Examination of witness (Questions 20-39)
WEDNESDAY 2 MAY 2001
RT HON
MR ALISTAIR
DARLING
20. The departmental report refers to the intention
to launch this new agency later in this year, 2001, does it not?
(Mr Darling) That is right. As I said, the Jobcentre
Plus will start from October, there will be 50 offices, we said
we would launch it then, that remains the case. It is on target,
we have identified the sites, the House was told where the sites
are, I think local Members are actually told where the sites are;
we are on target, the managers are about to be appointed, the
staff will be there and it will be open in October, exactly what
we said. The Pensions Service is being developed at the same time.
But at some point the Jobcentre Plus and the Pensions Service
will take over the work of BA and ES. That has to be done in a
way that is satisfactory to the staff and also in accounting terms,
remember, we have to account for the money that we spend, it is
not something that you do on a Wednesday in the middle of the
week, you have to make the arrangements to do that. So the work
is well in hand, and what I am saying to you is I hope to make
a formal announcement on the date, not the decade, the date, on
which these things happen. So we are well on track, and you need
have no worries about it.
21. Thank you. Can we move on. As far as the
question of local outlets is concerned, can you give us an idea
of what these will look like, not literally what they will look
like, in terms of the building, but where will they be housed,
what will a pensioner need to do to get in contact with this new
Service, how are you going to cater for pensioners with limited
mobility, those without access to a telephone, etc?
(Mr Darling) Remember that the vast majority of pensioners
do not get in touch with the DSS at all, they get their pensions
and that is about it. There are some who need to, some who want
to, and what we want to do is make sure that we can cater for
all those groups of people. Firstly, remember, at the moment,
a lot of the pension work is done centrally, the processing of
the state pension, for example, and so on, and a lot of that work
is done in Newcastle, for example. And I said in the past, and
I repeat today, that the intention is that a lot of the processing
work will be centralised on a small number of sites around the
country, this is the backroom stuff that the public never see,
the actual calculations, and so on. However, equally I have made
it clear that we do need, around the country, places where pensioners
can either go to or get in touch with for advice or for whatever
help is appropriate. Also I have made it clear that most pensioners,
I believe, do not want to go into your typical Benefits Agency
office.
22. So you will not be using those offices,
those old offices?
(Mr Darling) No. What we want to do is to look more
at how we can provide services in places where pensioners might
want to go, like a library, or like an Age Concern office, or
something like that.
23. Will they be pretty localised, rather than
regionalised?
(Mr Darling) I think we have to make sure that there
are sufficient round the country so access is realistic. It really
depends; and if you take, for example, the Western Isles of Scotland,
there is at the moment one office, in Stornoway, which covers
an area that stretches a hundred miles south of it. I do not know
about changing, in the sense that you could not possibly have
an office in every small village, or, in Archie's constituency,
in every town and village in the Borders of Scotland. So there
will be a spread. But bear in mind that, increasingly, pensioners
want to deal either in writing or over the 'phone, and an awful
lot of people are taking advantage of the 'phone lines that we
now operate, on Minimum Income Guarantee, for example, and if
you are on the 'phone it really does not matter to you where the
person is picking up the 'phone, what is more important is can
you answer the question they have got. But I do think that there
does need to be a presence round about the country, a local presence,
if you like, and it has to be one that is satisfactory; so that
is one of the things that we are looking at, at the moment, as
to where they ought to be. Also I should say, in case either one
of us is sitting round this table in the future and come back
to this point, that I do not anticipate that on such and such
a day there is going to be a big bang, where all our staff are
moved out of BA offices and go somewhere else, it will take time
to migrate from them, and there may be some BA offices which are
taken over by the Pensions Service rather than Jobcentre Plus
because it is simply convenient to do that. But I think what we
need to do is to make sure that we have a far better service at
the moment so we can offer a range of options for people, because
I say to you most pensioners, the vast majority of them, either
do not get in touch, other than at the point that they retire,
or they choose to do it by writing or by `phone, they do not actually
need or want to go into an office, but that facility has to be
available at an appropriate level in different parts of the country.
Mr Thomas: Thank you very much.
Chairman
24. I have been limited to three questions on
this subject by my colleagues, on Information Technology, because
I think it is so important, and I always have done. I have to
say, I was delighted that, at last, in the Spending Review last
year, the Department actually got some capital spend over the
next three years to make some inroads into this. Maybe you could
tell us just a wee bit about what you are hoping to achieve with
that? I think, for the first time in 15 years, as far as I am
concerned, Government has actually, realistically faced up to
the needs for IT requirements within the Department. Just tell
us a little bit about what the plan is and how you propose to
roll that out, and whether the system will be eventually an integrated
system or whether it is going to be into the client group divisions?
(Mr Darling) You are right that it needed to be replaced;
indeed, the Department now has no choice but to replace it because
some of it is getting so old that you cannot get the spare parts
for it. Our objective is to make sure that we have an IT system
that services the various client groups, for example, we will
need a computer system to deliver the Pension Credit, to deliver
the Integrated Child Credit. But also there is a lot of information
that the Government holds that is common to not just DSS functions,
if you like, but also some Inland Revenue and other parts of Government
as well; so we want to have them integrated so you avoid a situation
that you tell one arm of Government one thing and the other arms
just do not know anything about it. Clearly, for that to happen
completely is going to take some time. But it might be helpful
if I were to tell the Committee how we are approaching replacing
the system. The CSA computer systems are being replaced at the
moment, they will be delivered towards the end of this year and
there will follow a trialling period and they will be ready for
April of next year, when the new Child Support system comes in;
we could operate it off the existing system, but it will be better
to operate it on the new system. We are also going to be replacing
the Income Support and JSA systems, which, as I say, are almost
the spine of the Department at the moment, it is the biggest set
of benefits, and they need replacing, but they need to be replaced
in such a way that they do two separate things. The pensioner
benefits, if you like, the Minimum Income Guarantee and the Pension
Credit will look very different from the working age benefits,
so they will have a separate system for that, and then you will
need new systems to support JSA.
25. But will they be able to access each other?
(Mr Darling) Yes; because the information, if you
take Income Support, for example, Income Support holds information
that is relevant for children, for people of working age and for
pensioners, so, yes, there has to be an ability to read across.
And, indeed, the CSA stuff that I referred to, that computer system,
the platform there will allow a read-across into other parts of
the benefits system as well; because it is not completely insulated,
you do need Income Support information.
26. So we are no longer talking about chimneys,
we have got a platform that is common?
(Mr Darling) Yes. Basically, the system will be organised
around the new client groups, but it will be able to exchange
information and to read across between those client groups, where
that is appropriate. For example, if you take a pensioner who
is on the Minimum Income Guarantee then, clearly, information
held there may be relevant, for various reasons, to somebody in
the working age and possibly in the children as well; so there
does need to be that read-across. So what will happen is that
the CSA stuff is on course, the Early Office infrastructure, that
is the front-end stuff, is being delivered from July, over the
next year after that, the Income Support and JSA will be replaced
over the next two to three years. We also need to introduce the
new IT to support the Pension Credit as well, which will be coming
in, and the Integrated Child Credit. Now all that work is being
developed at the moment. And then in the succeeding years we will
steadily replace the rest of the systems. So it is one of the
biggest replacement systems anywhere, it is certainly the biggest
in Europe, it is possibly one of the biggest and it is probably
bigger than most systems in America as well, because it is so
comprehensive and it is so large.
27. Did I pick you up to say that in the shorter
term we are starting the roll-out of the new, high-spec. personal
computers to each member of staff in July this year?
(Mr Darling) Yes.
28. Did I understand you to say that you hope
to complete that within a year?
(Mr Darling) Yes; well, it will be just over a year
it will take to retire it.
29. So that all working members of staff will
have reasonably high-spec., industry-standard machines within
12 months?
(Mr Darling) They will have access to them, in the
office where they work. Remember, they are not all in front of
a screen all of the time, but they will have access to them, so
you will get away from the situation you have got at the moment,
where one member of staff might have to access at least three
different systems in order to find out information about one customer,
and wade their way through manuals that are several inches thick
to understand what they are trying to do, and sometimes be advised
how to work, despite what the computer is telling them. That is
what is being replaced.
30. And does that take you on to 2004? The Comprehensive
Spending Review of last June/July was for a three-year period,
it takes you to 2004; is there a plan that goes beyond that to
2006?
(Mr Darling) Yes, because we could not replace everything
in three years, there is just too much of it. I will try not to
make too many overt party political points, especially as the
Conservatives do not appear to be here today to defend themselves,
but what we would have liked to see would have been a Government
that replaced the IT system as and when it needed to, over the
years, but what has happened is that the investment stopped, I
think the CSA was the last big investment, and nothing happened.
So we have now got this huge amount of IT that needs to be replaced.
Now, obviously, I have got money to start that process; in the
future, I would like to think that it gets replaced on a sensible
programme. But I am in a situation where I have got to replace
the entire IT system, it is impossible to do that in four years,
just in capacity terms, it just is not possible. I have got money
in the current Spending Review; clearly, that will take us a long
way, because the Income Support and JSA system clearly is pretty
critical to the whole thing. But we have got to work our way right
the way through to the end of it all, so that will stretch on
for four or five years beyond that.
31. Thank you for that. My final question is,
with the experience of the National Insurance recording system,
and all of that, this is a huge project, it is right that you
are doing it and very welcome that you are making the progress
you are, but are we learning the lessons of the big IT projects
that have gone wrong in the past, there have been others, in other
Government Departments, or are you using risk assessment and taking
all the precautions that you can to make sure that when it is
in place it actually works?
(Mr Darling) Yes, we are. One of the big lessons from
the National Insurance recording system was that you need to be
very clear at the start what it is you actually want; now you
may think that is an obvious thing to be sure about, but it was
not. So with the benefit payment card, part of the problem there
was it was not at all clear that the then Government knew what
it wanted, it started with a speech and then went out of control
thereafter. If you take the CSA, for example, what we did was
to break down the replacement programme into manageable chunks.
CSA will be connected up to the rest of the system, but we dealt
with that separately, because it also enabled us to focus down
on some of the big problems that you need to resolve, and we spent
longer than some people wanted us to spend getting it right; but,
having got it right, each milestone is being reached, we are able
to deliver the thing, I am pretty confident that it will be there
when it is needed next year. Similarly with the projects we are
doing at the moment, Early Office infrastructure, that is the
front end, that is a separate contract, that is separately procured,
of course it will match up to the back end but it is being done,
again, in a manageable chunk. I think where things have gone wrong
in the past is, there was some sort of idea that somehow you could
go down to PC World and say, "Please can we have an IT system
that services the DSS," well that just is not possible. So
we are learning, we have got the outside validation, which we
are doing increasingly, in the big projects we are doing, it is
being looked at by people outside, in Government and external
advisers, and so on, and we are doing the best we can to make
sure that we deliver something on time, and crucially something
that actually works. And, certainly, the contracts we are entering
into are structured with what ought to be the obvious feature,
and that is we pay when they start to work, rather than we pay
and then we have a long discussion as to what it was meant to
do.
Mrs Humble: A question about what are you going
to do with all the computers that you are chucking out? I ask
because I was actually approached by the people—
Ms Buck: I am one of them.
Mrs Humble
32. Well, seriously, I have been approached
by some of the staff who work at Norcross, who said, as a result
of the Early Office infrastructure, huge numbers of computers
are going to be replaced, and they know and I know of a couple
of schemes locally where businesses give computers to be reconditioned
and then are either loaned out or sold at a substantial discount
to poor families in the area. I did point out to these members
of staff that, from my knowledge of these computers, nobody would
want them, and I did not think that they could be reconditioned,
but they did say that one or two of them may be able to be. I
honestly do not know, and I do not expect you to give me an immediate
answer now, but perhaps within all of this IT improvement there
might be some scope for some of the machines that you currently
have to be put into a system like the reconditioning schemes,
we have got one in Fleetwood and one down in Blackpool, and they
could be passed on? I will leave that with you, Alistair, that
it was raised with me.
(Mr Darling) I will reflect on that. I dare say there
are rules laid down as to what can happen with these things, but,
as you were acknowledging just a moment ago, some of the stuff
is completely clapped out, and, indeed, children would have to
be sent on a training course to learn some of the stuff that is
now obsolete and long gone. But if we can find a good home for
these things then clearly we will do that; but, as I say, there
are many people who would not thank you for it.
Chairman
33. It would be a good idea to take the information
off the hard drive first as well?
(Mr Darling) Yes, we would need to be satisfied that
we were not handing over that; but the things that we are talking
about at the moment are the free-standing PCs that sit on your
desk. As people will know, I am not the most up-to-date on all
this technology, but basically it is the television sets that
sit on your desk that we are getting rid of first.
Mrs Humble: Neither am I, which is why I rely
upon other people, and I did say that I did not think that any
of these would be of any use, especially to young people now at
school, who do have access to some very high-quality equipment.
But I have raised the issue, and thank you for allowing me to
do so.
Ms Buck
34. If you have got any spare sofas, I can find
a good home for those as well!
(Mr Darling) We are not having a closing-down sale,
I think we will need the sofas, and, if necessary, we will recover
them.
35. Very good; that is a very positive commitment.
Alistair, I think I can speak for everybody who is in attendance
at the Committee today too that the commitment on child and pensioner
poverty and the actions taken so far have been one of the remarkable
achievements of the Government. But in two or three of the fairly
substantial studies that we have done in the last year, pensioner
poverty, the Social Fund and the Integrated Children's Credit,
we have come up, again and again, really, on this issue of determining
adequacy standards and what kind of benchmark you have got, other
than, in a sense, the two benchmarks really, the cumulative one,
that effectively goes back on our trail back to Rowntree, and
the proportion of average income measurement. And we recommended,
in all of those reports, that the Government should put aside
some research funding into doing what it can to investigate the
consensus on adequacy standards; and, just before I ask you to
respond on whether you think we could proceed with that, what
exactly do you think is the stumbling-block in actually agreeing
at least research into how we can actually progress on that? The
pensioner poverty initiative that was taken last year, on the
Minimum Income Guarantee, did build on the Age Concern's own research
on what would be the modest but acceptable standard for pensioners,
and I think that was implicit in Jeff Rooker's evidence to this
Committee, that there was an acceptance of that figure being what
would be a kind of minimum standard for pensioners. Now, as that
was the case and as that was clearly a very successful and very
welcome initiative, why can we not build on that, across the board,
for benefits, and particularly for child poverty?
(Mr Darling) As you rightly identify, over the last
four years the Government has done a great deal, I think, firstly,
to acknowledge poverty; remember, for 18 years the word did not
pass the lips of Government Ministers, it was almost as though,
by not mentioning it, it was hoped that no-one would notice that
it was not there. And if you take child poverty, for example,
we are the first Government to promise to eradicate it within
a generation, to halve it within the next ten years; and, as you
say, in pensioner poverty, we have increased quite significantly
the amount of money that pensioners on low incomes get. And it
is worth reminding ourselves that in 1997 pensioners with nothing
else, even with Income Support, could get £68.80, that is
all they got, whereas the same pensioner today would get £92.15
and that will rise to £100 in 2003. And if you look at children,
for example, if you take the Income Support rates for children,
it was £16.90 for an 11-year-old in 1997, for that same child,
it is now £31.45. I have made that point because, as I said
to you right at the start, I have always been clear, as have my
colleagues across Government, that there were some people for
whom the Government at that time was not doing nearly enough;
and what we have done is thought it rather more important that
we actually get on and increase these rates, as fast as we can,
given the other spending commitments and given the state of the
economy, and that was rather more desirable than sitting back
and saying, "Let's have a study to see what the rates ought
to be." Now I am not sure that, even if you got together
various people, you would ever have a consensus on what the right
rate of benefit was, I think it would be difficult, but, frankly,
I would rather be judged, and I suspect Members would rather be
judged, on us being able to say, "We have increased the amount
of money that we are giving to people who are living in poverty,"
rather than saying, "We've conducted a study into it."
The Government will increase rates, as fast as it can and where
appropriate, as resources allow; we are spending less on unemployment
now, £4 billion less, that has enabled us to do far more
for children. That approach, to my mind, is more productive than
for us to say, "Let's stop, let's commission a study."
There is, as you know, quite a lot of research going on, and there
are academics up and down the country, and others, who carry out
research, which, of course, the Government looks at, but, frankly,
our objective has been two-fold. One is, to get all those people
into work who should be in work that in the past were not in work;
and, secondly, to make sure that we will increase support to people
who could never work. Now that, I think, is a more productive
thing to do than stopping work, or, if you like, commissioning
a study into it. I really think there is limited value in that,
because I am not sure that you would ever get a consensus.
36. I think I would have more sympathy with
that response were it very clearly an either/or question, and
I am just not sure about that; because, clearly, absolutely you
are right that we should not have paused, two or three years ago,
in order to carry out investigations, first, before taking action,
and action has been taken and that is very welcome and all credit
is given. But we still remain, I think, in a situation where there
was always going to be scope for people to question the progress
towards objectives. I think, one or two particular things that
are of concern: the extent to which people are able to say that
the children who have been lifted out of poverty now, or in this
first year, are the children who are closest to that benchmark
level, and therefore, in effect, least poor, and that there is
a danger that there are children who are left behind who are more
deeply poor, and therefore who should not be waiting longer in
order to be brought out of poverty. Now I do not know if that
is true, but the fact that we do not have anything approaching
an agreed benchmark allows that allegation to be made. And the
other problem, which is something that came out very much in the
evidence, particularly on the Social Fund and the Children's Credit,
is the extent to which things like the increase in the Income
Support provision for children, what is going to be rolled into
the Children's Credit, providing resources for children but possibly
not addressing the issue of children within the household, and
the fact that you can give money towards meeting the children's
needs, but if you are not actually looking at the household in
the round you are not necessarily addressing the core of true
poverty. And it is those kinds of questions that I think give
scope for research?
(Mr Darling) You ask about who we are lifting out
of poverty, and, as you know, the Government has published its
report, "Opportunity for All", it has published two
reports so far, which, I think I am right in saying, probably
set out more information than any Government has, across the piece,
and it allows people to draw their conclusions as to how well
we are doing and where we need to do more. We have, in fact, if
you take the poorest families, people who are not in work, on
Income Support, as I said to you, the amount of money, the premia
have increased quite dramatically, from about £17 to over
£30 a week, and those are people who are living in families
where the income was very low indeed; we have increased the amount
of money available to people with children who are disabled, who
clearly have very great needs as well. You mention the families,
and you are dead right; one of the reasons there was so much child
poverty was because there were so many families in this country
living in workless households. Now in the last four years we have
taken 300,000 children out of workless households, because the
best way to get money into the house is, frankly, if you can get
the parents into work, in addition to the other help, like Working
Families' Tax Credit, and so on, that will increase the amount
of money. And, of course, poverty, and fighting poverty, is also
about not just poverty of income, it is about poverty of opportunity
itself, and that means you have got to look at health spending.
Sure Start, for example, £300 this year, it is going up to
£500 a year; that is money going to parents who, all other
things being equal, would find their children were being born
into a significant degree of disadvantage. Just bear in mind this
as well, that the Government can only spend what it has got. Because
we have a stable economy, because we have sorted out the problems
we inherited, we actually have a lot more money to spend than
we would have had if we had not done all these things, and we
are systematically trying to address the problems that we face.
Now my starting-point is that I acknowledge the problems there
are, in the first place, I said that right at the start of this
hearing, we have said it time and time again, but we are doing
something about it. Now to come back to the study point, I remember,
last year, when the Age Concern report came out, it was against
the background of the 75p, they said the pension ought to be £90
a week, and lots of people said that was fine; when we made the
Minimum Income Guarantee £92 a week, it was not five minutes
before lots of people said, "Oh, well, £90 was not nearly
enough, it should have been . . ." whatever else it is. I
do not think, in this country, you would get a consensus. We do
not have a consensus amongst any academics that actually getting
people into work is a good thing for the Government to be doing;
there are people who believe that benefits, almost accept that
some people would, should and maybe ought to be on benefits for
the rest of their lives, I do not accept that. So what we are
doing, across the piece, is, where people can get into work we
are getting them into work, where they cannot get into work, whether
they are children or pensioners, whom no-one expects to work,
or whether they are people with disabilities, or carers, for example,
where we have significantly increased the amount of money going
to carers, by £10 a week, what we are doing is, systematically,
every year, trying to address these concerns by increasing the
amount of income that goes in there. But that is only possible,
firstly, if you have got the money, which, because of our stewardship
of the economy, we have, and, secondly, if you have the political
will to pay the money over, which we certainly have, because we
recognise that if you blight a generation of children through
poverty you will pay for it in later generations; that is something
the last lot never accepted, we do. And, frankly, I think that
is a better way to go. That is not to say there will not be people
like Joseph Rowntree, and they do lots of research, which of course
we look at, but I think sometimes it would be nice if some of
the more academic critics, who sometimes come to your Committee
and sometimes address us through the columns of the newspapers,
would just acknowledge that we have done a substantial amount
to try to address problems that have built up over the generations;
there is clearly a lot more to do and we will do it, provided
we are given the chance to do so.
37. I accept that. I also think, and I am sure
you would agree, that people like Child Poverty Action Group have
been very positive in recognising a lot has been done, whilst
still also stressing the fact that there is more to be done. Just
two or three other specific questions. Professor Jonathon Bradshaw
made the point that, in order to abolish child poverty, Income
Support, and, presumably, the equivalent components in the Integrated
Children's Credit, is going to need to rise faster than the rate
of inflation and faster than the increase in earnings to achieve
that goal. Do you have a view on that?
(Mr Darling) I think, year on year, what we have to
do is to make sure that systematically we lift more children out
of poverty. As you say, we have lifted a million out, or by the
end of this Parliament we will have lifted a million children
out of poverty, we have got targets to do more in the next Parliament,
and we will examine the ways in which we can do that, whether
it is Child Benefit, or whether it is through the Child Tax Credit,
or through other means, we will systematically go about doing
it. But our objective is very clear. We have set ourselves a target
of abolition of child poverty in a generation, halving it in ten
years, and people can judge us on that; and no Government has
ever done that before, and Mr Bradshaw and others will be able
to judge us. But, the mechanisms that we use, and the way in which
we do it, we take decisions about these things every year, and,
of course, in the Spending Review programme as well.
38. One of the particular groups of children,
that I think a number of commentators have flagged up to us as
being a concern, is children of the long-term sick and disabled
claimants, and, again, I appreciate what you have said about premiums
have increased, but would you recognise that, this particular
group of people, where the children are likely to grow up in families
of whom perhaps only a minority will move into work through the
different measures, more needs to be done for them?
(Mr Darling) We introduced the Disability Income Guarantee,
which is designed for people who are severely disabled, for whom,
as you say, work is unlikely, certainly full-time work, but you
have also mentioned the premiums, which, of course, go to children.
But at the heart of the Government's philosophy is that where
people can work they should work, because they will be better
off, the children will be better off, but of course we recognise
there are some people for whom that is not going to be possible.
And we need to make sure that those families, and their children
in particular, also have sufficient income in order to enjoy things
that other people take for granted, which is why we introduced
the Disability Income Guarantee, why we have increased the premiums,
increased them by a far higher amount than normal indexation would
have achieved. So, yes, of course, I recognise that, because it
would be just wrong in every sense to say, "Well, we're not
going to help you," because these children do need help,
and indeed sometimes they have extra needs that other children
do not have.
39. And so further attention in the future?
(Mr Darling) Yes; to coin a phrase, we have made a
start, we have a lot more to do.
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