Examination of Witnesses (Questions 239
- 259)
MONDAY 6 MARCH 2006
RT HON
JOHN HUTTON
MP
Q239 Chairman: Good afternoon, and
welcome to you, Secretary of State. The Government has set very
ambitious targets to reduce the incapacity benefits caseload by
a million and also to move 1 million older people into work. Can
you say how you differentiate between those two targets, particularly
for the over 50s, and if somebody is over 50 on Incapacity Benefit
and moves into work will they count against both targets?
Mr Hutton: It is an incredibly
ambitious target, you are quite right, Terry, particularly if
you look at the last 20 years of what has happened on incapacity
benefits. We have seen very significant increases. I think I am
right in saying it has trebled since the late 70s. We all have
probably got a very good sense of why that has happened but I
think the target of a million off in 10 years is the right general
approach that we should set for ourselves. It is what we think
we can achieve if we are successful in the national roll-out of
the Pathways to Work schemes, and if we can provide more help
to keep people staying at work when they are sick for as long
as possible. It is going to be a really tough call to get to the
million. We have not set about this exercise with a strict sense
of "Every year we ought to set ourselves a particular individual
annual target", I really do not think we could properly do
it that way, but I think it is the right thing to do. It enshrines
the ambition we have for these reforms. We do believe, based on
the success of the Pathways to Work pilots, that it is an achievable
objective for us to set, but I am certainly not going to try and
pretend to the Committee today that it is going to be anything
other than an incredibly tough challenge for us to realise. But
I think we have a choice really on all these things. We could
have chosen to continue as we were, and we are seeing now significant
change. The numbers coming into incapacity benefits have come
down by about a third over the last few years, and we are seeing
now the first fall on an annual basis of the numbers on incapacity
benefits, but that is all very incremental. Our analysis, basically,
and the reason we have brought forward these reforms, is rooted
in an argument that I hope Members of the Committee will feel
able to support that the system is currently failing; there are
literally hundreds of thousands of people who are sick and disabled.
For that reason I do not think we should continue with a failing
system. I think we should approach this reform from the basis
of tackling poverty and social exclusion, which essentially is
what happens if you have been on incapacity benefits for a long
period of time. That it is the role and responsibility of a modern,
active welfare state, to try and provide more support, help and
encouragement to people who in the vast majority say they want
to work again to try and realise that ambition. I think it is
going to be tough but it is absolutely the right thing to do.
Q240 Chairman: Do those targets reflect
the almost certain increase in numbers on incapacity benefits
following equalisation of state pension?
Mr Hutton: They will have to take
that into account. Potentially this could add maybe 200,000, maybe
more, on to the target that we have to meet having set it for
ourselves. But yes, they will have to take into account the effect
of equalising the state pension age, which I think, as everyone
recognises, is going to see more working age, because they will
be working age, adults staying on the benefit system, particularly
Incapacity Benefit and its successor, for longer than would otherwise
have been the case if SPA, state pension age, had stayed at 60
for women. But again, I do not think there is any question of
us trying to torture the data until it confesses here. It will
be a million off incapacity benefits starting from where we are
now over the next 10 years, and during that period of time from
2010 onwards, as state pension age begins to increase gradually
for women, that will have an effect on the numbers we are dealing
with. But that is the objective that we set for ourselves and
yes, it does take into account the potential increases for the
numbers on working age benefits, yes.
Q241 Chairman: Looking at the role
of GPs and primary care in this process as outlined in the paper,
the BMA said "the central purpose of the primary healthcare
team in managing the sick is restoration of health, or where this
is unrealistic ensuring the best possible strategies for the patient
to manage the chronic illness." Can you square that statement
with the role that you envisage for GPs and primary healthcare
teams in getting people back to work that you have set out in
the Green Paper?
Mr Hutton: I think we can. I think
the principal responsibility here of the general practitioner
is to secure the best possible outcome for the patient. We know
in some cases that that would mean that it is the right thing
to do to try and keep someone in the work place, and I think there
is a significant body of medical evidence and research that confirms
that, and I would be very happy to share that with the Select
Committee. We are not trying to ask GPs to perform roles that
are not consistent with their primary and over-arching responsibility
to secure the wellbeing of their patients; I do not think that
is true, and I think crucially, in relation to the incapacity
benefits reforms and the replacement of the incapacity benefits
with the new Employment and Support Allowance, we are saying that
we think it is better for decisions about whether people should
qualify for the benefits to be made by the benefit system, as
it were. It is our responsibility to make those determinations
and judgments, and to that extent I am at one with where I think
the BMA are, but I think it is perfectly possible to reconcile
the two statements because I believe very strongly that the vast
majority of GPs do see their responsibility as being to secure
the best possible outcome in the general sense of wellbeing in
the wider sense of the word for their patients. That is principally
about their medical condition, of course, they are physicians,
doctors, that is their principal responsibility, but we know,
for example, in relation to mental health the importance of keeping
people in contact with the work place in terms of tackling depression
and social exclusion that can often be the consequence of people
being away from the work place, the isolation that sometimes follows
from that. I do not believe that the Green Paper reforms in any
way compromise the role of GPs, no, and I do not think it is right
to say that we are trying to do something that is fundamentally
at odds with the wider responsibilities that GPs I know have and
feel and demonstrate towards their patients.
Q242 Chairman: What future role do
you see for what some would call the "infamous" sick
note?
Mr Hutton: I do not know who uses
the word "infamous".
Q243 Chairman: I will, then!
Mr Hutton: I am glad it is not
a speech of mine that you were quoting at me. I do not think I
have ever used that word. Look, there is an obvious and proper
role for GPs in relation to that process, and the Statutory Sick
Pay scheme obviously, in particular. We are proposing a series
of changes in the Green Paper that we think will make Statutory
Sick Pay more easily understood by more employers and, together
with the wider changes we are trying to introduce, that will have
the combined effect of keeping more people in work than automatically
assuming that the best place for them is to come out of work and
on to the benefit system. So there will clearly need to be a continuing
role for GPs in that system; I think that is taken as read. But
I think we are right to look at the relationship between Statutory
Sick Pay and incapacity benefits. There is an obvious connection
between the two and the Green Paper has tried to make that connection
and propose some changes. It is important to bear in mind here,
as in other parts of the Green Paper, this is a paper for consultation.
We are proposing a number of changes to Statutory Sick Pay on
which we would be interested to hear the views not just of employers
but others as to whether they make sense or not, but I am convinced
that we have to look seriously at the relationship between Statutory
Sick Pay and incapacity benefits, and we are proposing in particular,
for example, that there should not be an automatic transition.
I think it is absolutely essential before someone qualifies in
future for the new Employment and Support Allowance, which will
replace Incapacity Benefit, that there is a proper assessment
of that person's health and eligibility for that benefit, and
I think this is one, and there are other areas, where I think
we can, as it were, make sure that the gateway into the new Employment
and Support Allowance is properly controlled and accessed, not
just for the benefit, clearly, of taxpayers and businesses and
the wider community but for those people themselves as well.
Q244 Mr Dunne: Just before we get
into too much more of the detail, could I take you back, Secretary
of State, to the overall target you were referring to at the beginning?
Can I be quite clear that the one million reduction target is
a net target, that you are not just coming off but also coming
on?
Mr Hutton: Yes.
Q245 Mr Dunne: Can you confirm to
us how many people the Department are estimating will come off
naturally through progressing from incapacity benefits into pensions?
Mr Hutton: I will have to give
the Committee some detailed figures on that. I do not have those
with me. I think it is true, it is a net figure, so we are starting
from 2.7-2.72 million. By 2015-16 I would like to see that figure
down to 1.72 million, so it is a net figure. We are not trying
to do any clever statistical sleight of hand on this. The reduction
will come principally from two sources. Certainly in the majority
of cases the reductions will come from the roll-out of the Pathways
to Work-type scheme, so we can do more in placing people who are
currently on incapacity benefits and on the Employment and Support
Allowance in the future back into work where they want to be,
and that is where I think the majority will come, but I think
there will be some who we can prevent coming into the benefit
system altogether, through better occupational health, the work
of the employment advisers, for example, whom we would like to
see in GP surgeries as well. We have to do it from both ends of
the curve, so to speak. Yes, more active help from people on benefit
to get back into work, but also providing more help at the beginning
of that process so they do not come into the benefit system altogether
and, if we can be more successful at both ends of that curve,
we have every prospect of realising that aspiration of getting
a million people off incapacity benefits. I would be happy to
share the details of figures on, for example, the numbers who
currently leave IB and retire, because clearly there is an element
of that toobut that happens now. Clearly, we are talking
about going significantly further than the current trends. Roughly
650,000 of people a year come onto incapacity benefits. Last year
we moved about 700,000 off, hence the net figure of just over
50,000, but clearly, if we are going to get a million off in 10
years we are going to have to systematically improve our performance
right across the range, so it will not be achieved simply by relying
on the current exits from incapacity benefits. I cannot change
that; that is a demographic trend. We will come on to pensions
reform at some point in the future, thankfully not today, so there
is a statistical movement in that regard but that is not going
to account for the minimum reduction. If we are going to get the
million off, primarily it will be because we are more successful
in getting people off benefit and back into work.
Q246 Miss Begg: I have questions
on the Personal Capability Assessment, the new proposed one. When
Incapacity Benefit was introduced, the gateway to get on to the
benefit was the old work test, and it was rightly criticised as
being an all-or-nothing judgment that either somebody could do
full-time work or nothing at all and concentrated too much on
what people could not do and not on what they could do. So the
Personal Capability Assessment was introduced to try and emphasise
or concentrate on what people's capability of work was but, unfortunately,
that has not worked because it does not operate terribly differently
from the old work test, or in practice it does not. What is going
to be different about the new PCA that is being proposed in the
Green Paper that will in fact concentrate on a person's capability
for work rather than just the negative connotations?
Mr Hutton: That is the ambition
we have for the new Personal Capability Assessment. It is a more
accurate and more robust assessment of the capabilities of a person
to, for example, perform tasks that could lead to employment eventually,
and the analysis and the critique of the Personal Capability Assessment
we did try and set out in the Green Paper. I think there is a
general sense, a consensus, that the current system does not work
terribly well and you can look at all sorts of evidence about
that and particularly, for example, what happens on appeals, so
I think it is perfectly right and sensible for us to have another
look at this. Given the criticality of this part of the benefit
system, this fundamental assessment of a person's capabilities,
it is critical that we get this right because otherwise we are
going to find ourselves five, six, seven years from now having
exactly the same debate about the need to get the measurement
process properly calibrated. What is different this time, I hope,
is that we are going to set about this task of designing the Personal
Capability Assessment in a different way, and the Green Paper
made it very clear that we would, and we are going to, involve
disability organisations, the voluntary sector and others; the
medical profession obviously, and the BMA is welcome to be part
of this; to make sure we draw on the lessons of the last few years
that the PCA is currently structured; international evidence if
that is appropriate; the best medical and occupational health
evidence that is available to us, to design the new PCA to do
the job we want it to do. So, as we intend to, if we do it in
that consensual way, get people around the table who have a critique
and analysis of the current system that is relevant and that we
can draw on, we can get it right, but it is really important for
the success of these reforms for people to have confidence that
the PCA process, the new one, is going to treat them fairly and
reasonably, and that they have themselvesand we should
have, all of us here in this House and in the country, all of
us as citizens and taxpayersconfidence that the system
is doing things we want it to do. That is, in a rather longwinded
way, how I hope we will get it right.
Q247 Miss Begg: What is the timescale
for starting the process of the redesign? When we had the charities
in front of us last week they said they had not received an invitation
to get involved in the process you have just mentioned.
Mr Hutton: We have to crack on
with this pretty soon, so if they have not got the invitations
yet, they will be getting them very soon.
Q248 Miss Begg: You are not going
to wait until all the submissions are in for the Green Paper before
you start that process? You will start that process as soon as
possible?
Mr Hutton: I think we should start
as soon as possible.
Q249 Miss Begg: There is also reference
to other health professionals. What other health professionals
do you envisage being involved in the process, and are they going
to be involved from the NHS or the voluntary sector or contracted
out to the private sector?
Mr Hutton: We have a contract,
obviously, with Atos Origin to perform the Personal Capability
Assessments, and I think that contract does not run out until
2012, so I think it will be Atos Origin who will be delivering
the Personal Capability Assessment. In terms of the range of healthcare
professionals that need to be involved in it, I think that is
going to have to be something that we discuss with people. I think
it is sensible; generally, my understanding is that people agree
that we should involve the skills and expertise of a wider relevant
range of healthcare professionals to help us do this. There will
be a list of people, I am sure, occupational therapists and physiotherapists
and others, but who actually is involved in individual assessments
I think is going to have to be something we discuss with people
over the next few months.
Q250 Miss Begg: If you are already
tied into a contract for the delivery of this, will they be able
to fulfil the 12-week target to get the PCA done? Do you think
they will?
Mr Hutton: I am confident they
will, yes.
Q251 Miss Begg: What about contingency
plans if they cannot? That obviously has implications for what
happens further down the line, particularly in regard to level
of benefit.
Mr Hutton: Yes. We will have to
operationalise, obviously, the delivery of this part of the reforms
sensibly and seriously. I am advised that we can deliver the Personal
Capability Assessment within the 12-week target that we set out
in the Green Paper. On a general level, obviously we have to get
the details right but it is absolutely essential that somebody
coming into benefit and claiming this benefit gets their case
dealt with promptly and quickly. There are lots of other ways
we could do it. We could say we will do it in 26 or 52 weeks or
somethingthat is totally unacceptable. We have to do this
and we should be able to swiftly, efficiently and promptly. My
advice is that we will be able to do that and, obviously, I regard
that as a fundamental part of these reforms and I will be doing
all that I can to make sure that happens.
Q252 Miss Begg: RNID, when they were
giving evidence last week, came up with quite an interesting take
on the PCA, that it should not be just about an individual's capability
but actually a much more holistic approach, where you looked at
what the labour market was, the chances they might have within
the context of their lives, whether they have caring responsibilities
and things. Is that the kind of route that you are likely to go
down when you are redesigning the PCA, or will it be much more
of the "tick box" that we have seen in the past?
Mr Hutton: I do not think the
"tick box" approach is a brilliant one to go down, but
I think what emerges is that it is too early to tell, and I do
not want to sit here and pre-empt the outcome of that exercise
because I think it is very important that the Department goes
into it with an open mind. We want the new assessment process
to be right and to treat people fairly and reasonably, and at
the end of the process for the person who is claiming benefit
to feel that they have been treated properly, and their condition
has been fairly assessed. That is an important thing to strive
for and that is essentially the objective that I have asked my
officials to make sure comes out of this. What that means in relation
to specifics, and the specific point you have raised, I think
it is quite difficult for me to give you a concrete answer on
this afternoon.
Q253 Miss Begg: The in-flow on to
incapacity benefits is quite a different make-up from those who
are sitting on stock. The majority is now mental health problems
and their younger cohort as well. The way the PCA operates for
those with mental health problems is different from those with
physical disabilities. Somehowand I can say this as someone
with a physical disabilityit is easier if you have a physical
disability because you can quantify exactly the effect it has,
but when it is a variable condition, as with mental health, sometimes
it is dependent on perceptions and how the individual feels about
themselves. Are you confident that it is possible to come up with
a PCA that will take account of variable, fluctuating mental health
conditions, where the points system really does not always give
a proper indication of what an individual may be capable of one
day as opposed to the next? With mental health, if someone has
9 points, they are capable of full-time work and 10 points they
are capable of no work, and somehow the inability to go out on
your own only gets one point but that may be the big barrier that
stops someone from entering the work place. What extra work are
you going to do on the mental health assessment to make it more
responsive than the present one is?
Mr Hutton: We have again in the
Green Paper set out how we intend to do this. Clearly, this part
of the PCA process has been the subject of sustained and longstanding
criticism, particularly from the mental health organisations and
many of the disability movements, and we have tried to respond
to those concerns by saying again, very much in relation to my
previous remarks about the wider tests, that we should be able
to sit down, and we intend to sit down and talk to people about
what these criticisms are and how we can, if we can, respond to
them. I think it is perfectly possible to devise a sensible test
in relation to mental health, of course. It will need to rely
very heavily, of course, on expert medical opinion but I am sure
it will need to go wider than that, and those are, again, discussions
we will need to have with mental health interest groups and others
who have an interest in this. I suspect we will see in the responses
to the Green Paper more suggestions that will come forward; I
very much hope that is what happens, and we can then sit back
and reflect upon them. In relation to my earlier remarks about
the wider PCA processes, I really do want to try and get to a
point where these are historic arguments. Maybe there will always
be an argument about this, and I suspect that probably is true,
but I think we should be able to tackle head on some of the more
fundamental criticisms in this redesign exercise. Just as it is
important in relation to physical disability, it is just as important
in relation to mental health that we get a broad consensus about
a sensible way forward. You are quite right too, and I think this
is a fundamental challenge to all of us, and it became very clear
to me going through this in the run-up to the Green Paper, that
we may have a stereotype of what it is to be on incapacity benefits.
I think we should lose that because the picture is changing very
quickly. We are seeing, for example, declining numbers on incapacity
benefits in the traditional areas where we know there was a problem
in the 80s and 90s. We are seeing an increasing number of people
getting mental health problems, we are seeing rising numbers and
increasing pressure on incapacity benefits in some areas not traditionally
associated with incapacity benefitsLondon is a very obvious
exampleand increasingly it is much more likely that the
person is a younger woman who has picked up either a mental health
problem in an office-based work place or incapacity relating to
work in the office, and we have to take account of that too. The
situation is changing very quickly in relation to incapacity benefits
and we have to try and stay ahead of it.
Q254 Miss Begg: There is one particular
thing with regard to mental health where there will have to be
an element of trust in any PCA because it will be the individual's
own perception of their condition as to whether they think they
can work or not, and it is very difficult for an outsider, even
though they may be medically trained or have an insight into mental
health, to judge whether that individual is capable or not if
they themselves believe they are definitely not capable of work.
Mr Hutton: Those are going to
be the hard cases, and there are probably quite a few of them.
Yes, I am sure that is true, and we probably all know from our
own constituency work that not everyone agrees with the diagnosis
and assessment made in this process, so I think we all have to
be honest about this. I do not think we are ever going to get
to a point where we are going to have 100% of the cases 100% of
the time properly analysed. I think that is unlikely to be the
case. Remember, medical science is a human science, not a divine
exercise. There are mistakes made in that process, and that is
always going to be so. We have to have a system that deals with
the obvious mistakes and so on, and I think the appeals system,
properly functioning, can deal with that, but it is our ambition
to try and respond to the principal criticisms and concerns that
have been expressed about this, to have a dialogue, particularly
in this case, with the mental health organisations and specialist
interest groups who have been longstanding critics of the current
arrangements to see if we cannot reach a sensible agreement about
this, about the way this test should be constructed in the future.
We certainly go into this exercise with that intention, very much
so, and to the fore.
Q255 Justine Greening: I think everybody
welcomes the fact that the mental health test will be more comprehensive
and hopefully reach a better outcome. When do you think you will
come out with more detail? When we had the evidence sessions,
some of the charities involved in this area expressed concern
about the lack of detail. You said there was a review happening.
When do you expect to be able to come back with more facts about
what the new test will look like?
Mr Hutton: I think we should be
able to do that later this year.
Q256 Justine Greening: Secondly,
would that be something that Atos Origin, as an assessment company
involved with a contract, would also continue to do? Whatever
the new test is, would it be under the Atos Origin contract, or
would you look at having another company perhaps do it if it was
specialised enough that it needed skill sets that Atos Origin
did not have?
Mr Hutton: I do not know the answer
to that. My assumption at the moment is that it would be Atos
Origin because they have the principal contract working for us.
Q257 Jenny Willott: Moving on now
to the Employment and Support Allowance, although the allowance
would be paid at a higher rate than currently, not everyone would
benefit; it depends what they currently would be on. Has the Department
made any assessment of how many winners and losers there would
be under the new benefit when it is introduced in comparison with
the current system?
Mr Hutton: That will depend on
what the actual benefit rate for the Employment and Support Allowance
actually is.
Q258 Jenny Willott: Any clue?
Mr Hutton: We have not made a
decision about that. We were consulting in the Green Paper about
that proposal so I am sure people will come back with some specific
recommendations to us. We have said it will be above the current
long-term rate, which is about £76.50, and it will go up
in April to over £78. We have said it will be fixed at a
point above that rate, and clearly any calculation about winners
and losers will depend on what that calculation is. I think it
is important to bear a couple of things in mind, however. There
are going to be no real cash losers because this is a new benefit
claim for at some point after 2008, and we have made it very clear,
Chairman, that we are not changing entitlement to benefit under
the current system for the existing claimant, so there is going
to be no actual cash lowering, and it is very important to be
clear about that. We have also signalled, secondly, that for those
who clearly have no prospect of a return to work, for the type
of people who are terminally ill or who have serious disabilities,
we want to pay on top of that a more generous allowance through
the support component of the new Employment and Support Allowance
benefit for the people in that category, so I can say very clearly
this is not about cutting people's benefits. If anything, we are
trying to make sure those who have the greatest need get more,
and we treat people fairly and reasonably, as we will do in the
new system, as we should.
Q259 Jenny Willott: Will you be doing
an assessment when the new level has been determined as to whether
people would have got more on the old system and how many winners
and losers there would be?
Mr Hutton: Yes.
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