Supplementary memorandum submitted by
PCS after the publication of the Welfare Reform Green Paper
1. The Public and Commercial Services Union
represents 330,000 workers in the Civil Service, including 90,000
in the Department for Work and Pensions (DWP).
2. PCS supports an increased rate of employment
as well as better support for those on benefit. We believe that
wider support for these objectives could be mobilised if it was
under the banner of "full employment" rather than the
more limited goal of 80% employment.
3. PCS has already submitted a paper to
the Select Committee on Incapacity Benefit reform and this paper
is intended to complement that, in the light of the Green Paper's
publication. PCS will be making a fuller response to the Green
paper as a whole during the consultation period.
4. This piece of evidence will focus on
Chapter Five of the Green Paper and the new proposals for delivering
welfare reform contained therein. This is an area which impacts
very directly on our members and where we have developed a knowledge
that may provide useful insights.
5. PCS believes that Chapter Five amounts
to a major U-turn by the government in their approach to welfare.
Hitherto the government has seen a national network of skilled
and experienced employment advisers as the central cornerstone
for delivering employment services.
6. Whilst delivery of programme provision
has typically been contracted to partner organisations, Jobcentre
Plus advisers have been the gateway for all customers to access
work opportunities and appropriate employment programmes under
New Deal. The Green Paper thus marks a sharp change in direction
for the UK's public employment service by proposing to contract
out this key public service.
7. As the introduction to the Green Paper
recognises, Jobcentre Plus advisers have a history of delivering
huge improvements for the government with 2.3 million more people
in work since 1997. The UK's employment rate is now the highest
in the G8 countries.
8. Each of the specific programmes for different
client groups, (New deal for Young People, New Deal for Lone Parents,
New Deal 25 Plus, etc) were designed and delivered by Jobcentre
Plus and have transformed the levels and nature of the support
available, especially for the hardest to help. Jobcentre Plus
has used this wealth of experience to design successor programmes
that can be tailored to meet the needs of the individual client.
In all the delivery models to date, the design and management
functions have rested with Jobcentre Plus.
9. Within new Deal for Lone Parents (NDLP),
the best performing New Deal, all adviser support has been delivered
directly by Jobcentre Plus. In other New Deals, aspects of the
ongoing support is provided by delivery partners, in certain locations,
on an experimental basis. The department has commissioned a considerable
body of evaluation evidence to measure the success of these experiments.
In response to stories in the press in September 2005 about privatisation,
the Permanent Secretary set out the department's position in the
"Since 1997 a significant proportion of
our labour market provision has been contracted outor `contested'
to test whether private-sector providers can achieve better outcomes
than Jobcentre Plus. Our evaluation evidence to date is inconclusive."
10. PCS has searched in vain for any reference
to research which may support or explain the contention in Chapter
5, Paragraph 2 that Employment Zones deliver the best outcomes.
This is not a view shared by the PCS members who manage the Department's
evidence base, to whom we have talked.
11. In the absence of a case grounded in
the evidence base, we believe that this sudden shift is driven
by other considerations. The success of Pathways to Work rests
to a large extent on the role of the personal adviser. The drastic
headcount reductions imposed on the department by the government's
"Efficiency Challenge" mean that Jobcentre Plus does
not have the capacity to extend the successful Pathways approach
across the country.
12. This vindicates the view that PCS put
forward when the efficiency agenda was unveiled in 2004. Whilst
some savings at the margins can always be made by changing how
things are done, cuts on this scale can only be achieved by doing
13. In this instance it is proposed to take
a huge gamble with a key issue at the heart of the welfare reform
policy, by transferring the delivery of Pathways to Work from
Jobcentre Plus into the private sector on the basis of payment
by results. In reality this means that whatever provision is extended
geographically, it won't be the Pathways model. We believe this
raises some very difficult questions that are not covered in the
14. The experience and sensitivity of Jobcentre
Plus advisers has been crucial to bedding in the progressive extension
of mandatory work-focused interviews. The political difficulties
surrounding the elements of compulsion have been less than expected.
The processes do however involve benefit sanctions and labour
market adjudication. There is no indication of how this would
be done if the single national Jobcentre Plus gateway is removed.
15. PCS is extremely concerned about this
proposal to privatise the roles that lie at the heart of the employment
service. The scale of this would in itself be demoralising and
disruptive. Our members who are advisers are not planning to and
do not want to leave the civil service. We think it is wholly
wrong to attempt to force them to work for other employers.
16. Their skills and experience are the
key enablers on which Jobcentre Plus' vision is based. The loss
of this resource would be a crippling blow. Some of the commercial
organisations with Jobcentre Plus contracts have advocated an
employment service in which there is no government involvement
in delivery. PCS believe commercial organisations, motivated by
profit, should not be driving the development of employment services.
Instead the service should be driven and determined by the needs
of service users.
17. We want to see the rollout of Pathways
to Work in the form in which it has been successfully developed
by Jobcentre Plus. The feedback from the pilots has been very
positive. Research commissioned by DWP shows that staff in Pathway
to Work pilots "had the ability to make a difference to customers".
18. This research shows that the pathways
produced empathetic and tailored Work-Focused Interviews (WFIs)
and appropriate, customer-led referrals. The voluntary nature
of the pilots has been shown to be critical to gaining customer
commitment and cooperation. Crucially the Pathway pilots have
showed that public servants can help the more difficult "slow
burner" cases, as well as the "quick wins". It
is all too tempting to focus effort exclusively on "easy"
cases, especially if payment is by result.
19. The Pathways have shown that they can
motivate a wide range of customers, including, crucially, those
who were a long way from work and for whom the empathetic, interested
adviser, and tailored WFIs and appropriate referrals, proved vital.
20. We believe that the evidence from the
Pathways to Work pilot is clear. The Pathways do work and should
be rolled out nationally. But this must be done by public servants
as the only group with the public sector ethos, proven skills
and experience to do this, and with the ability to build on the
success of the pilots.
21. The lessons from the Pathways to Work
pilots are that the work is extremely labour intensive and will
not come cheap. The vague and ill-defined ideas in the Green Paper
that outside partnerships may develop alternative funding streams
appear to be little more than wishful thinking from a Treasury-pressed
department, rather than a coherent plan for changing how welfare
work is funded.
22. The use of the term `voluntary sector'
is also somewhat misleading. For instance the partnership Working
Links involves Manpower, Capgemini and Mission Australia. It must
be remembered that at present these organisations are still paid
out of DWP funds for all their activities, which of course includes
their administration/billing costs as well as their lobbying activities.
There are no grounds for supposing this is likely to change. No
charity or campaigning organisation is likely to consider fund-raising
to pay for services that they believe should be provided by government.
23. The implication that public servants
lack the new and innovative approaches that are needed is also
something that PCS can not agree with. The volume of innovative
change to emerge from Jobcentre Plus in recent years has shown
that the public sector has a firm track record of introducing,
and then successfully delivering, ground-breaking initiatives.
The numbers (quoted in the Green Paper) of people, from all kinds
of client groups, who have got back into work as a result of these
initiatives are the best testimony possible to this.
24. PCS is concerned at the proposals to
make much of the system mandatory. Experience shows that successful
interventions with benefit claimants rely on persuasion rather
than compulsion as the key tool.
25. There is an additional problem with
introducing compulsion. Recent figures have shown an increase
in violence in Job Centres, frequently from incapacity benefit
claimants, including the mentally ill. We have genuine concerns
that a greater reliance on compulsion could make this situation
worse and put our members into dangerous situations.
26. The use of sanctions calls into question
the nature of the role of any contractors in making decisions
on behalf of the Secretary of State, or even referrals for decisions
of this kind. Any benefit sanction is an integral part of the
administration of the benefits system. Rights of appeal must also
be safe-guarded and roles must be clear in this area.
27. The paper refers to the problems of
fraud in the benefit system. PCS recognises this problem and believes
that it must be given higher priority. We believe that the ability
of Jobcentre Plus to tackle fraud effectively has been seriously
undermined by the cuts in staffing that fraud teams have suffered
as part of the DWP 30,000 job cuts programme.
28. The cutbacks in DWP staff can also lead
to cases not being checked properly before payment is in place.
Recent experience in HMRC tax credits has seen millions of pounds
lost to fraud as a result of cases not being checked due to understaffing.
The lesson is clear. Cutting jobs is not cost efficient and leads
to far greater losses of taxpayers' money in the long run.
29. The proposal to radically alter the
delivery model are a dangerous and unnecessary diversion from
the central task. The record of staff in the Department for Work
and Pensions in delivering reforms is one for which ministers
have been quick to claim credit. Yet the new delivery proposals
contained in Chapter 5 would entail a betrayal of those hard-working
staff and a policy wrong turn of major proportions.
30. There is much that PCS welcomes in the
Green Paper but the proposals on radically altering the means
of delivering the new policies are not acceptable to PCS and must
be reconsidered. The public sector's record in employment service
is second to none. This should be recognised by the government
by a firm commitment to maintain the delivery of these services
where they belong, in the public sector.