Extracts from letter from Terry Moran
to Committee Chairman following visit, 28 January 2005
10. Thank you for visiting the DCS at Warbreck
House. It was good to meet you again and to meet newer members
of the Committee. I was grateful for your positive feedback at
the end of the visit. I promised to follow-up our discussions
with a written response to several points raised during your visit.
11. Against the backdrop of a discussion
about the Department's efficiency programme and the challenges
facing DCS, there was some discussion about the projected future
increase in our workloads. I undertook to let you know the reasons
for the growth. Overall we are facing a growth of approximately
19% over the next three years across all three benefits. The forecast
is on 2003-04 data for all the business events within DLA, AA
and CA cases and compared with the statisticians' workload forecast
(derived from the national GB forecasts using may 2004 data).
All the figures took account of the weighting factors for each
business event to calculate a meaningful workload increase over
the period. The Department's statisticians are confident in the
accuracy of the forecasts and suggest that there are a number
of underlying factors leading to this growth:
12. For AA, DLA and CA there has been growth
in claims recently which appears to be the result of a number
of initiatives and or policy changes. For example the Pension
Credit take up campaign and Joint Action teams appear to have
had a positive impact on AA claims and the extension of the upper
age limit in Carers Allowance has increased claims for this benefit.
This recent growth is expected to continue, albeit at different
levels, for all three benefits.
13. Analysts believe the main reason for
increase in AA claims in the recent past is the Pension Credit
take-up campaign. Currently there are only 20 Joint Teams in operation.
However, the plans are to roll Joint Teams out in the 200+ secondary
tier local authorities across the country over the next couple
of years. We think that most of the impact of Joint Teams on AA
(and CA) has yet to occur.
14. I hope you find this information of
use and do not hesitate to contact me if you require anything
further.
Terry Moran
B. David Leach, Rosalind
Hall
15. Operations Performance Improvement Initiative
— Scope of this work involves DBU only
at this time, set against a context of:
— Constant drive to improve Customer
Service.
— DWP reducing headcount requirement.
— Accommodating new work transferring
from Sutton.
— Achieving the above without just
"cracking the whip" over staff.
— Criteria for improvements to be considered:
— Better Customer experience.
— Better Staff experience.
— Once DBU opportunities have been
identified and implementation has commenced, focus will shift
to include DBCs.
16. Examples of the Themes Addressed by
Quick Wins:
— Re-classification of Valuable
items.
— Reducing the number of graded
signatures.
— Improving staff experience:
— Ceasing completion of duplicate
overpayment information by Operations on combined payment cases.
— Minimising unnecessary administrative/
clerical work:
— Using email rather than transmitting
forms clerically.
17. What's next
— Complete Proof of Concept trials
and validate To-Be designs.
— Validate potential benefits.
— Undertake implementation planning.
— Implement from February 2005 to mid-year.
— Start delivery and recognition of
benefits.
C. John Carey, Award Management
18. From a customer perspective, there are
problem areas that prevent DCS from delivering the required service:
— Inconsistency of decisions, for example,
by region.
— Quality and accuracy of decisions.
— High overturn rate at appeal.
Each of these areas needs to be addressed to
deliver improved customer service.
19. From a Decision Maker's perspective,
there are also specific problems:
— Information and evidence-gathering,
for example, the claim form is often inaccurately filled in and
there is a problem of receiving medical evidence.
— Guidance is not at the appropriate
level—handbook last updated 1998 and needs to be more customer-focused.
— No clearly defined decision-making
framework.
— A high rate of contested decisions.
They need to provide Decision Makers with a
comprehensive, supported decision making process.
20. A number of integrated initiatives to
address these issues include:
— Decision Maker accreditation.
— Award Management Guidance (AMG).
21. AMG is an IT supported framework for
Decision Makers. The framework:
— Is customer focused and impairment
specific.
— Retains the customer's care/mobility
needs as the primary consideration.
— Uses the claim form as the primary
source of information.
— Works within current legislation.
— Uses diagnosis to make best use of
the guidance.
— Applies to all claim events and multiple
disability cases.
— Provides factual and interactive
help screens.
— Uses the International Classification
of Diseases coding system.
22. AMG supports the Decision Makers by:
— Identifying what information is required
at the outset.
— Using the customer as the first source
of information.
— Tailoring evidence gathering to the
individual as much as possible.
— Identifying the best source of further
information.
— Providing a clearer explanation of
the decision.
— Providing comprehensive medical &
legislative guidance.
— Using the prognosis to help maintain
accuracy and consistency of decisions.
23. It is hoped that AMG will ensure better
customer experience, more job satisfaction for Decision Makers
and greater management control of the claims process. AMG will
help to:
— Delivers a more customer-focused
outcome.
— Improved consistency and accuracy.
— Improved quality standards.
— Reduced challenges at review and
appeal.
— Fewer appeal overturns.
— Improves confidence and credibility
in the decision making process.
— Improved business focus.
— Supports the Government's modernisation
and efficiency agenda.
24. For the future, DCS:
— Is working closely with medical and
policy colleagues to develop the guidance and exploring IT solutions.
— It will consult with all stakeholders
and use a step approach to design and development with ongoing
testing and evaluation.
D. Trade Union Side
25. The impact of proposed staffing reductions
was proportionately greater on the Preston/Fylde coast area which
currently had some 10,000 Civil Service jobs. Already in 2004,
500 jobs, involving 380 people had been declared surplus. The
people concerned had little or nothing to do and suffered low
morale. Communication about the jobs affected was poor and decisions
seem to have been haphazard.
26. IT trainers had been declared surplus
while 90% of new staff were unable to undertake their duties because
of lack of IT training.
27. DCS staff numbers had reduced from 2,500
(in 2001) to 1,600 currently, by natural wastage. Staff numbers
were being cut before the efficiencies from IT improvements had
been achieved. Complex benefits led to more mistakes and resulted
in greater demand on the helpline.
28. There had been no lateral co-ordination
between local DWP business units and jobs were offered at a great
distance from current location.
29. Concerns about the cuts were that it
would lead the to a concentration on meeting targets, possibly
to the detriment of the service as a whole. It was also felt important
to see whether IT would in fact deliver efficiency before reducing
staff levels.
PENSIONS SERVICE
A. Blackpool Pension Centre Manager and management
team
30. Blackpool Pension Centre was established
in 2002. Migration of work from the Benefits Agency was completed
in January 2004. The Centre currently serves East Sussex and Surrey,
but from 31 January 2005, it will also handle claims from pensioners
in Brighton, Lewes and Hove which are now processed by Wrexham
Pension Centre. The Pension Centre Manager was confident that
Blackpool could accommodate this additional workload. She explained
that Blackpool was currently one of the smallest Pension Centres,
but that it had the capacity to double in size. At present 37
staff process claims from East Sussex and 81 staff process work
from Surrey. Additional staff will join the East Sussex processing
team in January.
31. Blackpool had taken on a substantial
number of fixed term and casual staff and the Centre Manager was
about to make a business case for keeping them permanently. Blackpool
could recruit a very high calibre of staff, even fixed term or
casual, as the only alternative to Civil Service employment on
the Fylde Coast was the poorly paid tourist industry. When asked
whether a recruitment freeze was in place, the Centre Manager
said that to be fair to staff she first had to check whether new
positions could be filled from local surpluses, but that otherwise
she could recruit. Only one member of staff from Liverpool and
Burnley Centres which were closing felt they could manage the
journey to work at Blackpool.
32. The management team were uncertain about
the Centre's future. They did not yet know whether it was a migration
site which would close or a transformation site that would remain
and receive new IT. They hoped to receive news by Christmas.
33. Blackpool Pension Centre is overachieving
against clearance times for Pension Credit and State Pension applications
and against the national target for calls answered. Poorer performance
against telephony targets in April was due to an increase in calls
following a Pension Credit take-up drive. This had a subsequent
effect on processing time in May and June. The Manager explained
that figures for complaints and compliments included expressions
about policy rather than administration eg "Thank you for
the winter fuel payment".
The Centre had participated in national monitoring
of accuracy involving a sample of its caseload on three occasions.
So far it had achieved 100% accuracy. The Centre had also implemented
a Local Improvement Plan to address any accuracy issues. As part
of this Plan, accuracy is monitored at a local level and desk
aids and further training are given to staff.
34. The Centre Manager claimed that the
customers now applying for Pension Credit were the harder-to-reach
clients. Surrey and East Sussex are affluent areas and applicants
often have many different sources of income, making it more difficult
to assess entitlement. Staff had received new training to address
this. The management team believed that people who were not claiming
small amounts for which they were eligible should be encouraged
to apply for Pension Credit because it is a gateway to other benefits.
35. The Centre Manager explained that because
Blackpool Pension Centre is so geographically distant from its
customer base, she had made every effort to build a good relationship
with the Local Service and local authorities, for example, using
video conferencing. The management team spoke positively about
Joint Teams and explained that East Sussex authority had formed
a Joint Team with the Local Service which was working well. Surrey
did not yet have a Joint Team. The Local Service in Blackpool
had a very good relationship with Blackpool local authorities.
36. The management team explained that only
3.1% of staff are of ethnic minority origin. However, they had
never had anyone on the phone who needed an interpreter. Rather
people who could not speak English tended to ask a relative or
friend to call the Pension Centre on their behalf. Translation
of correspondence had only been required two or three times.
37. The Centre had been affected by the
recent IT difficulties with problems lasting two days. However,
the Manager claimed that the Centre had been less badly hit than
other Pension Centres as some of its PCs were able to access the
main system so they were able to link telephone staff to these.
She said no pensioner had missed a payment as a result of the
problems. The Centre Manager explained that the Pension Transformation
Programme was not a new system but a bolt-on addition to the main
system that would streamline services. She added that experienced
front-line staff would test the new technology before it was rolled
out. The management team explained that under the current legacy
IT system it could take up to a year for suggested improvements
to award letters to be made.
B. Meeting with North-West Local Service
Staff together with representatives from the local community
38. A representative from the local Citizens
Advice Bureau said that in her view face-to-face interviews were
a more effective way of working with older people than call centres.
She was concerned that we did not know how many people give up
rather than pursuing claims, particularly where there were literacy
issues or where people are deterred by the prospect of having
to send in documents. The existence of a healthy local service
was felt to be vital the functioning of the service. It is important
that people have places where they can take documents etc There
are different ways of accessing the local service in different
areas. For example, in some towns, you can go into the town hall,
where they have a one stop shop. The visiting service was said
to be very good, although, particularly in rural areas, visiting
officers can be inundated. There was concern at the prospect of
cuts to the local service, with the importance of retaining a
pro-active approach to take-up of other benefits, such as Attendance
Allowance emphasised.
39. The development of the joint teams was felt
to have positive aspects, with the contribution of the Pension
Service appreciated. The proactive and holistic approach to benefit
take-up was felt to be a good thing. There was a view that while
the telephone service was good for some pensioners and good for
simple things, such as reporting changes of circumstance. For
more complex transactions, such as making a claim, however, many
pensioners were felt to prefer face-to-face.
40. Citizen's Advice Bureaux may end up
having electronic access to departmental data. This is being discussed
at national level. There are questions about how Bureaux retain
independence through this and also about equality of treatment
for other advice workers.
41. The impact of savings credit on housing
benefit was identified as a particular barrier to take-up of Pension
Credit.
C. Trade Union side
42. The representatives complained about
a general lack of information from the top leading to a lot of
unease among staff. There was a lot of insecurity about what would
happen to jobs beyond the next two years. The most experienced
staff could not be redeployed as they would be unable to move
away from Blackpool.
43. Staff felt that there was no high level
strategy for staffing cuts and wanted to see evidence of a co-ordinated
plan across DWP. The representatives gave the Committee the example
of Stockport where there were vacancies at a benefits processing
centre but the town's closing Jobcentre Plus would not release
staff so they could apply for these jobs.
44. The representatives reported that morale
was the lowest ever seen. They contrasted this with the mood in
the Pension Service while it was being introduced and added that
staff were encouraged to join this new innovative service for
pensioners without any warning that jobs would go in the future.
The representatives also made the point that benefit processing
staff did have an interface with the public and that therefore
there was an argument that they were also "frontline".
45. There was concern that the Local Service
would be pulled back. Visiting staff had been put on "cold
calling" pensioners who had been picked up on "scans"
of data. Local surgeries were being cut back.
Glasgow Pensions Group Solution Centre,
31 January 2005
EXTRACTS FROM
DWP'S BRIEF
FOR COMMITTEE'S
VISIT
Executive Summary
46. The Pension Service has embarked on
a strategic business transformation programme, which will fundamentally
improve the way services are delivered to customers. The IT developments
to support this change will allow customers to transact more of
their business at a single point of contact, including over the
telephone, thereby eliminating the need for customers to provide
the same information more than once. These IT developments will
provide a more user friendly, joined up interface with existing
benefits processing systems, and are being introduced into the
business in a series of staged waves beginning in August 2005.
47. These changes will be complimented by
the introduction of a new Computer Information System which will
act as a central Departmental repository for customers' personal
data. This will provide staff with access to a customer's up to
date personal data, eliminating the need for the customer to repeat
previously provided information. The Customer Information System
will also reduce the need for so much data capture in other businesses
by sharing the most up to date details held by the Department.
48. Pensions Transformation Programme has
been realistic about the capacity of The Pension Service to absorb
change without excessive disruption to the business. Pensions
Transformation Programme is one of the first programmes to follow
the Department's new IS/IT strategy which avoids "big bang"
development of new (or replacement of existing) IT systems and
instead seeks to phase in new "front end" IT systems
over time whilst also utilising the existing "backend"
legacy systems. In this respect it is quite different from previous
programmes (for example Child Support Reform Programme). Implementation
has therefore been planned over multiple "waves of change",
stretching over several financial years. The importance of people
change management, communication, risk mitigation and contingency
planning is integral to the implementation planning process.
49. Significant progress has been made to
date. Pensions Transformation Programme passed through its Critical
Design Review on 24 November 2004 with funding approved until
31 July 2005 subject to agreement in the next Spending Review
settlement for the next three years.
50. Background
Key factors hindering The Pension Service's
ability to deliver a high-quality, efficient service are:
— insufficient automation: processes
are largely paper-based;
— information technology constraints;
— variability of performance; and
— susceptibility to fraud.
51. This combination of factors means that
staff:
— take up to three months to train
in complex processes and systems;
— have reduced job satisfaction; and
— spend much of their time focusing
on back-end processing not front-end customer facing activities
and services.
52. Additionally, an examination of the
Local Services operation found specific areas for improvement:
— increase emphasis on take-up and
effective activity measurement;
— define responsibility for take-up;
— remove duplication of efforts by
different agencies;
— clarify purpose of partnerships and
formalise relationships with partners; and
— develop output based performance
management.
53. The introduction of the first wave of
Pensions Transformation Programme Change (Wave 0) from mid 2004,
means that further progress is already underway on addressing
some of these issues.
54. Project Objectives
Pensions Transformation Programme focuses on
both core and critical products for today's pensioners and has
three primary objectives:
— increase take-up of entitlements
to reduce poverty;
— improve customer service; and
55. An additional, non-primary objective
is to deliver less invasive means-testing. These objectives are
defined in more detail in Table 1 below.
Table 1
PENSIONS TRANSFORMATION PROGRAMME OBJECTIVES
| Objective | Pensions Transformation
Programme Ambition
| Rationale |
Increase take-up of entitlements to reduce poverty
| — Delivery of benefits to all those entitled
— Delivery of benefits to those most in need
— Achievement of Government take-up targets
| — Government commitment to deliver benefits to those entitled and in need of them
— Government commitment to reduce pensioner poverty
— Pension Credit targets
|
Improve customer service
| — Accurate and timely delivery of The Pension Service benefits
— Respectful and informed service for benefits critical to The Pension Service mission
— Reduced visibility/impact of hand-off
| — Government commitment to improve public service
— Government commitment to provide dedicated service to pensioners
— Achieve customer service targets (Public Sector Agreement)
|
Improve efficiency
| — Radical productivity increase
— Reduction in overall headcount
— Reduce overall cost to serve pensioners
| — Spending review requires absolute and unit cost improvement
— Government has set headcount reduction target for DWP
|
| | |
56. The following two key enablers were identified to
ensure that these objectives maximise Pensions Transformation
Programme's ability to meet the overarching Pension Group objectives
and Public Sector Agreement targets.
Enablers
| Pensions Transformation
Programme Ambition
| Rationale
|
Improved staff experience
| — Deliver more customer focused service
— Improve job satisfaction and rewards
— Increase knowledge and skill sets
— Improve diversity of workforce
| — To support a more flexible organisation able to deliver the customer experience
— Staff trained and empowered to deliver entitlement at a single point of contact
|
Better Information Technology Capabilities
| — Single, unified view of the customer (eg, profile, preferences, entitlements)
— Fully integrated Information Technology systems (front office, back office and Legacy)
— Workflow and case routing capabilities based on skills and service workload
| — To support the delivery of improved customer service
— To improve efficiency of organisation
|
| | |
57. Dependencies
The success of Pensions Transformation Programme is dependent
on a wide variety of internal and external factors. These include
other projects within The Pension Service, such as the Customer
Information System, as well as policy changes.
58. The main interdependencies with other projects have
been identified as follows:
— The Customer Information System project is an
enabler to achieving accurate customer information more quickly
and is therefore key to the successful delivery of Pensions Transformation
Programme's related benefits.
— Pension Credit Project's achievements will provide
the baseline on which Pensions Transformation Programme will build
to achieve the Public Sector Agreement targets for take-up.
— The Link-Age Programme may overlap with some aspects
of Pensions Transformation Programme.
59. Some policy changes are required to support the proposed
systems, particularly in relation to the acceptance of electronic
claims forms. The legislative change process can be lengthy and,
depending upon the proposed changes, attract great ministerial
or public interest. Any policy changes required by Pensions Transformation
Programme will be carefully managed as delay or rejection of such
changes will impact the new design processes being developed.
60. Key Policy Changes
Key policy changes that were identified, prioritised and
action being taken:
— Removal of the requirement for segregation of
duties between obtaining details from customer and approving claim/change.
— IT support design includes appropriate controls
and has been subject to appropriate risk assessment. PTP has supported
review of The Pension Service mandatory checking regime.
— Eliminate the need for a signature for change
of circumstance (in line with Pension Direct).
— Legislation now changed. Pursuing as part
of the second wave of change detailed design and working with
Risk Based Verification initiative to ensure common understanding/approach.
— Enable The Pension Service to collect claim information
for Housing Benefit/Council Tax Benefit.
— PTP pursuing introduction and determining
timing.
— Eliminate the requirement for a signature on a
State Pension claim form.
— PTP worked with Policy/Strategy/Solicitors
Branch on regulations. Amended regulations have been accepted
by the Social Security Advisory Committee, were laid before Parliament
on 17 January 2005, SI2005/34 (due to come into force 2 May 2005).
— Enable Third Parties to verify evidence.
— Link to Third Age/Link Age—Joint teams
and integrated offices. PTP to discuss with Fraud Strategy Unit
and Working Age Housing Division.
61. The New Operating Model
Over the course of the Spending Review for the next three
years and the Spending Review period after that, Pensions Transformation
Programme will design, develop and implement a new Operating Model
that will enable The Pension Service to deliver a considerably
improved customer-centric service that will encourage take-up
whilst achieving significantly increased productivity and efficiency.
The Operating Model will:
— be an efficient and effective delivery model tailored
to meet the different needs of different customer groups;
— be capable of providing the product mix, new and
improved channels, information service and delivery capability
that will achieve Ministers' outcome requirements and targets
to increase significantly the income of the most disadvantaged
pensioners by increasing take-up of Pension Credit and other pensioner
entitlements;
— be easy and convenient for customers to access
through a single point of contact allowing a wider range of needs
to be met in a single transaction;
— make best use of new technology;
— allow staff efficiency and productivity to be
increased; and
— deliver a national telephone-based service with
highly automated straight-through processes supported and enabled
by integrated systems.
62. At the outset of Pensions Transformation Programme
the operating structure was as shown in Figure 1 and had the following
key features:
— telephony teams are separate and can only take
enquiries and initiate claims; they cannot process a claim in
its entirety;
— processing is paper-based and product-focused,
with separate handling of State Pension and Pension Credit;
— local service focus on benefit take-up could be
further improved;
— three levels of management and support: pension
centre, regional and central. (The regional layer has since been
removed as part of the early efficiency changes introduced in
wave 0 of the Pensions Transformation Programme); and
— staff are dependent on legacy systems.
Figure 1
THE PENSION SERVICE OPERATING STRUCTURE—PRE PENSIONS
TRANSFORMATION PROGRAMME
63. In future, the service offered will be customer focused,
responsive, and much more efficient. An overview of the end-state
operating model is depicted in:
64. Figure 2. Revisiting the key features of the current
structure shows major areas of change:
— complete processes will be conducted by telephone
and electronic channels as well as post, improving both service
efficiency and customer convenience;
— first-line customer agent teams will handle both
State Pension and Pension Credit products;
— local services will actively promote benefit take-up;
— there will be no regional management and support
layer, increasing efficiency; and
— staff will be supported by modern, packaged Information
Technology systems enabling best-in-class customer service and
avoiding the need to work directly with complex, proprietary legacy
systems.
Figure 2
THE PENSION SERVICE OPERATING STRUCTURE—POST PENSIONS
TRANSFORMATION PROGRAMME
65. Information Technology Development
As noted previously, one of the key enablers of the transformation
of The Pension Service is "better Information Technology
capabilities". Pensions Transformation Programme has adopted
DWP's new Information Systems/Information Technology Strategy
and Enterprise Architecture to deliver this. Change in Information
Technology is based on the deployment of best-in-class commercial
off-the-shelf packages, as a lower cost and lower risk alternative
to the large bespoke development projects undertaken at the Department
in the past.
66. Representatives of Pensions Transformation Programme
played an integral part in the selection of each of the following
Departmental strategic commercial off-the-shelf packages projects,
all of which will be part of the Pensions Transformation Programme
Information Technology solution:
— Customer Relationship Management: Siebel.
— Workflow: IBM WebSphere Workflow.
— Integration backbone: IBM WebSphere Integration.
— Document management: FileNet.
67. The Pensions Transformation Programme Information
Technology solution is being delivered by a number of external
suppliers, under the management and guidance of DWP staff in the
Pensions Transformation Programme Information Technology Strand
and DWP Technology Office. Accenture is the Information Technology
Solution Provider, leading the delivery of the overall solution.
As well as the commercial off-the-shelf packages vendors above,
other key suppliers are EDS (legacy system changes and legacy
integration) and British Telecom/Syntegra (telephony and networks).
The Pensions Transformation Programme solution further depends
on required functionality being made available from other DWP
systems (eg Customer Information System) and systems at other
government departments (eg National Insurance Recording System
2). The Pensions Transformation Programme Information Technology
strand includes dedicated resource to manage this network of suppliers.
68. Implementation
The scope and scale of implementation planning, and subsequent
deployment of the new capabilities within the operational businesses,
is hugely challenging. At the heart of the implementation strategy
and approach is the need to minimise the operational impact, on
both staff and customers, and the key, critical success factor
is to maintain business as usual whilst managing the transformation.
69. The high-level business implementation approach has
been designed to underpin, and provide a structure for, a complex
programme of multi-dimensional change which touches every part
of the organisation, and its people. This change will be delivered
over time, and across sites, process-by-process group, rather
than completely transforming on a site-by-site basis.
70. Against this background of complex organisational
and people change, the following critical success factors for
implementation planning were identified:
— Practical phasing of change.
— Ensuring that changes are phased in a manner
that: maintains business continuity, stability and performance
during transformation; is practical in terms of resource and capacity
requirements and constraints; and aligns with programme objectives
of improved efficiency, customer service and take-up at all stages.
— Operational buy in and readiness.
— Ensuring a clear understanding and ownership
of the change objectives and approach within operations and readiness
to make change happen.
— Effective people change management.
— Ensuring that full account is taken of the
need to communicate and prepare people properly for change, and
support them through the transition.
— Effective risk mitigation and contingency planning.
— Anticipating key risks to the programme
and the business, and put in place robust mitigation and contingency
plans—linked to revised business continuity plans.
71. Pensions Transformation Programme has established
an approach that is fundamentally joint working in full partnership
with teams from the programme, Booz Allen Hamilton, and Accenture.
A detailed and robust integrated programme plan with all key deliverables
and dependencies has been established. Progress of the programme
is closely tracked to agreed timescales and quality.
72. The programme deliverables are governed by senior
stakeholders from across The Pensions Group, The Pensions Service
and has a Programme Steering Committee with Departmental Heads
from Human Resources, Programme Systems Delivery, Finance and
representatives from senior stakeholder organisations such as
Jobcentre Plus.
73. Pensions Transformation Programme will be implemented
in successive waves of manageable change.
74. The first wave of change involving new Information
Technology (Wave 1a) will be deployed in three transformation
sites and will only affect the State Pension claims process. Deployment
will begin in August 2005 in Dundee, Swansea and London Pension
Centre (Newcastle). Deployment for State Pension and Pension Credit
will begin in the remaining transformation sites from April 2006
to September 2006.
75. Deployment of subsequent waves will follow a similar
pattern, with new processes fully implemented in one site then
rolled out in tranches across the remaining sites.
76. Implementation of Waves 1 and 2 will enable key financial
targets to be largely met, such as the Public Sector Agreement
headcount target of approximately 8,000 Whole Time Equivalent
staff by March 2008 and the Service Delivery Agreement unit cost
reduction by March 2009. These Waves will also contribute to Pensions
Transformation Programme's other objectives by increasing Pension
Credit take-up to three million in March 2006 and improving customer
service.
77. Implementation of new operating model will make The
Pension Service more customer focused, responsive and efficient
(see Table 2 below).
Table 2
IMPACT OF NEW OPERATING MODEL ON THE PENSION SERVICE
| Customer Focused | Responsive
| Efficient |
— Customer insight capability, which is necessary to support the tailoring of our product and services offer to all customer segments.
— Significant outbound acquisition capability to create a sustainable basis for Pension Credit take-up.
| — Emphasis on resolution of customer service requests (as opposed to contacts).
— End-to end ownership and accountability.
— Seamless hand-offs when required for resolution.
— Proactive management of capacity and service levels to ensure fast and accurate request resolution.
| — Faster and more standardised service via:
— Process redesign and Information Technology enablement.
— Broader range of communication options (eg e-Enablement).
— Smaller operating footprint.
— Fewer Pension Centres and staff with some centralisation.
— Local Service.
|
| | |
VISIT NOTES
A. Phil Bartlett, Business Design Director
78. The Centre was created to look at ways of transforming
and modernising the delivery of business within the Pension Service.
The Centre, which was built and opened in 10 months, provides
the facilities to bring people across a range of grades together
to work on business solutions to problems. Groups are made up
of two-thirds front-line staff. Emphasis is placed first on understanding
clearly what the nature of the particular problem in question
is. Private sector partners also frequently get involved. Average
projects last six to eight weeks. Project groups have access to
the Pension Service's Legacy IT system and to partners' networks.
The 50 projects undertaken in the last 12 months have recouped
the initial and five year running costs of the Centre. By removing
the demand that solutions are "ready to run", teams
are able to arrive at solutions far more quickly than has historically
been the case within DWP. Some teams have delivered solutions
fully fit for purpose within eight weeks. For example one team
solved a 15-year IT problem, which had been increasing the rate
of error. Their solution was rolled out four weeks later.
79. Responses to queries:
— The Solution Centre does have the capacity to
address the challenges of a shift in pensions policy, should such
a change occur.
— Projects are underway to create better data-sharing
arrangements.
B. Charlie MacKinnon, Operations Manager (Based on
slides presented to the Committee)
80. The Pensions Service is developing a new operating
model, PTP, that is expected to:
— Improve customer service.
See Figure A below for the project's design objectives.
Figure A
| Objective | Ambition
| Measures of Success and Quantifiable Benefits
|
| Increase take-up of entitlements to reduce poverty.
| — Delivery of benefits to all those entitled.
— Delivery of benefits to those most in need (combat poverty).
— Achievement of Government take-up targets (eg, Pension Credit (PC)).
| — Increase number of households in receipt of PC to three million by March 2006.
— Increase number of households in receipt of guaranteed element of PC to 2.1 million by March 2006.
— 79k "gateway" referrals (Attendance Allowance) and 95k (Council Tax Benefits/Housing Benefit).
— 85% of all gateway referrals pass the eligibility test of other agency.
|
| Deliver less invasive means-testing.[98]
| — Deliver a package of "entitled benefits".
— Less invasive claims process.
| — Measures of Success for this objective have been incorporated into increase take up and improve customer service objectives.
|
| Improve customer service. | — Accurate, secure, and timely delivery of The Pension Service benefits.
— Respectful and informed service for benefits critical to The Pension Service's mission.
— Reduced visibility/impact of hand-off.
| — 80% of calls answered within 20 seconds.
— 95% of Local Service visits conducted within 10 days by March 2008.
— Decrease postal contact from 68% to 21% by March 2008.
— Increase e-mail traffic to at least 4% by March 2008.
— Decrease error rate to 1.6% for RP and 3.8% for PC by March 2009.
— Reduce cost of error from £11 million to £5.4 million for RP and from £47 million to £22.5 million for PC.
— Reduce average actual clearance time (AACT) to process a PC claim from 12.9 days to 10 days by 2006; the AACT for an RP claim from 23.8 days to 15 days by March 2008; and the AACT for CoC to 2.8 and 5.4 days for PC and RP respectively.
— Increase the overall customer satisfaction rating from 80% to 90% by March 2008.
|
Improve efficiency.
| — Radical productivity increase.
— Reduce overall cost to serve pensioners.
| — Programme NPV of around £600 million and Internal Rate of Return (IRR) of 20%.
— Greater than 30% reduction in unit costs.
|
| | |
81. The transformation will occur through process redesign,
supported by new IT. It will enable the Pension Service to simultaneously
deliver its contribution to DWP's efficiency challenge and its
PSA targets for the take-up of entitlements. Once the programme
is fully implemented the Pension Service will be a radically streamlined
organisation, with fewer sites, fewer staff and a lower cost base.
The projected Net Present Value of the programme is around £600
million.
82. Current business processes in the Pension Service
are complex, inefficient, largely paper-based and present barriers
to take-up of entitlements. Up to seven customer contacts are
needed to claim Basic State Pension and Pension Credit. The existing
Legacy IT system does not allow for interaction between the two
products. Staff need a lot of training to understand the complexities
in the system and find its inefficiencies frustrating.
83. Under the new operating model, applications for Basic
State Pension and Pension Credit will be combined. There will
be no paper-based processing. Pension Centres will be able to
process at least 50% of applications immediately, telling customers
their final award at the end of the phone call. Only the International
Pension Centre will remain separate, as the work of dealing with
customers from abroad is highly specialised. 80% of staff within
each Pension Centre will be part of routine teams. The remainder
will be in specialist teams who will handle more difficult applications.
Details already given to routine operators will be available on-screen
if callers are passed to a specialist. Regional tiers of management
will be removed under PTP. Rigorous performance management will
ensure that changes can be implemented and sustained.
84. The Pension Service has recently appointed a Customer
Acquisition Director, who will be responsible for enabling the
Pension Service to meet take-up targets. As part of PTP, the Local
Service will be come a more mobile workforce with a greater focus
on take-up. It will continue to work with partners.
85. PTP is being implemented in a series of "waves"
to reflect the Pension Service's capacity to absorb change, to
match funding available and to manage down the risks of failure.
Wave 0 of the programme involved making tactical efficiencies
ahead of the challenge of introducing PTP. The first release of
IT as part of the programme will be in August 2005, when three
Pension Centres will receive new technology for processing State
Pension claims (Wave 1a). In April 2006, the telephony for Pension
Credit and Basic State Pension will be integrated in Pension Centres
to allow applications for both to be combined (Wave 1b). DWP is
retaining control over the introduction of IT, which is being
delivered by a number of external suppliers, with Accenture leading
the delivery of the overall solution. There will be no big-bang
delivery—the new IT builds on existing systems rather than
replacing them.
86. PTP is interdependent on other projects and policy
changes including:
— the Customer Information system;
— the Link-Age programme; and
— *enabling the Pension Service to collect claim
information for Housing Benefit or Council Tax Benefit.
Figure B
88. PTP is expected to enable the number of staff to
be reduced to 9,140 by 2008. The implementation of Waves 3-5 is
currently planned to start in April 2009 and to enable staffing
levels to reduce to 8,140 by end of the programme (expected to
be 2011/12). See Figure C below. In the Local Service, staffing
levels are to reduce to 2,350 in 2008 and to 1,930 in 2011-12.
Figure C
PTP WILL REDUCE HEADCOUNT BY 7,350 WTEs BY THE END OF
SR04, AND BY 8,590 BY THE END OF THE PROGRAMME
89. Ideally there would be no break in funding as it
is difficult to stand down a programme for six months and then
restart it. The managers are hoping that money might become available
from under-spends by the Department.
98
Not a primary objective but elevated during the Design and Initiate
phase until the Core Team is satisfied that it is embedded in
all customer-facing processes. Back
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