Examination of Witnesses (Questions 20
- 39)
WEDNESDAY 7 DECEMBER 2005
DEPARTMENT FOR
WORK AND
PENSIONS
Q20 Mr Davidson: So from now on,
if things are too complicated, it is all Mr Sharples' fault?
Mr Lewis: No. Perhaps I will hand
over to Mr Sharples, but I think Mr Sharples has been already,
if I may say so, part of the solution and not part of the problem.
Mr Sharples: I think, as Leigh
has made very clear, there is a strong commitment by ministers
to address problems of complexity. John Hutton made this very
clear when he talked to the Work and Pensions Select Committee
and in fact there is a commitment in the five-year strategy on
simplification. As you know, we are working on a Green Paper on
Welfare Reform and, as the Prime Minister told the House, this
will be published early next year. Obviously we cannot anticipate
the contents of that, but one would expect that the themes which
have been developed will be followed through.
Q21 Mr Davidson: Can I ask about
internal mechanisms? Do you have anything inside the Department
equivalent to a gateway review or anything similar which is a
go or a no-go in assessing the various proposals against certain
criteria which cover this issue of complexity?
Mr Sharples: I think it is important
to understand that a policy goes through a number of stages from
the initial debate and conception, which is often then subject
to consultation, and, as I say, we are proposing to publish a
Green Paper on Welfare Reform to get extended consultation on
future plans. We then go through a parliamentary process in which
there is parliamentary scrutiny and tests and if there is any
impact on regulation, there has to be a Regulatory Impact Assessment.
We then go through consultation on secondary legislation with
the Social Security Advisory Committee applying some tests, and
they often comment on the complexity or simplicity of regulations,
and we then flow through into implementation. I think, as Leigh
has said, there is a complete commitment on the part of officials
in the Department to ensure that at each stage in the process
the questions about complexity and simplification are being asked.
I think particularly when it comes to the delivery, then whatever
has been done in the intermediate stages, it seems to me absolutely
vital that we set the highest possible standards in the way things
are explained and presented and delivered to customers.
Q22 Mr Davidson: I am not sure if
that is a yes or a no actually because one of the most interesting
phrases in the Report is in paragraph 1.11 where it says, "Thus,
there has been a drift towards greater complexity, with few forces
working in the opposite direction". I understand the mechanism
you are outlining, but it seems to me that that is absolutely
tailor-made for gold-plating where the pressures will be to amend
it in this way, put it in that way, people will make a submission,
whether or not it is a question of exemption for lollipop persons,
and so on and so forth, and there is not actually anything which
is equivalent to a complexity main gate, it seems from what you
were saying. The fact that it is included in a whole number of
other things which are taken into consideration seems to me is
little more than paying lip service to the concept and, unless
there is actually a finite point at which these questions of complexity
are considered, I would have thought that they would always end
up being second best because simplification presumably does not
have a champion in the Department unless it is now yourself. I
am not clear whether or not you, as the simplification tsar presumably,
are going to have a role and a responsibility at every stage where
there could be encrustations being attached to proposals to actually
strike them out, stop them or reverse them. I understand, I think,
what your role is, but it seems to me that it is not sufficiently
tough and there is not the mechanism there to have the sort of
gateway that I was indicating. Have I picked that up wrong?
Mr Sharples: Well, I have responsibility
for advising ministers on working age benefits and, as Leigh has
explained, we want to toughen up the scrutiny we give to policy
from the point of view of simplification and that is why we are
setting up this new team which will ask these challenging questions.
We do want to strengthen that gateway, but we need to recognise,
and I think we just have to be straightforward about this, that
simplification is one ambition and there are other objectives
of policy that we need to take into account, that ministers will
take into account, including affordability, fairness and whether
benefits are going in a targeted way to the people who need them
most.
Q23 Mr Davidson: Some of your answers
are extremely long. I think we understand that these are complex
matters, but it does not give us confidence, if you cannot give
us simple answers to these questions, that the systems you are
establishing are going to be simple.
Mr Lewis: I think that is perhaps
not giving sufficient credit to the complexity of what we are
trying to do, but let me try and give you a simpler answer. I
think the NAO Report makes a very strong and good point, that
there is not a sufficient counterweight inside the Department
to the inevitable pressures that lead to more complexity rather
than less and, therefore, I want to put in a stronger counterweight.
I am establishing a unit, I am giving it a direct reporting line
to Adam Sharples and a direct reporting line to ministers and
it will know that I am interested in it.
Q24 Mr Davidson: Okay. There are
a couple of particular points I want to raise. The first is a
question to the NAO. In the annual report that you give us about
the resource accounts, is it possible, because of the impact that
complexity has upon fraud and error, for us also to have a report
which deals with these questions of complexity and outlines whether
or not the Department has actually been making progress in resolving
them because there obviously is a spill-over?
Mr Burr: I am sure that would
be an appropriate focus in that report because it is so relevant
to other areas like fraud and error which we have to address.
Q25 Mr Davidson: Would that be helpful,
Mr Lewis?
Mr Lewis: Yes, it would.
Mr Davidson: Well, the request was not
designed to be, but I am glad to hear that you welcome that. I
wonder if I could just ask you, Chairman, when the Government
is reviewing Invalidity Benefit in the near future, is it possible
for this Committee to be making a submission, not on questions
of policy, but on questions of process, procedure, complexity
and those sorts of aspects to make sure that all the issues we
have been wrestling with over a number of years are actually taken
and injected into that debate at a fairly high level? I am not
confident that simply mentioning it to officials within the Department
and hoping that they feed it in will necessarily give it the significance
it deserves.
Chairman: That is a very good question,
Mr Davidson, and the answer, as far as I am concerned, is yes.
Mr Davidson: Thank you, Chairman. On
that note, I will hand back to you.
Chairman: Sadiq Khan?
Q26 Mr Khan: Can I just begin where
Mr Davidson ended. Can we be clear about this: is it not inevitable
that the benefits system, the legislation and the regulations,
by their nature, are going to be inherently detailed and complex?
Mr Lewis: Yes, it is. We are—
Q27 Mr Khan: Is it not also inevitable
that the sort of constituents, and I have thousands of them, who
receive various forms of credit and thousands who receive benefits,
is it not inevitable that only those who have got problems and
grievances will approach me and either contact you or other MPs
when there are problems with the system?
Mr Lewis: Yes, both of those are
indeed true. Just to take them in turn, we live in a hugely complex
society. As the NAO Report says, we have 60 million individuals
who live in our society and they live in every different way that
60 million people do. To give you a couple of figures, every year
7 million start a new job, one in ten people move home, 600,000
people marry, 350,000 divorce, and our systems have to cope with
all of that, if you see what I mean, and much more besides. The
second point is to say that when we do surveys of the overall
satisfaction of our customers, actually we get very high levels
of satisfaction with our key business-delivery organisations.
That is not to say that everything is rosy in the garden and there
is much more we can and should do, but you are right to say that
when we get it right, and we do get it right an awful lot of the
time, you do not tend to hear as much about it.
Q28 Mr Khan: Well, that confirms
the point that it is no surprise, therefore, that the Comptroller
and Auditor General has been complaining since 1984 and MPs have
been complaining for ever about the system because one of the
flaws of the system obviously is the complexity. While we are
on this, is it inevitable that when you have a programme of trying
to target your resources to the poorest or to certain parts of
the community by introducing Pensions Credit, for example, or
Working Families Tax Credit or Disabled Person's Tax Credit, you
are introducing new systems to target different sections of the
community and when there is change, there will be problems with
that?
Mr Lewis: I think it is inevitable
and it is also inevitable, I think, that the more you try and
direct and target the benefits you wish to provide to a certain
subset of a wider group rather than the whole subset, it becomes
more difficult and more complex to do. The simplest benefits to
administer are the benefits that go to everyone on a kind of very
general basis or to very large numbers of people on a very general
basis. They are easy, by and large, to administer and they are
also, by their nature, expensive and it is that balance that you
have to work with.
Q29 Mr Khan: So although there may
be rough justice, how would a benefits system which was less means-tested
be simpler and less complex?
Mr Lewis: In terms of the pure
administration, I think that is so. Means-tested systems are more
complex to administer than non-means-tested systems. That is simply
a matter of fact. But there are, of course, very many policy and
financial and other reasons why successive governments have wanted
to introduce means-tested benefits.
Q30 Mr Khan: The policy we cannot
discuss, but there is a huge consensus, as you will see from today's
PMQs, about policy. That will be discussed elsewhere. Can I congratulate
you on the Department's five-year strategy published this year
and also on the appointment of a benefits simplification team—quite
a nice title for a team. Can I ask you how soon we can expect
to see some of the fruits of the success of the team and the five-year
strategy?
Mr Lewis: I am not going to try
and over-promise because I have been in the Department just three
full weeks, and I do not want to come to this Committee and promise
the earth. This is a hugely complex area and it is interesting
that the NAO Report itself in several places talks about the need
to "chip away" at the system and that radical reform
is neither necessary nor practical nor desirable in many cases.
So I do not want to give this Committee some promise that I cannot
keep. What I will say is that I do want to see that we give real
priority to the simplification agenda, along with the agendas
of meeting the needs of the people of this country in terms of
benefit provision.
Q31 Mr Khan: You will have seen,
I am sure, the excellent announcement by the Chancellor this week
in relation to the thresholds, which will obviously alleviate
some of the problems we have seen in recent months, the recent
publicity around Tax Credits and so on. What are you doing to
clarify what changes of circumstances people have to Report and
when?
Mr Lewis: We have already made
some changes. I might look to Mr O'Gorman, who is more expert
in the detail.
Q32 Mr Khan: One of the concerns
a constituent has raised with me is that they are not sure what
they need to report.
Mr Lewis: I do not think we are
as clear always as we should be in terms of when people have to
report changes of circumstances. We have made some simplifications.
Housing Benefit, for example: it used to be the case that you
had to make a claim annually for Housing Benefit, even if your
circumstances had not changed. We have changed that but I think
we should and could do more to be clearer with the public about
changes of circumstance.
Mr O'Gorman: We are actually commissioning
some research to try and find out the particular difficulties
people have. For years we have been, we hope, improving forms,
alerting people to the sort of changes they need to tell us about.
You are right though that people still find it difficult to remember
or to know precisely what they need to say to the different agencies
who may be paying them different benefits. For our next step in
improvement, we would like to know more about the particular difficulties
people have and the ways in which we could communicate with them
to give them a better chance to know what they have to do.
Q33 Mr Khan: My last question was
about a change in circumstances, but there is another issue, which
is the complexity deterring my constituents in Tooting from applying
in the first place. One of the excellent things that we recently
introduced was being able to phone up for a Pension Credit, which
my constituents think is a fantastic idea. How are you ensuring
other types of claims, for example, those receiving Council Tax
Benefit are not deterred from claiming? I am particularly concerned
about my pensioners, those for whom English is not their first
language and others. What steps are you taking to ensure they
are not being scared off or deterred because of the perceived
or real complexity?
Mr O'Gorman: We have introduced
a new, shortened claim form for Council Tax Benefit, for example,
for pensioners. It is only three or four pages long. Our Pension
Service has begun a series of ringing people who are on Pension
Credit to ask them whether they may be entitled to Council Tax
Benefit and will help them complete a form over the phone. They
will actually send them the completed form through the post with
a pre-paid envelope for the pensioner to send that claim form
on, if they are happy that it records their details correctly,
to the local authority to claim Council Tax Benefit.
Q34 Mr Khan: Would you be able to
write to me to let me know how many people in Tooting you have
phoned up to let them know their eligibility?[1]
Mr O'Gorman: I am sure we can.
Q35 Mr Khan: I am very grateful.
Can I just ask you about the figures on page 43, figures 13 and
14, which show that a small number of types of mistake account
for most of the costs of official and customer error. You will
also be aware from the Report, I am sure, that a staggering figure
of billions of pounds is lost by error. I think it is £1.5
billion a year. Can I ask you, looking at those figures, what
you are doing to root out error, for example, by directing staff
training systematically to those areas?
Mr Lewis: Let me say something
about what we have done, because those figures are high. There
are two types of error, of course. There is official error and
customer error. Let me stay with official error. Let me say some
of what we have done, very quickly and some of what we are going
to do. We are very much focusing—perhaps not rocket science—on
those offices which have the highest levels of error, so we are
trying to focus in on where the problems are at their most marked.
We have developed an end to end standard operating model within
Jobcentre Plus, for example, to try and make sure that we extend
best practice everywhere. We are extending the training in all
parts of the Department, particularly the Pension Service. Just
to pick up a point you have made, we have very much focused on
the gateway to try and stop errors entering into the system in
the first place, because one clear fact is if you make an error
in on the very first day you take in a claim, that error tends
to perpetuate itself and run through the system for a long time.
What are we going to do? Actually, we are drawing up an overall
strategy for reducing error. For a long time we have had an overall
strategy for reducing fraud and we have been very successful actually
in reducing the levels of fraud overall. We have not been as successful
yet in reducing the overall levels of error, and I want us to
see such a strategy in both the short and longer term—are
there some quick wins which will give us something really worth
having quickly? Are there some longer-term issues we have to tackle,
and are our target structures right as well? Are we giving the
right incentives to our staff?
Q36 Mr Khan: You will be aware that
the New Dawn means there is less Punch and Judy politics between
us, and also it will lead to less Punch and Judy between witnesses
and the Committee, I am pleased to say. If you were asked to come
back here in a year's time, what criteria should we use to measure
how successful you have been?
Mr Lewis: I think you should ask
me whether in that year I could point to demonstrable and measurable
reductions in the overall complexity of the system.
Q37 Greg Clark: Mr Lewis, as you
survey the scene of your new empire, how important is this issue
of complexity amongst the challenges that you have?
Mr Lewis: By the nature of my
appearing before this Committee, I have probably spent more of
my first three weeks on this subject than on any other single
subject. So, if this has done nothing else, it has brought it
very sharply to the top of my agenda, but I also intend to keep
it near the top of my agenda.
Q38 Greg Clark: Is it the most important
issue?
Mr Lewis: No. As you say, it is
a very big Department with some huge policy and delivery issues,
and I am not going to promise it is going to be the subject which
stands proud above all others.
Q39 Greg Clark: Do you disagree with
the Report then on page 25, paragraph 1.13, where it says, "The
complexity of the benefits system is perhaps the most important
issue facing the Department, and affects every aspect of performance."
You do not agree with that?
Mr Lewis: I certainly think it
is one of the—
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