Select Committee on Work and Pensions Second Report

 
 

 
2  Core Tasks

Table 3: Liaison Committee criteria relevant to 2005-06 inquiries
 Government and Commission
policy proposals  
Examination of deficiencies  Departmental actions  Associated public bodies  Major appointments Implementation of legislation  Draft legislation Expenditure  Evidence from Minister  Public Service Agreements 
Departmental Annual Report 2006    √    √   √  √  √  
Financial Assistance Scheme   √    √   √     √   
Incapacity Benefits and Pathways to Work  √        √    √ √  
Jobcentre Plus   √   √       √  
Pension Reform √  √      √  √ √  √ 
Power to incur expenditure under Section 82 of the Welfare Reform and Pensions Act 1999: new Employment and Support Allowance IT System              
The Child Support Agency   √  √ √  √ √    √  √ 
The Department for Work and Pensions Annual Report 2005    √    √   √  √ √  
The Department's Autumn Performance Report 2005    √    √   √   √ 
The Disability and Carers Service   √   √        √ 
The Draft Corporate Manslaughter Bill  √        √   √  
The Efficiency Savings Programme in Jobcentre Plus   √   √     √  √ √  
The Government's Employment Strategy  √ √         √  √ 
The Health and Safety Executive and Commission   √   √        √ 
The Pensions Commission     √         
The Pensions Regulator and the Pension Protection Fund   √   √   √      

IDENTIFICATION OF INQUIRIES

Government policy proposals

16. Having earlier in the Parliament questioned Pensions Commission members on the proposals in their Second Report, the Committee conducted an inquiry into Pension Reform. This looked in particular at the reforms proposed in the Pensions White Paper, Security in retirement: towards a new pensions system, which took forward many of the Pensions Commission's proposals. The Committee's Report[4] set out detailed responses to the Government's proposals for reforming the state pension system, the raising of the state pension age and the new system of personal accounts.

17. The Committee concluded that "on the whole the Government's measures were the right way forward. They do not represent the wholesale simplification some were seeking, but they have other advantages and appear to be feasible."[5] The Committee asked for more information on how the new personal accounts scheme would "interact with means-testing since people need to be confident that they will benefit from saving."[6] It asked for pre-legislative scrutiny of the legislation relating to personal accounts to assess how these matters had been addressed. In response, the Government argued that "on this occasion, pre-legislative scrutiny would mean that personal accounts could not be implemented in 2012."[7] The Committee has therefore announced an inquiry into the recently published personal accounts White Paper.

18. On the question of state pension reforms, the Committee welcomed reforms to the Basic State Pension such as the reintroduction of the link with earnings, although it was concerned that delay in reintroducing the link beyond 2010-11 would defer the benefits of the reforms. It also expressed concern that gaps in State Second Pension entitlement would continue, particularly for the self-employed, and recommended that the Government "set a date for re-examining the feasibility of moving to a single flat-rate pension."[8]

19. The inquiry into Incapacity Benefits and Pathways to Work was carried out around the time of publication of the Welfare Reform Green Paper, A new deal for welfare: Empowering people to work. The Committee's Report scrutinised the new Employment and Support Allowance, which is set to replace Incapacity Benefit in 2008. The Committee made recommendations about the level at which the benefit should be set and looked closely at the Pathways pilots to see if the Government would be right to roll them out nationally in 2008.[9]

20. The Committee has recently announced an inquiry into the Child Support Reform White Paper.

Areas seen by the Committee as requiring examination because of deficiencies

21. The Committee took evidence from Stephen Geraghty, the Chief Executive of the Child Support Agency (CSA) and the Secretary of State in February 2006 on the continuing problems of the CSA. Questioning focused on the number of cases in the "backlog", transferring cases from Jobcentre Plus to the CSA, why so many cases were still being handled manually, ongoing problems with the IT system and the problems of enforcement, debt and arrears and staff morale.[10]

22. One area the Committee has been particularly concerned about has been Jobcentre Plus's Efficiency Savings programme. This concern followed a particularly bad summer in 2005 for the Jobcentre Plus Contact centres where poor staffing planning and IT problems contributed to deteriorating service levels - the customer service measure dropped to 26.8% in one Contact Centre group against a target of 81%.[11] This led to an inquiry early in 2005-06 which included an evidence session with the Chief Executive of Jobcentre Plus, Lesley Strathie, and the Minister for Employment and Welfare Reform, the Rt Hon Margaret Hodge MP.

23. The Committee's Report concluded that too much had been asked of Jobcentre Plus with an efficiency programme overlapping with substantial organisational change. Change planning was poor, with management across the country struggling to keep up with and solve problems caused by the myriad of IT staffing, process, telephony and financial programmes which were all underway at the same time. The Committee recommended that headcount reductions in Jobcentre Plus should be slowed until all Contact Centres were running the full Customer Management System process and that the redeployment strategy should be reassessed to ensure the problems of the summer of 2005 were not repeated.[12]

Departmental actions

24. The Committee was denied access to papers by DWP on two occasions during the period covered by this report. Firstly, the Committee asked in its report on the Efficiency Savings Programme in Jobcentre Plus for copies of the quarterly updates submitted by DWP to the Office of Government Commerce on its progress against the efficiency challenge. They have yet to be produced for the Committee. Secondly, as part of our inquiry into a proposal by the DWP for power to incur expenditure under Section 82 of the Welfare Reform and Pensions Act 1999 in connection with a new IT system for the proposed Employment and Support Allowance, we asked the Department for a copy of the 'Gateway review' for the system due in October 2006. The DWP replied that "OGC policy is that they have refused to disclose information contained within Gateway reports to anyone but the Senior Responsible Officer."[13]

25. The Chief Executive of the Disability and Carers Service (DCS), Terry Moran, was the first person to appear before the Committee in this Parliament. The Committee were interested in meeting him to find out how the Service was managing as a new Executive Agency of the Department and whether service levels were improving. Terry Moran stated in the DCS 2005-06 Business Plan that "internally we see ourselves as a successful service because we meet our targets, but externally most of the informed public believe we do not deliver a service they are happy with."[14] The Committee questioned him further on this, the standard of service that the DCS provides and its targets. The Committee also examined the problems facing customers over the complicated nature of DCS claim forms and the difficulties following the overpayment of benefits in Scotland.[15]

26. The Chairman of the Health and Safety Commission and the Deputy Chief Executive of the Health and Safety Executive gave evidence to the Draft Corporate Manslaughter Sub-Committee. The Committee also held a specific evidence session with the Health and Safety Commission and Executive to discuss areas of their remit including the Health and Safety Executive and Commission's involvement in the investigations into the Buncefield Oil Depot explosion.[16]

27. The Committee met David Norgrove, Chair of the Pensions Regulator and Lawrence Churchill, Chair of the Pension Protection Fund, to scrutinise the workings of these two bodies since they were created in 2005 and 2004 respectively.

28. The Committee took evidence from James Purnell MP, Minister for Pensions Reform, on the Financial Assistance Scheme. He was questioned on subjects ranging from the Department's rejection of the Ombudsman's report of maladministration with regard to information provided on pensions to the small numbers of payouts that the Financial Assistance Scheme has made.

29. The work of Jobcentre Plus was scrutinised not just as part of the Efficiency Savings inquiry but also in an oral evidence session with the Chief Executive. Other aspects of the Efficiency Savings programme were looked at such as the closures of urban and rural offices, resulting in greater travelling times for customers, and a lack of effective engagement in 2005 between Jobcentre Plus and the private and voluntary sector providers, which supply many employment and training programmes.

Major appointments

30. The Committee does not hold formal appointment 'confirmation' hearings. However we are informed by the Department about appointments and make a point of meeting Chief Executives reasonably soon after appointment. The Committee took evidence from Stephen Geraghty, the new Chief Executive of the Child Support Agency, in February 2006.

Implementation of legislation and major policy initiatives

31. The Financial Assistance Scheme (FAS) was established by the Pensions Act 2004 and the Financial Assistance Scheme Regulations (2005). In questioning the Minister for Pensions Reform, James Purnell MP, the Committee looked at how the legislation was working in practice through the work of the FAS.

32. The Committee regularly reviews the implementation of government legislation and policy initiatives through the Departmental Annual Report sessions with the Secretary of State and the Autumn Performance Report session with the Permanent Secretary. In the three such meetings covered by this report the Department has been questioned on subjects such as Pension Credit, Pathways to Work, Housing Benefit and Benefit Simplification.

DRAFT LEGISLATION

33. The Committee's First Report of Session 2005-06 scrutinised the draft Corporate Manslaughter Bill. The inquiry was conducted jointly with the Home Affairs Committee. The Committees' Report welcomed the fact that the Government had finally introduced long-promised legislation to make it easier to prosecute companies for manslaughter, but made recommendations to improve the drafting of the Bill and widen its application. These included that the basis for liability for the offence - the senior manager test - should be redrafted; that the offence should apply to unincorporated bodies; that deaths in police and prison custody should not be exempted; that more innovative sanctions should be added; and that it should be possible to prosecute individuals for secondary liability if they had contributed to the offence.[17] The Report was tagged to a debate on the floor of the House on the Bill, which has now had its Third Reading in the Commons and had its Second Reading in the House of Lords on 19 December 2006.

EXPENDITURE

34. In this period the Committee has questioned the Secretary of State on both the 2005 and 2006 Departmental Annual Reports. We also questioned the DWP Permanent Secretary, Leigh Lewis, on the Autumn Performance Report 2005. Areas of expenditure covered in these evidence sessions included the qualifying of accounts by the National Audit Office, Spending Reviews and more specifically the unallocated resources in 2005 of £763 million and £36 million, a £730 million underspend in 2005, the financing of training programmes of £1 billion a year, staff costs and unclaimed benefits.[18]

35. During the Incapacity Benefit and Pathways to Work inquiry the Committee looked at the cost of Pathways to Work Pilots and the resources needed for the reform programme. The Report questioned whether the £360 million allocated would be adequate and asked that the Department work closely with the Treasury to ensure that sufficient funds for incapacity benefits reform, Pathways to Work national roll-out and the full reform package are made available.

36. The Committee was asked by the Minister of State for Employment and Welfare Reform to scrutinise the Government's proposals to use the procedure set out in Section 82 of the Welfare Reform and Pensions Reform Act 1999 to seek approval for preparatory expenditure on the new IT system for the proposed Employment and Support Allowance (ESA). The Committee produced a report, having taken evidence from officials in the Department, and made a series of recommendations to the DWP for inclusion in its final report to the House. The Committee was pleased that the Department had accepted the Committee's observations and recommendations.[19] The DWP has also undertaken to make a number of amendments to Departmental guidance on Section 82 Reports.

37. In the Committee's Report on Pension Reform the Committee looked into how much the Government's reforms set out in the White Paper would cost and recommended that the DWP publish a breakdown of spending projections into forecast spending on the Basic State Pension, the State Second Pension and means-tested elements. The DWP provided information in response to the Committee's request that it publish separate estimates of the impact of its proposed reforms on (a) spending on working age benefits such as incapacity benefits arising from the increase in the State Pension Age; (b) Income Tax and National Insurance receipts from the increase in both taxable benefits and the State Pension Age and (c) National Insurance receipts from the abolition of contracting out for Defined Contribution schemes.

38. During the course of the year the Committee examines the Supplementary Estimates with the assistance of the Committee Office Scrutiny Unit. Although there are not oral evidence sessions specifically on these issues there is an exchange of correspondence with the Department and issues raised feed into the evidence sessions on the Departmental Annual Report and the Autumn Performance Report.

EVIDENCE FROM MINISTERS

39. The Rt Hon John Hutton MP, Secretary of State for Work and Pensions, has appeared before the Committee on five occasions since the beginning of this Parliament. He has given evidence on Incapacity Benefits and Pathways to Work, Pension Reform, the Departmental Annual Reports for 2005 and 2006 and the Child Support Agency.

40. James Purnell MP, Minister of State for Pension Reform, gave evidence on the Financial Assistance Scheme.

41. The Rt Hon Margaret Hodge MP MBE, then Minister for Employment and Welfare Reform, appeared before the Committee for the inquiry on the Efficiency Savings Programme in Jobcentre Plus.

42. Fiona Mactaggart, Parliamentary Under-Secretary at the Home Office, gave evidence to the Draft Corporate Manslaughter Sub-Committee.

43. Jim Murphy MP, Minister for Employment and Welfare Reform attended the final meeting of 2006 to give evidence for the inquiry into the Government's Employment Strategy.

PUBLIC SERVICE AGREEMENTS

44. The Committee scrutinises the Department's Public Service Agreement (PSA) targets during the evidence sessions on the Departmental Annual Report and Autumn Performance Report as well as during the course of inquiries and during one-off evidence sessions with the separate agencies and bodies.

45. In the sessions on the 2005 and 2006 Annual Report and 2005 Autumn Performance Report there were recurrent PSA target themes running through the questioning. PSA targets that the Committee has been particularly interested in scrutinising include the Child Poverty and Employment Rate targets, the targets for reducing the proportion of children in workless households and the take up of Pension Credit. The targets for fraud and error, particularly the slippage in the Housing Benefit fraud and error target, were also examined.[20]

46. The inquiry into Incapacity Benefits and Pathways to Work looked at how the Government was progressing with its rolling PSA target to increase the employment rate of disabled people and significantly reduce the difference between their employment rate and the overall rate.[21] This target is also an important factor (along with the employment rate targets for lone parents, ethnic minorities and those with the lowest qualifications) for the Committee's current inquiry on the Government's Employment Strategy.

47. The Secretary of State and Chief Executive of the CSA were questioned about the PSA target to increase the proportion of Parents with Care on benefit who receive maintenance for their children to 60% by March 2006.[22]

48. Bill Callaghan, Chair of the Health and Safety Commission and Geoffrey Podger, Chief Executive, Health and Safety Executive were questioned about the HSE/C PSA targets and the failure to meet the target of 5% reduction in fatal and major injuries in the workplace. They were also asked about the less demanding nature of the 2007-08 targets.[23]

49. One of the Pension Reform inquiry conclusions was that achieving and maintaining the PSA target of take-up levels of 80% for Pension Credit is challenging and the Committee recommended that the Government sets out its analysis of how take-up programmes and procedures for claiming all means-tested benefits to which pensioners may be entitled could be made more effective.


4   Work and Pensions Committee, Fourth Report of Session 2005-06, Pension Reform, HC 1068 Back

5   Work and Pensions Committee, Fourth Report of Session 2005-06, Pension Reform, HC 1068, p 5 Back

6   Work and Pensions Committee, Fourth Report of Session 2005-06, Pension Reform, HC 1068, para 289 Back

7   Government Response to Fourth Report of the Work and Pensions Committee, Session 2005-06, Cm 6956, para 19 Back

8   Work and Pensions Committee, Fourth Report of Session 2005-06, Pension Reform, HC 1068, p 6 Back

9   Work and Pensions Committee, Third Report of Session 2005-06, Incapacity Benefits and Pathways to Work, HC 616, chapter 6 Back

10   Oral Evidence taken before the Work and Pensions Committee on 15 February 2006, HC (2005-06) 920 Back

11   Work and Pensions Committee, Second Report of Session 2005-06, The Efficiency Savings Programme in Jobcentre Plus HC 834-I, p 3 Back

12   Work and Pensions Committee, Second Report of Session 2005-06, The Efficiency Savings Programme in Jobcentre Plus, HC 834-I, para 56 Back

13   Work and Pensions Committee, Fifth Report of Session 2005-06, Power to incur expenditure under Section 82 of the Welfare Reform and Pensions Act 1999: new Employment and Support Allowance IT System, HC 1648, Ev 30  Back

14   Disability and Carers Business Plan 2005-06, p 3 Back

15   Oral Evidence taken before the Work and Pensions Committee on 19 October 2005, HC (2005-06) 572 Back

16   Oral Evidence taken before the Work and Pensions Committee on 24 May 2006, HC (2005-06) 1143 Back

17   Work and Pensions Committee, First Report of Session 2005-06, Draft Corporate Manslaughter Bill, HC 540 Back

18   Oral Evidence taken before the Work and Pensions Committee on 6 February 2006 HC (2005-06) 895 , Oral Evidence taken before the Work and Pensions Committee on 23 November 2005 HC (2005-06) 615 and Oral Evidence taken before the Work and Pensions Committee on 3 July 2006 HC (2005-06) 1389 Back

19   Work and Pensions Committee, First Report of Session 2006-07, Power to incur expenditure under Section 82 of the Welfare Reform and Pensions Act 1999: new ESA IT system - further report, HC 86, para 4 Back

20   Oral Evidence taken before the Work and Pensions Committee on 6 February 2006 HC (2005-06) 895 , Oral Evidence taken before the Work and Pensions Committee on 23 November 2005 HC (2005-06) 615 and Oral Evidence taken before the Work and Pensions Committee on 3 July 2006 HC (2005-06) 1389 Back

21   Work and Pensions Committee, Third Report of Session 2005-06, Incapacity Benefits and Pathways to Work, HC 616, para 41 Back

22   Oral Evidence taken before the Work and Pensions Committee on 15 February 2006, HC (2005-06) 920 Back

23   Oral Evidence taken before the Work and Pensions Committee on 24 May 2006, HC (2005-06) 1143 Back


 

 
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Prepared 19 January 2007