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There has been a reduction in staff. The Government made it a policy to reduce the head count at Jobcentre Plus. I know that that is meant to go hand in hand with efficiency—it is called efficiency savings. The head count in March 2004 was 82,067; in March 2006 it was down to 71,222—a big cut; and at the milestone of 31 March 2007 it will be down to 68,550. We then had figures for office closures in a recent answer from the Minister, who attached a letter from Lesley Strathie, the chief executive of Jobcentre Plus, stating that

Others have also been identified for closure. What is meant to go with that reduction is a top-of-the-range computer system that is up and running. However, we have learned from Citizens Advice that there are problems with that. I could have quoted a briefing from the Public and Commercial Services Union, the union that represents the workers in question, to the effect that that has not happened properly. Indeed, the Select Committee took evidence that made that very point, and expressed concern that the computer system is not filling the staff gap. The consequence is an effect on the service.

Recommendation 21 in the Select Committee report refers to the “catastrophic failure” of the service provided by Jobcentre Plus contact centres in 2005. Let us think about what those words really mean for people. That year has gone, but we cannot have catastrophic failure, or anything approaching that, for many vulnerable people this year, this summer or this autumn. I want the Minister’s response to that point. Will what is being done work? If we have problems, what remedial measures will he take so that vulnerable people do not suffer severely as a result?

Recommendations 6 and 7 in the report refer to reductions in services and programmes, and recommendation 17 mentions

so they are getting the figures wrong for people too. That is extremely serious. My experience as a constituency MP is that often when such things happen the individuals concerned, many of whom are on low incomes, do not get their entitlement to start with. It may be only a small amount of money that they are bilked of, but for them it is crucial in getting through the day. Often, if things go the other way and they are paid too much, they can be accused of fraud and of somehow having cheated. Beyond that, they are told, “Well, you have been overpaid. We will have to take all this money back off you”—money that they have spent on their daily lives. That presents them with huge bills and huge problems. The matter of accuracy is a serious one, and there is no doubt about something to which the Committee drew attention—accuracy levels dipped with the staffing head count reduction and the failure of other measures that were meant to compensate for that, including the computer system in particular.

The report made some other good points to which I want to draw attention. Often some staff are over-reliant on a script. If someone puts in a claim and says, “These are my needs,” they are read a script. I am not against a
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script. It sets out entitlements and helps the member of staff to get the point over, but things go wrong with a script. People’s needs do not very neatly fit in with the answers on the script. They are slightly different, and there is a need for flexibility about that. Errors creep in, firstly as a function of employee training that is not very good, or insufficient to build up their skills and show them what the system is about and what is available—even if that is off the script. Secondly, errors are a function of the low pay. Many Jobcentre Plus employees who have the script to work from are very low paid. Clearly training needs to be improved, but the best interpretation of what is available will not be provided by people working from that low base. Scripts are needed, and there is a need to update them, too, but there is also a need for competent people to operate them, and for much better training.

Personal advisers are another issue, akin to that of scripts. They are crucial for what the Government plan in their welfare reform programme. They are crucial if we are to get people off incapacity benefit into work, and make the best opportunities for them. My understanding—the Committee dealt with this in recommendations 45 and 46—was that about a third of the advisers were deemed almost to be on special measures. They were about to get the push or be moved somewhere else in the system, because they were not deemed good enough. That was because they had a fixed target for getting people into work. The trouble is that often they deal with people who have the most serious obstacles to working. I accept, again, that it is necessary to measure how well people are working as personal advisers—very competent people are needed—but the measurements must take into account the clientele that they work with, and the economic circumstances in which they operate. There might not be any jobs to get people into in a particular area. Personal advisers need to be given a bit of a fairer deal.

I am not defending anyone who is not succeeding. I agree that it is a management job to move them on, or do something with them, but it is wrong that so high a proportion of the personal advisers are not succeeding. It sets off a serious alarm bell, if we are to rely even more on personal advisers to deliver the incapacity benefit reforms. The Minister needs to deal with that, too.

The hon. Member for Weston-super-Mare (John Penrose) referred to the new deal, to building on the new deal and, I think, to the ambition programme. The Government have not come forward with the next way to build on the new deal. I think that although the new deal, particularly in London, has not ground to a halt—it is still doing a good job—it has slowed down. When it was introduced in the late 1990s it had a terrific impact. It found people jobs, got them trained, and put them on the environmental taskforce. It was one of the Government’s success stories, but it has slowed down. It needed to be built on. That is what is proposed—building on the new deal. It is a shame that the Government have not yet thought through what they want to do. It is vital that young people are given work and training programmes, but they must go up a step; what is needed is a step change.

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The Minister for Employment and Welfare Reform should think seriously about building on the new deal. That is not being done because of the efficiency savings programme, which is reducing staff and offices and which cannot seem to make the computer system work well. There are too many problems here and now to get on with the job and go forward to the next phase in youth employment and training, but it must be done sooner or later and I urge the Government to do it.

My penultimate point is that when the Select Committee produced the report, about 90,400 people had been added to the claimant count. The Select Committee thought that that figure was added, in the main, because of the changes; everything was not operating as efficiently as it had been and as a result the claimant count rose. That is bad for every one of those 90,400 people.

Publicity about the fact that the claimant count is about to go through the million barrier gives the Opposition parties a tool with which to attack the Government. The figure could be 90,400 less than that if the changes had not had such an impact on the claimant count figures. That may be a political point, but it is not a good thing for the individuals involved. It comes down to the gap between reducing the head count and the number of people who can help people into work and getting the other systems up and running efficiently. The other groups that help people to find work, which have contracts with Jobcentre Plus, could do more in that regard.

My final point is on the briefing from the Public and Commercial Services Union, which says that there should be a commitment at least to retain a consistent level of service while the changes and the efficiency savings proposed by Gershon, especially the head-count reduction, are being implemented. There has not been a consistent level of service over that period and that worries me. The PCS states that

The PCS is concerned about the scale and pace of the reductions and the office closures. The Government need to consider the matter extremely carefully; they should not just roll on the set of figures that they laid out several years ago without considering the consequences of the impact on the service, especially in respect of vulnerable people. The PCS and the Select Committee say that there may be a good case for revisiting the scale and the pace of the proposals.

3.35 pm

Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): I welcome the opportunity to debate this important report. I compliment the Select Committee on the quality, depth and detail of the report, which was exemplified in the initial remarks of the Chairman of the Select Committee, the hon. Member for Bradford, North (Mr. Rooney). I compliment him on the way in which he opened the debate.

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The Government’s response does not match the quality of the report. Several issues have been raised in the debate and I will mention a few more, but my fundamental response to the report is that the Government took an overly Panglossian view of the mistakes that occurred in 2005. The introduction to the Government’s response stated:

Not everything going perfectly is something of an understatement compared with some of the more robust, and I would say appropriate, language used by the Select Committee.

The nature of the Government’s response gives me cause for concern, not least for some of the reasons mentioned by the hon. Member for Leyton and Wanstead (Harry Cohen). There are a number of other major changes coming down the track in the Department for Work and Pensions; additional efficiency savings are being sought by the Treasury, and a major programme of welfare reform and additional IT changes are proposed.

I hope that in his response the Minister for Employment and Welfare Reform will acknowledge that it is incumbent on the Government to take full responsibility for the mistakes that occurred and to ensure that they fully learn the lessons from those mistakes when introducing future changes in the Department.

In its report, the Select Committee described the circumstances of the efficiency savings and the consequences of introducing the customer management system and so forth as “a catastrophic failure”. I contrast that with not everything having gone perfectly. The Select Committee’s phrase is appropriate. The Government state that lessons have been learned for future plans following problems that occurred in the contact centre. First, as the Chairman of the Select Committee made clear, there have been improvements in performance since the period that was the focus of the report. However, it is too early for claims to be made that the situation has been fixed. The briefing provided by the National Association of Citizens Advice Bureaux probably reflects the constituency experience of all hon. Members present: there are continuing problems with delays—for example in benefit processing times—in ensuring that those people who cannot use a phone system, particularly because of their disability, can engage in another form of processing.

There are examples in my constituency of people wishing to go to Jobcentre Plus to make claims and being turned away and told that they must use the phone. There are still too many examples of such unacceptable conduct for the Government to be able to say that everything has been put right.

Secondly, if and when the catastrophic service performance is resolved, there is little in the Government’s response to reassure us that the problems that caused the crisis have been addressed. There is still a state of denial within the Department about the problems that occurred in 2005.

It is disappointing that the Government are not taking the matter as seriously as they should, especially the points made in recommendations 21 and 22 of the report. We need more clarity about what lessons have been learned; in particular, do they accept the Select Committee’s view that too much was done too quickly?
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Was it good judgment to introduce a new IT system—the customer management system—at the same time as staff cuts and redeployment? Was it efficient to introduce an IT system that could soon be replaced again when the IT component of the benefit processing replacement/working age transformation and change programme—I hope I have got the title right; I cannot use the acronym—is implemented? Can we have any confidence in the Department and Jobcentre Plus to roll out pathways to work, and the new employment and support allowance, no doubt with a new computer system to manage that benefit, without a further breakdown in the quality of service provision of the sort that the Committee rightly outlined in its report?

The Committee Chairman rightly referred to the impact of the closure of local service outlets. I have experienced it in my constituency, where the Jobcentre Plus in Nairn, 15 miles east of Inverness, was closed. All the services in my constituency are provided through Inverness, so that someone who lived in Dalwhinnie, for example, would have to make a 115-mile round trip to the Jobcentre Plus.

My constituents have raised a number of issues, but I shall not dwell on them as I have been in correspondence with the Minister and his predecessor about them. However, there are ongoing issues about one important point. Within the Department, there is a travel-to-interview scheme to ensure that when people’s costs rise above a certain amount when they travel to job interviews or interviews at the new Jobcentre Plus to which they are supposed to go, which in my constituency is Inverness, they can have their costs reimbursed. A range of different interpretations of the scheme have been given to claimants in Nairn. Clarity is important when a local outlet is closed, so that claimants know their entitlements, where they are expected to go and how they can access those services. I am concerned that it has not been properly dealt with in Nairn.

Several hon. Members have made points about staffing and training, and recommendation 3 in the report deals with that. It is clear from the report that in the Committee’s view, staff are redeployed in some cases without adequate training for their new roles. The Government’s response was soft. They said:

“Should” is not will. There are no guarantees, and the reply does not set out the headlines of the redeployment strategy up to 2008, as the Committee specifically requested. Will the Minister do so in his response?

The Government make it clear that Jobcentre Plus staff will get an average of six days training per year. That is an average. It means undoubtedly that some staff with high training needs may get little or even no training in a particular year. Back office staff are being redeployed in customer-facing roles, for example as personal advisers. The Welfare Reform Bill and the associated roll out of pathways to work will require an increase in personal advisers employed in Jobcentre Plus. However, personal advisers for sick and disabled people will need to be well trained and skilled for what is a specialist role, as other Members have said. Will the Minister set out clearly the minimum provision of training for those who are redeployed in that role?

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Future staff reduction is the subject of recommendation 7, and we are told that Jobcentre Plus staff numbers have already been reduced by 10,000, that there will be a further reduction of 4,000 and that the reductions will take place only once detailed work force plans have been completed. I am sure that there were detailed work force plans for the reduction of the other 10,000 jobs, but it is clear from the report that not enough attention was paid to the impact on services as the reductions were made. Will there be greater flexibility in the pace of future reductions to ensure that the service to claimants is maintained during the transformation? It is clear from the report and our constituency experiences that services to claimants were not maintained during the initial transformation.

In recommendation 47, the Committee concludes that the procurement process for voluntary and private sector delivery of services is “deeply flawed”. The Government admit that last year, they

The taskforce and provision forum are welcome, provided the Government genuinely listen and respond to the points that they make.

Although the Government state that most contracts are for two or three years, many are still for one year only. In any case, two or three years may be too short a period. I recently spoke at an event sponsored by the organisation Tomorrow’s People, which it was running as part of its getting London working programme. It had secured funding for six years through the London Development Agency and the single regeneration budget. During that time, it achieved, pound for pound, double the job outcomes of any other SRB-funded programme nationally.

What assessment have the Government made of the system introduced in Australia, where since 1998 the Jobcentre Plus roles of providing services at the same time as regulating services and paying benefits have been entirely separated? The publicly funded job brokerage service was replaced by Job Network, a national network of private, voluntary and public organisations, leaving the Australian Government’s equivalent of Jobcentre Plus as purchaser and regulator of services, and manager of benefit claims, rather than the direct provider.

One cannot necessarily read across, but that is why I am interested to hear from the Minister whether the Government have studied that system either in response to the Committee’s report or as part of wider welfare reform. Under Australia’s new structure, the cost per employment outcome has roughly halved and job outcomes have significantly improved. They are efficiency savings way beyond those that the Government achieve with Jobcentre Plus.

As the hon. Member for Leyton and Wanstead said, yesterday we heard that unemployment continues to rise. I shall not comment on what he said about the political consequences of it, but 1.65 million people were classed as unemployed in the three months to May, an increase of 90,000 on the previous quarter.

The chief executive of Jobcentre Plus has made it clear that rising work load could put the efficiency savings programme at risk. She said that

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What is the Department doing in the context of the report to monitor the impact of the growing work load from rising unemployment? The chief executive made it clear to the Committee that certain decisions would need to be taken because of the rising work load. Has the Minister made any of those decisions yet?

The Committee also raised some important points about fraud and error in the benefit system. It was particularly concerned that the changes were having a detrimental effect on accuracy levels. Error costs the Department more than fraud, and last year the Select Committee on Public Accounts said that

It estimated the annual cost of staff and customer error to be £1.5 billion, and its report warned that the plans to cut 30,000 DWP staff, of which 14,000 have been cut already,

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