Select Committee on Public Accounts Minutes of Evidence


Examination of Witnesses (Questions 1-19)

DEPARTMENT FOR WORK AND PENSIONS, JOBCENTRE PLUS AND THE PENSION SERVICE

29 MARCH 2006

Mr Tim Burr, Deputy Comptroller and Auditor General and Mr Jeremy Lonsdale, Director of Work and Welfare Value for Money Studies, National Audit Office, were in attendance and gave oral evidence.

Mr Marius Gallaher, Alternate Treasury Officer of Accounts, HM Treasury, was in attendance.

REPORT BY THE COMPTROLLER AND AUDITOR GENERAL

DELIVERING EFFECTIVE SERVICES THROUGH CONTACT CENTRES (HC 941)

  Q1 Chairman: Good afternoon. Welcome to the Committee of Public Accounts where today we are considering the National Audit Office's Report on the Department for Work and Pensions: Delivering Effective Services Through Contact Centres. We welcome Mr Leigh Lewis, who is the Permanent Secretary for the Department of Work and Pensions. Would you like to introduce your colleagues, please.

  Mr Lewis: Chairman, on my right is Janet Grossman, who is the Centre Operations Director for The Pension Service, and on my left is Val Gibson, who is the Director of Contact Centres for Jobcentre Plus.

  Q2  Chairman: I would like to start by paying tribute to your staff who are working in the contact centres. I know that many are very highly committed and are doing an excellent job under difficult circumstances, but there are some problems which we want to explore this afternoon. I know there are anticipated efficiency savings. The reference is in paragraph 1.7 which you will find on page 16. Mr Lewis, I want to know how you can deliver them in the context of four different strategic plans, I think I am right in saying, 55 different phone numbers, a fluctuating number of centres and 21 million unanswered calls? You are obviously going to make efficiency savings, what is going to happen?

  Mr Lewis: Chairman, thank you. We are, of course, making efficiency savings and they are significant and substantial. I think overall the performance of our contact centres, although there have been some problems as the Report brings out, has been improving steadily. So far this year in 2005-06 it has been both on average and across the piece, good.

  Q3  Chairman: I am going to come back to that because I know the record in 2004-05 was poor and has improved. I will let you have a chance to go into how things are getting better, do not worry. That is your answer, is it? These plans for efficiency savings in the context of 21 million unanswered calls are not going to cause even more confusion and chaos?

  Mr Lewis: No, I do not think they are, Chairman. In some of our contact centres we did have some significant problems last year and that is brought out in the Report. This year we have had just 3% of the 30 million calls to us blocked and almost 90% of our calls answered. As the Report brings out, we have been steadily improving performance across the great range of our contact centres.

  Q4  Chairman: Let us look to the future for a minute and look, please, on page 25 at figure 12, which is how you are going to roll out your new IT, your equipment and your processes. How are you going to ensure that your equipment and your processes are not obsolete by the time you bring them in?

  Mr Lewis: I think in many cases we have got a very good track record of that. For example, anyone going into one of our new Jobcentre Plus offices, and we have rolled out over 700 of those to time and budget, will see the job point terminals there which now hold details at any one time of nearly half a million job vacancies. That is one example and there are many other of IT programmes which have gone in to time and to budget. We do have, within the Department, very strong control procedures working to the Board which look at all of our major IT developments and seek to ensure that they are proceeding as they should.

  Q5  Chairman: Let us look at what was happening in 2004-05 at figure 25 on page 49. You will see that some performances are truly appalling. If you look at the bottom you will see that with the Disability and Carers Service nearly 80% of calls had to be abandoned. I know you have made some good progress on that, have you not?

  Mr Lewis: Yes, we have.

  Q6  Chairman: But how do we know the improvement you are going to tell me about now is not a blip because you are pretty vulnerable, are you not?

  Mr Lewis: In a big organisation you are always vulnerable to blips, but I think the blip was last year and not this year. What we have done with the Disability and Carers Service is fundamentally re-engineered the system. We have brought in new telephony, we have updated our IT, but most importantly—and I have been to Warbreck House myself to see it—we now have a very substantial overflow system which means that we are not dependent simply any longer on those people whose job it is to answer calls on the DLA helpline all of the time. We have a very large number of staff who are there at times which are not peak times doing other work but who can be brought into the loop at any point where demand begins to rise. Through a system that everyone in that building calls turrets, which refers to the headsets they wear, they can be brought into that operation. That is one of the reasons why we are now answering well over 90% of the calls to that helpline.

  Q7  Chairman: Let us look at flexi time now, your staff and how they work. This is mentioned in paragraph 19 of the executive summary on page five. The problem is that flexi time is not suitable in many cases, is it, because staff there work when they want to rather than when the public want to call them? Why have you made so little progress since we last reported on call centres in dealing with people working flexi time and therefore at unsuitable times?

  Mr Lewis: I will put this in context and then let me take your question head-on. What, of course, we are doing in the Department is seeking to reduce our staffing overall very substantially by 30,000 over a three year period. That does mean that, quite rightly, we are seeking to relocate some staff from roles where we no longer need them into roles where we are expanding and that includes our contact centres. Those staff have existing terms and conditions which we have sought to honour, not least because we are rather proud of our family friendly policies and some of the flexible working patterns that we have. But we have been engaged in all of our contacts centres in a process of discussion with our staff and our trade unions to ensure that the patterns of work and the patterns that we operate are ones which are suited to the contact centre environment. In many ways, flexi time, as long as it is within some bounds, is an advantage to us because our contact centres have very large peaks of demand at different times in the day and at different times in the week.

  Q8  Chairman: That is fine for the new contract and you can say, "The peaks are this and we want you to work at this time on Monday morning when people have come back after the weekend". The trouble is you have got a large number of people on old contracts and what worries me is we have looked at this already and there is not much point in us doing the work if the Department does not make any more progress?

  Mr Lewis: I absolutely understand the point you are making, Chairman. I think we have been making real progress. In a number of places we have introduced new patterns of working. As you say, new staff are coming in on different contracts with review periods. It is a tribute to our staff in that they are remarkably flexible. Simply because they have flexi time arrangements does not mean that they operate them in an arbitrary way. Our staff care a great deal about their service to the customers, and we have an enormous amount of co-operation from our staff in adapting their flexi time to the needs of the centres and the customers.

  Q9  Chairman: Will you look at the previous paragraph which talks about costing data. This is a baseline point and it is still very weak. Once again, you have highlighted this in the past and this is a problem which is apparently inherent in your Department, is it not? Of course, you will have read, with great interest, the speech I gave on the Budget yesterday, will you not, or have been briefed on it, as was the House, sitting breathlessly on my every word. Tell us something about your costing data.

  Mr Lewis: I think our costing data is getting better, Chairman, I genuinely do. Forgive me, I have not read your words.

  Q10  Chairman: Nobody else has either!

  Mr Lewis: I will do so. You never have all of the data that you want, but we are getting better and better at having data not just in terms of the demand, but also increasingly we are getting cost per call minute data from more and more of our centres. We have a great deal of that in Jobcentre Plus. We have the balanced scorecard, which is referred to several times in the Report which I have looked at myself, it is online which is giving us stronger management data than we have ever had before. There are still gaps, as this Report makes clear, but we are not operating in a data-free environment in any way.

  Q11  Chairman: Let us look at ringing people back. If people ring you, presumably sometimes they will want to be phoned back. Shall we look at figure 29 on page 53: "The proportion of call backs completed within 24 hours has increased since Jobcentre Plus Direct started keeping records in August 2005". If we see your target, we would naturally assume that you would want to return 90% of the calls. You are way down below that. This could be crucial in the case of Jobcentre Plus. If you want to arrange an interview or something, you have got a pretty lamentable record. What is going on? How are you improving it?

  Mr Lewis: My colleague, Val Gibson, may want to add to this. Chairman, there were some well documented problems in the summer of last year in terms of people making their first contact with Jobcentre Plus. The performance figures then, in terms of people having their calls answered and being rung back, were simply not good enough. We have said that very, very clearly and I say it again here today. The most recent figures -they are more recent inevitably than the ones in the Report here—show that in February, the last complete month, over 60% of call backs took place within 24 hours and over 90% took place within 48 hours. We are still not where we would like to be. But the situation, the problems we faced last summer, has been transformed out of all recognition.

  Q12  Chairman: I think 3% of the nation's working population now work in contact centres, obviously mainly in the private sector. Does this Report not show that you are lagging far behind the private sector in the way you manage the contact centres.

  Mr Lewis: No, I do not think it does. There are a number of instances in this Report which compare us directly with the private sector in terms of external benchmarks. We come out well overall against those benchmarks. Average cost per agent, we are as good as the industry's standard; turnover rates, we have lower turnover rates; the length of service of our staff is better than in the private sector and staff costs as a proportion of the total, we come in lower. I do not think this is one area where the public sector is being shown to be languishing way behind the private sector norm. I think we are well up with it. What we want to do is to improve further.

  Q13  Mr Mitchell: I wonder if you are not just lamely imitating the private sector, short of handling funerals and interments by call centres in Bangladesh and Bangalore if it could. Here you see the private sector shifting to call centres, particularly banks and building societies, which are absolutely infuriating to deal with, where you would never get an answer. Most of the people you talk to seem half-baked. The Department thinks "here is a marvellous way of saving money, let us have some call centres up in the North particularly where we can get low paid chaps and chapesses with nothing else to do and we can close down or contract most of the local offices".

  Mr Lewis: It is simply not our policy to do that, Mr Mitchell.

  Q14  Mr Mitchell: It was a way of economising, was it not?

  Mr Lewis: No, it is not a way of economising. What we are trying to do in the Department is to offer—to use a slightly jargon-type word which I do not really like—different channels of communication to our customers. Let me give you a very good example of that. When I joined the Employment Service as its Chief Executive in 1997, the worst thing you could do was ring your local job centre, assuming you could find the telephone number, and ask if they could help you to find a job. What they would do is say, "You have to come into one of our offices and look at the cards on the board". If you now ring our Jobseeker Direct service, and a third of a million people have found jobs through that service, you can be helped through our full range of jobs on the phone or you can do that on the net or you most certainly can still come back into our offices, which are much more friendly places than ever they were, and use those job point terminals. What we are trying to do is offer our customers some real choice in many cases.

  Q15  Mr Mitchell: Yes, but you have got so many agencies with so many functions and it is much more complicated. If I can get the number and I ring my bank's call centre and say, "Can I have loan?", and they say politely, "No", but yours is very different. A lot of it is very personal, and a lot of people want personal contact. Your aim seems to be that anything that does not demand face-to-face contact is going to go eventually through the call centres. Surely that means a massive contraction of your local offices?

  Mr Lewis: Again, that is not our intention and I do not think it is what is happening. If you look at Jobcentre Plus, we are offering far more and far better face-to-face services than ever we were through the New Deal, the New Deal for Lone Parents, and lots of other face-to-face services. The Pension Service, again—I have been out with colleagues from The Pension Service to meet pensioners in their own homes—offers that as an alternative. I do not want to just quote statistic after statistic, but the NAO's findings of what our customers who use our telephone service think of it are very encouraging indeed in terms of the quality of the service they think they are getting overall.

  Q16  Mr Mitchell: As the Chairman said, the hours are convenient, but I am concerned about the number of functions the Department covers. I believe 55 separate numbers are far too many, is it not? Why can you not handle on initial contact all the basic simple things at the call centres and let the rest be handled by local offices?

  Mr Lewis: What we are trying to do is to provide the service in a way which is most convenient for our customers. Of course, cost effectiveness is an example of that. It is not just the opening hours our customers thought were good, 97% felt the person they dealt with was polite, and 80% had their query resolved in one call. To give you one example again where I think we are offering something genuinely better through a contact centre, we are beginning to roll out in The Pension Service—and Janet Grossman can speak of that—the fact that as you come up to the state retirement age, in an increasing number of our centres you are now able to make one call in which you will have your state pension entitlement assessed over the telephone. At the end of a 20 or 25 minute call you can be told what entitlement you will get and a letter will go out confirming it. That replaces acres of form filling which you used to have to do.

  Q17  Mr Mitchell: Are you going to be able to get into a situation where you have got one number to ring and the answerers have one common system of information on the screen by them, as seems to happen, for instance, with the building society, and they can give you an answer straightaway, because 55 numbers is far too complex for a lot of people.

  Mr Lewis: Certainly, we do not want to continue with 55 numbers. Can I put 55 numbers into context. If you sit in one part of the country, Manchester or Middlesbrough or wherever it is, you do not have 55 numbers because many of those numbers are the geographic numbers of your Jobcentre Plus call centre. For example, if you want to find a job, Jobseeker Direct on 0845 6060234, you can ring from anywhere in the country. We do want to make it simple and we do want to reduce the numbers, but one number, I think, is an unreal ambition. I do not think we will ever want to have one number which is the same for the employer wanting to give us a job vacancy or for the pensioner wanting to apply for pension credit, we do want some differentiation in this system, we have too much at the moment.

  Q18  Mr Mitchell: Did you not rush into it a little too quickly in the sense that staff did not particularly want to do this work and did not join the Department to do call centre work which is fairly demanding? The turnover is high in most of the call centres I have heard about. It needs a more gentle—gentler than my questioning approach—rapport with people. They were not trained for that, therefore, since they were under-trained as well, compared with the private sector, the system got off to a bad start because you rushed into it too quickly.

  Mr Lewis: I think there is always a trade-off, is there not, in seeking to deliver absolute perfection when you open up a new service. There are lots of quotes in this Report—again, you do not have to search hard through the NAO's Report to find favourable quotes—in terms of the Department and the services that it is offering and it has opened up. What I think we have done over the last few years is to have revolutionalised the amount of choice, availability and service to our customers. In that process we have not got it all right. Going back, we would have tried to do some things better, we would not have gone through the problems that we experienced last summer in some of our centres, but I do not regret the fact that we have taken a series of decisions to seek hugely to expand the range of choice.

  Q19  Mr Mitchell: Are the staff now happy?

  Mr Lewis: I cannot sit hear and say that every one of our staff is happy because you will too easily find some that are not. It is interesting, you mentioned turnover, our turnover is less than the industry norm in our call centres and the NAO Report says that is because they think our staff are, in general, well motivated and satisfied. Of course, there will be exceptions to that.


 
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