Examination of Witnesses (Questions 260
- 279)
WEDNESDAY 25 JANUARY 2006
MR IAN
LAWRENCE AND
MS LYNNE
WALLACE
Q260 Lorely Burt: Perhaps I can ask
you about the cuts. You have mentioned the 12,500 jobs. What impact
do you think the cuts have had to date on the department's administration
of tax credits and what impact would you expect them to have in
the future?
Mr Lawrence: People may ask what
impact they will have because we are seeing an increase in resources
in Tax Credits Offices, and we are; we will acknowledge that from
the start, but that ties into my comments about that being necessarily
supported by training and IT. We have major concerns based on
our understanding of where job cuts are destined to fall. I say
"our understanding" because here we are, some one year
on, from the Chancellor's announcements about efficiency savings
and job cuts across the Civil Service, still not knowing from
David Varney and his colleagues exactly where these cuts are destined
to fall. I have to say I find that appalling, as do our members.
One area where we do have some information to suggest where staff
cuts are imminent is in the area of tax credit compliance. We
have seen a report which suggests that there is going to be a
reduction of around 150 jobs. I would be quite delighted if someone
were to come here in the coming weeks and deny that. It would
be some reassurance to my members and ourselves. If that is the
case, and if it is also the case that there are scheduled to be
office closures and therefore in face-to-face contact, we are
concerned about that. That is going to worsen an already difficult
situation and I would urge some second thinking on that.
Q261 Lorely Burt: What about the
experience that staff who are working in the Tax Credits Office
have? Do you have the most experienced staff involved in decisions
about the most difficult cases?
Mr Lawrence: Our understanding
is that management have tried to set up specialist teams to deal
with the very difficult and complex cases. We would welcome that;
that is common sense. Where we come from, if you read our submission,
is about a more joined-up approach, about pulling together the
experience, skills and disciplines that people have in a much
more effective way. It is nonsense, as I heard two weeks ago,
for people to say that they phone up and cannot speak to the same
person. That just does not compute, if you will forgive the pun,
in terms of what should be on offer to people. That is the root
cause of the problem. I alluded earlier to the short term aspects
of staffing. Ergo there will be problems in getting to
see the same person; there will be a problem in encouraging corporate
ownership and we strongly urge that that changes. The problem
is compounded by a lack of training where again our understanding
is that two weeks is the norm.
Q262 Lorely Burt: Two weeks?
Mr Lawrence: It is two weeks typically.
Again, if management can come here and deny that and paint a rosier
picture I would be quite willing to examine that, but two weeks
and then to put people out in the front line, as it were, is inadequate.
Things change, the processes change almost weekly. I will not
produce it now but I have a schedule which shows just how many
teams there are and the different processes that they are involved
in and that is a massive task for people. No wonder stress levels
are high.
Q263 Lorely Burt: Indeed. In your
submission you say that it is your impression that jobs are being
de-skilled. I wonder if you could say what you mean by that and
where you feel it has taken place.
Mr Lawrence: I think the best
example I can give, and these are direct reports from members
that we have replicated in our submission, is that the most typical
is decisions about difficult cases where in the old Inland Revenue
typically they would be taken by a front line manager at the very
least, the old band D. Now that work is being farmed out (without
wishing to be patronising to our members) further down the line
to people with some experience but perhaps not the necessary grounding
in the systems to make decisions. There is evidence from our members
that that is the case. There are disputes around things like whether
the decisions are appropriate to their particular grade and the
rate of pay and terms and conditions they are on, and quite legitimately
we are concerned about that. Our members locally do a massive
job in trying to take those cases forward. There is the issue
of functionalisation. I have talked about the core processes in
the system. That too invites problems in identifying who is the
best placed person to deal with a particular issue. I am not trying
to paint a picture that this is all chaos; I am not. We are still
talking about trying to deal with those claimants among the 6.3
million who are in difficulty. It is not all the 6.3 million;
we know that, but it is a proportion that is too high, I grant
you that.
Q264 Lorely Burt: On the de-skilling,
when Frank Field gave his evidence he was giving one instance
of somebody who had been referred on a dispute 21 times to a specialist
team. Do you think that the de-skilling is something to do with
the fact that people think, "Oh, well, I do not have to resolve
this particular difficult case. I can just refer it on"?
Mr Lawrence: I would think that
was a factor. If you are there trying to clear 18 cases—and
it can be just as time-consuming to clear two cases as it is 18—then
you are going to want to get shot of them. Because of the fact
that we do not have enough joined-up sectional working, bringing
together a case-working ethos perhaps, which needs to come in
(and that is among the many things we have been saying), it does
not surprise me if that is the sort of thing that is reported
back to us.
Q265 Lorely Burt: Have you had involvement
with HMRC management in how to resolve some of these administrative
problems?
Mr Lawrence: The best I can say
there is that it is patchy. In one of the areas, tax benefits
and policy, we are making pretty good progress in trying to establish
a relationship, which is pretty important, you might think, after
all this time, in terms of where they are headed and how our members
might interact with that. I would say, on the whole, that the
interaction is not good enough but I might also say that that
is typical of what has happened across the new HMRC Department
where it has taken quite a while to come to terms with the new
management's approach to good industrial relations. We have struck
an agreement called the Jobs Protocol Agreement, which you may
be aware of, which affords greater consultation between management
and ourselves. I would be looking to TCO management to grasp that
nettle and I would be happy, Chairman, to take part in any joint
review with them in an attempt to build better industrial relations
that would then help claimants.
Q266 Jim Cousins: I have to say that
I think that was an extremely helpful exchange from the point
of view of the Committee. You say in your evidence that the contact
centres do not all have the same level of service or opening hours.
Without going into a lot of detail verbally I think it would inform
the Committee very helpfully if you could provide the evidence
about these variations in service and in opening hours.
Mr Lawrence: I would be quite
happy to do that. I could give you quite a lengthy and detailed
answer, Chairman, so I am quite happy to write to you on that.
Essentially we face similar problems across contact centres where
you have a number of staff on fixed term appointments working
under different terms and conditions, twilight shifts, terms that
are more akin to flexible working and those that are more on fixed
hours and that type of thing. That in itself suggests that the
department is showing a lack of investment and a lack of will
to invest in full time, well skilled permanent jobs. Our argument,
which we touch upon in our submission, is that we need to try
and get a grip on that so that when the voluntary sector and our
advisers, or anyone else for that matter, are trying to make contact
with HMRC they know when and where they can do so and also know
when and where is the best time to do so to get the right result.
It is quite a lengthy issue. I would be quite happy, if that is
okay with you, Chairman, to send you a narrative on that.[2]
Q267 Jim Cousins: There has been
a lot of emphasis in parliamentary discussion on people ringing
up and not being able to get through. Do you have digital telephone
systems that record the calls that do not get through which enable
you to ring those people back?
Mr Lawrence: No. What I do know
is that there is recording of calls, so there are recordings available
of transactions over the phone between operatives and the public.
Q268 Jim Cousins: So when callers
cannot get through there is no system of tracking where those
failed calls have come from, giving you the ability to return
them?
Mr Lawrence: Not to my understanding.
Our estimate, and this is not just in tax credits, let me make
that clear, is that something like 120 million calls to Government
call centres—our analysis—have gone unanswered over
the past three years. That is 120 million dissatisfied callers
to Government call centres.
Q269 Ms Keeble: Forty million a year?
Mr Lawrence: In our estimate it
is 120 million calls over the last three years. That suggests
one of two things, first, that the technology that you referred
to is not available and ought to be. That's 120 million dissatisfied
customers.
Q270 Jim Cousins: That would point
to a serious technological defect. You heard me ask a question
about the significance in the tax credits problem of household
changes. If I am ringing up and I am reporting that my partner
has left me, producing a massive income change, if I am a woman
ringing up is there any ability for me to say, "I want to
speak to another woman about this? No disrespect to you, sir,
but you are a bloke. I do not want to speak to you. I want to
speak to a woman"? Is there any capacity to deal with that?
Mr Lawrence: I comprehend the
point fully. No, there is not, and it is something which I think
needs to be looked at.
Q271 Jim Cousins: If you explained
to somebody over the phone, which I would guess would be extremely
stressful, all these things that are changing your life as a result
of somebody walking out on you, is there any ability for somebody
to ring back and say, "Look: I have already explained this
to Jane and Jane understood it and was very helpful and nice to
me. Do you think I could just speak to Jane again rather than
having to repeat it all to you?"?
Mr Lawrence: The answer is in
the negative, and this featured, I know, in your previous session
with the CAB and One Parent Families and others, and we very much
support that concept. There has to be a service which takes account
of people's individual circumstances and you are quite correct:
it could be a woman who is a victim of domestic violence and does
not wish to discuss the matter with a male, for whatever reason;
it could be any number of things. I agree: there has got to be
better investment in providing what the public requires.
Q272 Susan Kramer: Can I pick up
on this issue of moving much more towards a caseworker based system?
We have had a lot of evidence from people in previous weeks talking
about just the complexity if you are dealing with a general helpline,
with the Citizens Advice helpline if you come from the CAB, the
special payments team, the complaints team. Is there any evidence
of them working together to deal with a single case?
Mr Lawrence: I have no doubt that
the members we represent are doing their level best under difficult
circumstances to do just that. What we do know is that the Special
Management Unit will pick up the most difficult cases, probably
the ones that you people refer, with respect, usually the ones
that require those quick answers. I do not see that there is enough
going on in TCO to deal with those types of things. The Special
Management Unit does seek to deal confidentially with people but
if you think about the case loads that are going on then you can
imagine the pressure they are under.
Q273 Susan Kramer: And it can integrate
all the bits, can it, in that case?
Mr Lawrence: Within that particular
team there is an integrated approach. Our issues are around the
rest of the core processes.
Q274 Susan Kramer: So are we in effect
getting a sort of casework system through the back door in a sense,
creeping towards one? Is that what we are looking at?
Mr Lawrence: You could argue that
it is a two-tier system. Clearly you would have to create something
to deal with the most pressing cases. I have heard the horror
stories reported here and in other sessions about the number of
times that people have tried to get through and 26 different communications.
We want some pronouncements made about the urgency of the cases,
clearly, but that is not going to solve the whole issue. The whole
issue is about skills, IT, training being in the right place at
the right time so that our skilled operatives have some ownership
in the organisation in which they work. If you are a fixed term
appointee whose contract expires maybe in March, or it may be
that you will be terminated in March and you may be coming back
to the Tax Credits Office later in the year, I do not think that
gives you the incentive you need.
Q275 Susan Kramer: Can I unpick that
very slightly and try to understand whether what you are recommending
is that, other than the very complex cases which go off to the
special teams, you need to do some various things to improve the
situation of other people involved in the system and the technology
they have, or that we should go much more towards a general casework
approach? If so, how would that work and what would the obstacles
to that be?
Mr Lawrence: A holistic approach
is something we would obviously favour. The idea of using people
who do have some pretty good knowledge of the system in a more
effective way and through it encouraging better team working is
one way forward. I have seen a consultants' report—and again
it was not presented to us, Chairman, we found out about it -saying
that one of the root causes of problems in the tax credits system
is the lack of a corporate approach within TCO as encouraged by
management. I have here as a perfect example a publication that
was issued by HMRC last week, Working Together. Here we
are, nearly a year on from the inception of HMRC, with the Chief
Executive extolling the virtues to his managers, the 36 business
directors, of working together. I thought that was the message
from day one, and where we come from is that that is what we have
been saying to HMRC management and what we were saying to previous
management in Revenue and Customs as a way of getting the best
value for the taxpayer, and still that lesson is unheeded. Still
the department insists on going off in silos and creating silo
management within structures that are helping to make problems
worse, not better.
Q276 Susan Kramer: Can I ask about
one last aspect of casework or face-to-face interaction? You say
in your written evidence that the HMRC is planning to close various
inquiry centres. If face-to-face were to become more extensively
used, physically where would such meetings take place?
Mr Lawrence: You would expect
me to say that we believe in the idea of locations in the community
for HMRC, not just because of members' jobs but because we believe
it provides a service that the taxpayer demands. All the evidence
from our previous work in this area suggests that that is exactly
what claimants want: someone they can go and speak to, someone
that knows what they are doing and someone who can get them the
best possible answer on the day or at least find someone who can
pretty damn quick. Where we seem to be headed with what we know
as HMRC's channel strategy is foisting customers down a particular
line of inquiry with the sole intention of clearing the case as
quickly as possible from the books. Typically, someone could go
into an enquiry centre, if they could find one in the locality,
and indicate that they had a problem with their tax credits. They
might get lucky and find someone at point of contact who could
say, "That is the issue", or, "You should ring
this number". What is more likely is that they will be directed
towards having an appointment. You might think that is a great
idea but if, upon arriving at the inquiry centre a day later,
they find that, having had the appointment and having spoken to
a person, that person is none the wiser, then it is a waste of
everybody's time. What we are talking about is point of contact
but underpinned with the right resources, the right technology,
the right skills, to mean that that claimant does not have to
visit twice. That is just one example. I have talked about closures.
We have not yet seen HMRC's plans to close offices beyond those
we know are inevitable—lease breaks, contracts on property
ending—and so far we are satisfied that there is no detriment
there in terms of service to the public with two offices in Sheffield,
say, merging into one. What I am worried about are areas where
the public have difficulty reaching offices, areas where they
do not have any access at the minute, places like Blackburn which
has a very high proportion of tax credit claimants. We want to
see an improvement in the quality our members can provide, not
fobbing people off.
Q277 Mr Mudie: Just touching on fraud,
in July the National Audit Office, on the previous year's accounts,
reckoned that fraud and errors would account for £460 million,
but since then they have given an early estimate of £15 million
that has been lost due to organised crime, but that has been overtaken
by Works and Pensions' £30 million, and we have not got any
detailed figure about Network Rail. All that sounds as if it is
making the system worrying vulnerable to crime, and organised
crime at that. Did your members sense this or is this what you
would expect in terms of a big benefit system?
Mr Lawrence: Any system can be
defeated by organised criminals if they have the know-how, so
tax credits is no different from any other in that regard. Where
we believe things needed to have been done earlier, such as closing
down the public portal, is a moot point. HMRC might disagree.
I have heard David Varney's report on that. I am quite happy to
relay to the Committee from our members in confidence and anonymity
their thoughts about some weaknesses in the system. I cannot attribute
them, for obvious reasons, and I would not want to repeat them
here in the Committee. What we do know is likely to lead to fraud,
however, is the use of a fictitious name or false ID for want
of a better phrase, like producing forged, counterfeit or stolen
bank documents. We know that people try to adopt a real person's
identity alive, or dead, we know that people try and use fictitious
dependents as evidence of a claim, and we know that people can
submit numerous claims using false or hijacked identities and
that there is multiple identity fraud. That is not germane just
to tax credits; that is any system, so that is the given, what
we do know. We feel that the supposed faults in the IT provision
did not help matters and opened up a potential gateway to organised
criminals to exploit, and evidence suggests they have exploited
it. Beyond that I cannot comment because I think there is a criminal
investigation going on in at least one if not two of those areas.
It has been alleged that those were possibly as a result of in-house
criminal activity. I do not know so I am speculating there. The
point is that fraud can attack any system. What we are about is
making sure that the IT is foolproof, making sure that the training
for people having to make very difficult decisions in terms of
authorising a claim is better and that they have someone in the
chain of command that they can depend upon to make that decision
with a reasonable amount of certainty, risk assessment if you
like.
Q278 Mr Mudie: When did you, your
membership and the organisation, become aware of the vulnerability
of the online application system and when did you raise it, because
I have read somewhere some time in the past that this was raised
with management before the December cancellation?
Mr Lawrence: We certainly tried
to raise the issue with senior management in terms of what we
had been picking up on the grapevine, if you like. In fairness
to them, they closed that down, I believe, in December and it
has been reported that that was the earliest they could possibly
have done it. I cannot comment beyond that. The fact that they
closed it down is welcome and has closed that particular loophole.
Q279 Mr Mudie: Is that when you raised
it, in December?
Mr Lawrence: We had made comments
previously, in April, when we first got evidence of this.
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