Examination of Witnesses (Questions 1
- 19)
WEDNESDAY 7 DECEMBER 2005
DEPARTMENT FOR
WORK AND
PENSIONS
Q1 Chairman: Good afternoon, and
welcome to the Committee of Public Accounts. We are today looking
at the subject of tackling the complexity of benefit regulations.
We are joined by Mr Leigh Lewis, who is the Permanent Secretary
at the Department for Work and Pensions, and may I congratulate
you on your new appointment?
Mr Lewis: Thank you.
Q2 Chairman: It is a very big job
and we wish you well with it.
Mr Lewis: Thank you.
Q3 Chairman: We also welcome Mr Adam
Sharples, who is the Director General for Work, Welfare and Equality,
and Mr Brendan O'Gorman, who is the Divisional Manager for Benefit
Reform. You are all very welcome. Now, obviously I want to start
talking about how we are going to reform the complexity of this
system, so perhaps you could start, Mr Lewis, by looking at paragraph
1.12 which you can find on page 25. It deals with the history
of some of this, for instance, "In the mid-1980s, for example,
the `Fowler reforms' were driven by the desire to simplify and
rationalise some of the complex means-tested schemes in place".
Now, you profess to want to simplify the system, but it becomes
ever more complex. When will this end, Mr Lewis?
Mr Lewis: I think, as the Report
from the National Audit Office says, Chairman, this is an inherently
complex area of public policy and public delivery and I think
we are probably naïve to believe that there is a magic-wand
solution. However, I think it is right and fair to say that there
are serious and substantial areas where we have reformed and made
the system simpler. I will not at this moment, unless you would
like me to, go through every one such in detail, but Pension Credit,
payment modernisation, areas of Housing Benefit and areas of Jobseeker's
Allowance are all ones where I think we have been able to make
serious and substantial simplifications to the current system.
Q4 Chairman: All right, thank you.
We will develop that obviously over the afternoon and there will
be plenty of time. Now, let's look at how your Executive Team
operate. If you look at paragraph 2.2, which you can find on page
29, it talks about five types of interactions within different
parts of the system and that drives complexity. What I would like
to know, Mr Lewis, is how often does your Executive Team meet
to consider the benefits system as a whole and how you can reform
it rather than particular parts of it?
Mr Lewis: I probably am not able
to answer that question as fully as you might like in the sense
that, although my Executive Team meets weekly, it has met so far
precisely three times under my chairmanship since I joined the
Department and I simply cannot tell you how often the Executive
Team—
Q5 Chairman: Well, as a new great
performer in this Department, are you now going to drive this
process forward by getting your Executive Team to consider this
process as a whole rather than in parts?
Mr Lewis: Yes, I most certainly
am, but I am going to do something else actually which I would
like to say to the Committee at the outset because I have spent
a lot of time, as you would expect me to, reading this Report
and trying to get myself up to speed in that respect. I certainly
do want this to be one of the main themes of the Executive Team
in the Department. It is already one of the clear principles in
our five-year strategy and the one thing that I want to say at
the outset is that I have decided already to set up something
we have not got which is a dedicated Benefit Simplification Team
which is going to sit inside Mr O'Gorman's division. It is going
to report directly to Adam Sharples on my left and to ministers
and I am going to charge it, actually very much in the spirit
of the NAO Report, with being a counterweight to all of the tendencies
which, otherwise, tend to drive increasing complexity, so I want
to build in a counterweight to that. I want to build a small team,
it will be a small team, which is charged by me and by ministers
with trying to see, and set, the other side of that balance in
motion.
Q6 Chairman: Good, that is a very
helpful reply, thank you very much. Now, still on the same subject,
we in Parliament consider legislation obviously item by item.
What do you do to help MPs to consider the system as a whole and,
if you do not do it at the moment, why do you not consider doing
this as well?
Mr Lewis: Well, I think actually,
if I may say so, that there is room for much greater dialogue
on a working level between the Department and Members of Parliament
on the whole issue of the benefits system and the complexity of
that system. Clearly of course some of the decisions which parliamentarians
take will always be political in nature and that is exactly as
it should be, but I do not think we have necessarily in the past
had a sufficient dialogue with Members of Parliament to say, "Yes,
of course we can do this, but if we do this, it is going to have
these consequences and these results in terms of either simplifying
or adding to the complexity of the benefits system". Perhaps
at the risk of straying a long way outside of my own experience
in this area, I think perhaps at times we have all been responsible
for pursuing and promoting policies which have added to the complexity
of the system without always stopping to think of the consequences.
Q7 Chairman: You may recall that
in our Fifth Report on Inland Revenue Tax Credits and tax cases
we said that the Accounting Officer should seek a ministerial
direction if the proposed schemes would add unacceptable complexity.
That would be an interesting idea that you could consider in your
Department. If ministers come along to you with a proposal which
adds complexity, you could seek a ministerial direction, could
you not?
Mr Lewis: Yes, we could. As you
will know of course very well, a ministerial direction is something
which no Accounting Officer seeks lightly and I think that the
way that I would expect to proceed is to have, as one does in
a department, discussions with one's ministers and with one's
colleagues about the balance of advantage, but in absolute extremis
I think that the suggestion put forward is a helpful one.
Q8 Chairman: Thank you. Let's now
look at these 30,000 job cuts, paragraph 1.3, which you will find
on page 22. You currently employ 130,000 full-time equivalent
staff and you are going to reduce it to 100,000 by 2008 which
is very commendable and is going to have a huge impact on your
Department. Then, let's turn now to page 41 where you see how
your staff have great difficulty in dealing with the complexity,
and this is paragraph 3.6: "the Department estimates that
at any one time there were around 125,000 incorrect cases resulting
from customer error". Well, the obvious question is: how
are you going to reduce fraud and error when you are cutting the
staff by 30,000?
Mr Lewis: I think what we have
to do, and actually we are virtually half way to reaching that
100,000 manpower target, is work a great deal smarter in that
environment. I think we have to have better systems, we have to
have better processes, we have to have better IT and I think we
have to work in a simpler way. I think in all of those areas actually
we are making headway. Some of the reforms that we have already
instituted, for example, the enabling of people to register claims
to benefits by telephone rather than in person, are undoubtedly
already enabling us both to reach that manpower target and to
deliver a better service to our customers.
Q9 Chairman: When Sir Richard Mottram
appeared before us in March, he referred to "organisational
churn" having a serious effect on the amount of error going
up. Now, inevitably if you are cutting 30,000 staff, moving staff
around in agencies, that is going to add to the organisational
churn, is it not?
Mr Lewis: Yes, it is. It undoubtedly
is and I do not think anyone who has run a large organisation
would believe that one can reduce staffing by that degree without
there being some inevitable consequences in terms of staff turnover
and so on and so forth, but I think it is a challenge for us actually.
That is the challenge for the senior management team in the Department
to achieve that manpower reduction and at the same time ensure
that not only does our quality and accuracy not dip, but actually
we seek to improve it and that is the challenge I am going to
take up.
Q10 Chairman: Well, you have a very
good manner at dealing with the Committee and you are very good
at talking about the challenges and how to deal with them, but
during the course of the afternoon we are going to have to press
you further on how you are actually going to achieve it. Let us
look at box 13, page 37. If we are talking about the impact on
your staff in understanding this, "Volumes of guidance on
benefits—Decision-makers' Guide, 12 volumes; Income Support,
14 volumes; Jobseekers' Allowance, 24 files; Incapacity Benefit,
five volumes in 44 sections; Disability Living Allowance, 30 chapters;
Retirement Pension, six volumes", how can your staff be expected
to understand all of this?
Mr Lewis: Well, let me take your
admonition to me and let me come to specifics: what have we done?
I take no personal credit for this, but what has been done though,
to try and make that simpler for our staff? First of all, all
of our benefit guidance, for example, for our staff in Jobcentre
Plus is now electronic and we have completely phased out paper
copies. It is much, much more accessible when you go into the
system, so people can navigate their way through it much more
easily. It is, by definition, up to date because it is kept up
to date on an electronic basis, whereas in the old Social Security
offices of the past, there were dusty files sitting on shelves
which might or might not have been updated. We have put in place
a telephone support line for our staff who are having difficulty
in interpreting guidance. Actually, even with some of the complexities,
about two-thirds of our staff think our guidance is fundamentally
fit for purpose. None of that is to say that there is not more
to do; there absolutely is.
Q11 Chairman: You are relying so
much on these wonderful new improvements to information technology.
Alan Williams has been here a long time, he has heard it all before,
and if we start at paragraph 3.24 onwards, page 47, we have heard
so much of this before on IT improvements, but when are they going
to be fully functional?
Mr Lewis: I want just to say something
against that background which is both as of the here and now and
then in my past incarnations when I was within the Department
for Work and Pensions' family, running Jobcentre Plus and the
Employment Service before it. We have had our IT difficulties
of course and we still have IT difficulties. I know that and the
Committee knows that. We have also had some huge IT successes
and those tend not actually to receive anything like the same
amount of attention or publicity and they should. If you go into
one of our newly integrated Jobcentre Plus offices, you will find
those touch-screen terminals which have completely replaced all
of those little cards on all of those little boards. There are
8,500 of them. They work incredibly well and we get half a million
visits every week to our Internet site. There is one other, and
I will not bore you by reading out a catalogue on the other side,
but with the payment modernisation process we now pay 97% of our
customers directly into their bank accounts at a unit cost of
1p where we used formerly to pay by cheque, and still do in a
tiny minority of cases, which costs £1.61 per payment.
Q12 Chairman: We get the message,
but we also know about the IT difficulties. You are perfectly
entitled to talk about the successes. Now, let's look at one letter
which you sent out to a poor member of the public which you will
find on page 11. Would you understand this, you are a very clever
man? "We are pleased to tell you that your claim for Carer's
Allowance has been successful . . . You are entitled to £43.15
a week from 9 March 2004. You are entitled to an increase of £25.80
a week from 9 March 2004 for a dependent adult. We cannot pay
you from 9 March 2004. This is because the amount of Incapacity
Benefit you get is more than the amount of Carer's Allowance we
could pay you". Is that understandable?
Mr Lewis: No, I read it several
times and I failed to understand it, Chairman.
Q13 Chairman: What will you do about
it?
Mr Lewis: Well, what we have to
do actually is go on improving very substantially the letters
which we send to our customers. We have got a programme very much
to do that, but I think that is an area I really do want to address
because I think too often we send our customers information which,
whilst strictly accurate if you understand the complexities of
the system, is terribly difficult for the recipient to understand.
Q14 Chairman: My last question, Mr
Lewis, is: if you could remove three particularly troublesome
regulations, what would they be?
Mr Lewis: I do not know that I
can simply pick that up. There are complexities in the system.
There are hugely complex regulations about students, about some
small groups, retained firefighters, share fishermen. There are
lots of groups within the system. Some of the regulations in relation
to Mortgage Income Support are very complex. However, as the NAO
Report says, they all have their purpose in terms of the policy
objectives, so it is too easy in a way just to say, "I'll
sweep them away". What I do think we have to do is to have
a more grown-up conversation which is, "What's the balance
of advantage and disadvantage?" A Member of Parliament recently
put down a question, asking whether we could introduce benefit
disregards for school crossing patrol people. Now, no doubt there
is a good policy reason for doing that, but if we were to do it,
it just adds yet one more piece of complexity, and I think that
is the debate we should have.
Chairman: Right, thank you very much.
Mr Davidson?
Q15 Mr Davidson: I wonder whether,
among your many talents, you do your own glazing, but, should
you do so, and I do not know whether or not a member of staff
here could advise you, but if you have ever bought glass from
Pilkington's, you will know that one of the categorisations they
have for frosted glass is an obscuration index, so five is the
most obscure to one, which is clear. Do you have anything within
the Department equivalent which measures the leaflets you produce
or the regulations you apply?
Mr Lewis: I have never done my
own glazing, but, as a student, I lived very near St Helens, so
perhaps I should have gone to Pilkington's more often. No, as
far as I know, having been in the Department for just three weeks,
we do not have that, and that is a suggestion that quite seriously
we might take away. I have spent a bit of time looking at some
of the leaflets we produce and going through them and there is
both good and bad. There is a Pensions Guide, of which we sent
out 1.8 million copies last year, which I think actually is a
model of clarity. It is very clear, helpful, very well written
and I think it is a credit to the Department. There are others
which are much, much less clear.
Q16 Mr Davidson: Can I ask whether
or not you have come across the SMOG formula which I had not come
across until recently? It is the `simplified measure of gobbledegook'
formula which is apparently an internationally recognised means
of assessing forms and the like. Will you be using something like
that in the future to work your way through the material you produce?
Mr Lewis: Certainly I have not
seen a SMOG index, if we use one. What we do have on the back
of this leaflet, but not on the back of this one, is the Crystal
mark, clarity approved by the Plain English Campaign, and we certainly
do use that as a test and as an external verification.
Q17 Mr Davidson: That is a test,
so will you be applying that in the future to all the material
you produce rather than just to some of it?
Mr Lewis: Well, I would like to.
I do not want to give this Committee an absolute guarantee because
we produce many, many leaflets, actually rather too many leaflets
and we have been cutting down on this, but over time I would like
all of our leaflets to meet the test set by that.
Q18 Mr Davidson: You say "over
time" and I accept that. I had a look at the strategy document
and I found it very difficult to identify any indication that
simplification was any real part of the strategy. There are a
couple of mentions at various points, but it does not leap out
as being part of the Mission Statement or part of any major sections
of the Report. To what extent can you guarantee us that, whilst
the direction of travel is in the right direction, this is actually
going to be a meaningful priority for yourself and your colleagues?
Mr Lewis: There are two things
which I hope will give you some degree of assurance. First, the
Secretary of State, Mr Hutton, when he appeared shortly after
his appointment at the Work and Pensions Select Committee on this,
said that he thought we had to be more ambitious in the Department
on this. I have already made clear in a very brief time in the
Department that I think we have to be more ambitious on this,
so we have the Minister in charge of the Department and its Permanent
Secretary both believing that we need to be more ambitious.
Q19 Mr Davidson: More ambitious,
but starting from an extremely low base does not necessarily provide
the necessary solution to me. Will it be clearly identifiable
in the next strategy document you produce as being one of the
major priorities of the Department?
Mr Lewis: I certainly want to
give it a higher priority. I am not going to try and look ahead.
We have only just produced that five-year strategy for the Department
and, by its nature, therefore, it is going to be a while before
we produce another. What I will commit to is that this is going
to be a personal priority for me and that is one of the reasons
why, as I said to the Chairman, I have decided to establish a
small team actually dedicated to making the system simpler.
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