Select Committee on Works and Pensions Minutes of Evidence

Examination of witnesses(Questions 100-119)



  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.


  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.


  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.


  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.


  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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