House of Commons - Work and Pensions

Select Committee on Work and Pensions Third Report

5 THE PERFORMANCE OF PATHWAYS TO WORK

199. As already noted in the report, considerable effort will be required to reduce the incapacity benefits caseload by one million. This chapter will examine the performance of the Pathways to Work pilots. (For a description of the Pathways pilots, see paragraphs 29-31 in Chapter 2). The majority of the evidence received during the inquiry, both before and after publication of the Green Paper, broadly acknowledged that the approach taken by Pathways to Work was the right one.[221] The current 'light touch' approach to dealing with clients was particularly welcomed.[222] That said, criticisms of specific aspects of the pilots were raised and these will be addressed below. First we consider the Government's own assessment of the performance of Pathways.

Increasing the off-flow of claimants

200. Pathways to Work is being evaluated by a consortium of independent research and policy specialists.[223] To date, early findings from the evaluation have been published,[224] with further results expected between now and 2008.

201. So far, the Government have judged Pathways to be a success.[225] This assessment resulted in its decision to roll-out the pilots nationwide in 2008.[226] Statistics from the Department's administrative data systems were reported in January 2006.[227] These show that, by August 2005, 148,000 people had registered as new claimants in Pathways areas. From these, there were 44,500 initial work-focused interviews (WFIs), with a further 34,500 beyond the initial WFI. In addition, a further 7,840 existing claimants volunteered for an initial WFI. There had been 17,670 starts on the Choices package, of which: 8,540 were NDDP registrations; 7,490 were Condition Management Programme (CMP) referrals; and 1,650 were enrolments on other programmes such as Workstep. Of the 44,500 customers who have had at least one WFI there have been 19,500 job entries. It is disappointing that the Department does not publish regular updates on the Pathways data to enable a fuller assessment of whether or not Pathways is performing well. We recommend that the Department publish quarterly statistics on the performance of Pathways to Work.

202. The Department's analysis found that there was an increase of around eight percentage points in the six month incapacity benefits off-flow rate in Pathways areas compared with other offices nationally. Following our evidence session with the Secretary of State, the Department provided further written information clarifying that the six month off-flow rate in the first seven Pathways areas was 41% compared with 34% nationally.[228] However, it should also be noted that the DWP report summarising the performance statistics of Pathways pointed out:

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Chart 2: The six-month off-flow rate of incapacity benefits claimants in Pathways to Work pilot areas and nationwide

203. Table 1 shows recent figures of the national picture of claimants leaving IB and SDA in the six and 12 month periods to February 2005 and in the last seven years.[230] It is notable that the destination of more than half of all claimants leaving IB and SDA is unknown and the second largest group are those transferring to another benefit.

Table 1: Destinations of claimants leaving Incapacity Benefit and Severe Disablement Allowance

Incapacity benefit (IB) and severe disablement allowance (SDA) leavers by destination during periods shown.	IB/SDA claims ending in the last six months¹		IB/SDA claims ending in the last 12 months⁽²⁾		IB/SDA claims ending in the last seven years⁽³⁾
Transfer to other benefits⁽⁴⁾	83,900	24%	166,000	25%	1,334,000	25%
Return to IB/SDA⁽⁵⁾	16,700	5%	32,400	5%	268,600	5%
Reach retirement age or are recorded as moving to state pension	29,000	8%	60,900	9%	448,500	8%
Recorded as death of claimant	13,100	4%	25,800	4%	183,400	3%
Recorded as returned to work⁽⁶⁾	14,500	4%	26,700	4%	136,500	3%
Residual unknown destinations	198,200	56%	395,500	56%	2,965,800	56%
Total number of claims ending	355,400		707,400		5,336,800

Source: Information Directorate, 5 per cent. samples (terminations dataset).

(1)B/SDA claims ending in the last 6 months includes IB/SDA claims terminating from 1 Sept 2004 to 28 Feb 2005, this is the latest year for which figures are available.
(2) IB/SDA claims ending in the last 12 months includes IB/SDA claims terminating from 1 March 2004 to 28 Feb 2005,

(3) IB/SDA claims ending in the last seven years include IB/SDA claims terminating from 1 March 1998 to 28 February 2005.
(4) Those transferring to other benefits include those moving onto income support pension credit, jobseeker's allowance, working families tax credit, disabled persons tax credit within 90 days of the IB/SDA claim ending.
(5) Return to IB/SDA includes those who make another claim to IB/SDA within 90 days of their previous claim terminating.
(6) It is known that the number recorded as returning to work underestimates the true situation. It is not possible to determine the number that moved to employment, however the "Destinations of Benefit Leavers 2004" report showed that 62 per cent. of IS, JSA and IB leavers entered employment of 16 hours or more a week.
(7) Destinations of terminated IB/SDA claims are assigned in the priority order shown above.
Notes:
1. Figures are rounded to the nearest hundred.
2. Figures for the "last six months" and "last 12 months" given above will increase significantly following receipt of late notifications.

204. A further issue of note is that an additional breakdown of the statistics on the movement off incapacity benefits shows that there is a substantial difference in the off-flow rate depending upon the age of the claimant. Those aged under 50 in Pathways areas have an average increased off-flow rate of 10 percentage points. For those aged over 50 the increase in the off-flow rate is only 4 percentage points.[231]

INCAPACITY BENEFIT PERSONAL ADVISERS

Training

205. Evidence received by the Committee suggested that Incapacity Benefit Personal Advisers (IBPAs) are vital to the success of Pathways.[232] This is reinforced by early findings from the Pathways evaluation which showed that clients appreciated the support given by IBPAs, who were described as "helpful, supportive and 'not pushy'."[233] More recently, the evaluation found that clients viewed the amount of personal support from IBPAs as a positive element of Pathways.[234] IBPAs also played a crucial role in overcoming the anxieties of clients after they received their letter inviting them to their initial WFI (see para 225), by describing the purpose and content of Pathways, providing assurance that they would not be 'forced' into work and emphasising the opportunities that participation might lead to.[235] Nonetheless, areas of concern around the role of IBPAs were raised in evidence to the Committee. That most frequently mentioned was the inadequacy of their training.[236] Leonard Cheshire pointed out that the reforms "will require highly trained personal advisers delivering highly personalised support."[237] The Child Poverty Action Group (CPAG) said that the limited training received by IBPAs was unlikely to equip them with the necessary skills and sensitivities that are required to do the job effectively.[238]

206. IBPAs themselves have recognised the inadequacy of certain aspects of their training. Findings from the Pathways evaluation showed that the central focus of the training - interviewing skills - was highly valued by IBPAs. Aspects of the training which they felt had not fully prepared them for their role included: [239]

the administrative and procedural aspects of the job, such as making referrals and implementing the Return to Work credit;
contact with providers of the Choices package of support;
guidance on how to deal with clients with more complex or severe conditions;
dealing with clients with mental health conditions; and
training on benefits and tax credits and also on the computer system Labour Market System (LMS).

207. Reassuringly, the research also suggested that IBPA training had improved since the earlier stages of the pilot, as it found that those who been through later tranches of the IBPA training felt better prepared for their job than the IBPAs who were trained earlier on in the pilots.

208. According to the Secretary of State:

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209. DWP later confirmed that IBPAs receive 26 days training, consolidated through line manager coaching, mentoring and the use of small learning groups. Most of the training consists of four five-day workshops on: developing interviewing skills; developing knowledge and understanding of the client group and health conditions; case conferencing with the Condition Management Programmes and other NHS professionals; and engaging with employers, work-place support, working with the DDA, disclosure and advocacy.[241]

210. Citizens Advice Scotland described the IBPA as having "a complex and skilled role, where judgement has to be used as to when and how to engage with claimants."[242] The exercising of judgement and the importance of training is of paramount importance when dealing with claimants with more challenging illnesses or disabilities, such as mental ill health, learning disabilities, autism, blindness and deafness. For example, the National Autistic Society and mental health organisations pointed out that people with autism and mental health conditions may have communication difficulties and warned that these might be misinterpreted by an IBPA as un-cooperative behaviour. Consequently, they argued that an IBPA working with someone with autism must have understanding of the condition and should also work with external organisations who have specialist knowledge of that area.[243] Several organisations raised the issue of IBPAs not being sufficiently skilled to recognise people with fluctuating conditions, an issue previously mentioned in this report.[244]

211. The evaluation of the Pathways pilots found that IBPAs working with new claimants were concerned that they had received insufficient training to deal with clients with mental health conditions.[245] IBPAs working with existing claimants also said that they had some concerns about working with customers with severe and enduring mental health conditions and they believed their training should have included a specific session or sessions dealing with these cases.[246] More recent research on IBPA's experience of working with existing IB clients found that advisers believed that their training had not prepared them well for the demands of the job, both generally and because the existing customers had such complex and severe problems.[247] Considering the information provided by the Department on the content of the training, these findings from the evaluation are worrying.

212. In oral evidence, when questioned whether he would consider creating a special group of IBPAs who had been specifically trained to handle customers with mental health conditions, the Secretary of State replied that it was "something we can certainly look at."[248]

213. Several organisations suggested that the private and voluntary sector were better placed to work with clients with more complex cases, or with specific disabilities, who required more support to move into work.[249] For example, Mencap's written evidence said that if clients with a learning disability had an initial WFI, they were usually referred to Mencap because the IBPAs were unable to provide them with support."[250] Mencap told the Committee in oral evidence that IBPAs in the Derbyshire and Essex Pathways pilot areas referred learning disabled clients directly to Mencap as they felt it was the best service for them. However, they also pointed out that this was largely due to the fact that IBPAs did not have any expertise in learning disabilities, compared with physical disabilities or mental health.[251]

Knowledge of benefits

214. Incapacity benefits claimants who are considering moving into work need reassurance that their income will not suffer as a result. Some may be concerned about access to other benefits that they currently receive, for example Disability Living Allowance or Child Tax Credit, and others may be worried about what happens if a job placement is unsuccessful and they have to return to benefit. Several pieces of evidence pointed to the importance of claimants being able to access reliable advice on work and benefit rules.[252] CPAG pointed to evidence from the Pathways evaluation which found IBPAs were sometimes criticised for their lack of knowledge of the benefit system. They consequently argued that benefit applicants should receive advice and support on accessing their full benefit entitlement as an integral part of reformed system.[253] Mind argued that IBPAs should be able to give advice on the full range of benefits and the financial implications of moving into work - including issues such as Permitted Work rules, Linking Rules and access to free medical prescriptions..[254]

215. Evidence also pointed to the importance of a claimant's family circumstances when assessing levels of financial support and advising on the impact of work upon the benefits currently received.[255] It is also crucial that IBPAs are aware of issues such as an individual's caring responsibilities when advising on benefit entitlement and also when assisting in drawing up a work-related activity plan with claimants. Citizens Advice pointed out that some claimants may not be able to combine work-related activities with their caring responsibilities.

216. The Committee recognises that Incapacity Benefit Personal Advisers (IBPAs) have an important role in supporting their clients and the majority do it well. We are, however, concerned that they may not be as well trained as they need to be. In particular, we recommend that IBPAs receive a fuller training package on disability awareness and mental health. In addition, all IBPAs should be sufficiently skilled to be able to offer advice on benefits and tax credits and the impact upon them of moving into work. They should be able to calculate whether or not a claimant would benefit financially from moving into work compared with staying on benefits, or be able to refer the client onto someone else who can. The Department should also consider how IBPAs can benefit from the sharing of best practice experience. IBPAs should also be able to benefit from a clearly defined career path.

IBPA caseload

217. The size of each IBPA's individual caseload has also been acknowledged as causing difficulties. The Employment Related Services Association (ERSA) argued that if their caseload continues to increase, it will impact on outcomes.[256] A Pathways evaluation report found that the typical caseload of an IBPA was 50-60 clients compared with 30 clients at an earlier stage of the pilot. The report also found that IBPAs voiced concerns over the amount of time spent on administrative tasks and frequently reported taking on additional duties to cope with staff shortages in other areas of the Jobcentre Plus office. [257]

218. In evidence to the Committee, the Secretary of State said that that falling numbers of incapacity benefit claimants "will help ease some of the pressure on some of the front line, particularly the personal advisers".[258] However, in light of the increasing number of WFIs that will have to be delivered under the reformed system - and the fact that many of these will be with existing claimants who will be further from the labour market than new claimants - it is difficult to see how IBPAs can become less pressured. Already, we are receiving comments, for example from the Shaw Trust, which stated: "There appears to be a shortage of staff within Jobcentre Plus with the necessary expertise to act as Personal Advisers within the Pathways programme."[259] If IBPAs are required to carry out WFIs and provide ongoing support to clients when Pathways is rolled out, rather than staff of voluntary or private sector providers, this will be a key area of concern. (The resources available for national rollout are discussed further in Chapter 8).

219. The Committee recommends that the Department closely monitor the caseload of Incapacity Benefit Personal Advisers (IBPAs) to ensure that they are able to offer a full service to all of their clients. IBPAs should not be relied upon to carry out tasks that other Jobcentre Plus staff are employed to do. In our report into the Efficiency Savings Programme in Jobcentre Plus, we recommended that Jobcentre Plus should set out its timetable for providing administrative support to Personal Advisers. We reiterate this recommendation.

220. The Committee is also concerned that there will be insufficient trained staff to deal with the increased number of WFIs that will take place under the reformed system. We recommend that the Department develop, and publish, a strategy to develop the IBPA workforce to show that the future national roll-out will be sufficiently staffed.

221. A further issue that was raised in relation to staffing issues was that of the low pay levels of IBPAs. Sue Christoforou, representing Mind, said:

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222. We recommend that the Department urgently review the pay levels for Incapacity Benefit Personal Advisers to ensure that it is sufficient to attract the right calibre of people.

COMPULSORY WORK-FOCUSED INTERVIEWS

223. IBPAs can waive or defer a claimant's attendance at a WFI. Unauthorised non-attendance may result in a benefit sanction, although this is currently used as a last resort. By August 2005, there had been a total of 44,500 initial WFIs for new clients and a further 34,510 repeat WFIs had taken place.[261] The Pathways evaluation found that IBPAs reported varying levels of failures to attend interviews - the actual rate across the first seven pilot areas was around 20%.[262] A total of 370 benefit sanctions had been imposed as a result of claimants not attending a WFI.[263]

224. In the evidence received, most organisations agreed that WFIs were a useful tool in helping disabled people take steps towards possible employment, although views on whether they should be compulsory were mixed. Many disability organisations, and also the Public and Commercial Services Union (PCS), tended to argue against compulsion,[264] certainly beyond a first WFI, whereas those in favour of compulsory WFIs tended to be private sector service providers.[265]

225. The evidence received highlighted the point that there is a fine balance between encouraging people to find out about the support that is available to them and not wanting to frighten people off. Mencap were one of several organisations arguing that compulsion can lead to a fear of being pressured into work and a fear of losing benefits.[266] Mind and CPAG referred to clients becoming alarmed when they received their letter to attend a WFI, interpreting it as 'threatening' a withdrawal of benefits. CPAG asked for a review of the language used.[267] The Committee requested a copy of the standard letter that is sent to claimants for their initial WFI. To give an example of the tone of the letter:

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226. Sue Christoforou, Policy Officer at Mind, told the Committee that after receiving such letters some of her clients had "gone out immediately to get a job because they feel that is what that letter is saying to them, completely inappropriate jobs, and after a number of days the job fails".[269] CPAG also argued that a more flexible timetable of WFIs should be introduced as this would help the IBPA to accommodate issues around the health of the client and to reassure the client that the adviser is aware of their condition.[270]

227. On the other hand, the TUC said that it was reasonable to expect people to attend WFIs where they can find out about help available to return to paid work.[271] Arguably, a key approach to tackling the claimants' fears is to ensure that IBPAs are adequately trained (see paras 204-212 above).

228. Mind argued that conditionality could reduce trust in the IBPA, the relationship with whom was a crucial part in assisting a claimant back into work.[272] Lorna Reith, Chief Executive of Disability Alliance, pointed out in oral evidence that advisers had themselves raised the issue of conditionality undermining the relationship of trust they had with their clients..[273]

229. In evidence, the Secretary of State said:

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230. The Committee recognises that a delicate balance is required to ensure that compulsory work-focused interviews (WFIs) provide claimants with the opportunity of accessing the range of support services available through Pathways and Jobcentre Plus in a sensitive manner. We recommend that the Department revise the standard letter sent to claimants requesting attendance at their initial WFI to ensure its tone is one that will encourage attendance.

APPLYING BENEFIT SANCTIONS

231. Currently, IBPAs are responsible for deciding whether to waive or defer a client's attendance at a WFI and also whether to impose benefit sanctions. In evidence to the Committee, this ability of IBPAs to apply discretion was highlighted as a particular cause for concern.[275] Referring to the ability to waive or defer a WFI, CPAG said:

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232. The Disability Employment Coalition pointed out that the reforms would potentially give considerable power to first level Jobcentre Plus staff who had not received adequate disability equality training and might not be able to judge whether severely ill or disabled people should be looking for work.[277]

233. The Pathways evaluation found that IBPAs felt that in most cases of a failure to attend the WFI, a reasonable explanation was later given (such as being ill on the day) and a further appointment was made. IBPAs did also recognise the risk that those with certain health conditions or those who were misusing drugs or alcohol were more likely to miss their WFI.[278]

234. Citizen Advice Scotland pointed out that the application of sanctions varied among IBPAs.[279] This view was reinforced by findings from the Pathways evaluation which showed that there were different practices employed by IBPAs:

some IBPAs were opposed to the sanctions regime and developed strategies to avoid using them, such as fashioning justifiable reasons as to why the claimant had missed their interview, others used deferrals and waivers as a method of avoiding imposing sanctions;
a second group of IBPAs argued that sanctions were an integral part of Pathways and should therefore be used; and
a third group described being given clear guidance from management to make more use of sanctions. [280]

235. On the issue of whether or not IBPAs are sufficiently trained to administer a benefit sanction, the Secretary of State said:

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236. Benefit sanctions were also criticised on the grounds of the high poverty levels of disabled people.[282] The Centre for Regional Economic and Social Research (CRESR) argued that the imposition of sanctions for non-attendance at WFIs would be particularly harsh in areas where they may not be enough jobs for incapacity benefits claimants to move into.

237. Mind suggested that instead of applying sanctions, claimants should be incentivised to attend WFIs through additions to a minimum benefit, set at an 'adequate' level.[283] They suggested that such incentives might include paying prescription charges or access to concessionary rates, for example, for cinemas or adult education..[284]

238. The issues of compulsory activities and the application of sanctions are also addressed later in this chapter in the section looking at the national roll-out of Pathways and the Government's proposals to extend compulsion further to include mandatory participation in work-related activity.

THE CONDITION MANAGEMENT PROGRAMME

239. The Condition Management Programme (CMP) is an employment rehabilitation service that has been developed jointly by Jobcentre Plus and the NHS. The CMPs are run in co-operation with local health providers with the aim of helping clients manage their disability or health condition. To date, there have been nearly 7,500 referrals to the CMP. A recent parliamentary answer said that of those who have taken part in the CMP, 17% were no longer claiming benefits and 9% were in work within six months.[285]

240. Early findings from the Pathways evaluation suggest that the CMP was the service provided within the 'Choices' package that was most positively received by clients, particularly the one-to-one sessions with health professionals.[286] A similar view was obtained from the evidence received during the inquiry. The CMP was welcomed because it helped those with 'invisible' disabilities and health conditions deal with issues such as pain management, fatigue and coping with everyday life.[287] However, the Papworth Trust, RNIB and RNID pointed out that the CMP cannot provide appropriate help to those who are deaf or blind.[288]

241. In their written evidence, the Papworth Trust told the Committee about their involvement in the CMP in the Essex Pathways pilot area. They said that clients attended the CMP in the hope that it would help them manage their health condition or disability but many had vague expectations of what the programme provides. Those with a clearer understanding of the CMP's objectives tended to feel that it had a positive impact on their health and how better to manage it. In addition, those who had a strong wish to enter work also responded more positively to the CMP than those who did not view employment as possible or desirable.[289]

242. Although the CMP was generally well received by clients and disability organisations, it is worth highlighting findings from the Pathways evaluation which showed that some claimants who agreed to take part in the CMP lacked understanding of the aims of the service and what it would actually involve.[290] In addition, IBPAs varied in their level of referring clients to the CMP, largely due to misunderstandings of the services offered by the programme. Some IBPAs thought the CMP providers mainly helped those with complex mental health conditions or disabilities while others would not refer clients with mental health conditions.[291] Evidence from DWP's administrative data systems analysed IBPAs use of the Screening Tool and found that 30% of CMP clients stated that they expected to return to work within the next six months. This compared with 64% of NDDP clients.[292]

243. Mind, Rethink and the Royal College of Psychiatrists particularly praised the Cognitive Behavioural Therapy (CBT) model currently being tested as part of the CMP.[293] An internal evaluation of Rethink's programme in Derbyshire found that the fact that the programme dealt only with mental health problems was valued by participants.[294] Mr Matthew Lester, Director of the Employment Related Services Association (ERSA), told the Committee:

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244. A further issue was raised by the Shaw Trust which argued that the CMP relied too heavily on limited NHS resources.[296] A debate in the House in February 2006 on mental health services highlighted the difficulties those with mental health conditions faced in accessing CBT, with some GPs having no access to such therapies for their patients.[297] In September 2005, in a speech to the Sainsbury Centre for Mental Health, Professor Lord Layard, Government adviser, stressed that the National Institute for Clinical Excellence (NICE) guidelines stated that CBT was "of equal effectiveness to anti-depressants". Yet, he added, it was "not adequately available", with only one in ten patients having this option..[298]

245. In evidence to the Committee, the Secretary of State did acknowledge that there are shortages in provision of services such as CBT.[299] However, he went on to say that in some Pathways areas, providers had utilised their funding to buy CBT services from the private sector and stressed that this should be encouraged..[300] In addition, the Chartered Society of Physiotherapists said that there is currently a shortage of physiotherapists who would be able to provide services through Pathways to Work if it was rolled out nationally.[301]

246. In a parliamentary answer in April 2006, the Minister for Employment and Welfare Reform responded that the Department recognised that it needed sufficient health professionals in a range of specialisations in order for its incapacity benefit reforms to be successful. She added that DWP was currently creating a planning group to help identify likely requirements and potential solutions and that it was working closely with the Department of Health to look at ways in which access to such therapies could be improved.[302]

247. The Committee acknowledges the importance of the services provided through the Condition Management Programme (CMP) and supports its inclusion in the extensions to, and national roll-out of, Pathways to Work. We are concerned that the Pathways evaluation suggests a varying level of awareness of the content of the CMP among Personal Advisers and recommend that the Department makes further efforts to ensure that current, and future, Advisers are properly informed of the content of the Programme and how to refer their clients to it. In addition we are also concerned that there may be a capacity problem with the numbers of trained Cognitive Behavioural Therapists or other appropriate therapists when Pathways is further rolled out.

DISABILITY SPECIFIC SERVICES

248. It is apparent from the evidence received by the Committee that there is a strong argument for Jobcentre Plus to provide access to additional support for claimants with certain disabilities. The Royal National Institute for the Deaf (RNID) went as far as saying that Jobcentre Plus is actually inaccessible to deaf people.[303] They argued that all Jobcentre Plus staff should have a far greater level of deaf and disability awareness training and should be trained in dealing with the needs of deaf people.[304] The Royal National Institute for the Blind (RNIB) stressed that their client group required prolonged and specialist support to enable them to make steps towards the labour market, whether through accessing training programmes, or help with finding job vacancies, completing application forms and support in the workplace.[305]

249. Not all disabled people will require such a high level of intervention. For example, Matthew Lester of ERSA said:

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250. Some argued that complex conditions require expertise provided by external organisations specialising in the condition or disability. For example, Forth Sector said:

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251. David Congdon, head of campaigns and policy at Mencap, stated: "In general, all the different schemes from the Department tend inadvertently to miss out people with a learning disability". He argued that this was partly due to the fact that DWP did not monitor which groups of ill or disabled people take part in various employment schemes and, "If no monitoring takes place at the level of those specific and discrete groups of disabled people, no-one identifies accurately that they are missing out."[308]

252. The Committee recommends that the Department reviews the access of its services to all disabled people and monitors service use by different groups of disability and support needs. The Department should also ensure that, where specialist support is needed from external organisations, that this can be easily accessed by Personal Advisers.

RETURN TO WORK CREDIT

253. The Return to Work (RtW) credit - a payment of £40 per week for up to 12 months for those who enter full-time work and earn less than £15,000 - was also identified in the evidence as a particularly beneficial aspect of the Pathways pilot.[309] By August 2005, there had been a total of 11,500 RtW credit awards.[310] It was widely recognised in the evidence that, as a financial incentive, the RtW credit makes an important contribution to the income of a disabled person when moving into employment.[311] Nonetheless, the evidence did highlight a few areas of concern and issues needing clarification.

254. Age Concern praised the credit but also drew the Committee's attention to the similar Employment Credit that was available under the New Deal for 50+. They said that it was responsible for half of all that programme's job entries until the credit was replaced in April 2003 by the Working Tax Credit - resulting in job entries falling by a half. From this, they concluded that the RtW credit should continue as a flat-rate, visible payment in the Pathways roll-out.[312]

255. Several organisations asked what would happen to claimants when the RtW credit ended after one year.[313] For example, Rethink argued that those in low-paid jobs might find that when their credit was withdrawn, they were worse off financially than when they were receiving benefits.[314] This leads to the question of whether people are moving from claiming the RtW credit back to benefits.[315] Work Directions suggested that one way to ease the transition would be to flag up, at around 45 weeks, the fact that the credit was coming to an end. This would ensure that clients had fully explored all options available to them to continue earning at a similar rate.[316] When asked what the rationale for time limiting the RtW credit was, the Secretary of State told the Committee that there would have to be some limit on the extent of help that the credit could provide and that the evidence so far suggested that 52 weeks was a reasonable time limit. He also referred to the credit providing a foothold into work in the hope that claimants could then progress their income above an entry level.[317]

256. The Committee welcomes the financial support provided to disabled people by the Return to Work credit. However, problems may occur when this support ends after 52 weeks. We recommend that recipients of the credit are fully informed of the time limit at the outset of their claim. They should also be reminded of the date when the credit is ending by their Personal Adviser at least eight weeks prior to its withdrawal, with opportunities for them to discuss their options.

257. Recent findings from the Pathways evaluation confirmed that some claimants viewed the RtW credit as providing a useful source of income when moving into work, and also when moving into self-employment. Some welcomed the quick application process and resulting payments however others experienced delays which quickly led to financial problems.[318]

EXISTING CLAIMANTS

258. Since the Pathways to Work pilots first began, they have been targeted at new incapacity benefits claimants. In February 2005, Pathways was formally extended to existing claimants who had been on benefit for up to three years and from April 2006, the extension included those who have been claiming for up to eight years. In one pilot area (Somerset) Pathways was extended to all existing claimants. Prior to this, existing claimants could volunteer to take part in Pathways. In the early stages of the pilots, around one in ten participants were existing claimants.[319]

259. For the initial extension covering the first phase of the pilot areas, a live benefits data scan to identify existing eligible claimants found a total of 22,650 people. By the end of July 2005, 7,840 first WFIs had taken place with a further 3,750 second WFIs and 2,050 third WFIs. 2,860 claimants were recorded as failing to attend. By the end of July 2005, nearly half of the 22,650 identified by the data scan had been booked in for their first WFI, suggesting that the pilots appeared to be on target to call in all eligible existing claimants by March 2006, although there is not yet any data suggesting that this has been completed. As a result of the WFIs attended by the end of July 2005, there were 420 NDDP registrations, 800 referrals to the CMP, 380 referrals to other programmes and 210 recorded job entries.[320]

260. Evidence received during the inquiry supported the extension of Pathways to existing incapacity benefits claimants but presented voluntary participation in Pathways by existing claimants as evidence that compulsion to participate was not necessary.[321]

261. A recent report from the Pathways evaluation found that IBPAs had mixed views on the reduced number of mandatory WFIs for existing claimants. Some felt that having fewer WFIs was a positive decision, while others thought it unfair and that the number of compulsory WFIs should be the same for new and existing claimants. Many IBPAs also thought that there should be more discretion given to IBPAs to tailor provision to the claimants' needs and levels of motivation. [322]

262. In evidence to the Committee, the Secretary of State was asked for the rationale behind existing claimants attending three rather than six WFIs. He explained that the Department recognised that these claimants were very different to new claimants and were likely to have had minimal contact with Jobcentre Plus since their claim began. Consequently, a proactive approach with more frequent interviews would not be appropriate.[323] The Secretary of State also confirmed that those clients who wanted more support than could be offered in three WFIs from their IBPA would be able to access it.[324] Findings from the evaluation of the Pathways extension suggested that existing claimants needed more support than new claimants and did tend to make slower progress. Although there were some job entries, progress tended to be on 'soft' outcomes such as increased confidence, changes in attitude and motivation and punctuality at interviews.[325]

263. The situation of existing claimants will be explored in more detail in the following chapter regarding the national roll-out of Pathways to Work. Before moving onto looking at the proposed roll-out, the next section briefly addresses the cost-effectiveness of the current Pathways pilots.

Are the Pathways pilots cost-effective?

264. The Pathways pilots covering one third of the country cost £150m per annum. (Chapter 8 analyses the costs of the current pilots and future roll-out of Pathways in more detail). In a parliamentary answer, the Minister for Work stated that "the average funding per person on the Pathways programme, for each person entitled to access it, is around £400, excluding the Return to Work credit."[326] This figure represents the total cost of the Pathways programme, excluding the Return to Work credit, divided by the total number of programme starts.[327]Additional information provided in recent parliamentary answers provides further detail on some of the individual elements of the Pathways pilots. For example, the average cost per participant in the NDDP element of the Pathways pilots is £1,600 and for the Condition Management Programme it is £1,500.[328]

265. When the Secretary of State was asked whether he thought the 8 percentage point improvement in claimants moving off incapacity benefits was enough to justify the resources used by Pathways, he responded:

329

266. Following the evidence session, the Department provided the Committee with further detail on savings achieved by Pathways and the 'break-even point'. It commented that savings were driven by the additional numbers moving off the incapacity benefits caseload plus:

330

267. On the break-even point the Department stated:

"However, savings don't materialise straight away because of lagged effects. For example we have to pay the costs upfront of WFIs and support services, but the benefits might only be seen after, say, 6 months when people leave benefit to start a job as a result of the Pathways intervention.

The breakeven point is therefore determined by the extent to which long run savings exceed long run costs, and by the time it takes for the intervention to have an impact (before the impact, everything is a cost and savings are zero)."

268. We will continue to monitor the cost-effectiveness of the Pathways to Work programme.

221 See, for example, Q 33; Vol 2: Ev 13; Ev 19; Ev 23; Ev 65; Ev 81; Ev 112; and Vol 3: Ev 48; Ev 75; Ev 182 Back

222 Q 33; Ev 183, vol 3 Back

223 The consortium is led by the Policy Studies Institute and includes the National Centre for Social Research, the Social Policy Research Unit, the Institute for Fiscal Studies, Mathematica and David Greenberg of the University of Maryland. Back

224 Corden et al (2005) Incapacity Benefit Reforms Pilots - Findings from a longitudinal panel of clients, DWP Research Report No 259, Leeds: CDS; Knight et al (2005) Incapacity Benefit Reforms - the Personal Adviser role and practices: Stage Two, DWP Research Report 278, Leeds: CDS; Barnes H & Hudson M, (2006) Pathways to Work - extension to some existing customers: early findings from qualitative research, DWP Research Report No 323; Corden, A & Nice, K (2006) Incapacity Benefit Reforms Pilot: Findings from the second cohort in a longitudinal panel of clients, DWP Research Report No 345, Leeds: CDS; and Barnes, H & Hudson, M (2006) Pathways to Work: Qualitative Research on the Condition Management Programme, DWP Research Report No 346, Leeds: CDS Back

225 See, for example, Ev 219, vol 2; and DWP, Cm 6730, Jan 2006, p 28 Back

226 HC Deb, 24 January 2006, col1307W Back

227 Blyth, B, Pathways to Work Pilots performance and analysis, DWP Working Paper No 26, Jan 2006, p8 Back

228 Ev 254, vol 2 Back

229 Blyth, B, Incapacity Benefit Reforms - Pathways to Work Pilots performance and analysis, DWP Working Paper No 26, January 2006, p1 Back

230 HC Deb, 30 January 2006, col 253W Back

231 Figures were calculated from those provided in HC Deb, 20 March 2006, col 130W Back