Select Committee on Work and Pensions Second Report


1  The Committee's work in 2005-06


Introduction

1. The Work and Pensions Committee examines the expenditure, administration and policy of the Department for Work and Pensions (DWP) and its associated public bodies. With an annual expenditure in excess of £120 billion, the DWP is the highest spending government department and employs about 113,500 people. The Department operates principally through five executive agencies: Jobcentre Plus, The Pension Service, the Child Support Agency (CSA), the Disability and Carers Service and the Rent Service.[1] The Committee also monitors the work of several independent statutory bodies associated with the DWP, including the Health and Safety Commission, the Health and Safety Executive (HSC/E), the Pension Protection Fund and the Pensions Regulator.

Structure and support

2. The Committee meets once or twice each week when the House is sitting. In 2005-06 we met formally on 48 occasions and took oral evidence at 26 of those meetings. The Sub-Committee on the Draft Corporate Manslaughter Bill (a Joint Sub-Committee with the Home Affairs Committee) met on nine occasions and took oral evidence at six of those meetings.

3. We are grateful to the many witnesses who respond to our requests for written evidence, including academics, businesses, community groups and individuals. These submissions, along with oral evidence, form the foundation on which our reports are based. Although we have agreed not to take up individual cases, we assess carefully all correspondence received so that we can identify any emerging themes which may require study and take note of comments made and issues highlighted.

4. As usual, the Committee has received much valued expert help from its Specialist Advisers, who assist in analysing the subjects of complexity within our remit. We would like to thank Carl Emmerson, Professor Ruth Hancock and Professor Anthony Neuberger for their help with the Pension Reform inquiry, Kate Stanley for her work on the Incapacity Benefits and Pathways to Work inquiry, Professors Celia Wells and Chris Clarkson for their advice to the Sub-Committee on the Draft Corporate Manslaughter Bill and Professors Dan Finn and Jane Millar for their continuing support with the Government's Employment Strategy inquiry.

5. Further advice and briefing papers were received from the House of Commons Library and the Committee Office Scrutiny Unit. The DWP has also been very helpful in providing additional background information when required. A good working relationship has continued this year with the National Audit Office (NAO) which has provided general support and advice as well as more detailed information for the inquiry into a Report by the Government under Section 82 of the Welfare Reform and Pensions Act 1999. The NAO has also responded this year to a recommendation by the previous Work and Pensions Committee by examining the background of the Child Support Agency's IT system contract with EDS.[2]

Inquiries

6. So far this Parliament the Committee has carried out two large-scale inquiries, on Incapacity Benefits and Pathways to Work and on Pension Reform. We are also nearing the end of a major inquiry into the Government's Employment Strategy for which we have received just under forty memoranda, accessible to the public through the internet, and held seven oral evidence sessions. A substantial piece of work was carried out by the Sub-Committee created to scrutinise, in conjunction with a Home Affairs Sub-Committee, the Draft Corporate Manslaughter Bill. The Committee has carried out smaller-scale inquiries on the Efficiency Savings Programme in Jobcentre Plus and a Report by the Secretary of State for Work and Pensions under Section 82 of the Welfare Reform and Pensions Act 1999.

7. Throughout the session the Committee has continued to monitor the work of the Department's Executive Agencies and has had evidence sessions with the Disability and Carers Service, Jobcentre Plus and the Child Support Agency. The Committee has also scrutinised the work of the Department and its Agencies through taking oral evidence on the DWP Departmental Reports of 2005 and 2006 and the Autumn Performance Report 2005.Table 1: Subjects covered by Work and Pensions Committee, 2005-06
Subject Evidence sessions in Session 2005-06 and Session 2006-07 to date Sub-committee? Outcome
Departmental Annual Report 2006 1No Evidence published, August 2006
Financial Assistance Scheme 1No Evidence published, August 2006
Incapacity Benefits and Pathways to Work 4No Report, May 2006
Jobcentre Plus 1No Evidence published,

February 2006

Pension Reform 7No Report, July 2006
Power to incur expenditure under Section 82 of the Welfare Reform and Pensions Act 1999: new Employment and Support Allowance IT System 1No Report, November 2006
The Child Support Agency 1No Evidence published, May 2006
The Department for Work and Pensions Annual Report 2005 1No Evidence published, June 2006
The Department's Autumn Performance Report 2005 1No Evidence published, February 2006
The Disability and Carers Service 1No Evidence published, February 2006
The Draft Corporate Manslaughter Bill 6Yes Report, December 2005
The Efficiency Savings Programme in Jobcentre Plus 2No Report, March 2006
The Government's Employment Strategy 7No Report to be published
The Health and Safety Executive and Commission 1No Evidence published, July 2006
The Pensions Commission 1No Evidence published, December 2005
The Pensions Regulator and the Pension Protection Fund 1No Evidence published, March 2006

Visits

8. A key part of the Committee's work is its study visits both at home and abroad to put into context issues raised by particular inquiries. During 2005-06 we undertook four visits within the United Kingdom and three overseas. The Committee has also been represented at two Organisation for Economic Co-operation and Development (OECD) Seminars, one on "Ageing" and one on "Growth and Jobs" and a Lisbon Strategy meeting at the European Parliament in Brussels.[3]

9. The Committee spent a very informative two days at the Social Policy Research Unit at the University of York with various academics from different Universities throughout the country and representatives from the Joseph Rowntree Foundation (JRF). The discussions covered the key areas of our remit. We would like to thank the University for hosting the event, the JRF, and the academics that came to speak to us.

10. It is important for the Committee that we travel away from Westminster to see DWP policies in action, to meet frontline staff in DWP agencies and their customers and to hear about both the difficulties and the successes the Department experiences. During 2005-06 the Committee visited Jobcentre Plus offices in Hastings, Derby and Glasgow and a Child Support Agency office in Hastings. Jobcentre Plus in Glasgow facilitated a Committee visit to Rosemount Lifelong Learning Childcare and Education Centre and the Ethnic Minority Enterprise Centre which provided useful insights for our inquiry into the Government's Employment Strategy. This also provided opportunities for the Committee to meet with representatives from rural areas and from local employment initiatives.

11. Whilst in Derby for the Committee's inquiry into Incapacity Benefits and Pathways to Work the Committee met DWP staff including Incapacity Benefit Personal Advisers and Disability Employment Advisers as well as Delivery Partners, employers and employer representative organisations and Pathways customers. The Committee also visited a Remploy factory to meet staff and managers. We would like to take the opportunity to thank the DWP staff who have helped to organise the visits and who have welcomed us and the members of the public and organisations who have made themselves available to meet us.

12. The Committee took formal evidence away from Westminster on two occasions: in Derby for the inquiry on Incapacity Benefits and Pathways to Work and in Glasgow for the Government's Employment Strategy inquiry. On both occasions these evidence sessions were held in the local council chambers. We are very grateful to the councils for providing committee rooms for our use and to their staff for helping with the meetings.

13. The Committee's overseas visits have provided useful comparisons and insights into the policies of other countries. The Committee visited the Netherlands for the inquiry into Incapacity Benefits and Pathways to Work and learnt about the introduction of a new system of benefits there for disabled people to increase financial incentives to work. The Netherlands has already successfully reduced the in-flow of disability benefit claimants and has one of the highest out-flows of claimants of the OECD countries. This has coincided with the introduction of policies requiring employers to provide sickness benefits through a privatised system that includes vocational rehabilitation.

14. In Sweden the Committee learnt about the Swedish experience of pension reform. Of particular interest was the work of the Premium Pensions Authority - which has parallels to the system of 'personal accounts' which the UK Government proposes introducing - and the strategy for informing people about their pensions choices, including the 'orange envelope'. Also relevant were steps taken to deal with the rising cost of pensions - the introduction of an 'automatic balancing mechanism' rather than an increase in the State Pension Age - and how Sweden had managed the shift from a system largely dominated by 'defined benefit' (e.g. final salary) schemes to one dominated by 'defined contribution' schemes, in which individuals experience a greater degree of uncertainty and risk regarding their retirement income.

15. In its most recent visit, the Committee looked at New Zealand welfare to work programmes. New Zealand has shifted the emphasis, so that at the point of first contact with 'Work And Income' (New Zealand's Jobcentre Plus), the focus is on finding work rather than claiming benefits. The system also offers its 'Case Managers' more flexibility than is allowed to Jobcentre Plus Personal Advisers and devolves a greater degree of responsibility to local level, allowing programmes to be customised to the requirements of the local labour market and the needs of the local population. The Committee also looked at the plans for the implementation of the KiwiSaver, which has important similarities to (but also differences from) the proposed 'personal accounts' scheme. Table 2: Visits by the Work and Pensions Committee in 2005-06
Location Purpose of visit
York General Seminar
Hastings Jobcentre Plus and Child Support Agency
Derby Inquiry into Incapacity Benefits and Pathways to Work
Glasgow Inquiry into the Government's Employment Strategy
The Hague and Amsterdam, Netherlands Inquiry into Incapacity Benefits and Pathways to Work
Stockholm, Sweden Inquiry into Pension Reform
Wellington and Auckland, New Zealand Inquiry into the Government's Employment Strategy

16. As well as going on outward visits the Committee has hosted inward visits by foreign Parliamentarians. We have met delegations from the Social Policy and Health Committee of the Czech Parliament, the Committee of Social Affairs at Quebec's National Assembly and Quebec's Labour Market Partners Board, the Budget Committee of the German Bundestag and the Romanian minister responsible for issues related to Romanian citizens working abroad, in the Ministry of Work, Welfare and Family.


1   The Appeals Service was transferred over to the Department for Constitutional Affairs in April 2006. Back

2   Child Support Agency - Implementation of the Child Support Reforms, Report by the Comptroller and Auditor General HC (2005-06) 1174 Back

3   A Joint Parliamentary meeting on the Lisbon Strategy, see www.europarl.europa.eu Back


 
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Prepared 19 January 2007