Examination of Witnesses (Questions 380-399)
MR MALCOLM
WICKS MP AND
MS ALEXIS
CLEVELAND
8 DECEMBER 2004
Q380 Rob Marris: I want to pick up on
your reply, Ms Cleveland, to the last question from Andrew Selous
about the letters, and so on, when you were talking about giving
the worker a bit more power over the letter. The union, PCS, have
told us that you told them that an IT solution in the Pension
Service would make them three times more productive. However,
the union now say to us that senior management are saying to the
union that there is no such technology on the horizon. Your last
answer to Andrew Selous, to my mind, rather confirmed that but
I wanted to put it to you. Have the union misunderstood what you
told them, are the union misunderstanding what senior managers
are telling them, or is there no IT saviour on the horizon?
Ms Cleveland: Probably I will
not be able to say who said what to whom, but can I explain what
the position is, Mr Marris? We are looking at taking a fundamental
change in the Pension Service, about moving away from an organisation
which is focused on people who handle Pension Credit, people who
handle Winter Fuel Payments, people who handle retirement pension,
and put the customer at the heart of our business process. Instead
of an individual having to phone a different telephone number
at a different time to give the same information over again to
someone on the retirement pension Application Line and to someone
on the Pension Credit Application Line, they can do that with
one call.
Q381 Rob Marris: That suggests to me
data-sharing, which suggests fairly sophisticated technology.
Have you got that technology, or is it in prospect?
Ms Cleveland: We would still be
using our same legacy systems. What we are looking to do is integrate
that through just some commercial packages which are used by banks
and building societies and insurance companies, to pool those
together so that the information is presented through to the agent
who is taking the call. They will not need to have the understanding
of how to operate those systems because the front-end system will
just scrape the data they need and present it to them in a different
way.
Q382 Rob Marris: That is not what you
seemed to say to Andrew Selous about these letters, that the system
would not do it?
Ms Cleveland: This is actually
quite complicated. In terms of the letters, they are generated
through from our back-end, mainframe systems at the moment and
they are quite complicated to change. One of the difficulties
our agents have at the moment is that they have no visibility
of the letter which has gone to a particular customer. What we
are looking to do, through the changes we are bringing in, is
make the letter that will be generated visible to someone, so
that they can tailor it to the particular individual, using the
front-end systems and using just the basic word processing available
in the office with them, to tailor something more specifically
through the agent.
Q383 Rob Marris: That sounds more laborious?
Ms Cleveland: I do not think it
is, because I think, as part of the way you collect the information
that you are taking in, and the fact that we are doing this only
once rather than three times, at the moment there are some big
efficiencies in removal of duplication. In terms of looking at
our efficiency agenda, some of it is delivered through new IT
but some of it is not troubling the customer many times for the
same information and then spending time keying it into our systems
many times.
Q384 Rob Marris: I appreciate there is
a potential quality of service gain, but it does sound to me that
it is not going to be much less laborious for your staff, albeit
they will be putting forward a better service. Is that a correct
characterisation?
Ms Cleveland: I think it is going
to be a step improvement in the work that our staff do and their
interaction with our customers. Certainly, on the evidence we
have had, we are looking to begin to roll this out in October
next year. We have already got the first cut of some of this front-end
IT available now. We hope to have some people testing the system
from January. Having shown it to our frontline staff, admittedly
just a few of them, they have come up and said, "Is this
the sort of thing that actually will make your job a lot easier
and quicker?" They loved it.
Q385 Chairman: Is this the Transformation
Programme?
Ms Cleveland: Yes.
Q386 Chairman: All that you have been
describing to Mr Marris is part and parcel of that?
Ms Cleveland: That is right, yes.
Q387 Rob Marris: What I have picked up,
and I may have misinterpreted what you have been saying to me,
is that you have been emphasising, quite understandably, quality
of service to the customer. Yours plans from March 2004, I think,
are for a 43% cut in Pension Service staff, that is what we have
been told, from about 20,000 to about 11,300. You are talking
about rolling out this stuff next October, in 10 months' time.
There is now talk of additional job cuts above the figures I have
just given you from March. I may have misunderstood those, but
do you think you are going to be able to deliver this increased
quality of service with some software bought from the banks, as
it were, and I use that from what you were saying, with what seem
to us to be very swingeing job cuts?
Ms Cleveland: I am confident.
I am confident that IT can help support us in this. I am more
confident in the fact that we have been through every single one
of our business processes. We have looked at how we can rationalise
those processes both to the benefit of our staff and to the benefit
of the customer. I am confident that the work we are looking at
is about reducing the amount of verification that we ask for.
I am confident that the fact that we are taking more of a risk-based
approach to some of the checking that we do, the combination of
those things actually will deliver a much better customer service
and more rewarding jobs for our people.
Q388 Rob Marris: With half the staff?
Ms Cleveland: Yes, with half the
staff. The numbers that you have quoted, we have shared these
numbers with our staff, we have shared the numbers with our trade
unions, because I think that is the best way to operate with people.
They reflected the numbers under the Spending Review 2002. Currently,
in the Department, we are looking at the Spending Review 2004
and as part of the Spending Review 2004 we have got two new targets.
One is the increased target for Pension Credit, the other is the
Informed Choice target, about issuing more forecasts. Both of
those have had a head count. We have been asked to look also
at the timing of the Transformation Programme. The numbers that
you have will vary slightly over that period and when we have
those figures we will share them again with our trade unions.
Q389 Rob Marris: I just want to be clear
on this, because I am slightly sceptical, I have to say, and I
think some of my colleagues are, and you will correct me if I
get it wrong, but you seem to be saying that you have a plan,
a cunning plan, to use Baldrick's phrase, to cut staff by 50%
but to improve the quality of service and offer additional services,
such as Informed Choice, and you are going to do this within a
relatively short timeframe, less than three years.
Ms Cleveland: By 2008.
Q390 Rob Marris: So four years. Am I
understanding the situation correctly?
Ms Cleveland: Yes.
Q391 Rob Marris: Perhaps I could turn
to you, Minister, on this. Ms Cleveland, and the Pension Service,
has a cunning plan to do this, to use my words, a plan, but when
the Secretary of State, Alan Johnson, came to us in October he
seemed to be saying that there was not yet an overall plan for
the DWP, in terms of job cuts, in terms of the specificities of
where they would fall and how they would fall. He said: "with
regard to where it all fits right across the DWP . . . we are
not in a position to say [until] . . . the New Year." Yet
we have here the Chief Executive of the Pension Service saying,
as I understand her to be saying, that she has got it all under
control, there is going to be roughly 50% of job cuts and it is
all going to work. Are you as confident as she is overall?
Malcolm Wicks: Yes, I am, and
I think what the Secretary of State was saying was that there
is a huge challenge for our Department, because in terms of job
reductions we are the biggest player in Whitehall and there are
still a lot of issues to determine across the Department. The
Pension Service is playing its full part. We might even be somewhat
ahead of some of our colleagues on working out the implications
of this. I am confident. It is a tough challenge and obviously
we are very concerned about those of our staff who have felt insecure,
that we should offer other jobs within the Department or other
jobs within Government or one or two things we might be able to
announce soon about one or two of those issues. I am very concerned
about the staff security side of it. In terms of the customer
focus, I am confident that we can deliver in this way. I will
just say, Mr Marris, that although it is challenging we are not
the first organisation in the world to be able to reduce staff
numbers while maintaining, or even enhancing, customer service.
This is a trend you see in organisations across the western world,
surely.
Q392 Rob Marris: Could you name two large
organisations that in a four-year period cut their staff by 50%,
in the white-collar sector, and have additional output, such as
Informed Choice, and greater quality of service on the offer they
are making currently?
Malcolm Wicks: It is a good question.
I have not got a good answer for you. I have not got four in my
top pocket that I could name which satisfy the statistical criteria
that you are making. I am making the more general point that surely
there are a lot of organisations in the private sector which,
in order to survive, have had to do this while meeting their own
customer targets. I do not think this is so unusual.
Ms Cleveland: Could I just offer,
where we do some benchmark comparators is with the Internal Revenue
Service in the United States and Centre Link, the social security
organisation in Australia, which is actually a bit ahead of us
in the way that they have been taking their service forward.
Q393 Rob Marris: They are making roughly
equivalent job cuts, are they? It is the same sort of scenario
as you have been setting out?
Ms Cleveland: They have been through
some of this in advance of us, so they have delivered on quite
a lot of the changes. In terms of the actual nature of the benefits
that they deliver for pensioners, which is an entirely means-tested,
old-age support, then it is slightly different in terms of
their staffing requirements and the levels of reduction they have
made, but I think that reflects the nature of their business.
Q394 Rob Marris: A final question, Ms
Cleveland, in terms of the demographic profile of the staff currently
and what you envisage it may be, or what it may in fact turn out
to be with these job cuts. Are you going to get into a position
where you have got a lot of senior workers still with you, hanging
on for redundancy, and the newly-trained ones either on fixed-term
contracts or newly-trained leaving for pastures greener elsewhere?
Ms Cleveland: That is not our
experience so far, though there is a difference in, as people
have been leaving us, where they have gone, but the people with
longer service tend to go on to other parts of DWP or other government
departments. The people who have come in, perhaps people who are
more used to having a two-year period of employment, they tend
to have moved on to other organisations. I think, as we announced
it, and I think it links back to the point the Secretary of State
made about plans in the New Year, we were able to tell our staff
about the detail of the plans. Actually, our staff want to stay
with the Pension Service overall, and even through our staff surveys,
and we have just done a cultural audit, they are very committed
to our particular customer group.
Q395 Rob Marris: Certainly they are in
Wolverhampton, unfortunately, where you are closing the office?
Ms Cleveland: We are passing part
of DWP into Jobcentre Plus, who will be very anxious to have it
because of the good performance of that office.
Malcolm Wicks: Chairman, I do
know that Her Majesty's Loyal Opposition have downsized considerably,
in parliamentary terms, since 1992, but whether they can make
the customer satisfaction criteria is not for me to judge.
Q396 Chairman: However, I have to say
that as a Committee we were in Mexford House, in Blackpool, last
week and you could not miss the extent to which the staff were
riven with uncertainty. They are a centre, they do not know whether
they are going to exist in two years' time or not and the collapse
in morale is palpable. I think the questioning and the way they
all put it, I think carefully and accurately, is that it is going
to be a very good trick if you can achieve these challenges successfully.
What I want from you, Minister, if I can put it that way, is that,
if you really believe, in your heart of hearts, that the process
is damaging and it reaches a point where it does start to impinge
on and damage customer service, these staff cuts will be held
until you are confident that progress can be made only if that
customer service is maintained. I have to say, you leave these
places very proud of the staff quality and the commitment that
they make, you cannot question their duty, as they see it, as
public servants and they are very important jobs for the local
economy too. They said to us, quite clearly, "We were up
for the 2006 kind of scenario, but we can't see how we can do
the 2008 scenario without damage to the customer service."
What the Committee needs from ministers is an undertaking that,
okay, the Gershon agenda I think is ambitious and challenging
and all that, but what we want is assurances that it will not
be pushed to the extent that you are getting people hurt who the
system is designed to serve. I think we deserve nothing less,
to be honest?
Malcolm Wicks: First of all, can
I thank you for your acknowledgement that we have great staff,
both in our centres but also, of course, at Local Pension Service
level. They are doing a remarkable job. Yes, I would give you
that assurance. There are government targets and we are a key
player in that, in our Department. I am confident that the Pension
Service can deliver. When I visit centres and see the very large
numbers of people that we employ, I do not think it is a hopeless
task, far from it, and I think that we can still deliver to the
customer with a reduced staff. We have a very large staff, we
have had to build them up to deliver Pension Credit, for example,
so I am confident about it. Yes, Chairman, I would give you that
assurance. The purpose of my Department, the purpose of Government,
the purpose of the Pension Service is to deliver a first-class
service to our elders in this country, among other things, to
attack pensioner poverty. That is our target. We are not in the
business primarily of reducing staff, we think we can do both.
Q397 Chairman: If it took to 2010 to
do it properly and was not too late, you would be knocking back
on the Treasury's door? That is a question.
Malcolm Wicks: It is a fair question
and if I genuinely felt that reducing staff numbers as planned
was not on, was inhibiting the Pension Service, yes, I would knock
on the Treasury door, and I am sure my Secretary of State would.
Q398 Mr Goodman: You do acknowledge,
do you not, that we have had similar answers from ministers in
the past on the subject of the CSA? Does that give us grounds
for confidence?
Malcolm Wicks: Those who set up
the CSA must answer for the performance of the CSA and you have
had a committee hearing recently on it. I think, Mr Goodman, when
faced with the real success of the Pension Service, at local level,
at regional level, when we are tackling pensioner poverty, when
we are giving more money to our elders, particularly women, I
think, with all due respect, as they say on these occasions, suddenly
to throw the CSA at this one is a bit of a nonsense.
Q399 Vera Baird: The CSA is not working
and the Pension Service is, you do not want to lose them?
Ms Cleveland: You mentioned Gershon.
You should not blame Sir Peter Gershon for the reductions and
the efficiency agenda we are trying to make in the Pension Service,
because the work we were doing predated the Gershon Report and
it was driven very much internally, so if it is anyone it is me,
and it was driven from a perspective of how can we deliver customer
service but also how can we deliver value for the taxpayer?
Chairman: You are right to mention that.
I am sure that it was within our knowledge that you were already
moving in that direction, but I think that the Gershon agenda,
in the Comprehensive Spending Review statement of 2004 gave it
all a new push, but you are right to mention it.
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