Select Committee on Work and Pensions Written Evidence


Memorandum submitted by Leicester City Council

RECOMMENDATIONS

  1.  The proposals risk missing the opportunity to tackle the main issues in the ICB system. The system is complicated and in need of adjustment. We recommend that the work-incentive system within ICB be simplified so that claimants can see more easily the financial benefits of taking up employment.

  2.  Our experience highlights the need for client centred and flexible services that deliver a range of different types of support and over varying time scales required.

  3.  There is a serious gulf between ICB claimants and employers in terms of perceptions of employability and we, therefore, recommend more focus being placed on employers in order to bridge this gap.

  4.  We recommend obtaining the active involvement of employers. This could include running high profile employer led campaigns to promote the business case for diversity for employers and raising awareness of grants and support that are available to employers. Local Authorities could play important roles in any such campaign—as major employers, as users and suppliers of services and co-ordinating local employer forums.

1.  INTRODUCTION

  1.1  This is a response to the Work and Pensions consultation exercise from Advice Services and Economic Development, Leicester City Council. The response is made based on the experiences of three of the main service areas in Advice services—

    —  Welfare Benefits Advice Service;

    —  the Job Service Partnership (JSP); and

    —  the Employment Support Unit (ESU).

2.  LEICESTER CITY COUNCIL'S EMPLOYMENT PROJECTS

  2.1  The JSP supplements mainstream delivery of Jobcentre Plus, by focussing on increasing the employment rates of groups that are vulnerable in the labour market. This includes, as a result, a focus on people with a disability or work limiting illness.

  2.2  The JSP operates a gateway system offering intensive one to one support to enable clients to address barriers they have to entering employment. The project also engages employers through a Job Interview Guarantee Scheme that runs in tandem with the gateway system and aims to give job ready JSP clients priority interviews as and when appropriate vacancies arse. The JSP is relatively new with it operating from April 2005. However, already some patterns are starting to emerge that indicate some of the issues that have to be addressed in helping people with a disability or work limiting illness into work.

  2.3  Once in employment, clients are given support through an employment after-care service that provides a support, mediation and conciliation service to both JSP job starters and line managers. This part is managed from the Employment Support Unit which also provides an employment rights enquiry and casework advice service.

3.  REFORMS TO INCAPACITY BENEFITS

What lessons can be learned from Pathways to Work in shaping the direction of the reform of incapacity Benefits?

  3.1  The Pathways to Work approach clearly shows an increase in the number of people returning to work from incapacity or work limiting illness. Leicester is not an area in which the Pathways to Work has been piloted and there has been no significant change in the numbers claiming ICB as the following figures show:

  3.2  ICB and SDA claimants in Leicester[45]
Claim rate in Leicester is 8.74% of working age population.
Claim rate nationally is 7.29% of working age population.
Number of claimants nationally is 2.7 million.
Number of people moving from Incapacity benefits into employment is 300,000 (11%).


  3.3  The trends in the number of people claiming incapacity benefits has been practically level in Leicester:[46]


Year
Number of claimants

1997
15,500
1998
15,000
1999
14,800
2000
15,000
2001
15,600
2002
15,800
2003
15,600
2004
15,500


4.  What are the implications of DWP's proposals for the new structure of incapacity benefits?

  4.1  This proposed structure will create a two-tier system echoing the age old concepts of the deserving and undeserving poor. Those with the most severe conditions will obtain additional benefits on the basis of sickness and all others will need to work despite their condition and only receive extra income if they do this. This distinction can only be valid if barriers to employment are removed for people with health problems (eg addressing employer attitudes and matching people to the type of employment locally available). The system does not provide discretion where local labour markets fail to provide job opportunities that are appropriate to individual needs.

  4.2  Any division that is inflexible or ignores variability of illnesses especially in the area of mental health requiring increasing compunction will only create increased worry and stress for people who do not feel they are able to work. For example of this is the people with mental health conditions being told to attend interviews or lose entitlement to benefits when they are currently not in a position to do any form of work and no employer would take them on.

  4.3  The DWP's own research and press release states that nine out of 10 people on ICB want to work. Why then the increased threat that they risk reduction of their benefits? There has to be a risk, possibly significant, that the proposed policy could be seen to be penalising vulnerable people who want to work but, through no fault of their own, cannot gain entry into the labour market. If seen in this light the policy would be tantamount to bullying.

  4.4  What is welcome in the proposals, though, is a recognition that the reforms include more active support from employers. However, the indications from projects being delivered by Advice Services, Leicester City Council would indicate that there are considerable problems with the perceptions or expectations that claimants have of employers.

  4.5  This is particularly apparent when examining the after-care Employment Support Service (ESS) offered to new job starters. Out of a total of 19 clients passed through to the ESS, 17 have actually started work. Of these 17, eight (47%), have a disability or health problem. The startling realisation is that out of the eight people in employment that have a health problem only one has revealed this to their employer. This may indicate where the major barrier lies.

  4.6  We would like to see, therefore, more focused work undertaken with employers to alleviate the anxieties and negative expectations that ICB claimants can have of employers.

5.  Will the reforms help to improve work incentives for sick and disabled people?

  5.1  The proposals do not address the complicated linking rules for benefits and the interaction between them. These complications are compounded by the tax credit system that is yearly based as opposed to weekly like most benefits for people moving into work. There is a plethora of work incentives such as "in work credits" to help increase incentive to work that although admirable are difficult keep up with by advisers let alone clients. Therefore without this information explained and comprehensive better off calculations it is difficult to understand the financial implications of moving into work. As changes in circumstances invariably cause problems within the benefits system it is a "safer option" for clients to remain on existing benefits. Additionally, if a person moves off IB and into employment, but then subsequently returns to benefits paid at a lower level than previously, this can produce a negative connotation about work in general.

  5.2  We agree, therefore, that the system needs to over hauled. However, it is imperative that any adjustment simplifies the system and shows quite clearly to clients their financial incentive to take up employment.

  5.3  The problem seems to be structural and not determined by behavioural problems amongst claimants. We see no indication that claimants with health problems are workshy—indeed the opposite seems to be the case. The JSP is an entirely voluntary project and offers no work incentives, such as the Return to Work Credit offered by the Pathways to Work pilots, other than the prospect of getting a half decent job. Despite only operating for a few months the four Personal Advisors are operating at full capacity and have a caseload that well exceeds that in the original project specification. This, of course, support the aforementioned DWP research citing nine out of 10 ICB claimants want to work.

  5.4  The evidence from the JSP and ESS, so far, suggests that focusing on improving the quality of employment and employment prospects would seem to offer greater potential for any improvement on work incentive rather than benefit reforms. There must, however, be a recognition on the part of Government that moving IB claimants towards/into employment is a lengthy and time-consuming process that incurs additional costs. We know from first hand experience with JSP that concentrated one-to-one support over as long a period as the client needs it is necessary if clients are to be assisted into sustainable employment.

  5.5  In order to encapsulate the concept of fairness, therefore, we would recommend that any overhaul and simplification of the system should not, and need not, involve more draconian measures being taken against ICB claimants. We fear that the current proposals fail on both fronts. They don't simplify the system and they tighten restrictions on ICB claimants. Moreover, if the proposals are to be taken seriously as assisting people into employment then the system has to be more client centred and flexible in recognition of the different types and levels of support that are needed.

6.  Is it possible to distinguish between those who are able to return to work and those who are not?

  6.1  It is particularly difficult to decide who can and cannot do some work. The current system requires an assessment by an "independent" doctor in addition to a sick note from the General Practitioner and this is substantially flawed, partly due to lack of quality in the decision making process borne out by the success of appeals. Leicester City Council Welfare Rights Advice Service were successful in 39 of 52 appeals (75%) against Personal Capability Assessment decisions that clients were not "incapable of work" between April 2003 and April 2005.

  6.2  It is clear that the current decision making process is flawed. This is due to a number of factors including the variability of medical conditions and the inability of people to communicate their disability adequately. The poor quality of decision making was echoed by Judge Harris in the 2005 annual report of the Appeals Service.

  6.3  It is recognised that a large number of people on Incapacity Benefit want to work but this is not the same as being able to work and being able to find a suitable job. A large number will require long-term ongoing support, more flexible employment practices and understanding from employers to make this a reality and these areas need more focus and funding. However, from the above evidence, from the Employment Support service, it would appear that claimants fear that employers will make a distinction if they reveal their health condition.

7.  Will the reforms address the main areas of concern with the current system?

  7.1  From our experience in delivering services in this area and the evidence that we have gathered, no. There should be more emphasis on seeking the active involvement of employers rather than making people dishonest and fearful to disclose. It should also be pointed out that, of the eight people with a health condition who started in employment, all bar one is managing to sustain their employment. Quite clearly, this indicates discrimination, or fear of discrimination by employers at the recruitment stage.

  7.2  Of course, there is legislation in place to counter discrimination from employers. Although recognising the importance of legislation as important, and welcoming the forthcoming strengthening of the DDA, the evidence from the ESU's Employment Rights Service is that very few people raise concerns through, or access, the Disability Discrimination Act (DDA). Over the last four years, out of a total of 1,513 enquiries to the Employment Rights Advice line, only 21 (1.3%) have involved the DDA and, moreover, only one has progressed to being dealt with as a case.

  7.3  DWP Research Report No 277 (Disability in the Workplace) confirms that many small employers have no or limited experience of employing people with disabilities. Concern about the potential cost of workplace adaptations is cited as one of the main reasons for not employing people with disabilities. It is therefore important that the Government promotes a high profile campaign of information to all employers about the grants and other forms of support that may be available to them through Jobcentre Plus schemes such as Access to Work and Workstep. It is also necessary to seek to change employers' recruitment practices, opening up vacancies to all (thereby actually enlarging employers' recruitment pools) rather than sticking to "word-of-mouth" recruitment which has the effect of excluding many potential employees.

  7.4  We do support, therefore, the active involvement of employers and would recommend that the proposal give this more emphasis. We would support a high profile campaign led by the Government and Public Sector bodies and involving leading employers and employer organisations in a similar vein to what has been recommended by the National Employment Panel (NEP) in their report on tackling the ethic minority employment gap.[47] Leicester City Council will be co-ordinating an employer forum to carry forward the recommendations made by the NEP and we could envisage doping something similar in the field of ICB reform.

  7.5  Such an approach would lend itself to linking with other employment and incapacity initiatives. An example could be raising awareness in the local business community and complementing the recent Workplace Health Direct initiative that aims to help people return to work more quickly, reduce the burden on the NHS and lowering the chance of people ending up on ICB.

8.  FUTURE ROLLOUT OF PATHWAYS TO WORK

How successful have the Pathways to Work pilots been?

  8.1  Leicester has not been a Pathways to Work area. However, based on the national statistics, on a proportionate basis Leicester could expect to have a total of 4,650 starts in a Pathways to Work programme with 440 gaining employment.[48] When set against an unflinching level of ICB claimants over the last number of years in Leicester this could represent a significant improvement.

  8.2  The JSP adopts a similar approach to the Pathways to Work pilots, particularly with regard to the intensive and client centred service provided by Personal Advisers. The indications from the JSP are that a Pathways to Work pilot could be expected to, at least, replicate the levels of success of Pathways to Work in other areas.

9.  THE EXPERIENCE OF SICK AND DISABLED PEOPLE

Are people with different disabilities and health conditions given adequate support by Jobcentre Plus?

  9.1  The Disability Advisers and other Jobcentre Plus staff offer an invaluable service that all three service areas in Advice Services access on behalf of our clients. Nevertheless, the reason why the JSP and, in some part, the ESU have been established is to supplement and complement the mainstream delivery from Jobcentre Plus.

10.  LOCAL LABOUR MARKETS

What types of jobs are participants moving into?

  10.1  All the jobs that the JSP clients have moved into are at entry level including those with health problems. The samples are small but, at this stage it would seem that there is a tendency for JSP clients with health problems to work in health and warehouse jobs and not in retail. The table below gives a breakdown of the types of jobs that JSP clients have moved into.


Type of job
All JSP clients
JSP clients with health problems

Warehouse
2
2
Catering
2
1
Care
1
0
Retail
7
2
Leisure
1
1
Health
3
2
Manufacturing
1
0


11.  Are local labour markets able to provide the jobs needed?

  11.1  The indications are that the local labour market is still buoyant and that employment levels are expected to continue to increase. Manufacturing continues to shed jobs but these are more than offset by gains in construction, distribution, hotels, restaurants, public administration and education and health. There is also considerable retail development planned in Leicester which may mean Leicester escaping the expected downturn, nationally, in the retail sector. It has been the experience of the JSP that most clients gain employment with larger employers and it is larger employers that tend to report recruitment difficulties.

12.  What is the experience of employers?

  12.1  As reported elsewhere, none of the employers are aware that they have recruited employees with health problems, this being deliberately kept from them by clients for fear of being refused employment. The employer who was made aware, NHS, has responded positively by making adjustments to the employees' working conditions. So far, all the employees who have health problems are settling into their employment apart from one person who resigned because of problems due to his health condition.

Bob Blyth

3 October 2005




45   Nomis. Back

46   Nomis, Time Series. Back

47   "Enterprising People, Enterprising Places Measures to Increase Ethnic Minority Employment and Business Growth", (see pages 46, 79), National Employment Panel, May 2005. Back

48   Based on NOMIS. Back


 
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