Additional Answers from DWP
1. Departments are now permitted, under
Treasury guidance, to publish Autumn Performance Reports as Internet-only
documents. The Department should note that the use of colour graphs
can be confusing if the reader is reliant on printing documents
in monochrome. Many of the graphs in the Autumn Performance Report
could not be easily interpreted in black and white.
The Autumn Performance Report was designed to
be viewed on screen. However, the Department acknowledges that
some readers will prefer to use printed copies and will ensure
that future reports are designed in such a way that those wishing
to print in black and white will not be disadvantaged.
2. Later questions request greater detail
on reported efficiency savings and specifically for savings to
be split by delivery area or agencies. It would be helpful if
the Department could provide efficiency savings and head count
reductions data in this way in future performance reports. This
would enable the reader to appreciate resources changes relative
to PSA performance.
Agreed. The Department will provide efficiency
savings by delivery area or agency in future performance reports.
DEPARTMENTAL RESOURCE
ACCOUNTS 2005-06
3. As in previous years the accounts have
been qualified due to overpayments of benefits resulting from
fraud and error. The Department published a new strategy "Getting
welfare right: tackling fraud and error in the benefit system"
on 24 January. What specific targets and milestones form part
of this strategy?
Figure 5 in "Getting welfare right: tackling
error in the benefits system" sets out our high-level timetable
for implementation of the strategy's major initiatives. This timetable
shows that the majority of these are being implemented during
2007. The Department is working closely with its delivery businesses
to finalise the precise implementation dates for each of the initiatives.
Detailed monitoring and implementation arrangements are also currently
being put in place.
The error strategy aims to deliver a £1bn
reduction in overpaid expenditure resulting from official and
customer error by 2012, and around £185m a year thereafter.
The aim is for this reduction to start to accrue straightaway
and, by 2012, to result in expenditure from error being almost
20% lower than in 2004-05.
The Department already has a PSA target to reduce
the level of both fraud and error in Income Support and Jobseeker's
Allowance by 15% by 2010. The error reduction strategy supports
achievement of this target.
4. In qualifying the account, the C&AG
stated that the Department is currently reviewing its fraud and
error measurement regime. What are the initial outcomes from this
review? How does the Department expect the validity of future
measurements will be affected?
The first outcome from this review is a consolidation
of reporting arrangements. In order to provide a more coherent
picture of fraud and error, DWP has combined its regular fraud
and error reports for different benefits into a single series.
The first such report was published on 1st February, and also
included an update to the estimate of fraud and error across the
whole benefit system, which has previously appeared only in the
Resource Account.
The Department is also seeking to make the measurement
system as efficient as possible. Sample designs have been improved
with the aim of gaining more precise results from the existing
measurement resource. Options are also being explored for combining
the two main survey exercises to make the process more efficient.
5. The account was also qualified because
of uncertainty over the benefit customer overpayments debtor balance.
Over £4m of potential overpayments were still to be referred
to Debt Management and there was also a 168,000 backlog of debt
referrals as of September 2006. What is the current overpayments
debtor balance and what work is underway to correct this?
As at 31 December 2006, the benefit customer
overpayments debtor balance held on the Department's systems totalled
£1.68bn.
During 2005-06, the Department migrated existing
debt cases from its legacy debt systems to its new Debt Manager
system. This comprised 1.8m individual debts.
During this migration the Department took the
opportunity to ensure that migrated debt cases were accurate.
This involved a significant data cleansing exercise, which meant
diverting resources that would otherwise have been available to
process new debt arising in 2005-06. This resulted in a backlog
of cases which were not included in the debt stock at 31 March
2006.
The Debt Management Service has subsequently
implemented a recovery plan to address this backlog. As at 31
January this year the total number of cases awaiting input had
been reduced to 97,000 and the Department anticipates that this
backlog will have been eliminated by 31 March.
The Department has in parallel established a
taskforce, drawing together officials from across the Department,
to review the end to end debt identification, calculation, referral
and recovery process. The taskforce reports to the Permanent Secretary
and will be making recommendations to address the non-referral
and recovery of debt during March 2007.
6. There has been a major change in the
PFI commitments disclosed in 2005-06. The Department has consolidated
and restructured previous contracts which has resulted in a movement
of £0.6bn from off-balance sheet PFI commitments to non-PFI
on-balance sheet commitments (mainly from the new "TREDSS"
and "ICONS" contracts). The Committee would like to
know:
(a) What budgetary implications arise from
this restructuring;
(b) What were the problems with EDS and the
other service deliverers which led to the need to restructure;
(c) What were the costs of the consolidation
and restructuring of these contracts and how is the new structure
improving the management and delivery of the Department's objectives?
On a technical accounting point, the Committee
may wish to be aware that: (i) this movement accounts for the
difference between the 2005-06 balance of £1.219bn and the
2006-07 future commitment of £0.572bn, a movement of £0.647bn,
rounded to £0.6bn; (ii) the movement was from off-balance
sheet PFI commitments to off-balance sheet non PFI commitments
(not as described above, between off-balance sheet PFI commitments
and on-balance sheet non PFI commitments).
(a) What budgetary implications arise
from this restructuring?
On average, over each of the five years
from 2005 to 2010, the Department will be spending £520 million
on services delivered by EDS compared with more than £700
million per annum for the equivalent services provided since 2001 when
the Department came into being.
The Department will be spending around £160m
per annum on services delivered by BT over the period from 2005
to 2011 compared to around £170m per annum since 2002.
These revised arrangements will enable the Department
to modernise its infrastructure to improve services for customers
who are often the most vulnerable in society.
(b) What were the problems with EDS
and the other service deliverers which led to the need to restructure?
When the Department for Work and Pensions was
formed in 2001 it inherited a number of diverse contracts from
the then Department of Social Security and the then Employment
Service. Whilst all these contracts were consistent with Government
policy and the relevant Department's sourcing strategy at the
time when they were let, the overall contractual landscape inherited
by DWP was a complicated one.
In particular, EDS and BT were delivering aspects
of the same services to different parts of the new Department
but under completely different contractual terms and conditions.
These services had differing definitions, service levels and pricing
metrics, were defined to meet bespoke requirements and delivered
using different processes; a mixed asset ownership position added
to the complexity.
The Department also wanted to secure more modern,
standard services and service levels consistent with its current
business demands. These objectives were secured in the revised
"TREDSS" contract agreed with EDS in August 2005 and
the ICONS contract, agreed with BT, in December 2005.
(c) What were the costs of the consolidation
and restructuring of these contracts and how is the new structure
improving the management and delivery of the Department's objectives?
The Department spent approximately £13.5m
on the work to design and negotiate the TREDSS and ICONS contracts
including professional fees.
The significant reduction in the amount the
Department pays for its IT services (described at point 6a above)
is already contributing to its financial and efficiency objectives.
Other benefits that the Department has secured
from these re-aligned contracts include:
— standard services which are less
costly to deliver and manage and which can be compared with marketplace
comparators enabling us to achieve value for money;
— defined service improvements (eg
systems availability) which benefit our business operations;
— new desktops without capital outlay
which are providing a standardised desktop environment and
improved performance and support service levels;
— a consolidated and upgraded voice
and data network which is providing a standard, modern, faster
and more resilient system at reduced cost, and a better way
of handling contact centre workloads for our customers;
— capacity on demand which means the
Department pays only for what it uses.
7. The Committee requests further explanations
of the following variances in outturn compared to the Estimate:
European Social Fund (RfR2G): 380% overspend
(£126m) caused by losses on programme work.
Employment programmes (RfR2B): 6% (£58m)
under-spend on Jobcentre Plus Change Programmes.
The net ESF overspend was £20.165m (4%)
not £126m. To explain the specific variance set out in the
question, it needs to be read in context with the overall position
for ESF in the Estimate. To meet Government Accounting requirements,
ESF expenditure is recorded on two separate estimate lines. The
overall position is set out in the table below.
| Estimate Line |
Details | Outturn
(£k)
| Estimate
(£k) | Variance
(£k)
|
| G | ESF | 159,940
| 33,614 | (126,326) |
| H | ESF—Pre-funded |
320,944 | 427,105 | 106,161
|
| Total | | 480,884
| 460,719 | (20,165)
|
| | |
| |
The net adverse variance of £20.165m is predominantly
made up of programme losses offset by some smaller savings. The
losses were identified through audits undertaken in 2005 by both
the EC and DWP auditors covering the 2000-06 ESF programme. These
losses are of two types:
— cases where the Department's auditors have found
insufficient evidence to justify in full the claim for ESF made
to it by a project. When this happens the Department will seek
repayment, but often such projects are run by voluntary and community
organisations with very tight finances. As the Department is unable
to include ineligible amounts in its claims to the European Commission,
it effectively bears the loss.
— where EC auditors decide retrospectively that
funding for particular projects is ineligible. The regulations
about eligible expenditure are complex and subject to re-interpretation.
Approximately 25% of the losses relate to funding of projects
which EC auditors have deemed to be ineligible, despite earlier
agreement, in principle, with the Commission that the expenditure
would be eligible.
VARIANCE ON
EMPLOYMENT PROGRAMMES
To explain the specific variance set out in the question,
it needs to be read in context with the overall position for Employment
Programmes in the Estimate. To meet Government Accounting requirements,
Employment Programmes expenditure is recorded on three separate
estimate lines. The overall position is set out in the table below.
| Estimate Line |
Details
| Outturn
(£k) | Estimate
(£k)
| Variance
(£k) |
| B | Employment programmes |
966,235 | 1,024,111 | 57,876
|
| E | Capital Grants | 2,302
| 8,476 | 6,174 |
| I | Employment programmes |
68,876 | 37,047 | (31,829)
|
| Total | | 1,037,413
| 1,069,634 | 32,221
|
| | |
| |
The underspend on employment programmes was mainly due to
expected increases in activity levels on new programmes, such
as the IB reforms, not occurring as quickly as anticipated.
8. Prompt payment of suppliers fell to 89.8% in 2005-06
which reverses previous improvements made by the Department. How
are these problems to be rectified and what are the latest prompt
payment rates in 2006-07?
The target is for the Department to pay 96% of its invoices
to suppliers (including Doctors Fees and Jobcentre Plus programme
payments) within 30 days of receipt of a valid invoice. The Department
has traditionally had a good record of prompt payment to suppliers
but implementation of the Department's new Resource Management
system during 2005-06 had some impact on performance as users
adapted to different ways of working. The issues were, however,
quickly identified and a recovery plan put in place. In month
performance for August 2006 reached 94% and in subsequent months
the Department has remained at 95% or above.
Because the figure reported in the accounts for 2006-07 is
an average over the year, the Department would expect that to
be around 87%.
DISABILITY EQUALITY
DUTY
9. It would be helpful if the Department could provide
information about (a) its priorities for action under its Disability
Equality Scheme (b) its arrangements for conducting Disability
Equality Impact Assessments on current and future policies that
affect disabled people and (c) its arrangements for involving
disabled people in measuring progress against action plan targets,
reviewing the scheme and assisting with impact assessments.
(a) Each of the Department's agency and corporate centre
schemes set out specific priorities that disabled customers and
staff identified, but a number of key themes emerged across the
Department. These priorities are included in the main DWP scheme:
— communicating—a need to consider what a
customer's individual needs are and offer a range of options to
access our services;
— training, awareness and customer service—more
staff training in general disability awareness and for specific
conditions;
— joined-up services—to avoid customers having
to pass the same information to different parts of the Department;
— involvement—to review how we involve our
customers in setting our priorities and to ensure that our customers
are actively involved in any improvements to be implemented, spreading
good practice found at local levels across the Department; and
— physical access—some specific areas of accessibility
need to be addressed.
The main priorities identified for the Department's staff
are:
— training—ensuring that there is comprehensive,
relevant and up-to-date diversity and equality training for staff
and that the information on the Department's internal website
is kept up to date and easy to access; and
— reasonable adjustments—implementing an improved
process so that staff can get suitable reasonable adjustments
quickly.
(b) Accountability for impact assessments is devolved
to the individual businesses and corporate centre Directorates
in the Department. Impact assessment is also built into formal
processes governing policy making and change management. Corporate
guidance and an impact assessment tool have been provided to support
this process, and they include the requirement for change owners
to involve disabled people as appropriate.
(c) The Department already has a wide range of methods
of involving customers both nationally and locally—for example
the national Disability Forum—and it expects to use these
methods on an ongoing basis. In addition, the Department intends
to draw on the expertise of Equality 2025, a new non-departmental
public body, sponsored by DWP. It consists of 21 members who are
all disabled people and have a variety of skills and experiences.
They provide a mechanism through which disabled people can have
direct communication with central government to influence, at
an early stage, government policies and service delivery that
affect disabled people's lives.
The Department would be happy to provide the Committee with
more details of the Disability and Equality Schemes should that
be required.
CHILDREN
10. The Autumn Performance Report 2006 has reported the
overall child poverty target [PSA 1a] as "not yet assessed."
Why has the material deprivation indicator not been agreed some
18 months after the target was introduced? What are the key reasons
for the delay and when do you expect to be able to report performance?
The SR04 technical note said that the Government would set
a target in the 2006 Spending Review for relative low income and
material deprivation combined. The required data did not become
available until March 2006 by when the Government had announced
that there would be a 2007 Comprehensive Spending Review rather
than one in 2006. As part of CSR07 the Government is considering
the way in which the performance management framework, including
PSAs, should evolve. As the Government's child poverty measures
will apply throughout the CSR07 period, it would not be sensible
to set new target measures before the new performance management
framework is in place. The Government will therefore consider
how to reflect material deprivation in the new framework in the
CSR.
11. PSA 1a covers the period to 2010-11, but the associated
sub-measures PSA 1b and PSA 1c are to be achieved by Spring 2008.
How many children are expected to live in relative low-income
households by Spring 2008? Does the Department have a trajectory
of expected performance of PSA 1a to 2010-11 to complete Figure
2?
The Government does not make forecasts of future levels of
child poverty. The Harker Report[2]
included (graph 1, page 12) a projection of child poverty levels
using the DWP model of child poverty. This, however, is a projection
not a forecast. In particular, it assumes unchanged policies and
current macro-economic assumptions.
12. The SR2002 PSA target 5 is reported as "not
met" [page 14]. What were the key reasons for missing the
target?
The main reason for not achieving this target was that, although
there was a substantial improvement in lone parent employment,
it was not sufficient to achieve the SR02 PSA target to reduce
the proportion of children in workless households by 6.5% between
spring 2003 and spring 2006—the fall actually achieved over
the SR02 period being 5.2%. Overall, significant progress has
been made in reducing the number of children in households where
no one is working with a fall of 440,000 since 1997. In more detail:-
— in Q2 2006 there were more than one million lone
parents in work—317,000 more than in 1997;
— the lone parent employment rate in Q2 2006 was
56.5%—up 11.8 percentage points since 1997;
— at May 2006 there were 775,000 lone parents claiming
Income Support—a fall of around 246,000 since 1997;
— since October 1998 the New Deal for lone parents
has helped over 470,000 lone parents into work.
About one third of children in workless households live in
couple families. The proportion of couple households with children
with at least one parent in employment in Q2 2006 was 93.4%—up
2 percentage points since Q2 1997.
The Department is currently exploring, as part of the forthcoming
Child Poverty Strategy, what more it can do for lone parents and
couples to support the Children in Workless Households SR04 target.
13. The Department reports that performance against SR2004
PSA target 1c has slipped [page 15]. According to the Departmental
Annual Report achievement of the target was "dependent upon
the successful bulk conversion of old scheme cases" at the
Child Support Agency. How does the Department plan to achieve
the target now that there are "no plans at present for bulk
conversion" [page 16]?
This target cannot be met without conversion of old scheme
cases to the new scheme. Sir David Henshaw's Report, published
in July 2006[3], concluded
that existing plans to convert would be very challenging to administer
and that past experience did not make a case for taking this approach.
Ministers have decided to take a different approach as set out
in the White Paper[4] A
New System of Child Maintenance, published in December 2006. In
the interim the Child Support Agency will continue to convert
old scheme cases that have a relevant link with a new scheme case.
14. The Autumn Performance Report 2006 states that the
Sure Start PSA target 2 is "not yet assessed""
but that "the final 2006 results should be available in January
2007." The Committee would be grateful for a copy of the
results.
A copy of the full 2006 report, a Statistical First Release
issued by the Department for Education and Skills, is enclosed.
It can also be found at: www.dfes.gov.uk/rsgateway/DB/SFR/s000704/SFR03-2007.pdf
The results from the report show that, for the academic year
2005-06, 44% of children achieved a good level of development.
The figure in 2005 was 48%. The gap between children living in
the 30% most disadvantaged areas and the rest is estimated at
between 15.8 and 17.6 percentage points. This compares to the
range in 2005 of between 15.4 and 17.2 percentage points. However,
this element of the target has been particularly difficult to
assess because of sampling error and the difference may not be
statistically significant.
At this stage it is difficult to draw firm conclusions about
progress. The Foundation Stage Profile was introduced in the academic
year 2002-03. It is therefore a relatively new and developing
process and is taking time to bed in. Analysis of the data suggests
that the results reflect a continuing tightening up of the assessment
and moderation processes across local authorities and settings.
15. How many lone parents were unemployed at Spring 2003
and Spring 2006? How many of the unemployed lone parents at Spring
2006 had children aged between 3 and 14? How many children aged
between 3 and 14 at Spring 2006 had unemployed lone parents?
The figures are:
Non-working[5]
lone parents 2003: 710,000
Non-working lone parents 2006: 660,000
Non-working lone parents 2006 with child aged 3-14: 470,000
Number of children aged 3-14 with non-working lone parent
2006: 1.15million.
16. Paragraph 86 refers to the roll out of the ten year
childcare strategy. How many childcare places for children aged
3 to 14 were available at Spring 2006? What is the proposed roll
out of childcare places up to 2010? How many of those places are
(i) currently available and (ii) planned by Spring 2008?
Data for the number of childcare places is only available
for childcare for children aged 0-7 (childcare registered by Ofsted).
The total stock of full day care, out of school and childminder
places at March 2006 was 1,254,381; the comparable figure for
December 2006 was 1,291,319, a 2.9% increase.
There are no centrally prescribed targets for the creation
of childcare places up to 2010 so it is not possible to provide
details of planned childcare places in Spring 2008.
The Government's childcare policy emphasises the importance
of developing a diverse, sustainable childcare market that provides
sufficient childcare to meet the needs of parents. To support
this local authorities will have, from April 2008, a duty to secure,
as far as is reasonably practicable, sufficient childcare to enable
parents to work or train. Draft guidance for this duty is being
consulted upon between 7 February and 2 May 2007 and will be published
in its final form in the summer of this year.
Local Authorities will be able to judge what level of provision
is required through their Childcare Sufficiency Assessment, which
from April this year all local authorities will be required to
undertake. The assessment will be a detailed analysis of the supply
of, and demand for, childcare and will help to identify where
parents' needs are not being met. Local Authorities will use this
evidence to take steps to ensure that there is sufficient provision.
In the light of this, it is not appropriate to set targets
for the number of childcare places as issues such as local population
demographics and existing levels of childcare provision will influence
the assessment of whether there is sufficient provision.
EMPLOYMENT
17. The SR2002 employment and unemployment target, which
required improvements in both measures by Spring 2006, is reported
in the APR as "on course" [page 23]. Data from the Office
for National Statistics (ONS) for the period March to May 2006
indicates the position has not improved since the baseline. Does
the Department anticipate that the ONS reported employment and
unemployment rates for Spring 2006 may alter between now and the
end of the economic cycle? If not, why has a final assessment
not been reported?
The target states, "Demonstrate progress by spring 2006
on increasing the employment rate and reducing the unemployment
rate over the economic cycle". It would not be appropriate
to make a final assessment of this target until the end of the
current economic cycle.
HM Treasury publishes assessments of the economic cycle in
the Pre Budget Reports and Financial Statement and Budget Reports.
In line with this, the Treasury will review its assessment of
the economic cycle and provide an update at Budget 2007.
For much of 2005 and early 2006 economic growth was below
trend resulting in an employment gap between the rates achieved
and the expected rates if growth had been on trend. Given that
the target is based on the economic cycle it will be necessary
to wait until the end of the current economic cycle before finally
evaluating achievement against the target.
DISABLED PEOPLE
18. On what basis has the Department projected the level
of awareness of the Disability Discrimination Act between August
2006 and March 2008 shown in Figure 29 [page 55]?
The target for awareness of the Disability Discrimination
Act in March 2008 is set at 75%. The chart simply shows the trajectory
between August 2006 and the target level in March 2008. It is
not a projection.
19. Paragraph 153 refers to the Equality 2025 network
having been established to assist with policy formulation. How
many people are involved in the network? What range of disability
is covered by the membership? What evidence is there from the
activity of the network in 2006 to show their impact on policy
formulation?
Equality 2025, the United Kingdom Advisory Network for Disability
Equality, an Advisory Non Departmental Public Body, presently
comprises 21 members who are all disabled people with a wide range
of impairments. The Minister for Disabled People launched the
Network in December 2006. Its purpose is to enable the views of
disabled people across the UK to inform and influence policy making,
and contribute to the development of policies and services. Currently
the Network is looking to agree its first work plan to cover the
initial six month period, followed by a further programme of work
which will take it to 2008. The Network's members are therefore
in the early stages of developing their work programme. However,
they have already started looking at one particular issue—the
stability of local disability-led organisations—and have
expressed their willingness to work on this issue with the Department
of Health.
20. Paragraph 154 refers to awareness raising campaigns
run by the Department. (a) What form did these campaigns take?
(b) How many events were there in 2006? (c) How many people attended
the events? (d) By what criteria has the Department deemed the
campaign successful?
The "Adjusting for Better Business" Disability
Discrimination Act campaign ran from December 2005 to May 2006
with the aim of helping small and medium employers understand
the Act and their responsibilities towards disabled customers,
employees and job applicants. There were no specific events as
part of this campaign. Instead, the focus was on the use of a
mix of communication channels including public relations, internet,
press and radio advertising, which was, aside from internet activity,
delivered on a regional basis. An extension to the campaign ran
between August and December 2006 and focused on intermediaries.
This included regional press coverage, provision of industry sector
specific information packs, updating the DDA campaign web pages,
creating permanent links on intermediary websites and promoting
the DDA web pages using internet search engines.
Following completion of the first phase of the campaign,
research was conducted to evaluate its success. Findings showed
that the campaign had met its original objectives by raising awareness
levels of the DDA amongst the target organisations (up from 88%
to 92%) and by increasing knowledge of the main provisions of
the Act (up from 74% to 79%).
Approximately one third (35%) of small and medium sized employers
who were interviewed recalled the campaign and stated they were
more likely to take action as a result. The research also highlighted
that over 75% of them also use the internet as an information
resource for guidance on their business.
Using intermediary organisations as a channel to disseminate
key messages and material to small and medium sized employers
was particularly cost effective and successful. It resulted in
the campaign being featured in their member mailings including
newsletters and on websites. They also distributed over 220,000
copies of the "Adjusting for Better Business" booklet.
The campaign extension is currently being evaluated and a
summary of the findings will be available shortly.
21. Paragraph 154 also refers to "media campaigns"
run by the Department. (a) What media campaigns did the Department
support in 2006? (b) What was the cost of each campaign? (c) How
was the success evaluated?
In December 2006, the Department launched a new public information
film designed to show small employers how reasonable adjustments
under the DDA can make a big difference for workers with impairments
and health conditions, and for business. The total cost of production
and marketing was £95k with airtime donated free. The first
report detailing the level of use of this film will be available
in April 2007.
22. In October 2005 a National Audit Office report "Gaining
and retaining a job: the Department for Work and Pensions' support
for disabled people" [HC455] made a number of recommendations.
The Committee would appreciate an update on the progress made
to date in implementing each of the recommendations.
The National Audit Office report was followed by a Public
Accounts Committee (PAC) hearing on 3 May 2006. This in turn was
followed by the publication of the PAC report Gaining and retaining
a job: the Department for Work and Pensions' support for disabled
people [HC 112] on 16 January 2007. The Government will be responding
to the conclusions and recommendations of the PAC report early
in March and will send a copy of the report to the Committee as
soon as it is sent to the PAC.
PENSIONERS
23. The assessment of progress against PSA target 6 has
declined since the Department Annual Report 2006 with both elements
of the target now showing "slippage". Paragraph 134
shows activity planned to "maintain performance" but
what new and additional activity is the department planning to
improve performance and ensure the target is achieved?
Despite significant, high-profile campaigns, it has become
clear that the caseload has begun to plateau at around 2.7 million
households and so at this stage it seems unlikely that this target
can be met. This was discussed in extensive detail at the PAC
hearing on the NAO report Progress in Tackling Pensioner Poverty
held in December 2006.
In summary, efforts in 2006-07 were directed at around 1.2
million customers who, through data matching, have been identified
as the most likely still to be missing out on their entitlement.
Steps to continue driving up take up have included writing to
customers believed to be entitled to Pension Credit to encourage
them to apply; conducting home visits and offering a full benefit
entitlement check; working through The Pension Service Local Service
with local partners such as Help the Aged and Age Concern to encourage
applications; and increasing local marketing and media activity
supported by national press advertising.
24. To enhance the take up of pension benefits, how is
the success of (i) outbound calling, (ii) direct mailing and (iii)
Local Service visits evaluated? What contribution has each made
to the reported improvements since February 2006?
Direct mailing, outbound calling and Local Service visits
are used along with indirect advertising as part of an integrated
campaign. These campaigns are designed to encourage the target
audience to take up pensioner benefits and each element works
in conjunction with the others. Over the past twelve months up
to January 2007, 284,000 new applications have been made for Pension
Credit with 6% attributable to direct mailing, 6% to outbound
calling and 54% to Local Service visits. The remaining 34% are
attributable to internal business controls. These are controls
that have been set when a customer has previously contacted The
Pension Service and a change of circumstances has resulted in
eligibility (such as an award of Attendance Allowance or Disability
Living Allowance). Customers are then invited by Pension Service
staff to apply for Pension Credit.
25. The National Audit Office report "Progress in
tackling pensioner poverty: Encouraging take-up of entitlements"
[HC1178], published in July 2006, made five recommendations to
help improve the take-up of benefits. What proposals does the
Department have to implement each of the recommendations?
Recommendation 1—Targets set for The Pension Service
by the Department should reflect the need to promote work to tackle
pensioner poverty more widely than simply encourage take-up of
Pension Credit.
The Department is gathering information from a wide variety
of sources and targeting its efforts more strategically to enable
it to better understand eligibility and need across a wider range
of benefits and services for customers.
Recommendation 2—Improve data on who is not claiming
(Housing Benefit/Council Tax Benefit and Attendance Allowance).
Through extensive data-matching across the Department for
Work and Pensions and with HM Revenue and Customs, The Pension
Service has a good understanding of the size of the eligible non-recipient
population for Pension Credit, and holds the addresses of all
those who are most likely to be eligible. The Pension Service
(supported by Operational Research, Social Research and DWP Communications
colleagues) also holds information on the costs of marketing activity
across all channels, the successful applications likely to be
generated from a given level and mix of activity, and the amount
of benefits/value delivered to the customer.
Recommendation 3—Targeting of Local Work should
be improved by bringing together data sources and encouraging
local autonomy.
The Pension Service has made continuing improvements to the
data it uses to target its take-up activity. This collation of
data, as a national central repository, has provided an underpinning
knowledge base for local take-up activity. Over the last year
The Pension Service Local Service has been given increased autonomy
and flexibility to target local take-up activity based on local
knowledge and community needs. Local Service teams now request
centralised referrals from national lists to support the team's
take-up activity in a particular area. This change allows for
more responsive local services that reflect the diverse needs
of the community.
Recommendation 4—The Department should develop its
monitoring of cost-effectiveness to inform future strategy and
targeting of local resources.
The Pension Service is developing a Local Service "modeller"
tool to help measure the cost effectiveness of Local Service activity.
This tool will help to provide greater insight into the most productive
source of referrals for effective targeting of activity, in terms
of customer outcomes and benefit take-up and resource requirements.
Recommendation 5—A clear policy is needed on The
Pension Service's wider role as a gateway to other services.
Since December 2005 The Pension Service has offered an integrated
claims process for Pension Credit, Housing Benefit and Council
Tax Benefit. From July 2006 an integrated State Pension-Pension
Credit process was rolled out through the Pensions Transformation
Programme allowing pensioners to claim both entitlements during
the same telephone call. During spring 2007 The Pension Service
also plans to introduce an additional question in the Pension
Credit application process that will identify customers with relevant
caring responsibilities and where appropriate invite claims to
Carer's Allowance. The local service is also effective in increasing
benefit take-up by acting as a gateway for a wide range of DWP
benefits and services such as Disability Living Allowance and
Carers Allowance.
26. PSA target 7a is shown to have been "met early"
[page 49]. With regard to the 17.5 million pension forecasts issued
[paragraph 138], how many were in each of the 4 forecast categories
(CPF, IPF, RTPF, AFP)? How many employers in the private and public
sector participate in the Combined Pension Forecasts scheme and
how many individuals in the UK are covered by the scheme?
Of the 17.5 million individuals issued with a pension forecast
from April 2005 to September 2006, the distribution between the
four forecast categories was as follows:
— Combined Pension Forecasts (CPF) 3,449,878;
— Automatic Pension Forecasts (APF) 13,194,038;
— Individual Pension Forecasts (IPF) 818,093;
— Real Time Pension Forecasts (RTPF) 75,289.
The latest available data from December 2006 shows that there
were 2,766 employers, pension providers and administrated schemes
in the private and public sector participating in the Combined
Pension Forecasts scheme. This was split between:
— 2,691 in the private sector, of whom 2,212 are
linked to The Pensions Trust;
— 75 in the public sector. It should be noted that
some public sector schemes represent multiple employers.
5.5 million people are covered by the CPF scheme, but many
will not yet have received a CPF given lead times and annual scheduling.
HOUSING BENEFITS
AND LOCAL
HOUSING ALLOWANCE
27. Paragraph 169 refers to the Department undertaking
"risk based engagements, inspections and provision of consultancy
support with poorer local authorities." How many and what
proportion of the bottom 15% of local authorities did the Department
support in this way in 2004-05 and 2005-06? What were the clearance
times for the authorities supported in this way in 2003-04 and
2005-06?
The Department directly engaged with 95% of the Local Authorities
that were in the bottom 15% for processing new claims in 2003-04
and 2004-05. Audited data shows that, on average, the clearance
times for those authorities where there was an engagement improved
by 39 days between 2003-04 and 2005-06 and by 25 days between
2004-05 and 2005-06.
In 2003-04 the performance of the bottom 15% of Local Authorities
for processing new claims ranged from 178 days to 62 days. In
2004-05 the range narrowed to 139 days to 57 days. In 2005-06
the range narrowed further to 119 days to 44 days.
Only 27 of the bottom 15% (63) authorities in 2003-04 were
also in the bottom 15% in 2004-05, and only 12 of these authorities
were still in the bottom 15% in 2005-06. Eight of these remained
in the bottom 15% in the first half of 2006-07. The latest monitoring
information is that five of them are now processing new claims
in under 40 days.
FRAUD AND
ERROR RATES
28. According to paragraph 178 the methodology for measuring
income support and job seekers allowance fraud has been revised.
Please briefly set out for the Committee how the old and new methodologies
differ and how the new methodology represents an improvement.
The requirement, under the SR04 PSA target, to set a new
baseline using 2005-06 data, provided the opportunity (without
interrupting the ability to measure progress part way through
a target period) for a number of improvements to be introduced
into the measurement of progress against the new target.
The main changes being introduced are:
— where a benefit is found to have been paid in
error because the qualifying conditions are no longer being met
but entitlement to an alternative benefit existed and is then
claimed, only the residual overpayment will be counted as error
rather than the whole amount;
— recognition that not all failures by staff to
follow procedures have a material impact on the benefit award;
— increased sampling of new benefit claims, which
were under-represented by the old sampling method. This makes
the sample more representative of the whole caseload, and should
give more accurate results.
Together, these changes are aimed at ensuring that the Department's
estimates provide a better, and more accurate, reflection of the
amount overpaid due to fraud and error, and provide further consistency
in measurement methodology across different benefits.
29. The Committee would be interested to receive data
on the level of fraud, customer and official error in Housing
Benefit, as is provided for Income Support and Jobseekers Allowance
in Figure 33.
The table below shows the split between losses from fraud,
customer error and official error in Housing Benefit:
| Year | Fraud and Error
| Fraud | Customer Error
| Official Error |
| Apr02-Mar03 | 5.9% | 2.7%
| 2.0% | 1.2% |
| Apr03-Mar04 | 6.1% | 1.9%
| 2.8% | 1.3% |
| Apr04-Mar05 | 6.0% | 1.8%
| 2.9% | 1.3% |
| Apr05-Mar06 | 6.7% | 1.4%
| 3.7% | 1.6% |
| | |
| |
30. Paragraph 190 refers to the development of a strategy
to tackle claimant error on housing benefits. What are the key
elements of this strategy?
The strategy was published on 7 February this year. A copy
is enclosed.
Key elements of the strategy are:
— making the best use of information and data by
ensuring that Local Authorities have access to as much information
and data as possible that will help to prevent and detect incorrectness
in Housing Benefit and Council Tax Benefit;
— changing customer behaviour by developing resource-efficient
ways of reminding customers of their responsibility to report
changes in circumstances, and what changes they have to report—for
example by using targeted mail shots;
— improving IT and processes: developments in IT
will improve the transfer of data between DWP, local authorities
and HMRC that can help to reduce fraud and error, for example
by delivering data matches and risk-based products through a secure
electronic link;
— empowering Local Authorities and partner organisations,
by encouraging greater use of each Local Authority's own knowledge
and judgement to inform their approach to meeting targets for
identifying and correcting fraud and error in Housing and Council
Tax benefit claims
The Strategy complements the wider error reduction strategy
for the benefit system as a whole published by the Department
on 24 January.
EFFICIENCY
31. Please provide a breakdown of the efficiency savings
and headcount reductions and redeployments presented in Figure
35 [page 68], by delivery area or Agency. The breakdown should
show efficiency savings by OGC (Office of Government Commerce)
category—Final, Interim and Preliminary.
The breakdown of the efficiency savings by delivery area
and OGC category is shown in the following table.
EFFICIENCY CHALLENGE:
— Annual financial savings of £960 million
for March 2008 of which £480 million must be cashable. Non-Cashable
savings are cost avoidance. Savings are classified as preliminary,
interim or final.
— Net headcount reductions of 30,000 by March 2008.
— 10,000 posts re-deployed to customer-facing roles.
— 4,000 posts to be relocated from London and South
East.
32. The trajectory to deliver headcount reductions in
Figure 36 on page 70 shows two stepped increases in March 2007
and March 2008. Which of the delivery areas are expected to lose
staff under the workforce plans referred to in paragraph 202?
Headcount reductions are planned for all parts of the Department
through to March 2008. The March 2007 and March 2008 points shown
on the graph at figure 36 are the planned position at these points
in time.
The planned headcount position for each part of the Department,
through to March 2008, was shown on a table provided to the Committee
in June. A copy of this table is attached for completeness and
there have been no material changes since June.
| Business | Headcount Milestones (ONS)
| | | |
|
| | | 2005-06
| 2006-07 | 2007-08
|
| Actual Headcount
01 March 2004
| Actual Headcount
31 March 2006 |
Headstone Milestone
31 March 2006 |
Headcount Milestone
31 March 2007 |
Headcount Milestone
31 March 2008 |
| FTE | FTE
| FTE | FTE |
FTE |
| Jobcentre Plus | 82,067 | 71,222
| 71,100 | 68,550 | 66,700
|
| Child Support Agency | 10,928
| 11,034 | 11,350 | 10,650
| 9,600 |
Disability Carers Service 7,263
| 6,398 | 6,500 | 6,050
| 5,600 |
| The Rent Service | 0 | 674
| 750 | 650 | 200
|
| The Pension Service | 19,890 |
13,846 | 14,650 | 13,800
| 9,600 |
| Appeals Service | 850 | 759
| 800 | 0 | 0 |
Corporate Human Resources 1,681
| 1,563 | 1,450 | 1,300
| 1,100 |
| Group Finance | 5,814 | 5,745
| 6,000 | 5,500 | 5,000
|
| PSD | 1,207 | 446
| 500 | 450 | 450
|
Other Corporate and
Shared Services
| 1,279 | 1,402 | 1,500
| 1,400 | 1,300 |
| WWEG | 1,204 | 1,180
| 1,150 | 1,050 | 1,000
|
Pensions Client Directorate 360
| 498 | 550 | 550
| 550 |
| Contingency | n/a | n/a
| 0 | 0 | 1,450
|
| DWP Totals | 132,543
| 114,767 | 116,300
| 109,905 | 102,550
|
| | |
| | |
Note:
1. These profiles are indicative and subject to review.
2. Profiles rounded to nearest 50 FTEs.
3. Other Corporate and Shared Services include—ID,
CCSAD, LGSPG, Private Office, Communications and the ISBs.
4. The milestone figures do not include additional headcount
(approx 850) for new work (relating to Incapacity Benefits Reform,
New Deal Plus Pilots, Administration of the Growth and 50/50/50
Funds, the Affordable Credit Deduction Scheme and Additional Lone
Parent Work Focussed Interviews) that are outside of the Department's
efficiency challenge.
Glossary:
FTE—Full Time Equivalent
WWEG—Work, Welfare and Equality Group
PSD—Programme & System Delivery
ID—Information Directorate
ISBs—Independent Statutory Bodies
CCSAD—Cross Cutting Strategy Analysis Directorate
LSPG—Law, Government & Special Policy Group
33. Paragraph 206 states that the department has relocated
3,902 staff from London and the South East. How many of these
were front line posts?
Of the 3,902 posts relocated from London and South East by
September 2006 3,809 were operational and 93 Head Office posts.
The operational posts are a mix of processing functions and
customer contact roles. It is not possible to provide a breakdown
between the two categories because some posts include both processing
and customer contact.
COMPREHENSIVE SPENDING
REVIEW 2007
34. The Committee would be interested to see the draft
Public Service Agreements that the Department is agreeing with
HM Treasury as part of the Comprehensive Spending Review 2007.
Negotiations and work to develop Public Service Agreements
are continuing with the Treasury and other departments. DWP has
been actively involved in the development of the revised performance
framework and proposals for a reduced set of cross-cutting, rather
than departmentally constrained, PSAs. The Department is expecting
to play a key role on PSAs around areas such as employment, older
people, skills, child poverty and equality. However, at this point
the Department is still in the early stages of these discussions.
2
Delivering on Child Poverty: What would it take, A report for
the Department for Work and Pensions, Lisa Harker, November 2006). Back
3
http://www.dwp.gov.uk/childmaintenance/henshaw-report.asp Back
4
http://www.dwp.gov.uk/childmaintenance/csa-report.pdf Back
5
Including ILO unemployed and workless lone parents. Figures are
for Q2 in each of the years referred to. Back
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