1 COMPLEXITY IN THE BENEFITS
SYSTEM
1. The current benefits system is the result of years
of legislative change. Primary legislation and supporting regulations
are inherently detailed, for example, to meet the needs of people
in varying circumstances and to create incentives in line with
government policy. Benefits are also highly interconnected; for
example, there are 30 linkages between 22 working age benefits.
Many customers have straightforward dealings with the system,
but it can be problematic for others (Figure 1).
Figure 1: Factors affecting customers'
experiences of complexity
Source: National Audit Office
2. The system has also become
increasingly complex and unwieldy over time as it is refined to
take account of many complicated social circumstances
and the implications of other legislation. It is hard to quantify
how much the system has grown but the authoritative Child Poverty
Action Group guide to welfare benefits, which is widely used by
welfare rights advisers, has grown from 432 pages in 1990-91 to
1,546 pages in 2004-05.[4]
Legislators, policy-makers and the officials who draft legislation
all bear some responsibility for the growth of complexity.[5]
The Comptroller and Auditor General's Report identified five factors
which cause the system to be complex (Figure 2).[6]
3. This Committee, along with the Work and Pensions
Select Committee and successive governments have recognised the
need for the system to be simplified for a long time. As far back
as 1984, the Comptroller and Auditor General commented on the
complexity of Housing Benefit. In the last five years, at least
seven Reports by the Committee have highlighted its concerns.
Government statements have identified complexity as a factor increasing
its vulnerability to mistakes, leading to delays, making administration
difficult and deterring claims for some benefits.
[7]
Figure 2: Summary of different types of
interaction in the benefits system
Source: National Audit Office
4. There is widespread recognition that complexity
is a problem, but simplification is not an easy option. Radical
reform is costly, time-consuming and potentially controversial.
Simplification involves trade-offs with affordability, fairness
and the desire to target benefits at those who need them most.[8]
Traditionally, governments have sought to avoid creating 'losers'
which is likely with any significant reform.
5. Nevertheless, the Department recognises that it
needs to give greater attention to tackling complexity. The new
Secretary of State has told the Work and Pensions Select Committee
that he thought the Department should be more ambitious on simplification.
The new Permanent Secretary also assured us it was one of his
top priorities, if not necessarily the highest.[9]
Even if simplification cannot be the top priority, it must not
be treated as a residual matter to be dealt with after other concerns
have been addressed. The Department's 2005 Five Year Strategy[10]
refers to "actively considering the possibilities for future
benefit simplification" but complexity does not appear as
a core concern in this document. Nor is it explicit in the PSA
targets, although reducing complexity should assist in reaching
the target to reduce fraud and error.[11]
The examples of action taken given in the Comptroller and Auditor
General's report are rather piecemeal and relate only to some
parts of the Department. There is currently no clear strategy
for taking systematic simplifying action across the range of benefits.[12]
6. To be able to develop a strategy the Department
needs to have a clearer idea of the scale of the problem it faces.
The benefits system appears to be getting more complex but there
is currently no way of measuring the degree of complexity. Some
of the factors influenced by complexity, such as customer satisfaction,
error rates, benefit take-up and accessibility of customer services,
can be measured and could form part of a composite indicator.
Other elements to take into account might be the length of secondary
legislation, and the number of linkages with existing regulations.[13]
4 Qq 3, 28-29, 53, 76; C&AG's Report, Figure 1,
paras 1.11, 3 and Figure 3 Back
5
Qq 6, 102; Child Poverty Action Group, Welfare Benefits Handbook
(1990) and Welfare Benefits and Tax Credits Handbook (2004) Back
6
C&AG's Report, paras 2.2-2.33 and Figure 4 Back
7
C&AG's Report, paras 1.12-1.15 and Figure 7, Appendix 3 Back
8
ibid, para 4.2, Qq 22, 26, 103-104 Back
9
Qq 5, 18-20 Back
10
Department for Work and Pensions, Opportunity and security
throughout life (Cm 6447), January 2005 Back
11
C&AG's Report, para 4.2; Qq 37-44 Back
12
C&AG's Report, para 4.11; Q 112 Back
13
Qq 3, 15, 53-57, 93, 110-111 Back
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