Select Committee on Work and Pensions Third Report


6  NATIONAL ROLL-OUT OF PATHWAYS TO WORK

269. The Secretary of State has indicated that Pathways to Work will be rolled out nationally in 2008 alongside the introduction of the new benefit, ESA.[331] On the national roll-out, the Secretary of State said:

    "I am absolutely convinced - and it is not just my view but the view of the OECD and many others - that the Pathways to Work is the leading international model for how we can provide more effective interventions for disabled people, and I think we are perfectly entitled to draw on that evidence and to say now is the time to extend the benefits of it to a wider cohort of people."[332]

270. The roll-out will differ from the pilots in that it will primarily be delivered by the private and voluntary sectors and will test a range of 'work-related activities' to help disabled people move into work. There will also be an increased element of conditionality - the extent and content of which is yet to be confirmed.

The Pathways approach

271. While the current Pathways pilots were broadly welcomed, aspects of this approach were criticised, which raises questions on the content of the national roll-out. One issue that was frequently raised was that a 'work-first' approach is not appropriate for all disabled people and that many need first to deal with issues such as motivation, confidence, skills and so on.[333] For example, A4e argued that for many disabled people, their disability is not perceived as their main barrier to work - other barriers included low self-esteem, out-of-date skills and long-term economic inactivity.[334] Leonard Cheshire took this further and stated:

    "In launching the green paper the Secretary of State for Work and Pensions stated that "work is good for people" This is plainly a gross simplification. For many people a return to work could have great potential benefits, and could help to improve their health condition. Some people, however, could find that returning to work, particularly if they do not yet feel ready to do so, could worsen their impairment and further distance them from the labour market."[335]

272. Other issues raised regarded allowing people to make gradual steps towards work included doing voluntary work, work trials and taking up part-time, rather than full-time, work. Lorna Reith of Disability Alliance said that the Green Paper lacked information on enabling people to get used to the world of work again by building up their skills, their confidence and by doing part-time work.[336] This was raised several times in the evidence received.[337] Sue Christoforou from Mind argued the importance of providing stepping stones towards work at a speed which would not result in a deterioration of a person's health.[338]

273. The Green Paper does contain some information on enabling people to try out work before leaving incapacity benefits. The detail is confined to reiterating that those on incapacity benefits (and the new ESA) can undertake unlimited voluntary work; and mentioning work trials and the reformed permitted work as part of the suggested work-related activities. It does, however, ask for responses to the question of how best to improve work incentives within the new benefit so that people can try out periods of work and progress to full-time work where possible. [339]

274. One issue that was raised several times in the evidence received was the inadequacy of the earnings disregard for those claiming Income Support on the grounds of incapacity.[340] Currently, those claiming Income Support are allowed to earn up to £20 without their benefit being withdrawn (after that, it is withdrawn pound for pound). Both Citizens Advice and Disability Alliance argued that the disregard was a useful way of facilitating access to work but highlighted that it had not maintained its value over the years since it was introduced - if it had, it would now be worth £35 to £40.[341] Disability Alliance pointed out that until October 2005, those on Income Support could work for up to 4 hours on the minimum wage. Since then, increases to the minimum wage had meant that the earnings disregard only allowed Income Support claimants to work 3 hours a week - and this would continue to fall as the minimum wage increased.

275. Disability Alliance suggested that the Department should publish a booklet explaining the various rules in order to alleviate the confusion among claimants and the public about whether it is possible to undertake paid work while claiming benefits.[342]

276. The importance of providing stepping stones from incapacity benefits into employment will be crucial in the success of the Pathways to Work roll-out. The Committee recommends that Incapacity Benefit Personal Advisers (IBPAs) and all private and voluntary sector service providers are given accurate information and training on the range of options that are available to disabled people to enable them to move towards paid work. Jobcentre Plus and other service providers should develop close partnerships with employers and voluntary sector organisations to build links that will promote opportunities for part-time and voluntary work for disabled people. The Committee also recommends that the earnings disregard for those currently claiming Income Support, and those who will claim the means-tested element of the Employment and Support Allowance, be increased to enable people to work at least four hours at the National Minimum Wage. This disregard should be up-rated annually.

The roll-out of Pathways and existing claimants

277. In evidence, Lorna Reith of Disability Alliance said of the incapacity benefits reforms and the roll-out of Pathways to Work:

278. A similar view was expressed by others submitting evidence,[344] including Andrew Harrop of Age Concern, who said

    "there are over a million existing claimants over the age of 50 and the Green Paper really does not have anything for them. It is a paper entirely about what would happen after 2008. […] There are issues of unfairness in terms of not offering the intensive support to people already on the benefit who will get it in the future, but it is also not a sensible short to medium term strategy to only focus attempts at helping people off benefit and increasing the length of working lives for people claiming for the first time rather than people who would like to get back into the workforce who want the support but are not getting it at the moment."[345]

279. In addition to the current extension to some existing incapacity benefits claimants in Pathways areas outlined above, the Green Paper says that further extensions to existing claimants will be rolled out "as resources allow".[346] This could include increasing the frequency with which claimants are assessed and further compulsory work-focused interviews. Further conditionality with existing clients may also be piloted as part of the proposed 'city strategy.'

280. The Committee is concerned that existing claimants of incapacity benefits are in danger of being left behind as Pathways rolls out to new claimants. They may receive less benefit and less support to enable them to move into work. We recommend that the Department publishes a date by which existing claimants will be included in Pathways. The Department should also work closely with disability organisations to plan how best to reach existing claimants - who may have been on benefit for some years - and ensure that they are able to access the full range of support available to help them move into work, if they so wish.

The role of private and voluntary sector providers

281. In December 2005, before the Green Paper was published, the Committee held a very useful oral evidence session with representatives from private and voluntary sector service providers: Shaw Trust, Working Links, the Wise Group and the Employment Related Services Association (ERSA). Although, at that time, the content of the Green Paper was unknown, the evidence session provided the Committee with useful evidence on the possible future development of Pathways to Work and the additional support that could be provided by the private and voluntary sectors.

282. Strong support was expressed by several organisations on the involvement of private and voluntary sector service providers in helping disabled people move into work.[347] There was a general feeling that, other than providing NDDP job-broking services, the private and voluntary sector had had insufficient opportunity to participate in Pathways to Work.[348] This situation will change in the future as the Green Paper indicates that national roll-out will include greater involvement of the private and voluntary sectors.

283. The Green Paper states that a delivery network that is effective, accessible and flexible is needed to deliver the incapacity benefits reform programme. Services will build upon the success of NDDP and other initiatives. Voluntary sector and private providers will be invited to manage Pathways to Work in new areas and they will be encouraged to test new and innovative approaches. Service providers will be given the flexibility and discretion to tailor their policies to suit the individual needs of clients. Rather than replicating existing provision, new providers will be asked to focus on job entry and retention. The possibility of introducing outcome-based payments is also being considered in the consultation.[349]

284. In evidence to the Committee, the Secretary of State said that after the roll-out, two-thirds of Pathways to Work will be delivered by the private and voluntary sectors and the remainder by Jobcentre Plus.[350]

285. The Green Paper also contains proposals to tackle worklessness in cities and contribute to the aim of increasing the overall employment rate to 80% of the working-age population. Again, private and voluntary sector organisations will make a large contribution to the pilots that are proposed. Local consortia will be established to deliver the pilots and they will negotiate with Government to agree outcome targets that reflect the needs of the local community. The Green Paper also states:

    "The consortia will be required to operate within the new national benefits structure, including the proposed conditionality arrangements for new claimants. Once the new benefits structure is in place, the Government will consider proposals from pilot areas to trial a range of conditionality and incentive structures for existing claimants. Administration of benefits will continue to be managed by Jobcentre Plus."[351]

286. The Public and Commercial Services Union (PCS) raised strong objections to the proposal that the national roll-out of Pathways will be led by the private and voluntary sectors. They thought that this would be "a huge gamble" that negates the positive findings emerging from the Pathways evaluation.[352]

PROVIDING A FLEXIBLE SERVICE

287. Prior to the publication of the Green Paper, Chris Melvin and Matthew Lester from ERSA, Abigail Howard from the Wise Group and Ian Charlesworth from the Shaw Trust all highlighted the importance of the service provider being able to offer a flexible service to clients, particularly to those who might be further from the labour market.[353] Ian Charlesworth criticised Pathways for failing to acknowledge that some people might need to go though many stages before they were ready for work. A similar point was made by many of the disability organisations who submitted evidence.[354] PCS, however, argued that the pilots had shown that IBPAs could help "slow burner" cases as well as the "quick wins".

288. Working Links said that the current approach used by Jobcentre Plus promoted unnecessary complexity in providing employment support to benefit claimants by their perceived barrier, for example, disability, age or lone parenthood. They argued that people had multiple barriers and a model based upon Employment Zones[355] would provide more effective support to enable people to move into work.[356] A similar argument was made by the Centre for Economic and Social Inclusion (CESI)[357] and by Reed in Partnership who argued that a national roll-out of Pathways based upon the pilots would not be as effective as one based upon Employment Zones which allow greater freedom and flexibility to service providers.[358] However, these arguments were put prior to the publication of the Green Paper and it appears that these concerns may have been met by the Government's proposals to allow the private and voluntary sector to provide a fully flexible service.

289. In evidence to the Committee, the Secretary of State acknowledged:

    "in the Employment Zones, for example, the private and voluntary sector providers have a very good track record in improving outcomes for Incapacity Benefit claimants and Jobseeker's Allowance claimants. I think their performance actually exceeds Jobcentre Plus in a number of very important respects."[359]

290. However, in their written evidence the PCS argued that they could not locate any reference to research that supported or explained the Government's view that Employment Zones delivered the best outcomes.[360]

291. The private and voluntary sector providers who gave oral evidence to the Committee criticised the current Pathways pilots for failing to be efficient in the provision of services.[361] In evidence submitted after the Green Paper publication, the Shaw Trust confidently stated that the private and voluntary sectors "will out-perform the back-to-work rates achieved within existing Pathways pilots."[362]

292. A further issue on the extended use of the private and voluntary sector to provide services was raised by the DRC, which stated that

    "The impact of using private and voluntary sector providers to deliver Pathways in new areas without having to replicate existing provision will need to be closely evaluated as support may vary by locality, provider or individual adviser. Identifying the impact on employment rates by different impairment groups will be important."[363]

EFFECTIVELY ENGAGING CLIENTS

293. Many of the private sector organisations that already work closely with Jobcentre Plus commented that claimants are often more willing to engage with them, or with voluntary sector organisations, than with Jobcentre Plus. In their written evidence ERSA commented:

294. They compared this with services provided by 'independent' agencies that generated trust and appear unthreatening to clients.[364] Similar views were expressed by voluntary sector organisations such as Mencap, RNID and RNIB which argued that the needs of their client group make them more suitable than Jobcentre Plus to deliver some services.[365] The Wise Group argued that services that they currently provide which do not visibly name the service providers in the delivery process are effective as they do not "stimulate the same levels of mistrust amongst participants, as statutory agencies are liable to do." Consequently, the Wise Group suggested a similar approach be taken in Pathways.[366]

295. A similar view was expressed by the Shaw Trust which said that clients will more readily engage with independent organisations than with Jobcentre Plus staff in discussions about returning to work, and that private and voluntary sector organisations are more prepared to challenge clients' assumptions about their own work readiness.[367] On a similar point, several organisations raised concerns that the concentration by Jobcentre Plus on job entry targets had skewed the focus of some IBPAs to prioritise those closest to the labour market.[368] ERSA said that private and voluntary sector providers were particularly effective when dealing with clients who are the 'hardest to help,' compared with Jobcentre Plus staff.[369] This was also acknowledged by the Secretary of State who said that a broader partnership that included the public sector, but with the expertise of the private and voluntary sectors, would be a positive step forward when Pathways is rolled out.[370]

296. Ian Charlesworth of the Shaw Trust[371] and Matthew Lester of ERSA argued that the issues of benefits and work needed to be better separated to prevent clients from worrying that an invitation to attend a WFI would mean that their benefits might be withdrawn. Matthew Lester said:

    "we get a huge number of people who say they will not engage with Jobcentre Plus simply because of the fear of losing their benefit. They want to work but they do not want people to start talking about it because of the fear of losing their benefit. That is this trust issue. It pollutes the whole relationship in those interviews because it changes the emphasis and people are potentially at risk of losing their benefits."[372]

297. Similar points were made by CPAG and Mind (also see paras 221-226).[373] This leads on to the question of the extent to which private and voluntary sector organisations should be involved in implementing the planned national roll-out of Pathways. For example, should they provide WFIs for incapacity benefits claimants, as the Green Paper suggests will be piloted in cities.[374] There were mixed views on this issue.

DELIVERY OF WORK-FOCUSED ACTIVITIES AND INTERVIEWS

298. Several organisations pointed out that it may not be appropriate for voluntary sector organisations to deliver certain aspects of Pathways. At a fundamental level, CPAG argued that voluntary sector organisations might not actually have the coverage or capacity to take on a role as a primary provider of services. [375] Leonard Cheshire took this a step further and said that voluntary organisations "could find their core purpose compromised by close involvement in a system that could penalise their client group."[376] When asked whether his organisation would be willing to deliver the conditional aspects of an employment programme Mark Baker, from RNID, said "We would be reluctant to involve ourselves in regulating benefit, and we do not see that as part of our job." Employment Opportunities pointed to potential conflicts of interest and said that "charities must see service delivery as a means to an end, not an end in itself."[377] A similar warning was also given by CPAG which said:

    "We are especially worried about non-state providers being given the power and the discretion to sanction claimants. Extending delivery through these sectors raises difficult questions around accountability, and the impact that delivery contracts - and the financial motives these create - will have on quality of service."[378]

299. The TUC expressed their concern about the type of involvement that the private sector would have in delivering the reform programme. They said:

    "We would not be alone in being worried by the thought of private companies having the power to tell disabled people to apply for a job or lose their benefits - and having an incentive to do so."[379]

300. They also complained that the Green Paper was ambiguous and lacked detail on these issues.

301. A different view was presented by other service providers. The Shaw Trust said that they believe "that there is great merit in providers other than Jobcentre Plus being involved in the delivery of the initial work-focused interviews."[380] On the administering of benefit sanctions, Mr Chris Melvin of ERSA argued that there are already instances where voluntary and private sector providers are providing a service to claimants and paying their benefits. If the client does not engage, the cases are referred to decision-making and appeals to decide whether they have breached their benefit regulations.[381]

302. The Committee welcomes the involvement of the private and voluntary sectors in delivering aspects of the reform programme, including work-related activity programmes and work-focused interviews, recognising both the potential benefits and some of the risks. We are aware that there may be difficulties for some voluntary organisations, due to coverage, capacity issues or potentially conflicting roles. However, the requirement to deliver sanctions for non-compliance is more complicated. The Committee recommends that the decision of whether to administer a benefit sanction should rest with a DWP decision-maker rather than a contracted service provider. The Department should carefully consider the views of private and voluntary sector service providers received during its consultation on this issue.

OUTCOME-BASED FUNDING

303. As stated above, the Green Paper sets out the Government's intention to test further outcome-based funding for those delivering services for the national roll-out of Pathways. It also states: "Our objective will be to focus providers on improving job entry and retention, rather than simply asking them to replicate existing Pathways to Work provision."[382] Again, the evidence presented mixed views on this issue.

304. Many disability organisations, and the union PCS, opposed outcome-based funding on the grounds that it might encourage service providers to assist disabled people who are perceived as easier to help and who are closer to the labour market.[383] For example, RNID stated:

    "We are concerned that proposals to have outcome-based funding will militate against people with complex problems or perceived barriers to the labour market, as these people are likely to prove more costly in terms of the time and nature of the interventions they may need to become work-ready."[384]

305. The Disability Rights Commission said that outcome-based contracts would require safeguards to ensure that providers did not have incentives to prioritise those perceived to be closer to the labour market rather than those with more complex barriers or higher support needs.[385] To mitigate against this, the RNIB argued that contracts for private and voluntary sector providers should recognise a range of outcomes - not just finding someone a job and keeping them there for three or six months - and acknowledged that some people needed more help in progressing to employment.[386] During the Committee's visit to the Netherlands we heard that service providers there also use outcome-based contracts and receive funding for placing their clients in employment; they receive more if this is then sustained for at least six months; and also receive payments for placing clients in training, education and for recognised 'soft outcomes'.

306. A joint memorandum from Mind, Rethink and the Royal College of Psychiatrists argued that outcome-based contracts would only produce a crude measure of success in finding full-time employment for clients and "there is a real danger that people will move into unsuitable jobs, but that this outcome will be short-term only, yet services will be rewarded for achieving this unsatisfactory outcome."[387]

307. The National Autistic Society informed the Committee of an issue raised by their employment agency, Prospects, which:

    "has encountered difficulties with the rigid nature of outcomes based, time limited funding, when structures do not make allowances for the fact that people with autism need more support than is often available. As a result, Prospects has to provide that additional support as a cost to itself."[388]

308. A suggestion was made that smaller specialist and voluntary sector organisations would benefit from payments in advance rather than payment by results.[389] Nonetheless, several other private and voluntary sector service providers were in favour of outcome-based funding.[390]

309. We welcome the Department's commitment to extend outcome-based funding, but believe it needs to consider carefully how best to progress with such funding to ensure that all providers - private and voluntary sector - do not skew their focus towards helping into work those who are already closer to the labour market. Providers must receive payments that recognise the ongoing support needed, not only to move a disabled person into work, but also to ensure their jobs are sustained. We recommend that the contracts reward providers for a range of outcomes leading up to and including job entry and that job retention for at least 12 months is rewarded.

310. One final point of note is what will happen with the other employment programmes delivered by Jobcentre Plus - particularly those which overlap with Pathways. Dave Simmonds from CESI argued that for the roll-out of Pathways to be a success, the reform of other employment programmes delivered by DWP, including the mainstream New Deal programmes, would be necessary.[391] This is an important issue but one which the Committee did not have time to consider during this inquiry.

311. The Department should clarify its intentions for the future with regard to the wide range of employment programmes it delivers, including the New Deal 50 Plus.



331   HC Deb 24 Jan 2006, col 1306-7 Back

332   Q 287 Back

333   Vol 2: Ev 23; Vol 3: Ev 19; Ev 67; Ev 91; Ev 92; Ev 188; Qq 33 [Mr Faulkner], 43 [Ms Howard] Back

334   Ev 91, vol 3 Back

335   Ev 63 Back

336   Q 185 Back

337   Ev 116, vol 2; Vol 3: Ev 193; Ev 257; Ev 237 Back

338   Q 233 Back

339   DWP, A new deal for welfare: Empowering people to work, Cm 6730, January 2006, p 43-47 Back

340   Vol 2: Ev 117; Ev 162; Vol 3: Ev 1;Ev 38; Ev 127; Ev 188  Back

341   Ev 117, vol 2; Ev 188, vol 3 Back

342   Ev 117, vol 2 Back

343   Q 157 Back

344   Vol 2: Ev 144; Ev 134; Ev 109; Ev 250, vol 3 Back

345   Q 177 Back

346   DWP, A new deal for welfare: Empowering people to work, Cm 6730, January 2006, p47-48 Back

347   See, for example, Vol 2: Ev 12; Ev 45; Vol 3: Ev 40; Ev 46; Ev 141 Back

348   See, for example, Vol 2: Ev 13; Ev 20; Ev 28; Vol 3: Ev 124; Q 33 Back

349   DWP, A new deal for welfare: Empowering people to work, Cm 6730, January 2006, p 74-76 Back

350   Q 324 Back

351   DWP, A new deal for welfare: Empowering people to work, Cm 6730, January 2006, p 77-78 Back

352   Ev 219-220, vol 3 Back

353   Q 43 Back

354   For example, Vol 2: Ev 47; Ev 163; Vol 3: Ev 67; Ev 114 Back

355   Employment Zones were introduced in April 2000 in fifteen areas of the UK experiencing persistently high concentrations of long-term unemployed people. Back

356   Vol 2, Ev 42 and 45 Back

357   Vol 2, Ev 56 and 59 Back

358   Vol 3, Ev 47 Back

359   Q 328 Back

360   Vol 3, Ev 219 Back

361   Qq 31-33 Back

362   Vol 2, Ev 40 Back

363   Vol 2, Ev 110 Back

364   Vol 2, Ev 21 Back

365   Qq 77-78, 167, 170; Ev 144, vol 2  Back

366   Vol 2, Ev 14 Back

367   Vol 2: Ev 24 and 28 Back

368   Vol 2: Ev 159, Ev 177, Vol 3, Ev 60 and Ev 176 Back

369   Vol 2, Ev 21 Back

370   Q 327 Back

371   Q 34  Back

372   Q 35 Back

373   Vol 2, Ev 162 and Vol 3, Ev 202 Back

374   DWP. A new deal for welfare: Empowering people to work, Cm 6730, Jan 2006, p 74-78 Back

375   Vol 3, Ev 213 Back

376   Vol 3, Ev 64 Back

377   Vol 3, Ev 77 Back

378   Vol 3, Ev 213 Back

379   Vol 2, Ev 83 Back

380   Vol 2, Ev 28 Back

381   Q 45 Back

382   DWP, A new deal for welfare: Empowering people to work, Cm 6730, January 2006, p 75 Back

383   Vol 2: Ev 141, Ev 169, Ev 193 and Ev 205, Vol 3: Ev 117 and Ev 220 Back

384   Vol 2, Ev 145 Back

385   Vol 2, Ev 110 Back

386   Vol 2, Ev 141 Back

387   Vol 2, Ev 205 Back

388   Vol 3, Ev 117 Back

389   Vol 3, Ev 141 Back

390   Vol 3, Ev 47 and Q 67  Back

391   Q 116 Back


 
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