Select Committee on Work and Pensions Minutes of Evidence

Examination of Witnesses (Questions 1-19)




  1. Good morning, ladies and gentlemen. May I declare the formal session of evidence this morning duly open. The Committee is looking at The Pension Service and it is a one-off evidence session. We are lucky to be joined by Ms Alexis Cleveland, who is the Chief Executive of the new Pension Service. She is supported this morning by Mr Charlie MacKinnon, who is the Chief Operating Officer and Mr George McCorkell, who is the Change Director. Thank you very much for coming to see us and for your written memorandum, which is helpful. The Committee had a very instructive and informative visit to one of the new centres in Burnley recently. I have to say we were impressed, as we usually are, by the quality of staff and the commitment which they show. We came away also slightly daunted, as perhaps you are too, at the scale of this task. It is so important to get it right. That and the timescale, which politicians inevitably inflict on managers in the Civil Service, are all a bit frightening and we came away reassured that the staff commitment was there. We shall hopefully be able to explore in the course of the morning some of the issues about whether you can actually do what you are trying to do and it is important to get the implementation absolutely right first time. Why do you not just explain a little bit about how you are finding the task to date and maybe we can open up some areas of questions after that.

  (Ms Cleveland) I shall take the memorandum as read; I am not looking to repeat that. Since I was last in front of the Committee we have been through a very significant change, which was the safe transfer of the work from the old Benefits Agency into the new organisation. That in itself was quite a big task: to set up a new organisation and get the new managers in place. The Pension Service was successfully launched on 1 April. May I just remind the Committee where we stand at the moment? There is a legacy which we take forward into the new organisation, which is that we have minimum income guarantee work still run through a network of offices at up to 400 sites across the country, retirement pension work similarly run through a large network of sites, though, particularly for difficult work in London and for work which is paid by automatic credit transfer, a lot of it is already centralised in our Newcastle site. We have also added at the front end of those some telephone helplines: there is the Minimum Income Guarantee tele-service, there is a retirement pension tele-service run out of Newcastle, our Winter Fuel system is run out of a centre in Cardiff and pension forecasting runs out of a different centre in Newcastle. I just make the point that what we are taking into The Pension Service is very much an organisation which is arranged around a product. It has been designed to provide the efficient delivery of retirement pensions or Minimum Income Guarantee or pension forecasts. It has not been designed around the customer. What that means is that many of our customers who have entitlement to more than one benefit have quite a complex system to navigate through in order to get their full entitlement. It also means we do not have a single uniform method of delivery for all our customers and that we are finding that many of our customers did not want to call into the old Social Security offices, so there has been an increase in the use of the telephone as the main form of contact with them. What we are trying to do at the moment, and many of you will have seen our attempts at taking this forward within the Burnley centre which is the first of our centres (launched on 4 February), is to design a service which is set up to meet customers' needs. That we do by integrating the services; we collect information only once for them and then begin to use it across all of our systems. We begin to keep much better records of the contacts we have with them, to build up a total picture of the customer, which we do not have in one place at the moment and use much more modern telephony, so that we can track calls more easily and give immediate feedback, linking into the training of our staff. That is always going to be an issue for us, given the complexity of the products which we are delivering, and we are looking to support a largely telephone based service through a local face-to-face service which is very much designed to meet the needs of the particular community. It will not be a one-size fits all, it will be geared around the particular communities we are looking to serve. That is really what we are trying to do in service delivery. On top of that we have the challenge of how to implement the new Pension Credit, which has now been through the House. That has an advantage in that we do know a year in advance what it is we have to deliver, which is some advantage when we come to set up our IT systems and such like. Quite clearly that is the biggest challenge facing us over the next two years.

  2. Thank you, that is very useful. On that last point, one of the things I came away with after our visit was that the staff, who are absolutely up for all this and thought it was the right thing to do and were enthusiastic, were seriously daunted about the technical detail of the Pension Credit. You could see that there were maybe four or five questions in the call systems and we were looking at some of the processes and scripts they were using. It is very sophisticated and good for that, but they were not quite complaining—well actually they were - but there are four or five questions likely regarding eligibility to make a claim, but ten or 12 questions with Pension Credit. They were struggling to sound convincing that they were able to address this in so far as they could capture what was necessary at this stage. It is early days yet. When the Committee travels round the country all the time we find this "pointy-heads in Adelphi House" syndrome, that they are too clever for their own good and should come out here and try to make it work. Are you confident that the Pension Credit is going to be something you can actually graft on to what is already a very impressive attempted programme of change?
  (Ms Cleveland) There are two aspects to Pension Credit. One is something completely new, which is the savings reward element of it. This is a new concept that we shall have to train our staff in. Many aspects of Pension Credit itself are simpler than we have in Income Support at the moment. I did not say they were simple, but they are actually simpler.

  3. Everything is relative.
  (Ms Cleveland) Indeed. If you are taking Income Support as your base, you are probably starting with something very complicated. It is simpler to do. It is true that we shall have to ask more trigger questions through those telephone scripts to identify someone's full entitlement to Pension Credit. We shall have to ask more than we do for Income Support, MIG, at the moment. There is detailed work going on to try to keep that as simple as possible.

  4. Will you be watching that carefully?
  (Ms Cleveland) Absolutely and, to be fair, you talk about the pointy-heads in the Adelphi building, we have been working closely with them through the whole exercise.

  5. It was a facetious remark; I was not serious. Can you clarify something for me? The Social Fund. The Committee is a bit concerned about the Social Fund being left out of all this shiny, glossy new system. Are pensioners now seriously expected still to go to Jobcentre Plus? Having all the service in their right hand at the end of the telephone, is it planned in the long term to leave them still going to Jobcentre Plus to satisfy their Social Fund needs?
  (Ms Cleveland) No, this is a transitional arrangement. We decided that we could not split the administration of the Social Fund. Some of it is tied up in the legislation around Social Fund because it is geared to the older Benefits Agency districts which make it quite difficult to run through a centralised system in the way we can actually manage the budgets. What we have agreed is that the transitional arrangement is that people will be referred to Jobcentre Plus if they are in need of a Social Fund payment. We are talking about Social Fund in terms of crisis loans and grants, not the aspects of Social Fund which are paid through Winter Fuel Payments. We shall be dealing with Winter Fuel Payments. The aim is that gradually we shall be able to move to taking all the details through our telephone centres. The processing will still be done by Jobcentre Plus, but it will gradually become invisible to the pension customer that that part of the work is still being done by Jobcentre Plus. They will deal with The Pension Service only.

  6. I understand that during this transition period this is what will happen—I might tempt you to guess how long the transition period might be in a minute—but after that they should be able to get it all done and you are confident that you can achieve that after the transition period is over.
  (Ms Cleveland) Yes.

  7. Is that going to be long? Are we talking about years?
  (Ms Cleveland) I am not going to give you a date today because it does depend on our planning for Pension Credit. Pension Credit would take priority over providing that frontline access directly to Social Fund.

Miss Begg

  8. You appeared before the Public Administration Committee in May last year when you were Chief Executive of the Benefits Agency. You said at that time that any possible demerger of the Benefits Agency would be "very, very difficult"; not just one "very" but two. Has your experience to date confirmed that view?
  (Ms Cleveland) It has been very complex but we did start work on it in May last year and we did set up a special project team to identify all the issues we needed to clear as we moved forward to The Pension Service. We have not separated out all aspects of pensioner work directly into The Pension Service at this time, but we do have very detailed arrangements about how pensioners are served through the new organisation. For example, some people who are currently working on pensions formally sit within Jobcentre Plus at the moment. It is work we are planning on moving within the next few months, so we did not appoint them to The Pension Service only to transfer them back to Jobcentre Plus later on. Yes, it was complicated and complex, but has been managed very effectively.

  9. Are you saying that in some cases the staff really have not noticed much of a difference? They are still sitting in the same offices, doing the same job, but they have a different letterhead.
  (Ms Cleveland) Yes. Some of it at this stage is a badging exercise for some of the staff because they are still doing Minimum Income Guarantee claims sitting in their same office and are still part of what is going to be a long transition now.

  10. With regard to the transition, you set yourself quite an ambitious roll-out target to get the new service up and fully operational in two years. We were told in Burnley that that timetable is already beginning to slip. What is your assessment of how long the full roll-out is going to take?
  (Ms Cleveland) We are planning to have the last of our pension centres now open in June 2004.

  11. That is slipping by almost a year.
  (Ms Cleveland) Yes. I would not call it slipping, I would call it re-planning. What has clearly happened is that since last May we have been able to put in the management team, which has to take this forward, and we have had a much clearer idea of what the requirements of Pension Credit are going to be. When we started pulling these plans together, if we were not having to deliver Pension Credit, we could do it on a much quicker timetable. The key thing for us to ensure is that we deliver Pension Credit onto a stable organisation, which means that we are going to have to stop doing some of the case transfers for a period so that we can concentrate on successfully delivering Pension Credit.

  12. Is that new timetable now published? Is it in the public domain?
  (Ms Cleveland) It is not. We are still refining it as we come through and we shall be discussing it with the new Secretary of State shortly.

  13. How confident are you that you will able to deliver on that new timetable?
  (Ms Cleveland) On the current timetable we are working to, so far we have been progressing pretty much as planned. There are always things which slip a little bit but we have started moving work into ten of the pension centres already.

  14. Do you think the Government has been too ambitious? You have the formation of the DWP, the demerger, the setting up of The Pension Service plus the Pension Credit all coming one after the other. Is it too ambitious to try to do all of that at once?
  (Ms Cleveland) I do not think we could have made the move to the new Pension Service and Jobcentre Plus without the creation of DWP, so I see that as something which facilitates the move rather than getting in the way of it. The centralisation of pensions work is something which we would have wanted to do in any case. It is all `do-able'; it is the timescale. If we were forced to do all of the centralisation and have every centre up and running and do Pension Credit at the same time, that would not be `do-able'. We are making sure we come up with a plan that links those two things together and I will not sign up to a plan unless I think it is credible.


  15. Could Mr MacKinnon give us a note? It obviously makes sense to get the thing right rather than get it quickly, but the evolving management re-planning is of importance to us. If we could put a little note in the back of the evidence session transcript, it might be instructive, just to track how the planning process is going. Is that something which is capable of being done[1]?

  (Ms Cleveland) Absolutely; yes.

  Chairman: That would be very helpful.

Andrew Selous

  16. I should like to focus on your choice of using the telephone as the primary means of delivering the service. I understand that when pressed to give evidence as to why you picked this, you cited one particular research report, 147, as evidence of why this was the appropriate means of delivery. However, we are aware that research report 136 came to slightly different conclusions and indeed said that there were inherent weaknesses in the telephone delivery system for older target groups. Why have you not taken the conclusions of report 136 into account but focused on 147?
  (Ms Cleveland) We are also looking at the feedback we get from our helplines at the moment. We have several in place in The Pension Service at the moment. The feedback we get from them is generally very favourable: it is that people are more inclined to contact us by telephone. We have quite a lot of anecdotal evidence that people who would not have written to us, would not have called into an office have called to deal with us over the telephone. It does not mean that the telephone is the right method for absolutely everyone and that is why we are also looking to have a local service where that is appropriate. I do not know whether Members, when they were at Burnley, witnessed any calls coming through, but quite early on in the questioning we ask people whether they can deal with us by phone. If people have any obvious difficulties, that is when we fix up a local service visit.

  17. I received a memorandum from Help the Aged, which you may have as well. They make the point that on their Senior Line, their advisers are applying for the community legal service quality mark. Is this something you would like DWP operatives to have?
  (Ms Cleveland) I was not going to commit to that particular standard at the moment. I do not know enough about it and I too have seen that report. What we have committed to is a continual benchmarking of our services against the best external providers. So as part of general benchmarking, if that were the appropriate standard, then I would be very keen to make sure we do have more accreditation.

  18. You would at least consider applying for the community legal service quality mark.
  (Ms Cleveland) I will not rule it out. I do not know whether that is the right one, but I certainly would not rule it out.

  19. Your decision to go for the telephone was not just based on the cost factor.
  (Ms Cleveland) No, it was not just based on cost, it was based on some of the research and particularly people's concern about going into the old social security offices. We were not getting the callers in whom we should probably have been seeing face to face.


1   Please refer to the supplementary memorandum from The Pension Service (PS02), para 1, Ev 20. Back

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