Select Committee on Work and Pensions Written Evidence

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 following terms:

    "Since 1997 a significant proportion of our labour market provision has been contracted out—or `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 less.

  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 Green Paper.

  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.

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