress so far. Last year, 230,000 partners were eligible for the new deal, and this year we estimate that 150,000 will be eligible. This is a voluntary new deal, and, as such, the numbers of participants are often low. It can be difficult to persuade people who are cut off and socially disadvantaged and have, in many cases, become dependent on the security of benefits to take the first steps to re-enter the world of work.
Since the programme was introduced, more than 10,500 partners have arranged an appointment with a personal adviser. More than 3,500 have attended an interview, of whom 2,700 have taken further steps through the range of options of help provided to improve their job prospects. Of those, 576 have got a job. Those are low figures, because these are early days, but we are confident that in time they will pick up.
Joint claims for jobseeker's allowance will affect a small proportion of partners. Provisions for such claims are contained in the Welfare Reform and Pensions Act 1999. The House had the opportunity to debate those provisions during the passage of that Bill, and they remained unopposed. Couples without dependent children who wish to claim JSA will have to make a claim for a joint claim from 19 March 2001. That will apply where one or both members of the couple were born after 19 March 1976. Each will be required to meet JSA conditions and will be required to be available for, and actively seeking, work. About 10,000 partners of existing JSA claimants will be brought on to a joint claim on 19 March 2001. The regulations aim to ensure that joint claimants for the jobseeker's allowance will be treated, as far as possible, in the same way as single claimants.
The changes introduced by the Jobseeker's Allowance (Joint Claims: Consequential Amendments) Regulations 2000 will give joint claimants the same favourable rights as single claimants regarding the labour market conditions for receiving jobseeker's allowance. They provide that joint claimants are treated as available for and actively seeking employment for the short periods of temporary absence from Great Britain described. If the regulations were not approved, we would be penalising joint claimants. The regulations, if approved, would come into force on 19 March 2001 when joint claims for the jobseeker's allowance are introduced.
I hope that that brief explanation has helped the Committee to understand the purpose of the regulations and the context in which they are set. They underpin important elements of our ambitious and innovative welfare-to-work programme, which is already delivering success and opportunity for unemployed people up and down the country.
Mr. Graham Brady (Altrincham and Sale, West): Thank you, Mrs. Adams. I join the Minister in welcoming you to the Chair.
I thank the Minister for her introductory remarks, but I know that she would be disappointed if I did not wish to draw a little more information from her. I shall deal first with the second measure to which the Minister referredthe Jobseeker's Allowance (Joint Claims: Consequential Amendments) Regulations 2000. I have very few questions relating to those regulations, but I would like the Minister to put a little more flesh on the bones.
The purpose of the regulations is to bring joint claimants into line with the position facing single claimants, which seems a perfectly sensible adjustment to make. The measure will also amend regulations 14 and 19 of the Jobseeker's Allowance Regulations 1996, which would allow absence from Great Britain for periods of up to four weeks in a number of different circumstances. I should like the Minister to provide more detail on that matter.
It seems fairly straightforward that if a person was attending an interview and was, therefore, by definition, seeking employment, that would constitute reasonable grounds for absence from Great Britain. That seems self-explanatory. The other grounds on which absence is acceptable appear to focus on a combination of circumstances in which the partner is both a specified pensioner and is in receipt of specified disability premiums. My reading of the regulations is that both those conditions would need to be met for the exemption to apply. Perhaps the Minister will confirm that that is correct.
I presume that the underlying logic is that the claimant might be the carer of a disabled pensioner partner. Again, that seems perfectly reasonable. However, I must ask the Minister why the person needs to be both a disabled partner and a pensioner partner. If the grounds for the exemption are the need to care for a disabled partner, that should surely apply not just if the person is also in receipt of specified pension benefits.
Why is Northern Ireland treated differently for these purposes? There may be a purely technical explanation, but I would be interested to hear it.
I have more questions about the new deal pilot regulations, because that is a more substantial policy matter. I apologise, Mrs. Adams, for the fact that my voice is under a little strain; I assure the Minister and members of the Committee that it will hold up. The new deal pilot regulations seek, as the Minister said, to replace earlier pilot schemes: the Social Security (New Deal Pilot) Regulations 1999, which were themselves amended by the Social Security (Approved Work) Regulations 2000. Those two together replaced the Social Security (New Deal Pilot) Regulations 1998. There is nothing exceptional in that.
As the Government are seeking to roll forward the provisions relating to the new deal pilots, it seems reasonable to ask for a little more detail on the performance of the pilot schemes, the lessons that the Government are learning from them and how the Government's policies and responses are being shaped as they try to roll forward the pilot project.
Three categories are covered by the pilot schemes:
any person who...is aged 25 or over...and has been receiving benefit for a period of not less than 12 months...any person who...is aged 25 or over...and has been receiving benefit for a period of not less than 18 months,
and anyone aged 25 or over who
volunteers to attend a gateway interview,
according to areas specified in schedule 3. It would be helpful if the Minister would add a little detail to what she has already said about the experience of earlier aspects of the pilot schemes. What data arose from evaluation of the pilots' performance in relation to those three different target groups? What lessons can we learn about the appropriateness of the way in which the groups are defined? Why are they divided, for example, into 12-month and 18-month categories? Indeed, are there different experiences relating to those areas, which are treated in various ways, particularly in schedule 3?
What are the different experiences of various types of target area? Rural and urban areas that are represented in the pilot schemes are set out in the schedules. What is the relative performance of regions such as the north and the south? How do affluent areas perform against the more deprived areas? What lessons does the Minister draw from that evaluation? Should we conclude that a uniform provision would be inappropriate? In the light of experience of the new deal pilot for over-25s, does the Minister think that picking areas for particular treatment is the proper approach for employment projects that might inform other areas of Government policy?
There are certain oddities in respect of the distribution of the various jobcentres chosen for the pilot schemes, suggesting a degree of randomness. For example, in schedule 1 west Wales is represented by 12 jobcentres, but the west midlands by only two. Why does the north-west of England not feature at all in schedule 2?
I turn to sanctions and the Government's efforts to ensure that people cannot refuse to participate in such employment schemes. That issue is particularly important in respect of these regulations and the Government's whole approach to the new deal. The Government have been keen to deploy tough rhetoric about people's compulsion to participate in the new deal. On 2 July 1997, the Secretary of State for Education and Employment memorably stated:
Staying at home and doing nothing is not an option.
On 5 January 1998, the Chancellor of the Exchequer said that
from today there will be no option of simply staying at home on full benefit doing nothing.
In June 1999, the Secretary of State endorsed those words. He said:
We are determined to make it clear that under New Deal there is no fifth option.
However, in the experience of hon. Members and people throughout the country, the Government's efforts to sanction those who do not participate properly in new deal schemes fall somewhat short of their tough rhetoric. Indeed, on Monday the Minister kindly confirmed in a written answer that no sanctions had been applied to anybody under the national new deal for 25-plus or 50-plus. As she said, to do so would not be appropriate because the schemes are voluntary.
It is argued that the application of sanctions is central to the success of the new deal, and having studied the way that these programmes operate in other countries, I certainly believe that the compulsion element is possibly the most significant part of the schemes. If the schemes bring people off welfare, it is due as least as much to the threat hanging over people that their benefits will be withdrawn as to the other elements. That would certainly seem to be the US experience.
Do the Government believe that there should be no fifth option? If so, when will the sanctions be extended beyond these pilots? If the tough approach in terms of sanctions is so important and so appropriate in the areas that have been set out for the new deal pilot regulations, surely they would also bring benefits in terms of the national new deal for 25-plus and also, possibly, for 50-plus. This is a threat of the withdrawal of benefits not from someone who fails to get a job, but from someone who refuses to participate in the schemes offered to him or her or who does not take up available options.
Why do the Government choose to set the sanctions and the levels at which they operate? Section 19 of the Jobseekers Act 1995 sets out provisions allowing for the withdrawal of benefits for periods of between one week and 26 weeks in certain circumstances such as where a person has refused to take work, training or employment training, where a person has refused or neglected to apply for a vacancy that has been notified to him, or where a person has lost his position through misconduct or has left voluntarily.
Under regulation 6 of the regulations the sanction is clearly limited to a much lower level. It is fixed at a two-week suspension of benefits in ordinary circumstances, or four weeks where the previous breach of the regulations happened within a 12-month period. There is a four-week withdrawal of benefits for repeat offenders, although that is perhaps not the appropriate term; that does not quite tally with the tough rhetoric deployed by Ministers.
There is no fifth option; it is no longer an option to sit at home in receipt of benefits. There is a temporary withdrawal of benefits in some cases. In some instances it is a short withdrawal. Sometimes it goes as high as four weeks, but only where there is a history of not accepting offers of employment or assistance through the new deal. It is not as tough as Ministers seem to suggest.
Even in this rather lenient framework of sanctions, a catch-all exemption is applied to those who have been in the new deal before. Again, I find it difficult to understand the underlying logic. Regulation 9 sets out not good causes for failure to comply with the regulations and the terms of offers that are made to unemployed people, but rather what I could categorise as implied good causes. There may be reasons why an individual cannot fulfil new deal pilot requirements, but why extend those good reasons to an implied good reason for not complying? It seems odd that the assumption that there is good cause should be applied to anybody who has previously completed a 13-week intensive activity period. Surely if his participation failed to achieve the desired results, when he is called upon to participate again in the new deal, it would be reasonable to expect him to comply and to do his best to find his way into work, making use of whatever assistance is available.
I would welcome more explanation from the Minister about the effectiveness of the sanctions applied to those in the new deal. The figures may be slightly out of date, but according to the briefing notes originally supplied by the Department to the Social Security Committee, the Government states that 60,000 people had joined the 25-plus pilots by the end of April 2000. I learned from the Minister's reply to my written question on Monday that 2,222 people were subjected to sanctions for some form of non-compliance with the 25-plus pilots by June 2000. The vast majority of those people, some 1,750, were penalised for a failure to attend. How many of those people are already engaged, formally or informally, in employment while claiming benefits? If sanctions have been a success, why not extend them to the national new deal for 25-plus?
Regulation 10 of the new deal pilot regulations deals with the payment of allowance and provides exemptions to the penalties. Paragraph (1) provides for an income-based jobseeker's allowance to be payable to an individual if he loses his place on an intensive activity programme owing to misconduct. If the Government are serious about penalising those who do not seriously wish to engage with the new deal to get back into work, why provide that let-out clause for those who cannot complete the programme because of their own misconduct? That seems illogical and inconsistent with the Government's message that they wish to be tough in such areas. Again, the assumption is that if a person has already participated in a period of intensive activity for 13 weeks, he or she has gained an exemption from the normal strictures that would apply if that were not the case.
On a slightly softer notewhich may surprise the MinisterI wonder what the logic is under regulation 5 of including volunteers in the sanctions regime. Surely those who have volunteered to participate are the one category of people about whom a case for exclusion should be made. Is there any evidence that the practice of applying sanctions to those who enter the new deal pilots voluntarily discourages volunteering, or does it ensure that only determined jobseekers volunteer, which may in itself skew the pilot performance statistics? The figures on the performance of the three different categories of people participating in the pilots should be broken down so that we have a better idea of the percentage success rate, for example of those who have chosen to go into the new deal pilot in the schedule 3 areas and those required to go in under one of the other options.
Regulation 8 sets out terms relating to the availability for employment. It is implied that an individual should be treated as being available for work if he or she is on an employment-related course, as part of the intensive activity period, for no less than three days a week. I would welcome an explanation from the Minister. It is reasonable to expect that intensive activity should amount to at least three days a weekone would hope that it would amount to more than that. However, it is less easy to understand why any one element of that intensive activity must carry on for a minimum of three days a week. Why should a shorter course of work-related study not be a valid component of the intensive activity period? Both sidesnot just my ownhave criticised the new deal for being unduly prescriptive and containing a degree of inflexibility. That may be another instance of an unnecessary restriction that might constrain the provision of helpful and appropriate services.
After evaluating the performance of the new deal pilots over two years, the Minister must have a significant amount of evidence at her fingertips that would tell us something about its performance over that period. The Minister knows that I have a long-standing interest in some aspects of the evaluation of the new deal. I have always been interested in the question of how the Government can evaluate the dead-weight elementin other words, the number of people who would have been expected to find work without the intervention of the new deal. What assessment has the Minister made of the dead weight in respect of the new deal pilots?
On several occasions, the Minister and I have discussed another interesting calculation, although she does not think it as valid as I do. We should try to arrive at some idea of what the cost is per job found under the various new deal schemes and options. The Minister has some more up-to-date figures than the ones on which I have based my argument. I understand that, by April 2000, 60,000 people had been through the new deal 25-plus pilots; I presume that the figure is now higher. By April 2000, some 12,000 had gone into unsubsidised work that had been sustained for at least 13 weeks. The analysis done by the Department for Education and Employment suggested that the rate of people going into jobs in the pilot areas was approximately 50 per cent. higher than in the control areas. That suggests that the jobs found directly as result of the new deal pilots would not be 12,000, but 4,000. The Minister has told us that 16,000 people have now gone into unsubsidised work that was sustained for 13 weeks or longer, so the figures that I have given would be slightly different. On that basis, a little more than 5,000 of those jobs would be directly attributable to the new deal pilots.
When we have the figure, which I hope the Minister will give us, for the amount of money spent to date on the 25-plus new deal pilots, we will be able to divide it by about 5,500 to find the up-to-date cost per job found. Working with the old figuresthe ones that I haveproduces an interesting sum. The Minister will say that not all of the £129 million that was committed to the scheme has been spent; however, if we divide that sum by the 4,000 extra people who have found work we arrive at a cost per job found of £32,250. The Minister is laughing, and I am sure that she will be able to find a slightly more modest figure by giving the amount spent to date. It will then be simple for us to calculate the cost of the scheme.
This is a relatively small part of a wide-ranging set of proposals and schemes under the new deal. I have always taken the view that some schemes render genuine and valuable assistance to people who need help to get back into work, but I have always been sceptical about the amount of money that is spent and the way in which it is spent. The National Audit Office is studying the value for money being delivered by the new deal and we need the figures if hon. Members are to carry out our duty to scrutinise the proper use of public funds and if the National audit Office is to pursue its functions. I look forward to the Minister's reply and thank the Committee for its patience.