Examination of witnesses(Questions 100-119)
MR CHRISTOPHER
MELVIN, MR
STEPHEN MARTIN,
MR RICHARD
GRANGER, MR
PETER ALLRED,
MR MARK
LOVELL AND
MR PAUL
KNIGHT
WEDNESDAY 12 DECEMBER 2001
100. Underlining all this, the real partnership
was actually how well the Benefits Agency and the Employment Service
came together because that was the key partnership in it, different
agencies, different cultures, different agendas, power differences.
In a multi-level organisation, issues can arise about devolution
of discretion at a local level. Can you give us an honest account
of your partnership relations with the Employment Service and
the Benefits Agency at the strategic, advisory and delivery level?
(Mr Melvin) At a local level, generally very good.
At contractual level, less good because the people who were tasked
from BA and ES were constrained by the original scope of the contract
and did not seem able to change it.
(Mr Granger) I would say there was a series of discontinuities
between the policy agenda and the risk averse nature of the people
running the governance structure. One of them said to me, off
the record, that what we were finding was how resistant the Benefits
Agency was to change.
Chairman
101. That is not the first time that has been
said to us.
(Mr Granger) There was a political agenda
for change, but cautious senior officials. Below that at a regional
level, a significant number of senior managers who were extremely
motivated to deliver change in partnership, and then below that
contract administration people, who again were extremely cautious.
And below them, some deeply motivated seconded staff who really
bought into the vision of an integrated service delivery. I would
include the local authorities in that as well. A very complicated
hierarchy of differing fears and delivery success.
(Mr Lovell) Are you interested in comparisons between
the two, between ES and BA?
Miss Begg
102. Yes.
(Mr Lovell) I would say the relationships
with both are good and in North Cheshire in particular they embraced
the philosophy of seeking to achieve change. I mentioned at the
beginning that I think one of the biggest innovations which was
achieved in North Cheshire was the cultural change in the way
staff approached it. To put that into context, at the advisory
level the BA staff were keen and motivated to change, but scared
because they came from an environment where iterating and changing
processes, and innovating and thinking were not particularly encouraged,
so it took a while to do that. But we found they responded best
of all to the environment which was created for the work. Employment
Service staff, who came across as secondees, were perhaps more
confident they could deliver the service because they understood
the work-focused elements, but the complexity of some of the benefits
training they needed to go through was a significant hurdle for
them to overcome. Interestingly enough, the attitude to change
for the BA staff when they freed their spirit was the strongest,
but at contracting level the ES contracting methodology dominated
the contracting discussions. You get used to working with that
agency and we have had a lot of experience, so we were probably
more used to it than others. We found we had to push very hard.
We had a lot of arguments with the centre in terms of the way
the project was implemented very early on, to the extent of nearly
falling out with them. We felt it very important to say that regionally
and locally there needed to be autonomy in decision making. There
was a hard battle but it was eventually conceded—
to the extent that ES and BA were then free
cautiously to approach ways of changing methods of working. That
centralised structure is a dichotomy, which has existed throughout
the pilot and will continue to be there, between policy intent
and actual process and application. You tend to be working on
tomorrow's policy with yesterday's procedures. You are not even
working with today's procedures, because they are still not approved
in terms of the bureaucracy. If you approach it from that perspective,
you know what you are going into and you can find ways of working
round it. That is the environment in which we work.
103. Housing benefit was another partnership
issue, where you had to work with the local councils. That is
not going to be in the Jobcentre Plus. Is that the right decision
or not? What are the problems?
(Mr Lovell) No, I feel quite passionate about that.
I think it should still be in there. The relationships we develop
with the local authorities work.
Chairman
104. Is that a unanimous view? Housing benefit
in not out?
(Mr Granger) Yes, housing benefit should
be administered in conjunction with the other benefits. Which
authority administers it is a different question.
105. Is that unanimous?
(Mr Melvin) Yes.
Miss Begg
106. You are not going to be involved in the
Jobcentre Plus. Is it going to work? From your experience over
the last year or so, do you think it is possible? Will that policy
be able to be delivered or is it just going to fall apart because
the cultures are just too different and they are never going to
merge?
(Mr Lovell) You perhaps know more than
we do. We still have our fingers crossed for private sector involvement
in Jobcentre Plus. Perhaps we are naive. It can work, but also
people need to take on board the experience of things like the
ONE pilots. I mentioned earlier the marginalisation in communication
terms of that and in engaging us in offering support and advice,
which is something we have done proactively and I have no doubt
other people have done as well, and is something which is not
taken up enough. It is nice to be here having this conversation
but in terms of a policy intent, yes, it can work, but it is going
to take a lot of effort to make it work and we can manage that
process.
Chairman
107. Does that go for the other two here?
(Mr Granger) Yes.
(Mr Melvin) I would say that it will work. It is going
to be hard work and it will work better when the private sector
and the voluntary sector are engaged in the whole process along
with the public sector.
Chairman: I want to turn to the area of innovation.
Mr Mitchell
108. Innovation for many of us is at the heart
of this inquiry. We are very interested to find out what you,
the private sector, have been able to bring to the party. I know
that you have had some difficulties accessing innovation funding.
I want to park that issue on one side for a moment and try to
find out from you how successful introducing innovative ideas
has been. Perhaps all three of you can tell us what you actually
feel you have achieved in the area of innovation.
(Mr Lovell) The first and most important
innovation is the cultural change from the people who are delivering
the service. ONE/Jobcentre Plus has to be client focused. In order
to achieve that you need to manage advisers in a way which is
very different from the way they have been managed in the traditional
infrastructures they come from. I can only speak for our pilot
in terms of achieving that approach; anecdotal comments are probably
best. BA staff constantly say when they are talking about delivery
"We work above our grade. We are encouraged to work to our
potential. We are given freedom to make decisions about what needs
to be done for a client". I do not understand what it means
when someone says they work above their grade. People fulfill
their potential and they enjoy it and that, beyond process, beyond
product or service innovation, that is the most important thing.
Having achieved that, there is your answer to whether the Jobcentre
Plus can work. Process innovations: we have found ways of doing
that and iterating all the time and that is critically important
because you cannot deliver a service like this if you are hidebound
by procedure all the time. People have to be given the flexibility
to work on it. Flexibility is the third point and, taking the
service, we manage peaks and troughs by having staff working across
a number of locations in the district, which is the sort of thing
staff in BA and ES had never done before. I notice the PCS transcript
said that we did not have a benefits bus. In the end, when we
looked at it from the bid working through to implementation, it
was not relevant. We do have an electronic client form. What that
will also cut down is the training time required for advisers
and reduce inaccuracies. You can put that on line, you can get
people to access it in hours convenient to them, a whole range
of issues there. In terms of the non-JSA area, constantly challenging
the status quo in terms of the way the service is delivered,
which is a cultural thing in the way the advisers approach it,
is critical and it has enabled us to drive up. We were given a
target of one to two per cent — we achieved two per cent
in non-JSA placings; we shall do three next year. That is what
we aim for. You have 40, 50 people who have bought in to improving
what they do every day, and who are focused all the time on the
client as they come through the door. I do not think you should
park funding, because you start first with what you need to do
with the client, then you work back at how you fit that within
your overall funding portfolio. You do not drop things because
you cannot afford them. You have different ways of doing them.
That creativity is essential to making Jobcentre Plus work and
that is where we work well as private sector organisations with
the public sector.
Chairman
109. Your website says that you have a pink
bus and a Happiness and Health officer. Is this part of the innovation?
(Mr Lovell) We do. The 45ft pink truck
has made its trips to ONE. They are not necessarily innovations.
Health and Happiness is.
110. Health and Happiness is an innovation.
(Mr Lovell) Yes, our head of Health and Happiness
is there to look after the welfare of clients and is there to
look after the welfare of staff. It is good fun.
(Mr Granger) Innovation was one of the cornerstones
of our proposal when we got involved in ONE. It has also been
one of the areas of most disappointment to us. I have been amazed
by the number of barriers which have been put up to the delivery
of innovation. Some of them are structural barriers which need
to be addressed in the merger of ES and BA, or takeover, depending
on who you talk to. Estates have been a major problem. Delivering
service to people with mobility challenges, when 70 per cent of
your offices are up stairs with no lift, is a problem. Innovation
there involves sending members of staff down and getting remote
computer systems. We also delivered some innovation in terms of
the human resource approach. We have had people working together
happily from two organisations with very, very different pay and
grading structures. That is going to be a real challenge going
forward; the first manifestations of that are appearing. Delivery
of technology innovation: we found ourselves in a situation of
having to go through a national approvals process to deliver technology
innovation in two pilot locations. I find that a contradiction.
We are still waiting for approval for an electronic claim-taking
process which is available across the Internet. The development
was completed on time, the approval is still awaited. Process
innovation: one of the most obvious things we very rapidly identified
is the need to stream people coming through the door according
to their personal needs and condition. In Leeds, where there is
a buoyant job market, it is often the case that somebody comes
through the door on a Monday, having been laid off on a Friday,
and you could put them directly into work. The process audits
which are conducted to ensure we go through the benefit agenda
as well as the work agenda, along with desk space constraints
caused by the estates, which mean we cannot put more staff into
a location, mean that we do not get to see that person for a follow-up
meeting for several days to have a more fulsome conversation about
the work agenda. We are obliged to go through nugatory work around
the benefit agenda. There has been a lot of inhibition around
innovation and a lot of frustration there.
(Mr Melvin) There were three opportunities for us
to bring innovation to the ONE pilot, the first of which was capital
investment. Because it was a 25-month contract, which is short,
and the funding was capped, the private sector were not given
the opportunity to take the risk because we could not get the
return. So I would argue there was little capital investment from
the private sector. The second is around process change which
colleagues have commented on and I would agree with some of what
Deloitte said.
Mr Mitchell
111. On your first point, your approach would
have been entirely different had those rules not been laid down?
(Mr Melvin) Yes. With a longer contract
and an opportunity to have an uncapped contract, we would have
happily invested significant sums in it. On process, we have had
some opportunity to change processes but that has been primarily
down to the commitment of the staff, often secondees from public
agencies, who have worked above and beyond what might be expected
of them, to try to get round what are often bureaucracies put
in place to prevent you in many ways helping the client. It has
taken extra effort from them to do that. I would agree with Mark
that the principal innovation within the ONE pilots is around
the management of people, it is around the service clients receive
when they walk in the office. If you talk to the secondees about
their experience of working in a screenless environment and their
ability to engage with clients, it has liberated many of them.
I believe that if you look at some of the staff turnover figures,
for instance, where people have gone back to their agencies, in
our experience in many, many cases they have gone back on promotion
because the selection boards have seen that over the course of
12 months they have really found a great deal more in themselves
than perhaps they had earlier in their career.
112. You will have seen from the transcripts
from last week that PCS were fairly sniffy about your contribution
and said that you had not introduced anything new and that all
of it was done anyway by the public sector. It would be helpful
to us to hear your response to what they said last week.
(Mr Lovell) PCS have an agenda: they did not want
the private sector involved and they do not want the private sector
involved in Jobcentre Plus. It was clever semantics. No, we did
not introduce a mobile bus but we did introduce an electronic
claim form. The acid test is talking to the staff who deliver
the service and whether they feel that there is innovation and
there is a significant difference in the way that they are able
to function. The test is also in talking to the client when they
walk through the door and asking them how it feels. We sample
a lot of clients and get feedback; it is good. You have to fight
hard to get a cuddly toy in a Jobcentre, you have to fight really
hard. We had an argument with PCS because they are seen as violent
weapons, which can be picked up and thrown across. Yes, they can,
but we work in an environment with mature adults; staff welfare
and safety is critically important, but you could look at a thousand
tiny innovations which happen in a six-month period which when
you add them up really make a difference and that is what this
is about in terms of the final evaluation.
(Mr Granger) I am not surprised by Keith Wylie's position.
It is entirely in accordance with everything he has said. Talk
to the staff. Talk to the public who go to the ONE pilots for
service rather than to other offices.
113. Given that we cannot, can you tell us what
they would say?
(Mr Granger) A significantly more person-centred service,
with better trained staff, people who deal with the problem from
start to finish rather than hand them off to another office. We
get complaints from members of the public occasionally, and one
of the complaints we get is that they are not able to see the
member of staff with whom they have a personal relationship. Contrast
that with the average service delivered in a screened Benefits
Agency environment, where people are treated in a much more sterile
manner. I think we have delivered substantial innovation and service
improvement and it is not about public and private at all. It
is about respect for staff, respect for the public and focus on
service.
(Mr Melvin) I would agree with everything my fellow
witnesses have said and would add the word "disappointed"
in answer to your question.
Mr Dismore
114. I should like to pick up on one or two
points you have just been making about innovation. I have to say
I thought the Deloitte approach was rather more negative compared
with the other two in the answer you just gave to Mr Mitchell.
How is it that A4E can introduce an electronic claim form and
get it up and running and you cannot?
(Mr Granger) Because we wanted to introduce
an electronic claim form which was accessible to voluntary sector
groups outside the offices we were working in; we wanted it to
be-web-enabled, we wanted the evidence which was taken on that
claim form by somebody typing it in over the Internet not to have
to be re-typed in front of the person in the office. I suspect
that is the major difference.
115. Is that right?
(Mr Lovell) It is different if you are talking about
the technological approach we take in terms of developing systems.
Our approach is very different to Richard's. The net effect is
that we wanted something which enabled the advisers to take a
claim quickly, efficiently and easily and stopped a client giving
multiple information on multiple claims. I have to say the process
was difficult, it took us a long time, but we approached this
at a level which we thought was appropriate for the contract we
were delivering.
116. Going on to the contracts, how much of
your funding depends on innovation?
(Mr Lovell) Fifteen per cent.
(Mr Granger) It varied according to the moment in
time between 25 per cent and 15 per cent.
(Mr Melvin) I concur. It is 15 per cent. To put any
figure against innovation, to be frank, is contractually questionable.
What I would suggest is that what ought to be purchased is better
value for money, better service to clients and better outcomes
for the public purse rather than whatever innovation is.
117. Have you been able to get the money for
innovative ideas out of the Department?
(Mr Melvin) Eventually, yes. It did take months of
negotiations but yes, we have done and we feel it has significantly
improved the service. We started coming on stream some six months
ago, which was 18 months after the contract really started. Particularly
for non-JSA clients, we believe it has improved the service. My
point would be that we could do much more if that was not capped
at a particular level. If there was a contractual environment
whereby we could demonstrate the service had improved, accuracy
improved, greater numbers of people moving into the labour market,
then we would expect a return and if we could not, then we would
not get one but it was at our risk.
118. Is that not asking for a blank cheque?
(Mr Melvin) What we would want to seek to achieve
is an alignment between a benefit to the exchequer, so there are
fewer people claiming benefit, more people paying taxes, and the
amount of money we are paid. If the economy benefits, so do we
and that is equitable.
119. Richard, were you able to get the money
for innovation?
(Mr Granger) It has been a significant struggle contractually.
To cut through that, we tabled an offer where we said why did
they not just pay us completely on results with no cap. We would
work out an equitable sum of money on an open book basis to pay
us for accurate processing—and you will have seen that we
do have very accurate processing of benefits in Suffolk and above
average in Leeds, and above the norm for the number of people
we successfully place in sustainable employment. That offer was
rejected. We thought that was innovative and equitable.
(Mr Lovell) We have accessed the innovation funding
throughout because of the approach we took and the way we contracted
for that.
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