Examination of Witnesses (Questions 120-138)
WEDNESDAY 12 FEBRUARY 2003
MR IAN
CHARLESWORTH, MS
JOANNE HINDLE,
MR DAVID
NICHOLL AND
MR AUSTIN
HARDIE
120. So it is the SMEs who are the Marks and
Spencer of the future that we should be focusing on?
(Mr Hardie) Given the amount of people employed in
SMEs as opposed to large organisations, I think it is a very good
practice and it is about people kicking in and doing the right
thing. We have always got the old faithfuls such as Marks and
Spencer, and long may they continue with it, but it needs to be
much wider than that.
Ms Buck
121. None of you likes the current system of
benefits and tax credits in terms of their efficacy in helping
people back into work. What I would like to know a little more
about from you is the extent to which you are criticising the
back to work system in terms of its risk or in terms of its generosity
in making work financially viable, because they seem to me to
be very distinct aspects of the system. I just wonder if you could
briefly comment on what it is that you consider to be most lacking
from within the present benefit system.
(Ms Hindle) Risk. Certainly our point was not at all
about generosity. It was very much about risk. It ties in with
something we were saying earlier and I would just like to stress
it. It seems as if the entire system, benefits, Jobcentre Plus,
etc, is set up on the basis of a binary decision. You are either
incapacitated and it is almost a medical/charitable, "Oh,
dear, poor you" model, or you are in work, which almost means
full time, permanent, proper job, and yet we all know that for
most disabled people it is not that at all. It is a step by step
process and you will fall back along the way, one step up and
two steps back for a while. Somehow the system has got to be flexible
enough to recognise that and recognise that each of those steps
is a risk and guarantee or safeguard or put a safety net under
the persons taking that possibly very small step of half a day's
training a week, which may be all they can do. For them that is
a huge risk, and not only that but there may be a financial drawback
too. No, it was not generosity at all; it was risk.
122. Just on the risk point, certainly my understanding
of the Shaw Trust position is that it is slightly different. Last
week's evidence very much confirmed what I think I believe from
my own experience, which is that people are very lacking in knowledge
about what options are available to them.
(Ms Hindle) Yes.
123. The flip side of that is that they are
not taking a decision based on an informed understanding of whether
security is available to them through either a return to IB or
in-work benefits. What could be done to deal with that? Do you
think the system is structurally risky, which I think you are
implying now, or do you think that part of the risk is a failure
to properly lead people into an understanding of what options
are available to them to cushion any difficulties they may run
into?
(Ms Hindle) It is definitely both. We know Lorna Reith
at the Disability Alliance and I have read through her evidence
that she presented to you last week, and certainly we are totally
in support of her idea of this back-to-work diary that is a computerised
system which says, "Okay, you are getting back to work. Let
us take you through every single potential benefit you might have
or be entitled to. How will they inter-relate? If you give up
IB one week when do you get the tax credits? When did your housing
benefit stop? What allowances do you get for transport? Is access
to work going to kick in? When do you get your first pay cheque?"
You are trying to cope with all of that and with having been out
of work for a while as well, so there is the psychological risk,
but at least it will enable people to map all of that out and
probably along the way discover, "Good grief, I have never
heard of that one. I did not know I could have got it", which
is your knowledge point, but you are expecting DEAs to recollect
all of that and advise properly. Again, could not DWP put in place
a computer system that does it, and remove the need for the individual
adviser or claimant to understand it all themselves? It is all
there, interactive, touch of a button. Surely nowadays computer
programming is at a stage where we could provide this.
124. Can I ask Mr Charlesworth and other colleagues
to comment because I think, Mr Charlesworth, your evidence tended
rather more towards an addition to the risk element of saying
that the in-work benefit system was not generous enough to provide
a useful incentive?
(Mr Charlesworth) That is correct. We use the Benefits
Agency better-off calculation system on line where we run job
broking and for two-thirds of our clients they are not better
off on that first job.
125. Would you mind itemising for us what you
would see as the main reasons why people are not better off?
(Mr Charlesworth) Housing Benefit.
Ms Buck: Jolly good.
Chairman: I think that was the answer she was
looking for.
Ms Buck
126. I was not actually searching for that,
although it comes up and hits me on the nose every time I look
at it. Housing Benefit is an in-work benefit as well. To an extent
it is not a very satisfactory one but it is available to working
people.
(Mr Charlesworth) Tracey Proudlock, who is my expert
on benefits, has reminded me that it is based on a bread-line
system. The loss of Housing Benefit and the potential threat to
the home is a big fear factor for so many people.
127. Can I clarify this then? Obviously, only
a minority of people that you are dealing with, and the general
public as well, are tenants. The majority of people, even amongst
people with disabilities, will be home owners. Is there a financial
disincentive that is based on the risk about losing the mortgage
protection and is that significant as well?
(Mr Charlesworth) Absolutely. Home owners are a minority
group in our experience. They are not a significant part of the
group that currently come forward but they will be longer term
if you reach more people. I would say that the same fear is there
for that group as it is for housing tenants.
128. Perhaps Ms Hindle and Mr Nicholl and Mr
Hardie might comment on that because my interpretation would be
that of the pool of people that perhaps, Ms Hindle, you are dealing
with, people who have perhaps had an injury or an illness in their
working life rather than someone who had a long-standing or even
permanent disability, are more likely to be in that home owner
category.
(Ms Hindle) Yes, they are far more likely to be home
owners than possibly the bulk of the population without private
insurance. I recognise entirely that our experience is slightly
more segmented than the state as a whole. Of course it is, so
yes, you are right.
129. Housing costs we have identified. Is there
anything else?
(Mr Charlesworth) A lot of it is to do with a fear
that is not necessarily genuine. A good example of that is that
we now have an adviser who came to us as a client originally.
He will tell you that he did not even tell his wife for three
months that he had been to see us as a client originally because
of the fear that he would lose a range of benefits of which housing
was the key one. Tax credits are not available to those on £13,000
and above. A lot of the people we deal with who are mental health
clients are professionals wanting to get back into the labour
market, expecting to earn, if they do so, more than that sum,
and that flexibility is not there. Similarly with part-time work,
it is excluded unless it is 16 hours-plus. The people who might
want to go in on permitted earnings are forced to limit what they
can do and try out again because of the fear of losing benefits.
130. Forgive me. I am going to press you a little
bit on this point because your evidence states, "If we are
to make real inroads into reducing the number of claimants we
must address the significant financial disincentives to work".
(Mr Charlesworth) Quite.
131. But what you have just said to me is that
a lot of these disincentives are in people's heads.
(Mr Charlesworth) A lot of them are, but the reality
is that for two-thirds of the people they would be worse off using
the Benefits Agency calculation.
132. Because of housing costs?
(Mr Charlesworth) Partly because of that, or the other
way you can look at it is that the working tax credit is not high
enough to compensate for any loss of benefits, including housing
benefit. There are two ways of approaching that, are there not?
You do something about the housing benefit system or you do something
about the working tax credit.
133. Mr Nicholl and Mr Hardie might want to
comment on that. What is the answer? More money into the existing
system, fundamental structural change, much better coaching and
counselling?
(Mr Nicholl) There are a number of things that need
doing. There needs to be a proper transition stage between being
on Incapacity Benefit and being in full employment and it has
to be a properly structured transition stage. There does have
to be something done about Housing Benefit and its impact on people
who take up entry level jobs. The other thing that is really critical
is that during the transition period people have to be persuaded
that they need to think beyond their entry level job because often
the first job is the lowest paid job they are going to have. If
you are somebody who is making that immediate calculation and
saying, "I am going to be £5 a week worse off. Why should
I do it?"and people do worry about £5 a weekone
of the things you have to do is persuade them that if they get
a job they might temporarily be worse off but they have got to
look beyond that and see where they are going to be in four or
five years. If they remain on Incapacity Benefit their income
level is going to be the same. If they go on to a job their income
level may well be higher. It is not just about getting people
jobs. It is about moving them up the ladder of prosperity so that
they start to get better jobs over time.
Miss Begg
134. When you get people into work, are you
always getting them into paid jobs as employees or do you ever
suggest that they should become self-employed?
(Mr Nicholl) Paid jobs.
(Mr Charlesworth) Both.
135. Can you give me examples of some of the
self-employed things that you encourage?
(Mr Charlesworth) We set up self-employed people within
construction, within service industries, computer systems and
so on, as well as financial advisers. We have had a range.
136. Are you the only job broker that does that?
(Mr Charlesworth) No. Job Broker Cymru and West Country
Training would also be into that.
Chairman
137. You have got three minutes left. What is
the way forward? You have given us a lot to think about and we
are grateful for that, but just in the dying seconds of the meeting,
and let me start with Mr Nicholl, what would be the single most
significant change if you only had one change to make that would
make your role in assisting this process easier?
(Mr Nicholl) Differentiating between the different
groups within Incapacity Benefit.
138. Is that mainly mental illness versus the
physical, to put it crudely, or is that still too crude?
(Mr Nicholl) That is still slightly too crude. There
is the distance that people are from the open labour market that
needs to be differentiated. We also have to acknowledge that there
are very substantial numbers of people, who frankly there is nothing
wrong with, who are on Incapacity Benefit. Unfortunately, we tend
to talk about this as an incapacity and disability issue and it
hides these very substantial numbers of folk who really are not
affected by disability issues because there is nothing wrong with
them.
(Ms Hindle) For me probably the biggest thing that
sounds simple is to change the terminology and hence change the
mind set. Let us stop talking about incapacity; let us stop talking
about what people cannot do and doctors just signing people off
sick and not recognising the effect that might have. Look at what
they can do. Can they still do their job? What are they capable
of, not what are they incapable of? Over time that change of name
will change mind set. It will even get to changing employers and
discrimination because why would you discriminate against somebody
who is capable of things?
(Mr Charlesworth) Support the programmes that do work.
We have not mentioned Access to Work, Work Preparation, all good
schemes which work well, as does NDDP when properly delivered,
but make it a proper programme, redress the imbalance in the spending
to get the kind of result that hopefully we all want. The demand
from people with disability to get back into the labour market
is undoubtedly there. One and a half million people would love
to have a job tomorrow. It is not about people who are defrauding
the system. There are people who want to work but the support
is not there. That needs a commitment starting at the political
level which there has never been in our opinion over the last
50 years.
Chairman: Thank you. Can I apologise to you
again for keeping you waiting while we all went to vote. I hope
you have not felt that that was too much of a canter through your
evidence. It has been a very stimulating session for the Committee.
Thank you for appearing, thank you for your written evidence and
thank you also for doing what you do in your own respects. We
understand that it is valuable work.
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