Examination of Witnesses (Questions 360-379)
MR MALCOLM
WICKS MP AND
MS ALEXIS
CLEVELAND
8 DECEMBER 2004
Q360 Mr Dismore: If we want to look at
this more in the round, only 38% are claiming Savings Credit.
I think the point I would like to come back on, first of all,
is the question of the amounts involved. Certainly, as far as
Savings Credit is concerned, bearing in mind the claw-back for
Housing Benefit and Council Tax Benefit, are we talking really
about the 62% losing out on only minimal sums and is that why
they are not claiming?
Ms Cleveland: I think there is
an issue about the claw-back and what could be a full Savings
Credit element, if also you are receiving Housing Benefit and
Council Tax Benefit you are getting only 15p in the pound extra,
so even on a full Savings Credit of £15 it becomes a very
small sum, though, of course, it does passport people to other
benefits as well. That is why it is important that we do continue
to make those people take up their entitlements.
Q361 Mr Dismore: Is there any thought
about looking at what we are actually trying to achieve here,
by reference to not so much the numbers who claim but the amount,
the global amount, which is not being claimed? Would that be a
better target to look at?
Malcolm Wicks: It would be interesting
to know what Alexis Cleveland feels about this. I do not think
we have got the data yet but certainly I would want to see data
when it is robust which would, as is traditionally the case on
these occasions with means-tested benefits, let us see what the
percentage take-up is by individuals or by households, both, but
also in terms of what the percentage take-up of the cash entitlement
is. I would guess, at the moment, I think it is a reasonable guess,
that the percentage take-up of monies would be higher than the
households claiming, because I think the evidence we have got
shows pretty well that it is the ones who gain most who are most
likely to be receiving Pension Credit.
Ms Cleveland: My view is, it is
a matter of principle, that I would favour a percentage of the
money available as a target, because I think actually that focuses
you very clearly in that direction. What I cannot come up with
is a way of measuring that, given the uncertainties about the
underlying population and the adequacy of some of our data about
their income levels and reported income levels that you pick up
in survey information as well, which we know tends to be underestimating
that.
Q362 Mr Dismore: Is there any thought
about looking again at the claw-back and seeing whether we can
adjust the claw-back so that not so much gets taken away for Housing
Benefit and Council Tax Benefit? I had a pensioners meeting last
week and this woman came up to me and said, "I claimed Pension
Credit, I got £7.50 and found I ended up with about 4p by
the time I'd finished. What was the point of all that?" They
feel cheated.
Malcolm Wicks: Can I just say,
and this is an aside on the last point, that sometimes when people
write to me through their Members of Parliament about this there
is often some confusion because you have got two agencies, the
local council and our own Department. In terms of timescale, people
are saying sometimes actually they are worse off, whereas in fact
they are not if you compare like with like. I agree that, as Alexis
Cleveland says, the actual gain can be really rather small. We
will still argue, I think, that it is important for people to
claim their entitlements, because for those people who may say,
for example, "I've got my Pension Credit, I won't bother
about Council Tax Benefit," once you are entitled to these
things you often remain entitled, so it is important. Mr Dismore,
in answer to your question, yes, we are looking at that. Again,
I have to be realistic because nothing comes cheap in social security
and there are quite significant costs associated with this.
Q363 Mr Dismore: Looking at the numbers
who started to claim towards the March 2004 deadline for targets,
there was a significant increase just before that date and then
it seems to have fallen off somewhat since then, and I think only
15,000 claimed in September. Why do you think that is?
Ms Cleveland: I think there are
two things. There was a peak in March and that was a big effort
on our part to make sure we processed cases and it was driven
by a target at that point, but it was part of a very long campaign
we have been running since April 2003 for take-up. We have done
a great deal of very detailed work on customer segmentation that
will come through, which comes back to what do we know about take-up
so far. During the first 12 months of the campaign we wrote to
every pensioner household in the UK informing them of Pension
Credit. We tailored the letters particularly to encourage those
people we thought were most likely to apply to come through, and
we ran that and that was running through till the beginning of
this year. The impact of that really came through into the take-up
in March. We had planned a campaign where we expected over the
summer this year, through work we were doing with our partner
organisations, another surge of claims in September, when it came
towards the end of the 12-month back-dating period, because of
the policy change and continuing with the back-dating period which
I think will help us more with take-up in the future, but we did
not get that surge of claims. I think we were a little slow in
not anticipating that in the order of revitalising the campaign,
and that is what we are doing now. Although we would not expect
to see the increase probably until now and into next year, actually
we have relaunched our campaign, or are reapproaching, for example,
everybody who has contacted the Pension Credit Application Line
and filled in an application but not returned it to us. We are
contacting those people, saying "Why is this still sitting
on the mantelpiece?" to take that forward. We are doing other
calling and Local Service visits to people who look to be, from
data-matching we have done within the Department and according
to our records, those who are likely to have an entitlement to
Pension Credit. That is the next stage of the campaign that we
are running through now.
Q364 Mr Dismore: Going back to the Local
Service, I think you may get some more questions about that, are
you going to be able to sustain that?
Ms Cleveland: Certainly on the
plans that we have got at the moment, we are not looking to reduce
the numbers in Local Service over this period.
Q365 Mr Dismore: That has happened already
though, has it not?
Ms Cleveland: We have reduced
the numbers in line with the efficiency challenge that we have
been set in the Department, but also reflecting the fact that
we have been over a peak of activity. There is an opportunity
to put more work into this as we move through the direct payment
activity, because we are having to balance our resource in this
area between now and next March for visiting, for direct payment
conversions and for Pension Credit, where possibly we are trying
to integrate the two in a single conversation with the customer.
That resource, from March next year, will be available more directly
for Pension Credit take-up.
Q366 Mr Dismore: Can I address the question
of take-up of Attendance Allowance, and you were considering a
target in June 2003 for take-up on Attendance Allowance. How did
that end up?
Malcolm Wicks: We do not have
a target for Attendance Allowance.
Q367 Mr Dismore: You were talking about
it, that is what I am saying?
Malcolm Wicks: I am happy to take
that back as an issue. We are concerned for all of these benefits,
and recently we had a big campaign on Council Tax Benefit, for
example. A flyer has gone out with every Winter Fuel Payment about
Council Tax Benefit. We are very concerned that those eligible
for Attendance Allowance should receive it, so we are happy to
look at that again and discuss that with the Minister responsible.
Ms Cleveland: Certainly, from
an operational area, Mr Dismore, when we are doing Local Service
visits, a lot of our people are identifying the unclaimed Attendance
Allowance and also Carer's Allowance and picking up cases like
that. Again, some of the difficulties about take-up of Pension
Credit, actually assessing the underlying population for Attendance
Allowance is going to be very difficult.
Q368 Mr Dismore: Can I go on to some
of the suggestions which have been made about increasing take-up.
Citizens Advice have suggested that when people reach 60 and they
are already on Income Support, why can you not just passport them
straight through?
Ms Cleveland: We have arrangements
with Jobcentre Plus to make sure that we pick up these cases,
but the rules for Income Support and Pension Credit are slightly
different, particularly in terms of the capital rules. It should
be a seamless process. I know, in some cases, it has not been
and this is something we are working on very closely with Jobcentre
Plus at the moment, to make sure there is not any break in entitlement
or break in payment for these people.
Q369 Mr Dismore: The other problem, of
course, is perennially having to fill in very similar forms for
different benefits, like Housing, Council Tax and Pension Credit.
Where have we got to, in trying to work towards supplying information
once and that being used across the range of benefits?
Malcolm Wicks: I share your frustration
about that. There are different bits of the welfare state which
require this kind of information about personal details, income
and savings. I am absolutely clear that where we have got to move
towards, and I cannot give you a timescale but we are actively
looking at this, is a situation where one part of the welfare
state collects in that information and then can share it with
others, subject to all the rules about data protection, etc,—there
are some barriers we need to look at there,—we can share
it with other, legitimate people within the welfare state who
need that information. I think, from a customer's point of view,
where we are now does not seem to make any sense at all. Where
I think we are at the moment is to see whether in our Department
we can move towards a situation where we would prepopulate application
forms for other things, like Housing Benefit, for example, and
pass them to the individual so that she, or he, can send it to
the local authority. There are a number of kind of halfway-house
measures, I think, Chairman, on the route towards a much better
joined-up approach. I understand the force of the question. It
frustrates me, as a constituency MP, that we are where we are,
but I think there are a number of ideas around now to move in
the direction that you are suggesting we should, and I agree with
you.
Ms Cleveland: I think our proposals
would still involve completion of probably more than one form.
The objective we are looking at in the shorter term is that you
only have to complete the information which has not already been
provided to either the local authority, as part of a Housing Benefit
claim, or to us, as part of a Pension Credit claim.
Q370 Mr Dismore: Going back to some of
the earlier questions, as means-testing does look as if it is
going to increase in the short term, certainly people who may
be retiring now may not be entitled to Pension Credit, but in
three, four or five years' time they may well become entitled.
What are you trying to do to make sure you have got arrangements
to catch people later on, rather than just coming to retirement,
although I understand what you say, that the real push comes at
that time?
Ms Cleveland: Absolutely. Certainly
we need to make sure we get the gateway right, so that when people
are entering retirement we pick up their entitlements. Also we
are looking at reviews we might take at certain life events. That
might be reaching a certain age to look at a review, potentially
at the death of a partner for review, but also trying to pick
some of the near misses, people who are not quite qualified now
but you might want to come back to and do a review of that case
maybe in two years' time, because some of the impact of uprating
might bring people into this category as well. We have not got
any firm proposals on how to do the near misses yet, but certainly
that is something we are looking at very actively.
Q371 Mr Dismore: Presumably you can organise
your computers to do a flag or a trigger to say "This person
is facing" presumably from data projection, "an estimate
of where they are likely to be," assuming that Pension Credit
increases in line with earnings?
Ms Cleveland: You are absolutely
right. It is just finding the best way of doing that within our
systems.
Malcolm Wicks: I am sure our computers,
as ever, are well up to that task, Chairman.
Q372 Andrew Selous: Just to continue,
very briefly, the earlier exchange we had, I am concerned, Minister,
that we are not recognising a problem that is raised quite frequently
with my constituents, who perhaps are seeing their own occupational
pension collapse, and they are saying to me that their children
are saying very clearly to them that they do not think it is worth
saving for a pension, and this is what the younger people in my
constituency are telling me as well. I do not think that any of
us could say honestly it would be the great triumph of any future
Government to claim that even more people are claiming Pension
Credit, or whatever, because they decided not to save in the early
days. If you are prepared just to give some recognition to that,
I would find that comforting. Just purely for the record, you
did mention the unsustainable boom in the stock markets in the
eighties, I think it is only fair to mention that the UK stock
market performance, which of course is essential for occupational
and personal pension savings, has been pretty poor internationally
over the last six or seven years. Really it is that earlier point
about younger people and saving I want you to make a further comment
on?
Malcolm Wicks: The Turner analysis
was saying basically that, in a sense, some companies thought
they could have occupational pension schemes for almost nothing
and the booming share prices would just carry them forward, and
that is what Adair Turner and his colleagues called the fool's
paradise then. I do recognise these issues. We have just passed
a weighty, I hope in both senses of the term, Pensions Act, which
establishes from April a Pension Protection Fund. I am saddened
when I meet groups of workers, I met some yesterday, I have met
many groups with MPs, who have been in company pension schemes,
final salary schemes, so-called DB schemes, and, crash, the company
goes bust, and suddenly, lo and behold, the pension scheme does
not have enough money for all the pension liabilities into the
future. That is why we have established the Pension Protection
Fund, so from April we will be able to say to those workers, and
we do not want the companies to go bust, we have got the regulator
to try to get these schemes into better shape, of course, as well,
look them in the eye and say, "If the worst happens, you'll
get 90% of your pension rights if you are a worker and 100% if
you're already a company pensioner." That gets security back
into that aspect of social security. They have had that in the
States since the seventies. If it is good enough for American
workers it is good enough for British workers. Do we need to do
more? Yes, we do, and so this whole issue of how we get more people
into decent occupational pension schemes is the key set question
for Adair Turner, and we will look at his answers in his next
report later next year.
Q373 Andrew Selous: Moving on to some
of the more technical questions in relation to Pension Credit.
We have had evidence from a number of organisations that some
of the Application Line staff have not always been giving wholly
accurate advice, particularly in relation to Attendance Allowance
and Carer's Allowance. I had one of my constituents recently as
well who had a slightly complex issue about council tax arrears
and I think he had been told by the local authority that this
could not be taken back from Pension Credit and then he had been
told by his Local Pension Advice Service that it could, so obviously
he was confused and came to me. What comments would you have to
make on these sorts of issues?
Ms Cleveland: Just for clarity,
I think that would be a call to one of our main Pension Centres
rather than the Pension Credit Application Line, because really
that is just taking the applications. Certainly, in terms of the
Pension Service telephony service and the training of our staff,
we take any concerns like that very seriously. Where it is very
complex like that, it seems to me that someone should have referred
that to someone more technical in the organisation. We do know
there is an issue with people trying to help too much sometimes
when they do not know the detail. We are doing a lot with team
leaders listening in to telephone conversations, as part of the
ongoing training, for our staff to pick up issues like that. Also
we have introduced the "mystery shopping" process, whereby
National Opinion Polls, on our behalf, `phone in sometimes with
some quite complex information, just to check that our staff are
giving not just the correct information to a particular question
but making sure they have got complete information. It is important
for us that the customer has that full information but also it
is important because it saves another call to us.
Q374 Andrew Selous: You mentioned staff
training ongoing. Is it the case that is being reduced and it
is going to be reduced yet further?
Ms Cleveland: In terms of absolute
numbers of training days per year, it has reduced slightly, but
that reflects the fact we were recruiting so many people in the
run-up to the launch of Pension Credit. In absolute days it has
reduced, but in terms of the training for our staff, they will
have the training that they need to do their job.
Q375 Andrew Selous: In the future, will
the amount of training be reduced going forward?
Ms Cleveland: If you look forward,
the amount of training actually increases, because that is related
to the Transformation Programme we are trying to bring in. Also,
it tackles some of the issues about completeness, because as we
move forward we want to have more of our clerks able to deal with
a wider range of topics without having to hand customers on to
another member of staff off. Also to provide more in the way of
help screens, to make sure they do not miss some of the key and
very difficult technical points, but also so that they know when
to hand a case over to someone who is more of a technical expert
in a particular benefit.
Q376 Andrew Selous: In terms of errors
or delays, as far as applications are concerned, are you satisfied
that your staff are getting on top of that, in terms of dealing
with those issues?
Ms Cleveland: In terms of the
processing times, we are doing better under Pension Credit than
we did under Minimum Income Guarantee. There is a risk that it
might take longer, given that there are the two components of
Pension Credit, that we are hitting our internal targets on processing.
There are still some cases which take longer than we would like
and we are looking to reduce those, largely by improving the quality
of the information which comes through. One of the effects of
sharing information with local authorities and suchlike means
that in future we may have to do less verification, which again
will speed up the service. We have not yet got the first external
view of the accuracy of payments, for example. That will come
as part of the normal cycle of these checks. Our internal checks
are showing that we are performing well against our targets. We
have ensured, as we have recruited new people into the Service,
that we have something called a "line manager's assessment"
and that before someone moves off 100% checking of their work
they have to be able to demonstrate they can make these payments
accurately.
Q377 Andrew Selous: Finally, in terms
of the award letters that go out, when changes need to be made,
is it the case that there are difficulties with that, perhaps
because of older computer systems?
Ms Cleveland: Yes. The changes
to the letters have to be fitted in within a cycle of upgrades
to the technical systems, and just the way they are constructed
makes it quite difficult to change those letters. As part of our
Transformation Programme, we are looking to have the agent who
is dealing with the customer being able to structure the letter
that goes out to someone, rather than it being just an automatic
award letter generated from a section of paragraphs of the computer
system. Sometimes, I freely admit, when you look at them, they
are quite difficult to follow through.
Q378 Chairman: I noticed that there was
a PQ answer, I think the Minister answered it himself, saying
that 10% of calls to the Pension Service go unanswered and there
was a qualifying sentence which said that this is an industry
standard comparator. 10% seems quite a lot, to me. Is that something
you are actively working on at the moment?
Ms Cleveland: Yes, we have been
actively managing our telephony. This was new to us and we have
been working very carefully with a private sector partner, Ventura,
who are supplying some of the Pension Credit Application Line
service for us, about how you manage this. You have got to be
quite careful about how you interpret some of these figures, because
it is whether someone does not get a reply and it is quite how
quickly they hang up, because sometimes people get distracted
and they hang up after a few seconds because someone has rung
the doorbell. If they have hung on for over 35 or 40 seconds then
that is a real issue for us, from that perspective. Calls abandoned
are also an issue.
Q379 Chairman: It could be people throwing
the `phone at the wall?
Ms Cleveland: I sincerely hope
not, after two or three minutes. On any comparator we have done,
we are providing a good service. It is one of the things we are
picking up also as part of our mystery shopping, Chairman, and
we score nil points if they cannot get an answer, and that
is a big incentive for us.
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