Examination of Witnesses (Questions 1
- 19)
MONDAY 15 NOVEMBER 2004
Department for Work and Pensions and Department for
Education and Skills
Q1 Chairman: Good
afternoon, ladies and gentlemen, and welcome to the Committee
of Public Accounts where today we are looking at "Welfare
to Work: Tackling the Barriers to the Employment of Older People"
and we are joined by witnesses from the Department for Work and
Pensions, Sir Richard Mottram, who is the Permanent Secretary,
and Mr David Anderson who is the Chief Executive of Jobcentre
Plus and, from the Department for Education and Skills, we are
joined by Mr Stephen Marston, Director of the Adult Learning Group.
You are all very welcome on what is clearly an important subject.
Could I ask you, Sir Richard, to start this hearing by looking
at page 33, paragraph 2.14 which says, "New Deal 50 Plus
has helped at least 120,000 older people into work at a cost of
£270 million" but it makes clear that a lot of these
initiatives are available to people drawing benefits for six months;
that is right, is it not?
Sir Richard Mottram:
Yes, it is.
Q2 Chairman: Of course, we know that
the longer you are out of work, the more difficult it becomes
to get back into work. So, why are you forcing people to wait
six months before they can access the programmes?
Sir Richard Mottram: Because,
in all of these programmes, there is a trade-off between offering
people early help and, if you offer too many people too much early
help, you are actually helping into work people who can get into
work anyway. So, all the while, you are trading these things off.
What is striking about New Deal 50 Plus is that it does offer
this at the six month point whereas, if it were New Deal 25 Plus,
it would actually be later. So, this is designed, in a sense,
to take into account your point.
Q3 Chairman: But there would not
be any harm having some more flexibility, would there?
Sir Richard Mottram: There would
not.
Q4 Chairman: For instance, if somebody
wanted to come and seek earlier, why not let them?
Sir Richard Mottram: There would
be advantage in having more flexibility which is precisely why
we are looking at introducing changes which go under the acronym
of BOND which is Building on the New Deal and those changes we
will be piloting from next year onwards.
Q5 Chairman: Can we now look at the
take-up of Incapacity Benefit and we can find that at paragraph
1.6 on page 20. It tells us in that paragraph, "In particular,
the number of older people claiming Incapacity Benefits has grown"
and, if we look over the page at figure 14 which we can find on
page 23 of the Auditor's General Report, we see that there are
approximately 1.3 million people over 50 who are on Incapacity
Benefits. When do you expect there to be a significant fall in
the number of people on Incapacity Benefits?
Sir Richard Mottram: That depends
really on the work we have in hand now on piloting new approaches
which goes under the name Pathways to Work. We are piloting new
approaches. We think that the initial results are quite encouraging.
Given the nature of this problem which is brought out very clearly
in the Report, you have both an on-flow onto the benefit and then
people who, if they do not get off it fairly quickly, stay on
it for a very long time. Although we have actually been dealing
with the problem of the rate of people coming on to it, since
it is a very large stock, reducing that very large stock is in
fact a long-term target.
Q6 Chairman: This is a very serious
problem indeed. We read in paragraph 2.27 which you will find
on page 37, ". . . almost half of claimants have been receiving
the benefit for at least five years." So, here we have 1.3
million people over 50 on Incapacity Benefits, half of those receiving
it for at least five years. This is a very serious situation,
is it not?
Sir Richard Mottram: It is indeed,
Chairman. All I would say about it to put it into perspective
is that I think this is not a UK unique problem, this is a problem
that is found throughout advanced societies and all the evidence
we have is that the approach we have been adopting is as rigorous
as, or more rigorous than, almost any other country and we are
certainly working actively to think about ways of reducing this
number. I quite agree that it is very large and, as the Report
brings out, this is the most significant group of people who are
not working over 50.
Q7 Chairman: Do you have any idea
of how many of these 1.3 million are incapacitated in reality?
Sir Richard Mottram: Well, all
of them are incapacitated in reality, Chairman, since they have
satisfied the conditions of the benefit.
Q8 Chairman: Thank you for that answer!
If we are going to get some of these people back, we have to have
that personal contact, do we not?
Sir Richard Mottram: Yes.
Q9 Chairman: I am looking at your
expression which will not be broadcast, Sir Richard. It was a
treat as you answered that last question. Can we look at Box 4,
"Pathways to work pilot initiative". It talks there
about support from skilled personal advisors. A great deal of
this work is very labour intensive on the part of your people,
is it not?
Sir Richard Mottram: It is.
Q10 Chairman: You employ 130,000
people at present but you are going to be faced with 30,000 job
reductions.
Sir Richard Mottram: We are.
Q11 Chairman: Are a number of these
job reductions not going to hit you precisely in this area where
you have labour intensive work trying to help people back into
work?
Sir Richard Mottram: No because
the approach we are taking to achieving the 30,000 reduction gives
priority to those effective personal interventions like Work-Focused
Interviews and a number of things that are described in this Report.
So, as we change the organisation, what we are trying to do is
to make reductions where they have least impact. For example,
bringing together on a much larger scale some of our processing
while, as far as we can, preserving effort in these areas and
indeed enhancing it. We are absolutely conscious that we need
to have a differential approach to how we achieve these reductions.
We are not simply scaling the whole organisation down.
Q12 Chairman: Is it right that you
have 10,000 personal advisers?
Sir Richard Mottram: We have 10,000
personal advisers.
Q13 Chairman: Once you have had these
30,000 job reductions in your department, are they all going to
still be there?
Sir Richard Mottram: That is something
we are working on at the moment.
Q14 Chairman: So, contrary to what
you just said, we have no idea whether we will still have the
same number of people actually at the coalface helping ordinary
people get back to work.
Sir Richard Mottram: The only
reason why I hesitate is because, as we are still working it out,
the precise detail is not something I can give you. My previous
answer was designed to give you the sense of what it is we intend
to achieve through this process.
Q15 Chairman: If we look at figure
4 on page 5, we can see that there are a number of organisations
involved in this. Can you personally co-ordinate such a large
number of organisations or can somebody in government?
Sir Richard Mottram: I do not
do this personally.
Q16 Chairman: We are talking about
Treasury, Inland Revenue, Cabinet Office, Office of the Deputy
Prime Minister, Department for Education and Skills, Department
for Work and Pensions, Department for Trade and Industry and so
it goes on.
Sir Richard Mottram: If you look
at a number of issues which government deals with, they would
have these many organisations involved. Basically, as the Report
brings out, there is a Cabinet Committee which superintends all
of this and then there is a lot of informal day-to-day working
between me and my people and David and a number of the organisations
here. I certainly do not think that this spread of organisations
involved is in any way unmanageable.
Q17 Chairman: Mr Anderson, can I
ask you to look at page 33 and at paragraph 2.15 which says there,
"Also, a full evaluation of the effectiveness of the programme"
this is New Deal 50 Plus "in increasing employment among
older people has not been undertaken." Why not?
Mr Anderson: There have been a
number of evaluations but a full economic evaluation has not yet
been undertaken.
Q18 Chairman: Why not?
Mr Anderson: That is largely on
the grounds of the changing expectation right from the beginning
of New Deal 50 Plus. When the New Deal 50 Plus was launched with
its employment credit, it was always known that the employment
credit was a temporary measure and would be removed and replaced
by the working tax credit within a short period of time. So, the
evaluation has been focused on what makes the activity work and
what the people say about this programme. Economic evaluation
is obviously something that we can look at down the track as we
see the financial impact of the working tax credit.
Q19 Chairman: If you do not have
this information, how do you know how many people would have got
jobs anyway?
Mr Anderson: The research carried
out has been by asking people what they think about the programme
and we know that 40% of them say that they would not have got
into employment, they would not have found a job, without the
help of a personal adviser and a rather larger number say that
they found the employment credit of significant benefit in helping
them get into work. I think that takes the total to about 90%
altogether.
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