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Westminster Hall

Thursday 13 July 2006

[David Taylor in the Chair]

Jobcentre Plus

[Relevant documents: Efficiency savings programme in Jobcentre Plus—Second Report from the Work and Pensions Committee, Session 2005-06, HC 834, and the Government’s response thereto, Second Special Report of the Committee, Session 2005-06, HC 1187.]

Motion made, and Question proposed, That the sitting be now adjourned.—[Kevin Brennan.]

2.30 pm

Mr. Terry Rooney (Bradford, North) (Lab): What a pleasure it is to present my first report of this nature with you in the Chair, Mr. Taylor—no doubt that will be the cause of further discussion later. I also welcome my hon. Friend the Minister to what I shall call his first confrontation with the Select Committee on Work and Pensions. We shall see how we get on today. No doubt there will be many future occasions on which we can cross swords.

The background to the report started in November, when the then Minister of State in the Department for Work and Pensions, who is now my right hon. Friend the Minister for Industry and the Regions, and the chief executive of Jobcentre Plus, appeared before the Committee for discussion of the annual report. All members of the Committee, through their own constituency work, press reports and submissions made to our incapacity benefit inquiry, were well aware that there were escalating problems in the operation of Jobcentre Plus. As a result, we decided to conduct a short inquiry. Had we known what we were going to find, we would probably have decided to have a longer inquiry, but we had set ourselves a timetable and we had to adhere to it.

The focus of the inquiry was the impact of the efficiency savings on training programmes, personal advisers, the customer management system and contact centres. It is important to say at this stage that what was originally the Department of Employment finished up being merged into the Department for Work and Pensions in 2002. That was the third major change of machinery in Government in seven years, and no doubt it has left some legacies. We need to recognise, as we did in the report, the achievements of Jobcentre Plus offices. Every working day, details of 13,000 vacancies are received; they conduct 36,000 work-focused interviews; they place 4,000 people in work; and they take 16,000 new claims. By any standard, that is reasonably impressive, but we have to recognise the nature of the clientele with which Jobcentre Plus is dealing. Any failure in that is a failure for those in society who are least able to help themselves.

We found that the Department or Jobcentre Plus was trying to carry out four major projects at the same time: rationalisation of the estate; the creation of Jobcentre Plus offices; the integration of a new information technology system; and the very significant head-count reductions.
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Any one of those would have been a major project on its own; having all four running at the same time stretched management capability to the limit and perhaps even to breaking point. That was not just nationally; in districts and local offices, there was real pressure on management.

As a consequence, many of the services provided through the Department suffered. We should remember that Jobcentre Plus is key to two major departmental objectives: the welfare-to-work programme and the elimination or reduction of child and pensioner poverty. If the system is not working, those laudable social objectives are not being met and vulnerable people suffer as a result.

One consequence of the head-count reduction has been that, frankly, inappropriate staff have been placed in contact centres. Anyone who has had experience of contact centres, whether in the public or private sector, knows that a special talent is required to work in them. We visited one contact centre—I do not want to name it, because I do not want to embarrass anyone—and it was quite obvious from the submissions and the evidence that we received that that process was happening. It was being done almost in a humane way, from management’s point of view: rather than putting someone out of a job, they would be transferred to fill a new vacancy. However, the skills required to work in a contact centre are specific. They do not relate to someone who has spent 20 years being a decision maker, benefit processor or claims assessor. Last summer, because of the process that I have described, there was virtually a total breakdown in the contact centre operation.

Mr. Michael Wills (North Swindon) (Lab): I am grateful to my hon. Friend for an excellent report. Does he agree that one problem is not only that inappropriate staff are in the contact centre, but that it is impossible to get through to the contact centre to get advice? My constituents and I have certainly found that over and over again. The local citizens advice bureau regularly finds it impossible to get through to St. Austell, which is its contact point, but I can get through, so the only point of contact for all the people in North Swindon who need to get in contact is through me and the dedicated contact centre for MPs. Members of the public find it practically impossible to get through.

Mr. Rooney: I have a deal of sympathy with what my hon. Friend says. The situation has improved significantly since the low point of last August, but it would have been difficult for it not to. There is still a major problem with people’s ability to get through to chase up progress once a claim has been established. I think that the achievement level now in terms of calls answered on initial claim is about 94 per cent. That sounds impressive, but there are 16,000 new claims a day, so even 6 per cent. of calls not answered represents about 1,000 claims. That is 1,000 people who are delayed in receiving their entitlement. There had also been major difficulties with the quality of the telephone systems that were installed in the first place, but we understand that, through work with BT, most of those problems have been dealt with.

The second consequence of the efficiency targets being chased was on fraud and error. In many ways, the figure for fraud and error is nebulous. No one can say
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down to the last pound what it actually is, but we received plenty of evidence that the rate and scale of fraud and error increased last year, and the previous permanent secretary confirmed that the efficiency savings targets had been a contributory factor in that. All this is a consequence of management being stretched and having to deliver on four major targets. What I am describing was not a deliberate action at all; it was almost an inevitable consequence of what was happening.

Mr. Tim Boswell (Daventry) (Con): I am admiring the thoughtful way in which the hon. Gentleman is putting his case. Will he accept this point from my own business experience? When I ran a business, I always worked on the basis of being able to carry out one additional task on top of running the business normally—a building project or whatever. Anything beyond that would have been quite beyond my powers, and I think that something similar has happened in this case.

Mr. Rooney: I have long been an admirer of the hon. Gentleman and I am sure that he could have completed more than one task at a time. We came to the conclusion that each of the four projects was almost certainly worth while on its own, but the phasing of them was wrong; it was out of kilter. A Department that employs 130,000 people should be able to do more than one major project at a time, but the evidence is that it could not do four at a time. If it thought it could, it did not succeed, and the evidence is there for all to see.

The next major consequence—sadly, the figures out yesterday provide further evidence of this—was on the job entry target. Apart from, I think, one month, since February 2005 the numbers on the claimant count have increased every month and the job entry target has not been met. I think that, even at the year end, the figure was about 97 per cent. of target. At one point, the figure was 93 per cent., so something had been clawed back. If the number of people on inactive benefits had also increased, that could be put down to the general economic situation, but, as we all know, the number of people in employment has gone up dramatically, and the number of lone parents and people on incapacity benefit moving in to work has also gone up. So, why is the jobseeker’s allowance sector the only one with adverse figures? The job entry target figures spell that out. I do not think that that was by design, but a result of the constant pressure on management time to achieve other things.

Miss Anne Begg (Aberdeen, South) (Lab): The Committee thought that Jobcentre Plus was doing a good job and that the amalgamation of the Benefits Agency and Employment Service into Jobcentre Plus was the right thing to do. What disappointed the Committee was that the good work of Jobcentre Plus was undermined last summer by the difficulties of managing the change and the staff reduction, and we were keen that that good work should not be overshadowed. Does my hon. Friend agree that we need to make sure that the Department gets it right in future, so that the number of people going into work can continue to improve and we do not see the dip that we saw last summer?

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Mr. Rooney: I would never disagree with my hon. Friend. She is my guide and mentor. She is absolutely right: in theory, the Employment Service and old Benefits Agency came together in 2002, but, in practice, the welding together of those organisations probably still is not complete. An awful lot of the estate rationalisation was about getting rid of unsuitable offices and creating processing centres. Those are worthwhile objectives—each of the four objectives is worth while—but there are questions regarding the scale on which they were dealt with and how they overlapped with each other.

Finally, because I want to allow plenty of time for colleagues—

Ann Coffey (Stockport) (Lab): Will my hon. Friend give way before he moves on?

Mr. Rooney: How can I resist Stockport?

Ann Coffey: I was interested in what my hon. Friend said about the difficulty with jobseeker’s allowance. Did the Committee take any evidence on the effect of the efficiency savings related to the outreach work being done by Jobcentre Plus? I am sure that he will agree that advisors do valuable work by going out to new communities. That is an effective way of reaching those families and parents who might not have worked for a considerable period of time.

Mr. Rooney: There is no doubt that Jobcentre Plus does good things like that. I hate to say this, but, in 1984 I established the first contact arrangement between benefit advisors and the old Department of Health and Social Security staff in Bradford, which was developed and replicated throughout the country. The more pressure we put on staff to do core tasks, which must be to deal with new claims effectively and efficiently, the less chance there is for them to do other necessary and worthwhile things, because there is less space, capability and staffing time available.

There is a lot of concern about the many groups in society for whom telephone claiming simply is not possible. We have taken evidence about cases in which the claims of people who are hard of hearing or totally deaf have been almost cruelly rejected because they were unable to complete a telephone conversation to make the claim. That outrageous example is not isolated; there are many others. There are also concerns about people with problems that come under the general heading of mental illness, particularly those with psychosis. The last thing that people who suffer from hearing voices want to do is to get on a telephone and hear a voice, because it triggers problems, but that is not recognised in the system.

At the end of last year, or perhaps early this year, the Department beefed up its advice to contact centres about classes or groups of people for whom it is acceptable to make claims by post or even through home visits. That is welcome, but it has not been happening on the ground. Every Member of Parliament can report cases—not isolated cases, as there are far too many—in which the practice, at ground level, has been that people have done all they could to ensure that claims had to be made by
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telephone. I can understand that to some extent, because that is the cheapest way for new claims to be processed, but the focus of attention should be the individual, not the unit cost. If there is a problem with unit cost, we should go back to considering budgetary matters. There is a process for dealing with such matters. So, there are real issues about those groups of people who are already severely disadvantaged—mostly by mental health, but also by other disabilities. It just is not right, fair or proper, especially in this day and age, that claimants should be abused in that way.

My next point concerns crisis loans. Boy, did we get some conflicting evidence and words on those. About four years ago, the system on crisis loans changed to one in which claims are mostly made by telephone. We were told that at every office people can make a walk-in claim, but we received lots of evidence from many different organisations that people can walk in, but are then told to go away and use a phone. If they do not have their own phone, they are advised to find a public telephone that they can stand by and wait for someone to ring them. People have waited for up to three hours for someone to call them.

Applying for a crisis loan is not the most ennobling situation in the first place. By definition, if someone is in such a state that they have to apply for a crisis loan, there has probably been a major incident in their life and they are probably penniless, if not destitute. For such a person to be told to wait somewhere for three hours, not knowing what the decision is going to be, and that somebody might ring them in that time is unacceptable. We received lots of evidence about the walk-in facilities at different offices around the country stating that people can get through the door, but that it is still difficult for them to have their claims processed there while they wait.

All of those issues are compounded for people who live in rural areas. In major conurbations such as Stockport, Bradford, Aberdeen and Swindon—I shall not name any more—there is a reasonable chance of people being able to manage that system. However, for someone who lives in Kirby Stephen in Cumbria, the nearest office is Carlisle, which is an 80-mile round trip. Take someone who is hard of hearing who needs to make a crisis claim. Using the telephone is not an option for them, and they will not have the money to travel the 40 miles to Carlisle to get the money that might help them to get back. That might be an extreme example, but there are green and pleasant parts of this country which are 10, 20 or 30 miles from the nearest major population centre.

The Committee recognises and understands the rationale behind the reorganisation of the estate. In terms of pounds, shillings and pence—I am showing my age—there is an argument for it, but there is also a service argument. We need some sort of network in rural areas which uses other agencies, if necessary, by which people can access Jobcentre Plus services, particularly for those people who are already disadvantaged and want to make new claims, for whom the speedy processing of their benefit claims is essential. The same applies to crisis loans.

Mr. David Drew (Stroud) (Lab/Co-op): I apologise for leaving in the middle of my hon. Friend’s speech, but I was in the quorum of an all-party group. We have
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all had to leave the Chamber for that purpose. I encountered exactly the problem that he is talking about when they shut the Dursley job centre in my constituency, which was done against my better judgment. I discussed it with the then Secretary of State for Work and Pensions, who is now the Secretary of State for Education and Skills. The issue was that the alternatives were that people could travel to Stroud, Yate or Gloucester. Anyone who knows Dursley will know that some people would never normally travel from there to those places. People regularly say how disadvantaged they feel, particularly as they want to get back into work. They feel that they are being punished just because they happen to be in a place that no longer has a Jobcentre Plus office.

I am glad that my hon. Friend raised those points. There is a serious issue in rural areas: people who are no longer in work are doubly disadvantaged because they have not got a job and they have not got a service—

David Taylor (in the Chair): Order. Interventions should be brief.

Mr. Rooney: I do not think I need to add anything to those points.

One of our recommendations was that the Department should report progress against efficiency targets to the Committee, if necessary on a confidential basis. Apparently, they have to be submitted quarterly to the Office of Government Commerce. We were told that there was no way that we could see those figures, because they were extremely confidential. There has been an exchange on this in a sitting of the Public Accounts Committee.

Frankly, one of the prime roles of a Select Committee is measuring the operation and efficiency of the Department it is monitoring. If we do not have access to the basic information, it is a denial of that basic function of the Select Committee. I realise that this is a wider issue than—

Harry Cohen (Leyton and Wanstead) (Lab): My hon. Friend is making the important point that this material about how the efficiency savings are working should be available to the Select Committee. Has he experienced, as I have, that Governments of both hues sometimes do not provide the full information? If they summarise information that they have, there are sometimes omissions or they doctor it in a way that is convenient to them. If they are getting this information anyway, surely all of it should be provided to the Select Committee so that it can see the whole picture of how the efficiency savings are working, and not just a doctored picture.

Mr. Rooney: I am mindful of my hon. Friend’s comments. Government responses are like our own personal election addresses: we highlight the positive and miss out all the other things. We are all guilty of that at one time or another.

To return to the point I was making, I do not think that this is an issue solely for the Department, but I hope that the Minister will pass on the comments. There is a major constitutional issue: if Select
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Committees are to carry out that function, which Parliament has charged them with—it is in the Standing Orders—we should have access to that information. I can accept that it needs to be in private and in confidence, but if we are to do the job properly, we should have that information.

I should not sit down before complimenting the diligent work on behalf of the rural community done by the hon. Member for Ludlow (Mr. Dunne), who sadly cannot be present this afternoon as he is attending a family wedding. I know that he would have kicked my shins had I not put his name on the record.

We were deeply concerned at what we found, and the more we took evidence, the deeper the guilt became. There is no doubt that there has been significant improvement in the areas that we raised, but we think there are still challenges and major issues for the Department. In the next two to three years, particularly given what has been foreshadowed in the next comprehensive spending review, these issues will not go away. It is a major challenge for Ministers and for management, and, if I may say so, the poor infantry are still trying to carry on, despite all the odds.

2.54 pm

John Penrose (Weston-super-Mare) (Con): I should like to pick up on some of the comments made by the Chairman of the Work and Pensions Committee, the hon. Member for Bradford, North (Mr. Rooney). I begin by picking up on the point that he made about whether or not information is available.

Let us consider the grip of the leadership and management on the performance of the efficiency savings programme. Significant questions remain to be answered, even after one has read the Government’s response to the Committee’s report. We asked in recommendation 16 why the figures were not available for local performance targets as opposed to a national overall target. We had spotted that there had been some severe and material local variations around the national average.

The Government said :

in the way they collect the information

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