Examination of Witnesses (Questions 400-420)
MR MALCOLM
WICKS MP AND
MS ALEXIS
CLEVELAND
8 DECEMBER 2004
Q400 Miss Begg: I think what Vera said
about the Pension Service working relatively well is borne out
by my own experience over the summer, when I went into all my
sheltered housing complexes and actually was inviting complaints
about how the new Pension Service is working. Generally they were
very complimentary and thought that the telephony was working
well, including one younger pensioner in a block of flats who
had `phoned up just to see how easy it was, because she knew others
would come to her, only to discover that she qualified herself,
which was quite an interesting exercise on her behalf. However,
the big complaint I got on almost every housing complex I went
into was about direct payment and the problems with the opening
of Post Office Card Accounts. Older people are loyal to the Post
Office, they want to keep the local Post Offices open, they have
been under threat in my own constituency and it is predominantly
the pensioners who have signed the petitions, campaigned to keep
the Post Offices open and they want to support the Post Office
by opening a Post Office Card Account, but they are still facing
enormous difficulties and an enormous bureaucracy. They have to
have an invitation letter from the DWP before they can go and
open an account and I had a `phone call from the son of one of
my constituents, he lives in Edinburgh, she lives in Aberdeen.
She tried to open a Post Office Account some months ago. Even
though she told them at the Post Office that the name on the form
was wrong, her first name was wrong, and despite two `phone calls
from my office to our hotline to get the name changed and being
assured it was, she is still not getting her money into this account
because the name still has not been changed. The son was on the
`phone to me, he is in Edinburgh and he cannot do it on the `phone
because they say the mother has to write. The mother is now in
hospital, the mother is not in a fit state to write or even to
sign the letter. He is in Edinburgh, she is in Aberdeen and how
does she get it? She is still not getting her pension. All of
this extra bureaucracy is being incredibly frustrating, as you
can appreciate. Why is that the case?
Ms Cleveland: I do hope she is
getting her pension but just not paid into her Post Office Account.
Q401 Miss Begg: I am not entirely sure
about that. I did not actually find out. I am assuming she has
still got an order book but I am not absolutely sure of that.
It is just the frustration of the younger members of the family
not being able to solve it for the elderly, and this is a service
which is meant to be accessed by vulnerable old people. Why does
it have to be so bureaucratic, and it seems to be not just the
Post Office being bureaucratic but also the DWP?
Ms Cleveland: Let us unpack some
of the things in there. One, the Post Office Current Account is
just one choice that customers have in terms of the accounts that
their pension can be paid into. It is not the only account that
is accessible through the Post Office because basic bank accounts
and some current accounts are accessible through the Post Office
as well, many of those without having to have the pin number.
One of the initial parts, in terms of our interaction with pensioners
for their direct payment, is to explain the options that come
through. I think one of the messages that we have not clearly
got across to people, and I think it is a message that is being
pushed in the Post Office, is "If you want to access your
money through the Post Office you have to have a Post Office Card
Account." Some of the criticism we have had about "Why
are you telling us about all these things?" is that we are
trying to explain to people their choices. If people then make
the choice to go for a Post Office Card Account, these are quite
limited accounts, you can only have benefits paid into them, you
have to take the money out in one go from them,[2]
you cannot have Standing Orders, or anything else, run through
them. Really it is just the electronic method of getting the money
to the Post Office and you can access it only during Post Office
hours.
Q402 Miss Begg: The fact that these accounts
are so limited, do you not get the sense that perhaps the Post
Office did not really want these accounts? They have just been
forced into it, partly because we have said that they must have
this option of being paid through the Post Office and that it
is the Post Office that have done everything in their power to
make sure that these accounts are just not worth the candle?
Ms Cleveland: That predates any
of my expertise in this area. Certainly it is something we could
look at and come back to you on, but I do not know what the conversations
were about the decisions to set up the Post Office Card Account.
Malcolm Wicks: I think what we
have got to remember is that the old system of pension books really
was not, to use that phrase, fit for purpose. I used to have responsibility
in the Department for our attack on fraud and we were losing something
like £50 million to £70 million worth of social security
money in the system. People knew that books were flushing around
the system and they were thieving them, so it was a very, very
inefficient system, also extraordinarily costly to run on behalf
of the taxpayer. Every order book foil costs us something like
68 pence. A giro cheque costs us £1.47. The electronic transfer
is costing, I think, somewhere between one penny and two pennies.
This is a modern system, but because Government and all of us
are so concerned to try to maintain the local Post Office network,
what we have got to do is turn the local Post Office, the Sub
Post Office, into a modern banking system. Those who choose to,
and large numbers of pensioners are choosing to, by the way, I
have got a figure here that 2.7 million people, pensioners, have
requested a Post Office Card Account, many of them are using them
quite successfully. Also, very often, by being able to cash your
cheques or cards from your building society or bank account, we
can turn the local Post Office into a modern banking centre. That
will help save the network. In addition, as you know, the Government
has put about £2 billion into those local Post Offices. The
system did have to change. Chairman, I do recognise that, for
many elderly people now, both with the Pension Credit and the
new direct payment system, it is a difficult time and really we
need to be on top of the communications task, and I think we are
but we are not complacent about getting that message across to
people.
Q403 Miss Begg: Because of the way that
the Post Office Card Account operates and the need for the pin
number, there is a real problem for elderly people who use their
carers to get their pension, especially if they have got different
carers coming in each week and they do not want to give out their
pin number to everyone. From what you said, Ms Cleveland, that
there are other bank accounts which can be accessed through the
Post Office, I am fairly sure that most pensioners are not aware
of those, and whether those would be a better option for them
in solving the problem we have with regard to carers. Is that
a fair solution?
Ms Cleveland: Certainly, if people
are phoning up, when they are invited, about their direct payment
change, the contact centre which operates that, which operates
for the whole Department, does try to explain to people the various
options that they have. I have seen in Post Offices, the conversation
there tends to be "If you want to carry on getting your money
at the Post Office, get a Post Office Card Account." People
have a good relationship with their local Postmaster, so I think
that is largely what is driving a lot of people's decision-making
and information about it. One of the things we are doing as part
of the move to direct payment, the alternative, if people have
not made a choice, is that we move onto a cheque payment. For
some people that may still be the right way of receiving their
money, but for many people it will not be and we want to go out
and talk to as many people as possible to make sure they make
the right choice.
Q404 Miss Begg: Moving on to the issue
of cheques, at the moment these cheques are going to be weekly,
but in weeks where there may be a Bank Holiday, or during the
Christmas period when the post is much slower, elderly people
are frightened that the cheque is not going to arrive on time.
Have you looked at how you can get around that? Would it be possible
to send out, for instance, four weekly cheques, or a cheque once
a month, rather than every week? I mean four cheques, so that
they could cash them individually each week? Surely that would
help to alleviate some of the worry but also it would be cheaper,
presumably?
Ms Cleveland: Certainly we are
looking at sending out cheques to make sure people will get them
on time, so we are bringing forward the date on which we will
issue them because we know that not all first-class post arrives
the next day. I cannot remember whether it is two or three days
earlier we are looking to post them. We already have special arrangements
in place in the Department for advanced payment around Bank Holidays,
and suchlike. It has not been used so much within the pensions
arena to date, but certainly for Jobseeker's Allowance, for example,
there is a facility to make prepayments there. All of those are
available across the Department as well.
Q405 Miss Begg: Minister, you mentioned
fraud in the old order book system. Is there not a danger that
weekly cheques are going to be even more insecure, as things can
go wrong with the post, and so on?
Malcolm Wicks: Let us be clear
about this. The major options are to have your money paid into
a bank account or a building society account, and some of these
institutions now have the basic bank account, or into your Post
Office Card Account. That is the most secure way of delivering
money to the elderly person, but in response to pressure, and
indeed our understanding of human circumstance, we recognise there
are some people, maybe because of multiple carers, or whatever,
where none of these systems seem to be suitable. Therefore, talking
about it with the Royal National Institute for the Blind, listening
to colleagues, my own experience as a constituency MP, we thought
that there should be an exception service, and the only way we
can think of doing that is to send a cheque through the post.
I am not here to say this is the ideal method, of course it is
not, there is a fraud issue there, which is why the exception
service has to be relevant only to exceptional circumstances,
because, like you, I worry about this, of course I do. One cannot
have it both ways. You cannot demand an exception service, which
is simple, cheque-based, and then worry about the consequences.
I worry about the consequences of this, but it is responding to
people's concerns which has led us to have this exception service.
Q406 Chairman: We heard last week in
Blackpool of an estimate of 4,000 cheques being lost when the
exception service is fully implemented. Is that a figure that
the Department has got any knowledge of? Somebody must be doing
some estimate. It will be a number, but 4,000 cheque units getting
lost in the post under the new exception system was slightly concerning
for those of us who were listening to the evidence at the time.
If you have not got an answer to that now, maybe you could let
us have a note, would that be possible?
Ms Cleveland: Were they suggesting
that was a week, a year, or what?
Q407 Chairman: Each week, they said to
us, 4,000 a week was a worry to us. If that is wrong, can you
put us right?
Ms Cleveland: Yes.
Malcolm Wicks: I hope, Chairman,
that those who have deliberately stirred up cynicism about Post
Office Card Accounts and have said "It's all impossible,
it won't work" will take this on board, because if they have
too many people in the exception service it opens up new difficulties
for those elderly people and new worries for them.
Chairman: The point is well made.
Q408 Miss Begg: Minister, you said that
it is important to distinguish between those who definitely need
the exception service, or for whom it is most appropriate, and
those for whom it would be far better if they had a Card Account.
What kind of training do your staff have on the telephone lines
to identify those pensioners for whom a Card Account is just too
complex or too big a challenge? If they are in their eighties
or nineties, sometimes it is the culture change that is too big.
What kind of training do your staff get?
Ms Cleveland: Within each of our
Pension Centres we have a specialist team dealing with direct
payments conversations. If someone `phones up and says "I
want to change to a bank account and here are the details,"
routine staff will do it. If it is a more complicated position,
we have a Direct Payment Team in each office who have been specially
trained in this, but more often with cases like that we would
refer it for a local visit, to send someone out to their home
to go through their circumstances with them, to tell them what
the options are and, if they are going to go for a Post Office
Card Account, help them through that process.
Q409 Miss Begg: Through that local visit,
if they are worrying, do you sit and do a calculation to make
sure they are not entitled to more money?
Ms Cleveland: Of course, yes.
Q410 Miss Begg: That is part of the procedure?
Ms Cleveland: Absolutely. We try
to link those two together. Similarly, if as a result of one of
our particular data scans we did a visit for a Pension Credit,
we would also be checking what was their payment position and
have a conversation about direct payment with them at the same
time.
Q411 Vera Baird: My questions are about
Joint Teams and their drive to set up joint working with local
authorities with a view to giving an integrated service to older
people. These Joint Teams, I think that currently there are only
25 of them, though you say 70% of local authorities, Ms Cleveland,
have agreed in principle to setting them up. At the same time,
though there are only a few working, Partner Liaison Managers
appear to have been cut fairly drastically, I think by a third,
down to 203, and the PCS say that this figure does not include
another third of them who have already left without being replaced,
and you are starting, as it were, from a low base. How can you
justify getting rid of Partner Liaison Managers when you have
got only 25 Joint Teams working?
Malcolm Wicks: Ms Baird, would
you mind if I start off on this and then hand over to our Chief
Executive, because I would like to share with the Committee our
thinking on this and then we will come on to the issue about staffing,
and Alexis Cleveland can deal with that. I think we were touching
on earlier that for some elderly people the welfare state locally
looks a bit confusing, do you go here, do you go there, is it
DWP, is it the local council, etc What we are trying to do is
make the local welfare state more coherent for the elderly person,
and the carer where that is appropriate. At the moment, we have
in being 29 Joint Teams, and by Joint Teams I mean the social
service department, the social work department, I guess, in Scotland,
working with our Local Pension Service. A Joint Team means that
one person only does, for example, the home visit and she, or
he, is charged with the task of looking at social service issues,
fairer charging, for example, as well as all the take-up of benefits.
We have got 29 Teams. We have signed agreements, I think, with
100 local authorities, I will check that figure but it is of that
order, and indeed our plan is that this will roll out across the
whole nation. I think the good news is that in some areas Housing
Benefit and Council Tax Benefit people also are coming in. In
one or two areas I have come across more than one or two. Twickenham,
I went there, the Age Concern local office is part of the Joint
Team arrangements. I know of at least two authorities, it might
be more, where the Primary Care Trust is also involved. This is
our vision and this is where we want to get to, so that almost
whoever the professional calling on the elderly person can look
at their needs holistically. We have had some nice stories already
of how our Local Pension Service people have almost forgotten
the Pension Credit application for a while because the house is
so wretchedly cold that you have got to get some energy efficiency
into it and draught-proofing, and all the rest. I am not saying
we are there yet, Chairman, on fulfilling that vision, but that
is our vision and, with the Joint Teams and our document published
recently on Link Age, you can see where our ambitions lie on that.
Now on the staffing issues: Alexis.
Ms Cleveland: We are up to 29
actually coming on stream.
Q412 Vera Baird: Yes, I gathered that
from what the Minister has just said. I said 25.
Ms Cleveland: We are in discussion
with 100% of local authorities. I think it is on the fingers of
one hand the number of places where we do not think we are making
a great deal of progress, two or three where we cannot see that
we are going to get there just yet. On all of the others we are
making good progress and, as I say, 70% have agreed in principle,
and in principle means we are beginning to start the planning
for when we are going to start up these particular joint ventures.
Also some of the planning is about whether people are going to
be sited in DWP premises or in the local town hall, or some of
them in voluntary sector premises. It is at that stage of planning
with them now. The rationalisation we brought in, in the Local
Service, is to try to align our service more closely to the primary
tier local authorities, and so we have gone from 165, I think
it is, down to 133, that actually it improves our alignment. We
have looked also at the ratio of our Partner Liaison Managers
to our Customer Liaison Managers and we have got over 8,000 partnership
agreements in place with various national and local organisations.
Once those are established, you need less resource focused on
the partnership side to maintain that rather than to set it up
in the first place. We are looking at reducing the number of people
marked as Partner Liaison Managers and transferring, not losing,
that resource, transferring it to Customer Liaison management
roles. If we get that wrong in a particular area, Ms Baird, then
we will move some of that resource back again, but we are trying
to focus as much of the resource as we can locally into frontline
people who are out visiting our customers, either just as Pension
Service visits or as joint visits with local authorities and the
voluntary sector.
Q413 Vera Baird: Thank you for that.
Can I pick up the issue about visiting. We saw PCS last week and
they said that the overwhelming priority that is put upon their
staff is Pension Credit take-up. They think that the service more
broadly is being compromised by that drive. Information Points
are being cut and they refer specifically to visiting officers
being desk-bound now because you have introduced a system of cold-calling,
working from scans of potential PC recipients. They say, in addition,
that it is very poor targeting. They quoted to us a couple of
multimillionaires who had been approached by your scanned process.
What do you say about that? Is it being changed from a visiting
service into a cold-calling service?
Ms Cleveland: No. Certainly we
do not cold-call anyone.
Q414 Vera Baird: The scan process is
cold-calling?
Ms Cleveland: We do not call people
if we have not written to them in the past about that. As part
of our take-up for Pension Credit, we did a lot of very detailed
customer segmentation, coming back to some of the discussion with
Mr Dismore about how we can target the people we think are most
entitled to that. These are people who already have an entitlement
to Housing Benefit but we have no record of a claim for Pension
Credit from them. They are very likely to have an entitlement
and so we use those records. We try to make contact by telephone
first, because actually that is a more efficient way for us to
do it, and many of our customers can do that. Also we use the
scans to drive our Local Service visits, so we have people going
through to identify the cases from the scans, and if they do not
come out completely accurate from the computer systems we have
to go through and select out the most relevant cases. They are
used first to try for a telephone contact, and if we do not get
them through the telephone to try to arrange a home visit.
Vera Baird: They said, for instance,
that Vera Duckworth, from Coronation Street, had been approached
to see if she wanted to make a Pension Credit application. I did
ask if she did want to, but I think not. Also they referred to,
in fact, just telephoning people out of the blue, including those
who are ex-directory, who said, as a first response, not surprisingly,
being elders, "Who are you? How did you get my `phone number?
Why are you asking me questions about my money?"
Q415 Chairman: Let me reinforce that.
It was a very, very powerful piece of evidence we took last week,
and again it was being done in good faith, people were saying
"If we were allowed to get on with the business as we know
it, visiting, doing the personal stuff, it would be much more
effective than this," and they almost hated it. They were
professional, they were doing it because that was what they were
charged with doing, but really they hated it and thought it was
a waste of time and it produced all sorts of untoward, perverse
visits.
Malcolm Wicks: Can I just say,
Chairman, I have a feeling that Vera Duckworth helped us with
the take-up publicity on an earlier occasion. In all seriousness,
however sophisticated our campaigning, occasionally will we get
it wrong? Yes, we will. Will we sometimes target the multimillionaire?
I guess, occasionally, we will.
Vera Baird: They were not talking about
occasionally getting it wrong. These are responsible professionals
who were complaining that this was happening far too frequently.
Q416 Chairman: They do not like it.
Malcolm Wicks: I suppose these
multimillionaires verified their multimillionaireness with the
Local Pension Service, so I guess some of these things are rather
apocryphal rather than evidence-based. Chairman, as I say, if
we are getting some of these things wrong we will learn lessons
from it, but if I had been sitting here, as I would not have been
as a Minister, 10 or 15 years ago, all of the questions would
be about why on earth are we not better at communicating welfare
rights to people, why are we so secret about it, are we really
in the business of not getting people to claim their entitlements?
If we have gone too far, and now the criticism is that we are
communicating too often and occasionally getting it wrong, I would
rather be there than where we were 15 years ago. I have been on
a Select Committee and I know they can have it both ways, but
I am conscious of the need to get the balance right.
Q417 Chairman: That is a monstrous attack.
Ms Cleveland: I recognise also
that the staff do not like it, because they enjoy the face-to-face
customer contact, they enjoy that activity, but we have to balance
out what that delivers in terms of results for us in terms of
the take-up as well.
Q418 Vera Baird: It is not just their
enjoyment though, they feel that is the best way to communicate
with older people, and I think that is very understandable. Can
I ask you just quickly, the local authority Welfare Rights service
as well as the PCS have said the number of Information Points
in local authorities have been cut, is that right?
Ms Cleveland: We have rationalised
those, but we are seeing more people at the centres, the ones
that we have retained. We keep this constantly under review, and
we have kept it under review because, running an Information Point
in a particular area, and we have taken these out to particular
housing estates, and suchlike, you run it for three or four months
and then the number of people attending drops off because you
have satisfied the requirement in that area. We have tried to
be flexible in terms of moving these around.
Malcolm Wicks: I think that is
right, Chairman. I visited a lot of these advice centres early
on and some I would go to and there would be queues and at some
there would be hardly any customers, and it is not wrong that
we have rationalised. I hear your concerns about what will happen
in the future, but at the moment I think, at so-called Information
Points, or advice services, we have seen almost half a million
people and the number of home visits have been 720,000 to date.
I am very determined that we maintain that kind of human contact
with our customers, hopefully not the multimillionaires but the
people who really need our help.
Q419 Chairman: Certainly it was an essential
part of the bargain that was put to the House by your colleague,
the Right Honourable Member for Makerfield, when he set this thing
up, that the Local Service was an integral part. We were picking
up last week that it would be an easy hit, if you are all under
pressure, and you are, to achieve these targets, that some of
that pain and agony would be visited disproportionately on the
Local Service. What you are saying to us is, you are assuring
us that will not be what will happen, that you will protect that
Local Service as a continuing, integral part of the future Pension
Service?
Malcolm Wicks: Yes.
Ms Cleveland: It is the key face-to-face
channel as we go forward.
Q420 Vera Baird: You can confirm too,
can you, that there should be no suggestion that you are shifting
the burden of funding and accommodation to the local authorities?
Ms Cleveland: What we have agreed
overall is that probably it will be about 50-50, in terms of accommodation.
We would expect 50% of the Joint Teams to be placed in our accommodation
across the country and probably 50% in the local authority or
voluntary sectors.
Malcolm Wicks: In the future,
we are talking about a better service for elderly people.
Chairman: Can I thank you both for your
written evidence and for your appearance this morning. It has
been most helpful. Thank you very much.
2 Customers do not have to take all of their money
out of their card account in one go. They could, for example,
make a number of £10 withdrawals on consecutive days if they
wished. Back
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