Select Committee on Work and Pensions Minutes of Evidence


Examination of Witnesses (Questions 100-119)

WEDNESDAY 12 FEBRUARY 2003

MR IAN CHARLESWORTH, MS JOANNE HINDLE, MR DAVID NICHOLL AND MR AUSTIN HARDIE

Mr Goodman

  100. I am going to ask some questions about the New Deal for Disabled People. Mr Charlesworth, this is perhaps a redundant question to ask you, given that in your evidence you say that NDDP is a low profile, under-resourced arm of the Government's Welfare to Work agenda. Can I just go down the line and ask you in turn, do you think the NDDP has been a success so far?
  (Mr Charlesworth) It has been a success so far as the clients we have helped into work are concerned. It is very cost effective from a state point of view. It is very effective from an individual client point of view. Where you have got a good job broker, and there are good job brokers from the private, the voluntary and the public sector, it works well. However, you have had a contracting process which has allowed a lot of organisations who should not have been involved to become involved and give it a bad name.
  (Ms Hindle) A one-word answer really: patchy. Where it has been good it has been great and where it has been bad it has achieved very little for anyone.
  (Mr Nicholl) I think "patchy" is absolutely correct. Nationally it is not good. There are beacons of good results. Very often where these exist they exist where the New Deal for Disabled People provisions are integrated into other mechanisms to help move people back into work.
  (Mr Hardie) I can only echo that. It has started slowly; it is building in some strength. There is an awful lot more it could do.

  101. How could the NDDP change to reach the people who are furthest from the labour market? Is it just a matter of putting your money in or is there rather more to it than that?
  (Mr Charlesworth) There is more to it than that. First of all, you change your contracting strategy, get people in working partnership with others who know what they are doing. Secondly, you change your contact strategy to allow much more direct communication between your job broker and the individual client using the benefits system, as has happened on the employment zones and the ONE pilots and so on, which would help reach more people. More money is needed for the marketing side as well. You will find in our response half a million pounds for marketing nationally for NDDP. The tax credit adverts that have been on television recently had a budget of £10 million, and there is half a million for the whole of NDDP. That is another direct way. At least 30% of the current cost is being wasted by us chasing evidence that the person has moved into work, has sustained the job, often to the detriment of the client, because we have to chase people who are in second and third jobs and do not want the employer to know that they have come off IB in the past, when it could be done by pushing a button using the tax, insurance and benefits information that they now have access to. With the new regulations that went through they can access tax at Jobcentre Plus, but instead 30% of our time is spent running round employers and individuals to get that evidence. There are all sorts of practical ways in which the scheme can be improved, not least of which is that you need to have those local partnerships and local links and that should be encouraged in the way that it was under the old system in the personal advisor pilots. None of the lessons of the personal advisor pilots about contact, about contracting, was learned.

  The Committee was suspended from 3.59 pm to 4.21 pm for divisions in the House

  Chairman: We were in the middle of an answer by Mr Charlesworth to a question from Mr Goodman.

Mr Goodman

  102. We were talking about reaching the people who were furthest from the labour market and whether it was just a matter of money.
  (Ms Hindle) My short answer to whether the NDDP can be improved sounds perverse but it is much the same point: slow down. Stop piloting things, stop trying out new things, look at what is working, analyse it thoroughly and spread the good practice elsewhere. It may take ostensibly a bit longer, but I suspect that in fact the results will come through much quicker. I think over time that is what will have the biggest effect. It is self-evident, is it not? Find what works and replicate it.

  103. You feel strongly, clearly, that this proliferation of pilots, of experimentation, is having perversely counter-effective results in that people are so busy experimenting and trying things that they have got no room to settle down and find out what the end result will be.
  (Ms Hindle) Yes, exactly the point Mr Charlesworth made, keeping records and chasing up and filling in the forms and seeing what has worked. Before ever we got the final analysis of the ONE pilots Jobcentre Plus was launched. It may or may not have been the right thing to do, but what was the point of spending money doing pilots if you were not going to wait and see what the results were and then move forward? I know that sounds as if I am meaning everything will go slower. I think in practice it will not. I think the results for people will come through a lot quicker because we are concentrating on spending the money and the time on the good stuff rather than keep on piloting or indeed rolling out stuff which was not working but we did not know that before we rolled it out.

  104. Mr Nicholl, do you dissent from that?
  (Mr Nicholl) Not entirely. I would add though that it would certainly be a welcome move if the financial structure of New Deal for Disabled People was slightly different. Too much of the payment structure works on outputs. I think there is a danger that that could encourage organisations to cherry-pick, to take those nearest the labour market and work with those because that is where the financial rewards come in. It is important to get greater local flexibility because clearly the numbers of people on Incapacity Benefit are not uniform throughout the country and I think Jobcentre Plus, for instance, may have greater flexibility locally to administer schemes in their area and adapt them to their circumstances. Finally, the thing that I think is critically important is that there has to be a change in the way that the regulations are administered for people who are on Incapacity Benefit. Essentially, if you are on Incapacity Benefit you are certifying that you are not able to work. Therefore, by participating in work experience or training, you are saying that you are fit to work and your benefits stop at that point. I think if people were allowed to keep their benefits during a training and work experience period that would encourage people into training and work experience, a good number of them would get permanent work after that, and it would effectively be budget neutral because they are going to get the money anyway. You could use the existing budget sources much more effectively with some minor changes in the regulations.
  (Mr Hardie) One minor point is that, along with flexibility at a local level, there is a degree of accountability that needs to be looked at. NDDP is essentially a centrally managed national programme and I think that devolution of some of those targets and outcomes to local Jobcentre Plus levels at regional and city level would certainly be helpful in engaging local Jobcentre Plus staff to help push the case of NDDP. Somewhere along the line to date that has been missed out because it is perceived as a centrally managed programme.
  (Mr Charlesworth) I have given the paper to the Clerk on what would make NDDP better. Can I add something else that is troubling me a little bit? You did talk about the public record and the 2.7 million. There are actually 3.651 million disabled people who are economically inactive and that is the important number as far as I am concerned. Incapacity Benefit is just one benefit that somebody might be on. There are 3.65 million disabled people of working age who are economically inactive and that is the group that we would ask you to concentrate on, not just the IB claimants.

  105. Could I start the next question by asking Mr Nicholl and Mr Hardie about it because it relates to something in your evidence? In your evidence you talk about intermediate labour market programmes and how helpful they are in making the transition to full time work, but you also point to a problem, which is a reluctance by some people with disabilities to engage in those programmes. How do you think you could solve the problem, being that you have these programmes that are extremely useful?
  (Mr Nicholl) I think it requires a pragmatic rather than a legalistic solution and action on the part of the department. That is about changing the regulation and differentiating work experience programmes and training from work. The catch-22 situation that many people are in is that they do not want to jeopardise their benefit for the insecurity of the open labour market, particularly at entry level jobs where it is very insecure, but they may not have up to date work skills. Sometimes the only way to acquire those up to date work skills is to participate in either a training or a work experience programme like an intermediate labour market. That is just one of many solutions but it is the one that we are particularly interested in. If the department could make an exception around there I think many people would see that as a safety net that would allow them to test their likelihood of gaining permanent employment.
  (Mr Hardie) Essentially it is the psychology of moving back to work. A short series of measured steps that progressively move people back to work using intermediate labour markets and related programmes would certainly work to increase the confidence of many sick and disabled people on Incapacity Benefit rather than this, "I am going to risk my relative economic security on benefits at the roll of the labour market dice". Many people would not go for that. It is the psychology of this transition and I think it is giving people security that this transition is about: moving them in manageable chunks towards inclusion in the labour market rather than rolling a dice and seeing what happens in an entry level job that may or may not last very long.

Miss Begg

  106. From what you have said this afternoon, Mr Charlesworth, I get the impression that you are not particularly enamoured of the service provided by Jobcentre Plus. Is that a fair criticism?
  (Mr Charlesworth) I would not say that. I believe that the DEAs are very professional and very committed bunch of individuals who are doing a good job in difficult circumstances. I do not think the disability service within Jobcentre Plus has been properly supported within the management structure of Jobcentre Plus. That would be my criticism, not of the people on the ground. Similarly, where Jobcentre Plus is a provider of services, such as in job broking, they are a good provider. What my criticism would be is, as I have already said, is that they take the service out in the same way as we do and form the same kinds of local partnerships. It seems that it is at the policy and strategic level, and whether it is political with a small "p" or not, they want to see the Jobcentre and the Jobcentre Plus at the core and the hub of the process initially for new claimants but they have already said within the Green Paper that they will probably extend that process to existing claimants as well. I do not believe that that is a good way of moving forward. It is more the strategy and the policy and, to some extent, the management rather than the delivery by Jobcentre Plus.

  107. Your criticism of Jobcentre Plus is that it brings the benefits and the Employment Service together. That was the whole point of Jobcentre Plus.
  (Mr Charlesworth) I am afraid we would seriously say that that is questionable. Psychologically we do not believe it works. You need to split the two.

  108. Is that just for disabled people or do you think that is for all the other New Deals as well?
  (Mr Charlesworth) No, I do not. The difference is that the other New Deals have an element of compulsion for a start, and they are for job seekers who are used to being engaged by Jobcentres.

  109. So it is not a problem for the other New Deals? You just think you need a different model for New Deal for Disabled People?
  (Mr Charlesworth) Yes, which recognises the additional barriers which disabled people often face.

  110. When asked if NDDP has been successful, three of you said "patchy", and I think the DWP would say it is because of that patchy success that they would rather have it in-house. In an area where Shaw Trust works it is great, and where the Wise Group works it is great. You have providers who are able to act as both providers and job brokers. However, in Aberdeen it was very difficult for the local Jobcentre Plus to find job brokers. They have had to take that in-house and go out and find them as their only solution. What do you say to their response to your criticisms?
  (Mr Charlesworth) I can give a straightforward response to that. That is their contracting and procurement policy which has been flawed from the beginning. If you go out and appoint contractors on the cheapest basis who have no track record, no knowledge and no experience of working with a group, you will get the results that you get. What I would say is that you have had good providers—Wise, ourselves, West Country Training, obviously, and Job broker Cymru who were the Jobcentre Plus themselves. Many of the others had no idea and have been misled often by Jobcentre Plus who originally, when launching a pilot, were advising would-be providers that this could be done for ridiculous amounts of money when it clearly could not.

  111. There are two things you have said. One was that you were against compulsion, but at the same time you said that the difficulty you have is getting them through the door. Once they are through the door you have been very successful.
  (Mr Charlesworth) Yes.

  112. What is your solution to getting them through the door without compulsion?
  (Mr Charlesworth) A much more positive message going out, much more expenditure on the marketing side. Twenty 5% of my costs are in local marketing. It is a shame we are not backed up by any national marketing. You should be putting positive messages across rather than threatening people's benefits; secondly, ensuring that you have got the links to feed in from these other providers; and, thirdly, being able to use the benefits system in a positive manner to send out a positive message about the way in which you can help people back into employment, which has been cut off under the latest regime.

  113. Can I ask the question of both the Wise Group and UnumProvident? Do you believe what the Shaw Trust is saying, that the model of bringing the Benefits Agency and the Employment Service together in Jobcentre Plus is the wrong model when it comes to delivering for disabled people, or do you think that is irrelevant and it is actually about what is provided on the ground?
  (Mr Nicholl) I think it is about what is provided on the ground by and large because, while everybody would like to see more resource put into it, we have to be realistic and say that it is unlikely that much more resource will be put into it. It is then about using the money that is there as best you can. Jobcentre Plus will almost certainly have to act as a job broker of last resort in many areas where there simply is not another infrastructure often because of the socio-economic profile of that area. In places like the post-industrial conurbations you often have all sorts of support mechanisms because there have been many years of having to deal with mass unemployment, so you have got a range of interventions there that can be brought together. In places like Aberdeen, which is by and large a good deal more prosperous, then you tend not to have that infrastructure to provide support to people, so something like New Deal for Disabled People, which does not have very much money, on its own just will not do it. Somebody has to be there and I think Jobcentre Plus are, as I say, the broker of last resort.

  114. But you still need more money, I think, coming into the system?
  (Mr Nicholl) I think you need local flexibility and you do need more money in certain areas. You need to use the money differently and more intelligently in other areas.
  (Ms Hindle) I would still try and distinguish between stock and flow. On flow I do not necessarily agree with what Mr Charlesworth was saying. I think most people flowing on to IB do not come from other benefit; they come from work. They are not out of touch with the labour market, and expecting them to go into a Jobcentre Plus, the "Plus" hopefully helping them with the disability issues, giving them work-focused interviews, keeping work in the forefront of their mind, I think works and should work. Stock is a very different issue. For people who are out of touch with the labour market, to suddenly say to somebody who has been on IB for eight years, "Come in for a work-focused interview", will achieve nothing for anyone other than waste people's time, frankly. We do need to look at the stock very much more creatively, but for flow it is a good idea.

  115. The next question is about the funding which both voluntary and private sector organisations have criticised, saying that paying organisations on the outcomes is quite damaging because it is dependent on getting people into work. Is there a process where contractors can be paid depending on how far they can move a disabled person towards work? Is that a way forward or is that a danger because the whole purpose is to get people into work and if you fund it that way then that incentive to get people finally into work is taken away?
  (Mr Charlesworth) We are not opposed to the outcome funding regime. What we are opposed to is the length of the contracts which do not give you enough time to recoup your investment that you need to make in up-front costs. The other thing is that for the voluntary sector cash flow is very difficult if you are doing large contracts and the Government are paying in arrears. They have on other New Deals used payment on account which would be a way round the cash flow problems. Obviously, if you do not get the results you pay back the Government. We are not opposed to the principle of payment by results; it is rather the method and the time that you are given to make anything work.

  116. Is that specifically because disabled people take longer to get job ready?
  (Mr Charlesworth) Yes, indeed.
  (Mr Nicholl) We would welcome a re-balancing of the way that the money is paid. There is no harm in output related funding. It does sharpen the mind and focus people on what they are expected to do, but at the moment a disproportionate element of the risk, if you like, is placed on the delivery organisation. It is not about more money again; it is about how you pay it.

Mr Stewart

  117. What is your assessment of the extent of discrimination against employing disabled people?
  (Mr Charlesworth) There is a great deal of discrimination that exists but it is not quite in the same category in my opinion as race discrimination. Often it is more to do with lack of knowledge and ignorance and to some extent fear. I know that could apply in the race field but, having worked in Bradford and Rochdale for many years, I think I know the difference, which is that race discrimination is much more to do with personal prejudice, and I am not sure it is personal prejudice that disabled people face. It is more to do with lack of information and lack of knowledge which lead to discrimination because the easier option is not to employ disabled people. In terms of the answer as to what to do about it, I do hope that the DDA does not fall into the same disrepute that the old legislation fell into: six prosecutions in 50 years under the old quota system, maximum fine £1,000, and yet I worked for an authority employing 28,000 people that had 0.018% people who were disabled and we were supposed to have a 3% quota.
  (Ms Hindle) Two comments, if I may. First, yes, I echo specifically the point around fear and uncertainty and I think that is particularly difficult for small and medium sized enterprises, SMEs. A large company, such as Barclays, will have huge resources in-house. They can say, "How do I cope with it? What are the adjustments I need to make for somebody with epilepsy, blindness, in a wheelchair?" A small or medium sized enterprise has not got that resource in-house, does not know automatically where to go and will not necessarily have the time even to try and find out, so immediately you have got that, "Too difficult, can't cope". The SME end therefore is a particular problem. Engaging Jobcentre Plus in helping with that must be key for me. We have done some work with Jobcentre Plus where we have put together a briefing pack on a whole range of disabilities and what employers can do which we have distributed to every DEA in the country—there are some 8,000 of these packs now out there—to try and say to DEAs, for when a small employer asks what to do about epilepsy, "Look: here is something you can point them to or photocopy for them". It is a huge job because there are so many of them. Exactly as Mr Charlesworth says, it is not deliberate discrimination; it is just fear or uncertainty, or just that life is too short, "I am trying to run a business here. I just cannot cope".
  (Mr Nicholl) Clearly there is discrimination against people with disabilities in the labour market. However, I think the real test of the extent of that would come were unemployment to rise. Nothing changes behaviour faster than money. We are in a tight labour market where employers find it difficult to recruit; therefore employers will make recruitment decisions they might not have made five or six years ago when they had a larger pool of people to choose from, and I think some of the progress we have made may well prove to be short-lived.
  (Mr Hardie) To echo David, we find it incredibly difficult to detect discrimination, especially at the point of recruitment. In practical experience of running an NDDP programme we have not had any direct discrimination reported to us. That does not mean it does not happen. To echo what Ms Hindle said, there is a continuing educational issue that needs to be addressed.

  118. You touched on advice and guidance to employers and the role of large employers. Do you think it will be important that we set up role models as employers, for example, large local authorities, some health authorities, some blue-chip companies, such as British Airways and Marks and Spencer, and let them lead the way in terms of employing people with disabilities?
  (Ms Hindle) Yes, but not just large ones. Find some small ones as well and say, "Look: it is possible". At an awards do last year—there is an award for the small employer that has done most—the award was given to a small pub somewhere in the West Country, the New Forest, I think. Literally they had gone and got specially printed large-print menus, they had got braille menus, they had put a ramp up at the front door. They had just stopped and thought about it. They were recognised nationally. They had said, "For us as a small business it did not cost us that much and we just thought about doing it". They never said quite why. It was wonderful; they just did it. So find some smaller ones as well. Otherwise all that happens is that small companies say, "I am not BAA, I cannot do it", and immediately turn off again. Find employers anywhere in the country who will say, "Here is what works for us; here is why we did it, how we did it", and take some of that fear away.

  119. And presumably if we are going to look at this we will need a decent publicity budget to make sure that people do know about the successes.
  (Ms Hindle) Yes.
  (Mr Charlesworth) There are a lot of very good small companies. We support over 3,000 people in the Workstep Programme and there are a lot of employers who do over and above what could be expected of them. They are role models but they are not publicised. If you look at what is happening in terms of the funding that you are putting into the New Deal, who is discriminating? The employers or the state?
  (Mr Hardie) I do not fundamentally believe that it should be the Marks and Spencers and the like who are leading the charge all the time. I think it is about getting a spread of employers across a range of sectors and showing good practice in that.


 
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