Examination of Witnesses (Questions 40-59)
MR LEIGH
LEWIS, MR
ADAM SHARPLES
AND MR
PHIL WYNN
OWEN
28 MARCH 2007
Q40 Chairman: Forgive me but I think
it is a bit more than what you are saying. Each member of staff
has the 24 scenarios. They then have the question and the answer
for every single scenario. If you are really testing staff's ability,
they would not have these at all. You would judge accurately,
I would suggest, how people are treated. It does not matter whether
the individual staff member recognises the mystery shopper or
not. If they have any sense, they will have read this and they
should know it anyway. Most of them I could have answered anyway.
I fail to see how giving these scenarios to every member of staff
validates the mystery shopper programme. I think it does the exact
opposite.
Mr Lewis: I would like to take
a little more of an in-depth look at this in the light of your
question to me because it certainly leaves a question in my mind.
In some sense, we are probably slightly between a rock and a hard
place here. Staff have some legitimate expectation to understand
how the programme works. It is after all one of the targets for
the organisation. It is hard to proceed in a cloak and dagger
way and not be clear as to the basis on which the programme operates.
I do understand where you are coming from. If it becomes almost
ritualistic and pre-digested, it ceases to be delivering the aim
of the exercise, which is to have a genuine view of what it is
like to be a customer of Jobcentre Plus. To give a bit of reassurance,
I hope, to the Committee the results from the mystery shopping
programme are run quite close to the results that Jobcentre Plus
have received from their customer survey. It is a two year survey.
If one was a complete artificial exercise, you would expect the
two sets of results to diverge very greatly and they do not. That
would suggest that both have a validity.
Q41 Chairman: If that is the case,
why bother paying external bodies money to do the mystery shopper
survey if your own customer survey gives you the information you
need, particularly given the tight budget set? I will leave that
with you. Once again, the staff survey has not been very good
in terms of staff's view of management and working conditions.
There is a general perception that their concerns are just not
taken notice of. Is this a fair criticism? Is it an inevitability
of the changes that have happened over the last three years? What
are you doing about making your staff feel better about you and
everybody else?
Mr Lewis: To put this in context,
our most recent staff survey results in terms of absolute figures
are not the figures that I, as the Permanent Secretary of the
Department, or my colleagues—Adam and Phil are both members
of our executive team—would want. If you look at those numbers
in absolute terms, have we a Department which is whistling on
its way to work, which is entirely happy with the way their working
lives are being taken forward? No, clearly not. There are some
real messages there, but—and it is really quite an important
but—the trend is very important. This year's results are
significantly better than the previous year on almost all of the
questions. Out of 67 questions, 48 are more positive this year,
12 were stable and only seven had a more negative set of results.
Some of those were in relation to our performance management system
which has never been popular with our staff and which we have,
since the survey took place, radically changed. We have a Department
which is less unhappy than it was by a significant margin a year
ago. None of us is remotely satisfied with where we are now. We
had on the first day of last week a conference which of course
I led of 250 members of our senior Civil Service, our top management
team. We spent half of that entire day looking and asking ourselves
how we could engage better with our first line staff. Interestingly,
we did this in rather an unusual way. Typically in an organisation
you sit in a room; you put a towel over your own head and you
come up with some ideas to make it better. We decided to reverse
that process. We went out to a group of our first line staff and
asked them to tell us what it felt like. They came and presented
to that top management conference. They not only presented what
it felt like out there to work for the Department but what they
would like us to do as the leadership to engage more with our
people. There was a very, very positive response to that. This
is one of our key challenges that we have agreed right across
my top table, right across our senior leadership team for the
year we are about to start. We are utterly committed to increasing
our visibility and engagement and become more visible and engaged
leaders yet. Having said that, inevitably we are a Department
going through a period of major change. We are reducing staff.
We are asking many people to change the location where they work,
to change the job they do. We are causing disruption to people's
lives and human beings very rarely welcome that. The environment
in which we are operating inevitably is not a wholly easy one
but there are just two messages to leave the Committee with from
me. One, it is better than it was a year ago. That is really important.
Secondly, we are absolutely seized on this. It is one of the absolute
top challenges around my top table and for me personally.
Q42 Michael Jabez Foster: Given your
excellent record on avoiding compulsory redundancies, is not the
one single factor that could improve morale—certainly at
Hastings, which I represent—simply to give that guarantee
of no compulsory redundancies? You do not do it anyway so why
not just make that guarantee and make the difference to the morale
across the board?
Mr Lewis: I try and go out almost
every week to see some part of our Department for myself. This
is quite a frequently asked question. Whenever I go out I gather
a group of staff together and try to have as open and honest a
question and answer session as I can. The honest answer to your
question is I cannot do it honestly because I do not know. I do
not know—nor does my top team—whether we will be able
to make the reductions that we are being asked to make through
the rest of the SR04 period and the SR07 period without having
to resort to compulsory redundancy. I am pleased that so far we
have reduced by nearly 22,000 staff. We have had just one—a
very odd case—compulsory redundancy. I would love nothing
more than to reach the end of the SR04 programme and through into
SR07 with that number remaining at one. I do not know as a matter
of fact whether that will be possible to achieve. Therefore, I
do not believe, as the head of the Department, as the Permanent
Secretary, that I can give people a promise I do not know whether
I will be able to keep.
Q43 Michael Jabez Foster: Frankly,
with the cost of your achievements in the past, the risk factor
is so great that you are going to continue to upset your staff,
to reduce their morale, to reduce the work base—I am absolutely
confident that that is happening from the numbers of your staff
that come to me as a constituency MP—if you gave that one
promise I think you would dramatically change the morale overnight.
I understand what you are saying that it is almost a risk worth
taking, not to take the risk of being wrong but to take the risk
of overspending to achieve that objective.
Mr Lewis: I do understand where
you are coming from. I honestly do not believe we can do it. I
do not believe I can do it with honesty because, while we as the
top team would like to avoid compulsory redundancy, I do not know
if that will be possible. I think the organisation is feeling
less worried than it was. I said that our results had become better.
On the question which says in the survey, "Please say how
you feel about the following aspects of your job: your job security",
there was a 9% improvement in the 2006 survey compared with the
2005 survey. We are now over two-thirds of the way SR04 headcount
challenge. We have only had to make one person, in a very rare
and unusual case, compulsorily redundant. People are beginning
to feel more reassured. There is another dimension to this. If
you are not an honest leader, you cannot be a leader. I could
not honestly stand before my Department at the moment and say
that I can promise to be able to avoid compulsory redundancy.
Q44 Chairman: Taking your point that
this year's results are better, frankly, from a very low base
because last year's were dire, at a point where only 13% of staff
have confidence in the senior managers within the Department,
only 14% agree that DWP is well managed and 22% think the poor
performance is dealt with effectively, part of the efficiency
has to be your staff feeling better about themselves and about
their jobs. Efficiency will increase if morale increases. I do
not think you are being complacent. I hope you are not. Those
figures are a long way from where you want to be, I am sure. It
is not helpful when you say that there has been an improvement
because it was dire last year.
Mr Lewis: This is so important
to me personally. If I have given any hint of complacency to the
Committee, I wish to withdraw that unreservedly. I am not remotely
complacent about this. This is the single most important challenge
that I face as the Civil Service leader of a Department with over
100,000 people. That is why we have given and are giving such
huge attention to this. It is easy to put explanations around
figures. I do not disagree with you in absolute terms. If you
look at the figures in absolute terms, they are still in far too
many areas much lower than any of us would wish. It is too easy
to find explanations for that. That is why re-engaging with our
people at the front line is very, very important. We have no higher
priority as a leadership team for the year which we are about
to start.
Mr Wynn Owen: Leigh sent a message
round to all our staff and we all followed up at executive team
level, interpreting our own local statistics. The key phrase in
Leigh's message was, "We are making progress". This
is a statistically significant increase, albeit from a very low
base, but we have much further to go. None of us disagrees with
that. No-one is complacent about this. The one thing that unifies
virtually everybody who works in DWP is an interest in serving
and helping our customers. It was striking that in answer to the
question, my part of DWP does an important job, we had 80% up
on last year believing in what they do. That dedication to the
customer, we believe, is the way we can unify our staff around
a common cause. I do not honestly believe that to give reassurances
that in time may prove to be false about employment status is
necessarily the right way to motivate people. We are all working
very hard in terms of getting round and seeing our people, working
on the leadership capacity, both of ourselves as individuals and
in a team and of our key, front line leaders to drive up performance
across the Department in response to a survey that I think does
indicate that perhaps we have turned a corner on a nadir two years
ago. We have a lot more to do. For instance, in my own area which
is Strategy and Pensions, we are working on better internal communications.
None of these things is easy. These are the nitty-gritty things
of management, experimenting in different ways of communicating
with people. All my senior managers are travelling a lot more
to access staff in all corners of the country. Within the past
few weeks, I have been to Lytham and Swansea. I will be in Newcastle
this Friday. We are getting around and being very visible as leaders.
We are looking at working together across the organisation much
more effectively, stressing the importance of all locations because
the most senior managers have not always in the past been visible
in all locations, which is a pity, but we are seeking to address
that and developing ourselves as leaders in every way we can.
Chairman: We all have a shared concern
here and I hope that next year there is a really significant improvement,
particularly in some of those areas.
Q45 Miss Begg: It would appear that
you make it very difficult indeed for people to access the social
fund and crisis loans in particular. Even when they do get that
access, the decisions are not always very sound because the Independent
Review Service inspectors change almost 60% of community care
grant decisions on appeal and over 50% of crisis loan decisions
on appeal. Why are you making it so difficult?
Mr Lewis: Our Minister, James
Plaskitt, and a senior member of Jobcentre Plus are coming before
the Committee in April on the social fund and will no doubt be
able to go into this in more detail. I think we are in a period
of transition from an old system of handling crisis loan and social
fund applications to a new one. I have no doubt that the new one,
when it is fully rolled out, will be better by a substantial margin.
It involves, as you know, effectively applying for crisis loans
by telephone using an 0800 number. It involves a model in which
the decision will be given normally within the bounds of one telephone
call of around something like 20 minutes. At the end of that call,
the person who is applying for the crisis loan will either be
told that they are not entitled and, if so, given the obvious
information about appeal rights and so on; or they will be told
they are entitled and that they can then go to their nearest Jobcentre
Plus office if they are in immediate need and collect that payment
at a given time. It is operating in about half the country now
but it is not, as you know, fully rolled out. I think that is
already proving to be a more effective system. There is a temptation
sometimes for all of us—and that includes the staff of the
Department—to look back to a sort of golden age in which
you went into your old social security office and you met someone
who decided there and then. The reality is you often went into
an environment which was pretty ghastly and you sat for hours
and hours and hours while something was decided. This new process
will be a much more effective process but we are in the middle
of rolling it out and it is not operating absolutely fully yet.
Q46 Miss Begg: Do I take it from
what you said that the customer access phones within Jobcentre
Plus still will not be able to be used, as they are not at the
moment, in order for someone to make a crisis loan application?
We were told in January 2007 that these phones could not be used
because of an agreement with the unions. Is that going to continue?
If it is, what on earth can possibly be the rationale for it?
Mr Lewis: Yes, it is. I owe the
Committee an apology because, in the course of a rather long letter,
I gave just on that one issue some inaccurate information after
appearing before the Committee last year. Can I apologise for
that? Yes, that is the case. Why? In a sense, you do not have
to pause all that long to think this through. If someone is using
a customer access phone in an unscreened Jobcentre Plus office
or an unscreened part of a Jobcentre Plus office and making that
call, because it is now a once and done process and the decision
will be given as part of that call, there will be some people
of course at the end of that call who will be pleased because
there has been an agreement that they will be granted a crisis
loan; but there will be some people who would obviously be unhappy,
who may feel themselves in very difficult circumstances. Jobcentre
Plus wants to go on talking about this with their trade unions.
We do not at this moment believe that that would be a safe environment
for someone to receive that decision.
Q47 Miss Begg: John Penrose, a Member
of the Committee who is unfortunately not here today, in reply
to some parliamentary questions he put down has found that only
2.5% of assaults on Jobcentre Plus staff are related to social
fund applications. That is a very small proportion which would
suggest that the screened environment is not necessarily necessary
in these circumstances in terms of health and safety when the
vast majority, presumably 97.5%, of assaults on staff are not
happening in the screened environment or on social fund applications.
Mr Lewis: In many ways you are
absolutely preaching to the converted. I was the first Jobcentre
Plus chief executive and I led Jobcentre Plus through a long and
difficult period, as you know, precisely because we believed very
passionately that we could not deliver the services we wanted
to within a predominantly screened environment. There is much
talk in some of these papers of the Peterborough Agreement. It
is a misnomer. I was there. There was a failure, sadly, to reach
agreement in Peterborough. There was an agreement reached some
time afterwards which reflected most of those proposals. I absolutely
do believe that if you treat people in a civilised way, in a civilised
environment, the great majority of people respond enormously well
to that, even if the news which you are giving them is not always
news they might want to hear. There is a "but" to it.
We go through in every one of our offices a risk assessment process.
There is no doubt that there are some potential points of tension
and, as we look at it at the moment, we believe that having someone
who is not involved in a conversation with a member of staff from
the office simply receiving from a distant location a decision
that says, "I am awfully sorry, Mr or Mrs Smith. You are
not entitled to a crisis loan" when that individual may feel
they are in very difficult circumstances there and then, is not
a comfortable place to be.
Q48 Miss Begg: I suggest that you
need to find a solution. In relation to my earlier questions on
your disability duty, if you are talking about inequality of duty
being something which is real and on the ground, you have to address
the issues that may face people with mental health problems who—I
am generalising—probably make up a fair proportion of those
who are applying for a social fund or crisis loan. That whole
area of people with disabilities is being disadvantaged as a result
of the policy that you presently have in place. If it is not right
that they can use the customer access phones, there has to be
some other provision put in place that would give them the support
they should expect if they are given a disappointing decision.
Mr Lewis: I probably do not agree
with you on this one. I think that, once this process is fully
rolled out, we will be giving a better service to a group of people
who almost by definition are in difficulty at the point where
they apply for a loan. We will no longer be requiring them to
get to an office automatically. We will not be requiring them,
as they often had to do in the past, to wait for a very long time.
We will be providing a service which they will be able to access
free from any land line, which will take them straight to a decision
maker who will make a decision on their application there and
then. If the decision is positive—about 70% of the decisions
are, as you know—they will then be given a time and a place
that day, unless it is literally at the very end of the day, when
they will be able to go and collect that payment there and then.
If not, they will at least have had the decision quickly. They
will be told their appeal rights et cetera. Given that we are
dealing with inevitably one of the most difficult processes that
Jobcentre Plus operates, I think this is a better way of dealing
with that group of customers.
Miss Begg: We will have the Minister
before us on 25 April so perhaps we can explore those matters
further.
Q49 Chairman: Is it the case that
a positive decision on a crisis loan application can be given
in an unscreened environment?
Mr Lewis: The agreement that was
finally reached was that the handling of decisions on crisis loans
would take place in a screened environment. That is, in a sense,
because you do not precook the decision. The decision maker has
to hear the arguments that the individual is making for their
need for a crisis loan and then has to determine what they believe
should be the answer to that. In the existing process, where it
was a two stage process, we did make it possible for people to
make the application from an unscreened environment because that
is all they were doing at that point. No decision was being given.
It has always been clear that we have sought to have the decisions
given in a screened environment.
Q50 Chairman: You think it is necessary
to be in a screened environment when you are saying to somebody,
"Yes, your application is successful. Here is your giro"?
Mr Lewis: Almost by definition
not, but the point I am trying to make—and probably not
really making very well—is that if this is going to be done
in a once and done process rather than in several stages—and
that is what we are trying to do—supposing this was being
done in an office. It will still be possible. People will not
be required to use the phone process. If you are seeing someone
and explaining that circumstance to an individual, the person
making that decision is going to reach a judgment. What do they
do if they are in an unscreened environment? If they are coming
to the view, "Yes, I think this is a wholly deserving case
and I am going to award Mr Smith a crisis loan", that is
fine. What do they do if they are in an unscreened environment
and they are coming to the view, "I do not see a ground for
granting a crisis loan. Would you come with me into the screened
environment because I think I am about to give you some bad news?"?
It is not a real scenario because, at the point where the conversation
is taking place, the decision is not being made.
Chairman: I think a lot of that depends
on the configuration of offices.
Q51 Justine Greening: I want to ask
a few questions about the Benefits Processing Replacement Programme
which only in February 2006 was being described as a key strategic
initiative. You have said that one of the ways you are making
savings is through IT improvements. It was cancelled at a cost
of £140 million. Worryingly, after the programme was formally
closed, £10 million was still spent on it. Is that something
that you think is acceptable, that £10 million was spent
on a programme that had already been cancelled?
Mr Lewis: Let me step back a bit.
Sharply in distinction to many other programmes which we have
introduced successfully, this is a programme that we stopped.
There has therefore been a cost to public funds. In terms of the
figures, which it is important to put on the record, our latest
estimate is that the total cost of the BPRP programme will have
been £135 million of which we estimate that £73 million
is and has been of value to the Department. The nugatory figure
is the difference between those two numbers. I am not seeking
to say to you for one moment that this was our finest hour and
a great success but in some ways this was a Department that I
was heading at the key point that was acting responsibly became
it became clear to us that this programme was not going to be
successful. That is always a really tough point because there
is always a temptation to go on. There are always voices that
say, "Go on. It will come right. Let us just put more resource,
more money, more people into it. It will come right." We
believed that we had enough information at that point that this
programme in its then configuration was not going to come right
and the right decision was to stop it. That was in effect to make
sure that no further public money would be wasted beyond that
point.
Q52 Justine Greening: We spent £10
million after that.
Mr Lewis: I do not have every
detail of that. I would like to be able to look at that and perhaps
write to you because I do not have that literal degree of detail
in my head on that. It may be that that was because we had some
completely unavoidable, contractual hangovers that we could not
extract ourselves from. Nevertheless, the bottom line is that
by stopping the programme I am quite clear that we prevented the
further loss of public moneys and that it was the right and responsible
thing to do.
Q53 Justine Greening: Your perception
is that we only had to write off £60 million?
Mr Lewis: No, because that is
almost a parody of what I am trying to say. Nobody, least alone
me, would say that those sums of public money are to be taken
lightly. We faced a point at which we had one of two choices.
Either we let this programme go on in the face of mounting evidence
that it was not going to successfully deliver and was not going
to be affordable, in which case we risked in the end having a
failure with a much higher bill attached to it; or we took the
decision—and that is what we did do—to stop the programme
at that point, recognising that it was going to be awkward and
difficult and presentationally was not going to be easy for all
the reasons that we are having this conversation this morning.
If we had gone on, we risked putting at loss very much larger
sums of public money. That is why if I had to go back again to
May of last year when we took that decision I would make exactly
the same decision again.
Q54 Justine Greening: How much of
the £73 million that will be recycled has already been recycled?
Mr Lewis: Quite a lot of it because
the programme has delivered some outcomes already. Some of what
we bought, like the customer case management system, some of the
licences, some of the IT platforms, some of the capability and
testing environments, is being used in the development of the
employment and support allowance, in our new Friams IT system
for our fraud operation, so it has not been wasted. We have gone
into this in some very considerable detail. We believe that the
£73 million element is not wasted money and that is still
money from which there is a positive, good return for the taxpayer,
but there is an element which is not, which has clearly just been
nugatory expenditure.
Q55 Justine Greening: It would be
helpful to the Committee, if you have gone into the detail about
the variety of spend that is going to be recycled, for us to get
a status report on what is recycled and the detail of what you
expect to be recycled by when.
Mr Lewis: I would be happy to
do that.
Q56 Justine Greening: Thank you.
In terms of the efficiency savings that we have, last year the
DWP published an analysis of DWP productivity from 1997-98 to
2007-08. The Office for National Statistics published a similar
report called Public Service Productivity. Social Security
Administration in September 2006. Why did you feel as a Department
that you needed to produce a separate report?
Mr Lewis: We go into deep waters,
do we not? If you read these reports, as I have, I am still not
sure I can explain every word to you. We thought it was important
that we did look ourselves at the productivity of the Department
since its inception in 2001-02—we are a major department;
we consume a very large amount of public expenditure—in
the light of what had by then become the agreed methodology and
at the productivity outcomes of the Department over its life.
What anyone who reads that report will realise is that this is
not a simple thing to do. There is more than one methodology that
can be employed. There is more than one set of assumptions that
can be employed. Also, there are a lot of outcomes that we value.
We have spent a lot of time talking this morning about improved
customer service, which is quite hard to measure. Why did we do
it ourselves? Because we thought it was very important to do.
Have we learned from it? Yes. Are we continuing to use and develop
the methodology? Yes. Is it straightforward and simple? No.
Q57 Justine Greening: In terms of
the change programme you have to help deliver these efficiency
savings, other than the voluntary redundancy payments, what would
you estimate is the overall cost of the rest of the IT and the
process of re-engineering?
Mr Lewis: I am afraid I do not
have a figure for that simply in my head because we do not quite
measure ourselves in that way. We look at our change programme
as a whole. We look at the individual projects that are going
on within it, which tend to be a combination of both IT resource,
human resource, sometimes consultancy resource and so on. Each
has to have its own business case, its own justification. It is
important to state that the NAO commended our overall approach
in their report on the Government's overall efficiency programme
which they produced in February. They cited DWP's approach on
productivity measurement in clearly approving terms. They gave
us a quite high degree of assurance for the efficiencies we have
been making.
Q58 Justine Greening: Making those
efficiencies comes at a cost. There may be a payback period but
what I am trying to get to is how we know whether the amount you
are spending on change has been worth it to deliver the per annum
costs that you are then going to get out.
Mr Lewis: We do it because there
is really quite a strong governance process inside the Department
which works at the level of my executive team. Below it, we have
two committees, an investment committee which is chaired by the
Department's finance director general, and a change committee,
chaired by the Department's chief information officer. The job
of the investment committee for each individual part of the change
programme, each project, whatever it is, is to satisfy itself
that there is a clear business case justification for that project
or that programme going ahead. It goes into it—my colleagues
will be members of that committee at times—in great detail
and will aim to produce NPV estimates over the lifetime of the
project et cetera. That committee will not, save in highly exceptional
circumstances, approve any project which it does not believe,
when you look at the cost of the investment that you are putting
into it against the expected returns that you are going to get
for it, that the project provides a clear, positive return. It
will not allow it to proceed.
Q59 Justine Greening: I want to press
you on this a little. To be honest, as somebody who was an accountant
before coming here, I am surprised that although you have overall
targets for per annum savings for the Department at some point
somebody has not added together the overall money being spent
across the Department on achieving those savings.
Mr Lewis: It is there in a sense.
When we submit to the National Audit Office our overall efficiency
savings for their validation, they have in them the fact that
for each individual project, if the NAO wishes to see it, is the
availability of the business case which would set out the investment
cost in both time, IT, consultancy, whatever else is going into
it. I will look, in answer to your question, at whether I can
help the Committee and give some kind of overall figure. Let me
take your question away and see if I can help in some way.
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