Select Committee on Public Accounts Minutes of Evidence


Examination of Witnesses (Questions 20 - 39)

MONDAY 15 NOVEMBER 2004

Department for Work and Pensions and Department for Education and Skills

  Q20  Mr Field: Sir Richard, can I go back on a couple of questions which the Chairman has asked. You are being asked to cull 30,000 staff and the staff budget is less than 3% of the benefit budget, is it not?

  Sir Richard Mottram: It is a little more actually; it is about £8 billion on £110 billion, so about 7%.

  Q21  Mr Field: In preparing for this change, given that the Incapacity Benefit recipients now stand out as a very distinct and large group compared with other groups of recipients, did anybody in the department work out how many of your frontline staff would have to deliver people from Incapacity Benefit into work to save more money than is going to be saved by cutting staff by 30,000?

  Sir Richard Mottram: The answer to that question is that we have yet to establish—that is precisely why we are doing the pilots—how effective we could be as an organisation in getting people on Incapacity Benefit back into work. When we complete the pilots, as the Report makes clear, then the Government can take a decision on whether they wish to invest further effort in dealing with people on Incapacity Benefit. At the moment, what we have is the provision for going forward and expanding work-focused interviews in relation to Incapacity Benefit claimants as we roll out the new Jobcentre Plus model. Our forward public expenditure provision does not include provision to roll out a Pathways to Work approach right across the organisation.

  Q22  Mr Field: Again following on the Chairman's point to you, no one is owed a job by anybody else we now know in this world. Therefore, we cannot make a case for defending civil service posts because they have always been there, but one of the big changes that has occurred under the previous Government, much speeded up under this Government, is trying to develop a service which helps them from benefit into work. There is therefore a concern that when you have to make 30,000 cuts, the change in culture that you are making to your service in moving from a passive one of paying out benefits to one which does that as well as helping people into work might be more difficult to achieve rather than less difficult to achieve. Would that be reasonable, Sir Richard?

  Sir Richard Mottram: It could be that the whole basis on which we are planning to bring our numbers down to the 100,000 set for us by the Government is on an understanding that we intend to maintain the policy on the right balance between individual's rights and their responsibilities. What we are not talking about is moving away from a regime which had a very high expectation that the best solution to most problems is for people to be in work. We are not talking about moving away from that. Similarly, we are not talking about moving away from a strong focus on trying to improve, for example, our performance on fraud and error which we have discussed in this committee before. So, we are not talking about a change in the strategy of the department.

  Q23  Mr Field: The news coming through from the pilots is very encouraging.

  Sir Richard Mottram: The preliminary evidence is encouraging, yes.

  Q24  Mr Field: But you have just told us that there are no plans to roll that out nationally, however successful they are yet.

  Sir Richard Mottram: No.

  Q25  Mr Field: Although we are cutting staff by 30,000.

  Sir Richard Mottram: That is correct.

  Q26  Mr Field: On the cutting of staff, given that this is a Report about making sure that older workers get their fair share of the job market, are you ensuring that the older workers are not chopped first when you have to make the 30,000 cuts in staff?

  Sir Richard Mottram: The way in which the 30,000 cuts in staff are being made is very likely to be a combination of recruitment restrictions which are already in place and I do not see why they would impact differentially towards older people and a series of voluntary redundancy schemes and possibly, as a last resort, compulsory redundancy. The way in which we will frame those latter schemes is not designed to target our older workers.

  Q27  Mr Field: If you have a policy of voluntary redundancy, given the culture about older people generally not working, you might have a flood of older people who apply, might you not?

  Sir Richard Mottram: We might except that what we are not yet proposing to do is have a general departmental-wide voluntary redundancy scheme through which anyone can apply and some rules that would release the older people differentially.

  Q28  Mr Field: When you are further down the road and you have data, might you provide the Committee with just the age profile of those who are going of your 30,000?

  Sir Richard Mottram: We could do that, yes. Obviously, people who come to retirement will be a part of this, that is normal age retirement, but even there we are taking a more flexible approach to that issue.

  Q29  Mr Field: If you turn to page 3 and your graph—and these questions are coming from someone who supports totally the idea of moving to an active service—you could almost draw a straight line to the increase in the numbers of older workers in work and the increase starts generally speaking when we came out of the last recession under Norman Lamont and it continues today. Would you honestly be able that any one of those point to where you could say that is where the welfare to work measures kicked in which helped older people into work and, if so, can you tell us where they are?

  Sir Richard Mottram: This is a very difficult thing, obviously. If you look at the trend line, I think it is quite encouraging. Once you get behind it, I think you can obviously see that there are a number of factors at work here. There is the general state of the economy.

  Q30  Mr Field: Which is a big one, is it not?

  Sir Richard Mottram: The general state of the economy is a big factor, yes. There is the changing level of female employment so that many more women are now employed and obviously that is having a significant effect and then what we would claim is that all the help that we provide helps that process along, but we are not claiming that it is all just us.

  Q31  Mr Field: It would be not only not all of us, the truth is that the numbers of jobs in the economy are going up and, just as the number of single parents claiming benefit falls when that happens, so the number of older workers taking work increases and we would be hard pressed, would we not, on looking at that graph to say when particular welfare to work measures kicked in or contributed. That is not to say that we should not be doing that but we should not be looking particularly at people just claiming benefits. It would be difficult, would it not, Sir Richard?

  Sir Richard Mottram: It is difficult precisely to prove the effect. So, what we have to do is go out and ask people what the impact of what we have done is and we always openly admit that, whatever activity we are engaged in, there is a significant group of people which have been given the rather odd title of "the deadweight" who would probably have done something anyway and I think that is the point which David was touching on.

  Q32  Mr Field: When you say that you have gone out and asked people, could we have copies of any data that you have?

  Sir Richard Mottram: The data that we have is the data referred to in the evaluations which are listed in appendix 2.

  Q33  Mr Field: Could you to turn to 2.20. The Revenue have submitted that there are 450,000 claimant workers who have been messed about by one of their tax credits being wrong and they are paying the price of that. At the end of the paragraph, it says that you have anecdotal evidence from your staff which suggests that people have found it more difficult to engage in claiming working tax credits than the old employment credits. What evidence do you have and specifically what do they say on that and is it because the message has gone by word of mouth that it is quite risky thinking about moving into work and depending on the working tax credit because they might not arrive or you might be overpaid and they are asking for £3,000 back?

  Sir Richard Mottram: I think the anecdotal evidence that is referred to there is essentially a feeling that the number of job outcomes we are achieving has reduced with the switch from the employment credit to the working tax credit.

  Q34  Mr Field: The other one was simpler to claim, was it not?

  Sir Richard Mottram: It was, yes. The only reason why I make that point is because—

  Q35  Mr Field: There are 48 pages of it.

  Sir Richard Mottram: It is not for me to speak about how people get tax credits. It was just a more direct way of getting the money and it was actually a higher sum. So, it could be that it had some positive incentives, it could be also that it had some incentives that did not add a lot inside the system, but I think that is what is being referred to there. As we moved to a less direct form of payment not in our control, it may have dulled the effect.

  Q36  Mr Field: Sir Richard, you are worth every penny of your salary!

  Sir Richard Mottram: Could you record that.

  Chairman: It has been!

  Q37  Jim Sheridan: Sir Richard, I missed the figure you mentioned as to how many advisers you have.

  Sir Richard Mottram: We said 10,000.

  Q38  Jim Sheridan: What is the age profile of those advisers?

  Sir Richard Mottram: I do not have that with me.

  Mr Anderson: We do not have a national profile but, broadly speaking, they mirror the profile of the age group of all our employees. I am not aware that there is a particular skew. Certainly I have seen the profile for the three districts that were examined in this Report where special work was done and they were quite a range into the 30s, 40s and 50s, pretty much matching the population.

  Sir Richard Mottram: We can give you the age profile of both Jobcentre Plus and the Department as a whole.

  Q39  Jim Sheridan: The rationale behind my question is when you are engaging advisors to try and advise and encouraging those over 50 to get back into this, surely it would make sense that the advisers themselves should be in that age bracket.

  Sir Richard Mottram: I am afraid I do not know the answer but I will ask David if he would like to answer that.

  Mr Anderson: We do not have statistics by the personal adviser job because our employment systems record statistics by the grade of staff rather than by the job purpose and therefore the national statistics that you have asked for are not available. Broadly speaking, as I say, when we looked at the specific areas that we looked at, we did actually match the population as a whole. There were a number of older advisers dealing with older people.


 
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