Select Committee on Social Security Minutes of Evidence

Examination of witness (Questions 20-39)



  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.


  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.


  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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