Examination of Witnesses (Questions 299-319)
MR PAUL
VIZARD AND
MR KEITH
WYLIE
2 DECEMBER 2004
Q299 Chairman: We are concluding our
inquiry into pension credit and we are joined by witnesses from
the Public and Commercial Services Union: Keith Wylie, who is
a National Officer, and Paul Vizard, who is the Pension Service
Trade Union Side. Gentlemen, you are both very welcome. We had
some very helpful evidence from the PCS Union at an early stage
of the inquiry and we certainly had a very useful visit, which
Mrs Humble helped to organise, in Blackpool yesterday, where we
took the opportunity of visiting the departmental Pension Service
business units to talk to some of the local staff. It would be
fair to say that you should not waste any of our precious time
together this morning trying to explain to us the depth of feeling
and uncertainty that is around because we have already got that
evidence of our own knowledge from the staff, a very impressive
group of people who are obviously facing some real uncertainties.
We have three or four areas that we would like to cover with you
dealing with some of the technicalities. Keith, why do you not
just set the scene a little by saying what your perspective is
from the union's point of view, bearing in mind that what we are
really focusing on this morning is that in a week's time we get
to see the Minister and the Chief Executive and we will as a result
of that draft a report which will include recommendations? The
power that we have, if indeed it is power at all, is that we are
able to require the Government to respond to our recommendations
and that gives us a chance of making sure that we put things squarely
to them that the witnesses put to us. If you could help us in
that context this morning we would be most grateful.
Mr Wylie: Thank you, Chair. First
of all can we record our thanks as a union to you for calling
us to give us the opportunity to give evidence to you first hand.
Maybe I should explain our roles in the union briefly. I am the
National Officer for PCS and an employee of that trade union.
My role within PCS is Group Secretary of the DWP Group, so I am
the senior official representing all of our members across DWP,
including those in the Pension Service. Paul is the Secretary
of the Pension Service trade union side, which is an organisation
that umbrellas all the unions in the Pension Service, although
obviously not at the bigger end of the three unions that are recognised
by the Pension Service itself. Any questions on general policy
and the wider issues I will be happy to answer. Paul is going
to help me out on any detailed or technical questions about the
Pension Service. I will be brief in terms of our opening remarks.
I just want to outline the three areas that we see as the most
important areas pertaining to your inquiry that affect our members.
The first one is the rundown of the local Pension Service. We
have grave concerns about the number of cuts that are being proposed
in Local Service and the impact that has on our members' ability
to deliver the service that they want to deliver to pensioners
locally. We set off with the vision of being a holistic service,
a quality service that provides not just a telephone service to
pensioners across the community, and we believe that the cuts
that are being effected now and are being proposed for the future
will seriously jeopardise our members' ability to do that. It
will reduce our influence locally, and it was interesting to hear
from colleagues that were here earlier that it will reduce the
influence that DWP and the Pension Service has with Joint Working
Teams, with the partnership arrangements in communities. It will
reduce the amount of proactive work that we do in trying to identify
the poorest pensioners in society. The second area that we know
the Committee is aware of but on which we want to expand a little
bit further is the problems that we have with the IT. I am sure
everybody is aware of the problems that we had last week because
they made pretty good headlines. Whilst that was a fairly spectacular
crash, it was not typical and is not a good example of the problems
that our members face. They are facing day-to-day problems with
the IT that they have to work with. We were told this week in
a meeting with management that the savings that they had projected
by the introduction of the new systems, to use their words, are
"not even on the horizon yet" and that there is no real
prospect of the processing systems making any real savings before
our staff are cut in the drastic way that the Government is proposing.
The IT problems that we faced last week and that our members face
on a daily basis add to the frustration that they feel and the
disillusionment that is increasingly seen amongst our members,
which is a great pity because a large number of committed people
work in the Pension Service. The final and most important area,
obviously, is the cuts. I know we will come on to that but perhaps
I can help the Committee by giving you some figures that we have
recently been given. We are told that in the Pension Service itself
as at 1 April this year there were 19,620 staff. The target for
the end of March 2005 is 14,500, which is a cut of over 5,000,
and the target by 2008, which is the end point of the Chancellor's
proposed cuts, is 11,500, which is a cut from today's figures
of around 8,000 staff. We are also told that from the present
position of 29 pension centres the current proposals will take
us down to 19 by the mid point of next year and we are expecting
an announcement at some point in the near future that that will
move from 19 in 2006 to nine pension centres. Therefore, over
a two to three year period we will lose in the region of 20 pension
centres. We will probably talk more about the consequences of
these cuts but one of the biggest consequences, as well as the
impact on staff morale, is the attrition rates, which is a DWP
term for the number of people who are leaving the service, which
is even higher than management's worst projections. Our major
concern is that we are losing new people in particular very quickly.
There are a number of reasons for that. The low pay is one, the
lack of confidence in senior management is another, but it is
mainly because of the uncertainty of people's futures. Even if
you are in one of the 19 remaining pension centres in the back
of your mind must be the constant worry that it could be one of
the 10 that is going in two years' time and if it is in an isolated
location the possibility of redeployment is reduced, especially
redeployment to a department where they will lose 30,000 jobs
over the next three years as well. We have a major concern, therefore,
not just about the morale of staff in terms of these cuts but
also the ability of the remaining staff to deliver the service
that we want to see delivered.
Q300 Chairman: That is extremely helpful.
We were under the impression—and to be fair to the new Secretary
of State he had only been in office six weeks when he came to
talk to us about the departmental report—that it would be
the end of the year before the incidence of the cuts that the
Chancellor announced in the comprehensive spending review last
summer would be known. Do I understand that these figures that
you are sharing with us this morning, which are certainly new
to me; I do not know about anybody else, are the first formal
intimation that the union has had of the incidence of the cuts
for the Pension Service?
Mr Wylie: These are the figures
given to us as projections by Pension Service management very
recently. It may be that these figures change and we were given
a fairly clear health warning that they would go down as well
as go up but in order to make the Chancellor's targets these are
the figures for the Pension Service.
Q301 Chairman: So if the Chancellor's
net reduction by 2008 of 30,000 is to be met you are saying that
the professional management team that were giving you these figures
say that that is the scale of the thing that they would need to
achieve to get there by that date?
Mr Wylie: Within the Pension Service,
yes.
Q302 Chairman: The first thing that strikes
me is, were you expecting job reductions? The way it has been
put to us, and I guess there is some logic and coherence to this,
was that if you are launching pension credit and there is a massive
likelihood of take-up at the beginning, nobody could possibly
realistically expect that level of employment and administrative
back-up, processing and take-up effort, to continue ad infinitum.
Therefore, the argument goes, were you not prepared? Were you
not expecting a reduction in the staff levels when the service
was originally set up in 2003?
Mr Wylie: To an extent we were.
At the outset it was made clear to us that there would be what
they described as a ramping up and then a ramping down around
the introduction of pension credit. What is different from what
was proposed to us at that time is that, firstly, the ramp is
a lot steeper coming down than we had envisaged it and, secondly,
that the numbers being lost are far greater than were projected
in the early discussions we had with Pension Service management.
It is a quicker reduction and a greater reduction than we were
expecting. We were expecting it mainly to be dealt with by the
use of people on fixed term contracts who would be employed for
12 or 18 months and then their contract would terminate: they
would know at the start of the contract that it was for a fixed
period, but we are now seeing, for example, with the closure of
York and Liverpool, and York in particular, people who expected
to be there for a long time now being told they are no longer
needed and are being redeployed.
Q303 Chairman: So the extent of it is
a shock? Would that be putting it too strongly? I do not want
to start giving you leading questions. How do you characterise
the impact that the extent of all this is having on your members?
Mr Vizard: "Shock" certainly
is not too strong a term. I was involved in discussions at departmental
level before the Pension Service was set up. In those discussions
we were told quite clearly by departmental management that there
would be this ramping up of fixed term contract staff, which we
fully agreed with and understood the need for, to help get the
new benefit in and get it to steady state, and then there would
be a gradual reduction by fixed term contracts simply running
out and then there would be a steady state and that would go forward
for the future. As part of the process of setting up the Pension
Service and the other business units within the DWP all staff
were asked to express a preference about where they would like
to work. The people who expressed a preference to go to the Pension
Service were those who were committed to the vision that was being
sold to us at the time, that we would be helping to eradicate
pensioner poverty, which is a worthwhile thing for anybody to
be involved in. What we are seeing now is that the cuts that are
being envisaged to get us down to 11,500 and reducing the number
of pension centres from 29 to nine is a far more serious cut than
we ever envisaged. The arguments that we have had from Pension
Service management up to now is that those cuts were predicated
on IT solutions. I know that Alexis Cleveland, the Chief Executive,
said that there would be an IT solution that would make us all
three times more productive, which would be marvellous if that
came up. We have been sold this line at meeting after meeting
ever since the initial cuts announcement was made in June. At
a very recent meeting we had in Sheffield senior management turned
round to us and said, "The IT solution is not there. It is
not on the horizon". What they have said to ministers is
that we can make the initial cuts that were planned up to the
end of 2005-06, because they were part of the ramping down that
was envisaged initially, but we have been told very clearly that
senior management have informed the Minister that future cuts
are not possible.
Q304 Chairman: That is very interesting.
Let me be quite sure that I understand this. What you are saying
is that if the planned changes and reductions were left at the
levels of 2005-06, both the scale and the extent to which the
staff were being reduced, that is possible and sustainable but
after that the phase two as it were would be unlikely to succeed
without seriously diminishing the service? That is what you said?
Mr Vizard: That is it really.
We were expecting a rundown in numbers once we got to some sort
of steady state. Without the IT solution that has been promised
there is no possibility of us being able to deliver any sort of
service to pensioners. It is indicative of the way the management
are approaching the cuts, which is not simply running down numbers
in pension centres but a clear attack on the numbers involved
in Local Service, which from our point of view has been a great
success, as has pension credit. I want to make that clear from
the start. I think that pension credit has been a success story
and as part of that Local Service has been a very important success
story, actually going out and doing that outreach work and starting
to reach some of the most vulnerable people in society. The way
that management are making the cuts, however, is that right at
the start of these cuts they have started to decimate the Local
Service.
Q305 Chairman: I want to come on to the
Local Service in a moment because it is a crucial part of the
inquiry that we are doing but, staying with the central call-centre
scenario, this might sound a naive question but if you could be
transported through to 2008 and all these cuts that you have just
been explaining to us actually took place, what would be the most
obvious effect on the service that applied to your clients' perception
of what was being offered to them by way of the service? Is there
any way that you could try and capture for us the extent to which—and
I am anxious to concentrate on the central call-centre if we are
down to nine—that would affect the service to ordinary people?
Mr Vizard: It is virtually impossible
for me to envisage any sort of service being delivered if we are
down to nine centres when it started at 29. We have already got
backlogs building in the centres. We have already got problems
of cases being lost, important documents being lost, because we
have not really got the resources to deliver the service that
we are trying to deliver. I would find it very difficult to try
and envisage any sort of service. The attrition rate when the
next announcement is made, which we are told is imminent, will
go through the roof.
Q306 Chairman: Before I move to my final
question about attrition rates, which is a worry, I want to try
and tease out a little bit more about the background to all this.
We were all hoping and expecting that the functionality would
increase and that that would give us some extra flexibility within
the workplace. Presumably you were affected as badly as everybody
else last week with the upgrade in the operating system. Can you
tell us a little bit more about your understanding of what the
additional functionality will deliver in the future?
Mr Vizard: We cannot share very
much with you at all about that. In the discussions we have had
with Pension Service management they have all along said that
this IT solution is imminent.
Q307 Chairman: It is more than the Pensions
Transformation Project because we know that that is coming in
2005-06.
Mr Vizard: What management are
looking at now, having decided that the IT solution is not there,
is ways of trying to improve the efficiency of the way in which
we work currently, so they are looking at HR policies, for example,
and whether there are things we can do there within the current
departmental framework to improve efficiency, but we have not
had any real engagement on what that might look like at all.
Q308 Chairman: There are some concerns,
even with the 2005-06 figures, about trying to make it as easy
as possible to try and keep the corporate knowledge but be fair
to people who are being released. It is anecdotal to us at the
moment but worrying, the figures about attrition rates. Do you
have any hard data yourselves about how this is beginning to affect
people? You said earlier that it was appearing to be harder to
keep newly recruited staff. Is there any way that before next
week we could get hold of some figures or even estimates of the
kinds of things that might be happening?
Mr Wylie: We can ask the question
of the DWP management and they should provide it to us. We have
got some broad brush figures that we used for the purpose of pay
negotiations this year but I am not sure if they are broken down
by business unit. They probably are but they will be older figures
in any case and so they will not reflect the attrition rates that
we have seen since the announcements have been made and since
it has been clear in the summer which offices are closing. Our
experience anecdotally is that the newer people who are coming
in, who came in to work for the Pension Service because they wanted
to deliver that sort of service, are the first to be going. The
people with long service, with lots more experience, are tending
to hang around waiting for the big package, which we do not believe
will appear anyway, in that if you have got a lot of service it
is worth waiting to see if there is a redundancy package on offer.
One of the figures we can give you that we were given this week
is that in York and Liverpool already, even though the closure
of those two offices is not scheduled until the spring of next
year, over 50% of the staff have been redeployed.
Q309 Chairman: 50% redeployed?
Mr Wylie: Redeployed outside those
centres.
Q310 Chairman: Outside? Does that mean
outside the department or outside the service?
Mr Wylie: Either within DWP or
to other government departments. They have been redeployed out
of the Pension Service. One of the points that was made to us
yesterday is that the pensions management in York and Liverpool
are beginning to wonder if there is going to be anybody left there
to turn the lights off when it finally closes. That is one of
our concerns as well, that if you de-motivate people and put them
in a position where they are so concerned about their future that
they go, then it becomes a self-fulfilling prophecy that you will
lose those staff.
Q311 Chairman: That in itself suggests
that there is not what you would consider to be a coherent thought-out
management process to try and help folk who are affected by these
cuts to find other work in the department or indeed outside.
Mr Vizard: Management in the Pension
Service have a flight path, as they call it, which is their preferred
attrition rate. They shared that with us quite recently. If you
imagine their flight path being up there (indicating), we are
actually down here (indicating). We are told this is a success
story for the Pension Service because more people are leaving
it earlier than they want them to. We asked the question, and
Keith has just made the point, that presumably the people who
are leaving are the very people that they are going to want to
keep for the future because they have brought those in within
the last 18 months or two years and trained them in the telephony
systems, which is the vision for the call-centres of the future,
but they are leaving because they are generally low paid, or they
think they are not going to have a future in the Pension Service,
and I do have a vision if we carry on down this line, that at
some point the only people who will be left will be those who
have 15 or 20 years' service who are waiting for a mythical package
but are not necessarily the people that the Pension Service ought
to be trying to keep.
Q312 Chairman: You have not had any meaningful
discussions yet about packages, not that this is the Committee's
work? We cannot negotiate packages; that is the union's job. You
sounded pretty sceptical about whether people might wait long
enough and be disappointed at the end.
Mr Wylie: There have been discussions
at departmental level about redundancy avoidance procedures which
we finalised two or three weeks ago and reached agreement on,
which the Secretary of State was personally involved in. He was
quite pleased that we had managed to reach agreement. What it
does not do is guarantee large sums of money for people to take
early severance packages. There will be some areas where there
is closure of an office and the possibility of redeployment is
incredibly limited, where people will be paid compulsory redundancy
terms even if they volunteer to go because there is no choice,
but those are quite limited and the information we have from the
department is that the Treasury have not given them a great sack
of gold to get rid of the 40,000 staff.
Q313 Mrs Humble: Can I move on to the
Local Service which you both mentioned as a key part of the delivery
of pension credit? Can you clarify for me some of the statistics
that we have been given? On the one hand we have got the DWP saying
that the reorganisation into new clusters is to align the Local
Service more closely with local government boundaries and make
it more efficient, joint partnership working, etc You have told
us that you think that two-thirds of the partnership liaison manager
posts are going to be cut, but the DWP have told us that it is
only going to be a third of those partnership liaison manager
posts which are going to be closed. What does it all mean? What
is happening out there?
Mr Wylie: It depends when you
start counting, does it not? From DWP's figures, which we checked
on the way down, I think they are saying that the current level
of partnership liaison managers is around 180 and they are moving
it down to around 130, which is a reduction of about a third,
but what they do not count in is the number of partnership liaison
managers who have already left or moved on and our figures are
based on the people in post some time back at the point when we
started counting in the summer when the announcements were made.
What it also fails to count in is the empower pilots where there
were more PLMs than there were in other parts of the organisation,
but they are being lost as well, so we counted them in as well,
which explains the discrepancy. It is a bit like the cuts in the
CSA. We claimed that it was a third because they were going from
12,000 to 8,000. They claimed it was 20% because they had already
lost 2,000, so they were only going from 10,000 to 8,000.
Q314 Mrs Humble: I need a flow chart.
There is a serious point. We were earlier hearing evidence about
the importance of setting up the Joint Teams with local authorities.
If you have not got these partnership liaison managers how are
you going to set up the Joint Teams? Who is supposed to do it?
What role would they have in it?
Mr Vizard: I think that is exactly
the point, the damage the cuts are having. From our perspective,
when the Pension Service was set up an absolutely crucial part
of it was the Local Service for the simple reason that in pension
centres there is no public counter so the public cannot come in
and ask questions about their benefits. The whole vision was based
around phone contact but with Local Service. I know when Ian McCartney
was Minister he used to major on this a lot, that he saw this
as being an absolutely critical part of the vision for the future,
that we would be out there working with partners in local authorities
and Age Concern, Help the Aged, etc, building these Joint Teams
where we could jointly do good outreach work to reach the most
vulnerable sections of society. We have fully supported that.
In terms of members doing the jobs, they very much enjoy the work
and find it extremely rewarding and they are seen as good quality
jobs. What we have seen now, and please bear in mind that we are
at the very early stages of the cuts, is that in a lot of the
Joint Team areas the Pension Service partners are walking away
and saying, "We cannot possibly deliver that any longer".
The good work that has been done in building up those relationships
and starting to get the Joint Teams working is patchy across the
country. In some areas it has been very successful, but the Pension
Service now seem to be saying, "Because we have got to deliver
these cuts we can no longer deliver that sort of service. We are
not going to try and deliver that level of outreach work any longer".
I think that leaves very vulnerable people with nowhere to go
at all. We have been doing some research in the last couple of
weeks building up to today, looking at the effects on surgery
closures, which the Pension Service are now calling information
points. The evidence that we have got up to now, which is relatively
limited but I am sure we could build it up, is that we are looking
at something like 50% closures of surgeries because we have not
got the staff to run them.
Q315 Mrs Humble: One of the other justifications
for job losses is that the job losses will be amongst so-called
backroom people in order to release resources for front line people.
How are cuts in the Local Service justified in those terms and
are you seeing additional staff appearing somewhere who are doing
all the take-up work that the local teams currently do?
Mr Vizard: No. One of the things
that has angered members as much as anything in the way this has
been handled is the way that the cuts are being portrayed as a
method of—"waste" is a word that has been used—moving
waste out of the Civil Service to the front line in terms of education
and health. Clearly, it is quite insulting to be described as
waste anyway, for any public servant to be denigrated in that
way, but from our perspective I am not sure how more front line
you can be than being a visiting officer in the Local Service,
running these surgeries, reaching the most vulnerable people in
society. To suggest that by cutting these Joint Teams that is
reducing waste I think is absurd.
Mr Wylie: You asked earlier, Chairman,
how we would envisage the Pension Service operating if we go down
to 9,000 staff. We do not envisage it working. What would increasingly
happen is that management would go for the softer targets in which
to make the cuts and the softer targets are in the Local Service.
At the end of the day as a department we have to process benefits
and we will carry on processing benefits and it will be done in
a big shed somewhere in those nine locations, but if we have to
cut back further than the anticipated cuts the easiest areas to
cut are the Local Service and the outreach workers. They have
not started talking to us yet about the cuts for the number of
visiting officers but if the pattern for the middle managers carries
on we can expect them to be cut by a third and that will reduce
by a third our capacity in the field and that is a retrograde
step as far as we are concerned.
Q316 Mrs Humble: You as a union at your
conference talked not just about the importance of middle management
roles but also about the importance of the "lower grade"
staff, because they are often the foot soldiers and if you have
not got foot soldiers then the managers have nobody to manage
and what is going to happen in the service? You mentioned cuts
but do you have any figures about people who are resigning or
walking away? You said earlier a lot of the new people are giving
up the work. Does that apply also to the Local Service? Are they
walking away from that?
Mr Wylie: The attrition rates
are across the board, are they not?
Mr Vizard: Yes. I do not think
we have any hard data on this but I suspect just from what I know
around the service that because the majority of people who have
got the Local Service jobs are experienced civil servants who
know the benefits well and have had the training over time (I
think there would be a lower incidence of new recruits doing the
Local Service work) the attrition rates would be lower in the
Local Service than they would be in the Pension Service.
Q317 Mrs Humble: You have mentioned a
holistic approach and it has been mentioned before. Why has the
service moved to cold-calling instead? Is that happening everywhere?
Mr Vizard: Yes.
Q318 Mrs Humble: Why? What is happening?
Mr Vizard: It is happening everywhere.
I think it is management's desperation in looking at the cuts
that they are planning to deliver. They have a target to reach
five million claims by 2016. At the moment we are at 2.6 million.
Talking to colleagues in Local Service, they do not see any way
that even the 2.8 million or the three million targets will be
reached by the correct dates. I think that in desperation management
have gone to this cold-calling approach. What is happening is
that the department's computers are being used to generate scans.
The first scans that were being generated seemed to be reasonably
well targeted in that they were looking perhaps at people on attendance
allowance where you would expect that there would be a good success
rate on the pension credit claims. Now what we have been told
is that it is a random scan for pensioners who have not yet got
pension credit or who have not responded to us. We are contacting
people and the stories are starting to increase now. We are cold-calling
millionaires to ask them whether they want pension credit. Vera
Duckworth was phoned last week to ask whether she wanted pension
credit or not. I know in my own area we were ringing somebody
repeatedly. It is quite soul-destroying work for people who have
previously gone out doing quality outreach work to be repeatedly
phoning somebody and finding in desperation that they rang back
and say, "Will you stop pestering me? I have got £3
million in the bank". That is a complete waste of taxpayers'
money, having executive officers in the Civil Service calling
these people. What we should be doing quite clearly is building
on the Local Service approach and the Joint Team approach and
going out with our partners and literally finding the people who
most need our help, not just sitting at desks cold-calling. The
information that we get from the scans is also very erratic. Quite
often they will not have a phone number for them, so again civil
servants are having to find time trying to trace phone numbers.
When they get through, the experience is, "Where did you
get my number from? How do I know you are the Civil Service? You
are asking me how much money I have got in the bank, what my savings
are. Are you going to come round and rob me?"
Q319 Mrs Humble: Forgive me if I am asking
what you see as a simplistic set of questions but I do want to
get this on the record. How does this cold-calling fit into any
sort of scheme to target the hard to reach pensioners?
Mr Wylie: We do not think it does.
Mr Vizard: It is completely random.
It is an attempt to get the numbers up from the 2.6 million figure
up towards 2.8 million and 3 million. In no way can it be described
as targeting.
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