House of Commons - Work and Pensions

Select Committee on Work and Pensions Seventh Report

1 Introduction

1. The complexity of the current UK benefits system is illustrated by the fact that the latest edition of the Child Poverty Action Group's publication, the Welfare benefits and Tax Credits handbook, which is widely used by welfare rights workers, has 1,594 pages[1] and the DWP's on-line Decision-Maker's Guide runs to 14 volumes.[2]

2. Simplifying the system, or at least managing its complexity, has been the subject of increasing scrutiny from experts and interest groups both within and outside Government. The National Audit Office[3] and the Public Accounts Committee[4] have both conducted inquiries, which we have studied closely; the Department for Work and Pensions has established a 'Benefit Simplification Unit' (which we will discuss in further detail later in this report) and the possibility of more fundamental reform has been raised by the Government[5] and David Freud[6] and is currently the subject of a study by the Institute for Public Policy Research.[7] We have not sought in this inquiry to re-run the detailed analyses included in the reports described above. What we seek to do is take the debate forward, explore what progress is being made and make recommendations to Government on where it should go next.

3. The Government's responses to the Freud and Leitch Reviews were published shortly after this report was agreed but before it was published. We look forward to these important statements of policy, and will take evidence on them separately.

4. We were grateful to receive written evidence from 25 organisations and individuals, and also held five oral evidence sessions with a range of witnesses. We also benefited from the expertise of our two Specialist Advisers, Dr Roy Sainsbury, Social Policy Research Unit, University of York, and Professor Paul Spicker, Centre for Public Policy and Management, The Robert Gordon University, Aberdeen.

5. One underlying theme of this report is that the simplification process must focus on claimants. Our two UK visits for this inquiry, to Stratford in East London, and Leeds and Doncaster, therefore included discussions with people applying for benefits. We were interested to learn about their experiences and what it feels like to use the system. These meetings gave us a chance to talk to DWP staff, who should also be integral in any efforts to reduce complexity. We went to speak to experts and politicians in Los Angeles, San Francisco and Sacramento about the efforts which have been made to simplify welfare payments there. This experience has extensively informed our report.

6. What has come out of this inquiry is that there are no easy answers. But the very real problems caused by complexity must be faced and addressed across the Government as a whole, especially given the prospect of significant changes to the way in which employment and support programmes are delivered. DWP should be driving a systematic review of the benefits it administers and the links with other agencies. We have serious concerns that, while a start has been made, this is not happening at the moment.

The sources of complexity

7. Complexity in the benefits system is a real problem for the DWP. The National Audit Office (NAO) concluded in November 2005 that "an equilibrium between the [benefits] system being complex enough to meet the needs of a wide range of different individuals in various circumstances, yet straightforward enough to run efficiently"[8] was not being reached. It drew attention to the impact on fraud and error, the work created by appeals and the degree of customer support required, concluding that "in the NAO's opinion, [complexity] is perhaps one of the most important issues impacting on the performance of the Department."[9] Given that the NAO has qualified the DWP's accounts (and those of its predecessor Department for Social Security) for 17 successive years,[10] its assessment has to be taken seriously.

8. The complexity of the benefits system reflects, to some degree, the complexity of the circumstances it is dealing with. It deals with contingencies that can be difficult to identify or classify, such as work status, personal relationships and disability. It often deals with changing circumstances. Relationships change, for example through divorce and repartnering. Personal needs change: disability can be different from one week to the next. Income fluctuates. Some people are in marginal employment, shifting between temporary, casual and irregular work. Janet Allbeson of One Parent Families commented that the models used for benefits "do not take on board how swiftly people's circumstances change, particularly those of working age. Tax Credits made that mistake, Child support has made that mistake. The systems just cannot cope with it."[11]

9. The DWP alone administers around 40 benefits, allowances and grants, many of which have different eligibility criteria and governing rules.[12] There are recurrent problems of interaction between benefits, conflicting rules and entitlements which are affected by other parts of the benefits system.[13] The process of administration can contribute further to complexity. Many rules reflect administrative constraints, for example on claiming, backdating, recovering overpayment, verification or reporting changes in circumstances.

10. Viewing the system from the claimant's perspective, though, the complexity arises not just from this structure, but also from the individual's experience of the process, and whether or not the letters they receive are clear and comprehensible, their claims are dealt with efficiently and they have access to help if they need it.

11. The DWP's own recently produced 'Simplification Guide' included a powerful critique of the status quo and an analysis of the sources of complexity within its own systems:

"The benefits system has too many detailed and varied rules … too many 'special' groups mean that people in similar situations are treated differently … information cannot easily be explained to customers and staff are required to give non-routine explanations to customers … customers and staff are expected to know things they do not know and can obtain only with difficulty … customers are required to make difficult decisions which require expert advice to decide the best course of action … staff are expected to interpret rules using subjective judgements rather than having to follow instructions … the system is full of anomalies, out-of-date rules, and historical transitional provisions.

"The benefits system has become administratively cumbersome … duplicated or overlapping benefit provision gives rise to complex links and dependencies between the various benefits … information flows develop that are not fully automated and staff are forced to rely on clerical intervention … co-operation is required from third parties which cannot be guaranteed.

"The benefits system requires people to behave in a way that appears contrary to what common sense would suggest … customers can be better off by claiming a benefit even though they will not be paid it … customers are expected to manage their financial affairs through unusual means … customers are required to act in a particular fashion or respond to requests for information without understanding why this is relevant."[14]

12. A number of the reports produced on complexity, for example the 2005 Report by the National Audit Office, have broken down complexity into various types. The NAO chose to focus on five different aspects: (1) relating to the way the system has been designed and (2) subsequently amended, (3) the complexity generated by how different layers in the organisation work together, (4) how different benefits and parts of the organisation interact with others and (5) the way benefits are delivered.[15]

13. We recognise the usefulness of the NAO analysis, but in this inquiry we have chosen to look at complexity somewhat differently. Our starting point is the ample evidence that we have received and have read that complexity needs addressing. We heard a range of ideas about how Government, its agencies and other bodies could and should respond to existing complexity. We identified three types of response in the evidence we have been given:

The first type of response is to 'shield' the claimant from complexity by improving the claimant experience of dealing with the benefit system. Sue Royston, from Citizens Advice, who was seconded to the Benefit Simplification Unit for nine months to write a report on the complexity of the benefits system from the claimant's perspective, similarly referred to "masking" complexity from the claimant;[16]
The second response is to identify specific sources of complexity in the rules and administrative processes of the benefit system and make incremental changes to simplify them; and
The third type of response is to consider the possibility of fundamental reform to the structure of the benefit system as a way of achieving a step change in simplification.

14. We explore each of these types of response in the later chapters of this Report, but it is important to note at the outset that the options are not mutually exclusive. We have also included a section on how the existing benefits system, with its various complexities, impacts on work incentives, as we see this as a key issue.

TAX CREDITS

15. The written evidence we received stressed that complexity also arises from the number of different Agencies people have to deal with, and in particular the links with Tax Credits. Although they are not strictly within our remit, being the responsibility of Her Majesty's Revenue and Customs (HMRC), it is clear that - for claimants - this is all part of the same, confusing, system.

16. One Parent Families commented that "to focus simply on DWP-administered benefits is to risk ignoring key areas (and their interactions) which need to be addressed if ordinary peoples' lives are to be made easier."[17] Donald Hirsch of the Joseph Rowntree Foundation (JRF) agreed, particularly in the case of Tax Credits, saying:

"To them [claimants] it looks like a benefit … It seems to me that - whether it is for individuals, government departments or parliamentary committees - it is just a complete nonsense to draw that distinction."[18]

And Fran Bennett of the University of Oxford agreed:

"It is absolutely essential that the interaction between benefits and Tax Credits, and the interaction between benefits and child support, for example, are tackled. You can only do that in a cross-government way."[19]

17. We have therefore sought and received evidence on what DWP is doing to work with HMRC to improve integrated delivery, and we cover this in a later section of this report.

COMPLEXITY: A NECESSARY EVIL?

18. As Dr Paul Dornan of the Child Poverty Action Group told us, "complexity is of no benefit per se but there may be reasons why it is there."[20] John Wheatley of Citizens Advice described the positive virtues of aspects of complexity:

"Things like adviser discretion, which give personal advisers the discretion to spend money on getting claimants into work. Some of the in-work benefits and some of the linking rules have the potential to be very good. They do add complexity, but I think they depend very critically on the people running the system knowing how to use them, knowing when they come into play, and on claimants themselves having an awareness of them."[21]

19. The fact that individual needs might not be met in a simplified system was highlighted by a series of organisations. One Parent Families described a certain amount of complexity as "inevitable",[22] noting that what could appear simple at first sight (like the 2001 child support reforms) might turn out to be very complex in practice;[23] and concluding:

"Whilst a concerted drive towards greater simplification is to be actively encouraged, measures which fail to take proper account of the wide variety of different circumstances of those reliant on state help are likely to be either prohibitively expensive or unacceptably harsh."[24]

20. Every Disabled Child Matters asked whether the benefits system should be "simple but unfair or … fair but complex"?[25] Similarly, the Wise Group, while describing the system as a "complex morass", added that there was a need to ensure that any new system retained the ability to deal with the individual needs of the diverse body of claimants.[26]

21. Professor John Veit-Wilson, University of Newcastle upon Tyne, pointed out to us that Lord Beveridge had stressed the inevitability of complexity, quoting from his Report on Social Insurance and Allied Services:

"The social security system even when unified and simplified in the way proposed here must still be a machine with many parts and complications to deal with all the complexities of need and variety of persons."[27]

22. And when giving oral evidence, James Plaskitt, Parliamentary Under-Secretary of State, Department for Work and Pensions (referred to in this report as 'the Minister') endorsed this point, stressing:

"What you want is a system which plays fair by people, reflects the very different and very complex circumstances which people present when they engage with the benefits system, responds to specific needs in a way that we would like to see, and all of that is pushing you towards more and more complexity."[28]

23. However, it was stressed to us that the inevitable nature of complexity did not mean nothing could or should be done. Donald Hirsch of the JRF drew "an important distinction between having a complex set of rules that affect an individual at any one point in time and the degree to which the system as a whole has many different facets"[29] and Fran Bennett added that the 'inevitability argument' was true "to some extent … but quite often it can be used as an excuse. Quite often, complexity is actually about excluding people from entitlement rather than trying to meet complex needs."[30]

The benefits of - and imperative for - simplification

REDUCING ERROR

24. Complexity becomes a problem for DWP staff when it is the cause of uninformed or wrong advice, errors and appeals. One particular area identified by the NAO and the DWP as a problem exacerbated by complexity was official and customer error, the NAO noting that "much of [it] is generated by the complexity of the system."[31] The DWP report, Getting welfare right: Tackling error in the benefits system clearly stated that "simpler systems are … less prone to error", stating that the Department is aiming to prevent new error from getting into the system "by simplifying the design of social security benefits, starting with those most vulnerable to error. A simpler benefits system will be easier to administer and will help our staff follow the correct procedures."[32]

25. The DWP Public Service Agreement aim is to reduce losses from fraud and error in Income Support and Jobseeker's Allowance by 15% by March 2010 against the baseline set in 2006, and by 25% in working age Housing Benefit by 2008 against the 2002-03 baseline.[33]

26. Fran Bennett of Oxford University emphasised the importance of getting things right first time in the attempt to drive error rates down:

"if you make it right first time, again it is a kind of invest-to-save, win-win situation because you do not get so many complaints and so many reviews and so many appeals further down the line, which, of course, are very labour intensive and frustrating for claimant and administrator alike".[34]

27. Anna Pearson of Help the Aged linked complexity and error very clearly, describing a situation where staff at DWP were "trying to do their best for people, trying really hard to meet that person's needs, but actually not empowered to do it because they can hardly understand the calculations they are making".[35] Disability Alliance was also highly critical:

"With complex claiming processes and inadequate advice or support available, especially face to face advice, claimant errors can often lead to other problems developing down the line, for example, non-take up of relevant benefits, underpayments and overpayments, debts incurred, etc. The DWP appear to be institutionally failing with regards to provision of accurate and more importantly complete information to claimants about all of their choices and options when interactions occur."[36]

28. DWP staff voiced their own concerns about the impact of complexity on their work. Steve Devereux, a Jobcentre Plus Benefit Delivery Centre manager, told us:

"simplification from the staff perspective would reduce a lot of frustration around the system … . simplification would reduce training and that in turn would make a member of staff more effective … . it would improve our accuracy, the staff's interpretation of the benefit and the assessment of the benefit, and that in turn would make for more efficient and effective use of the Exchequer … simplification should result in a better service to the customer."[37]

29. The Minister conceded that the rate of progress in reducing error had not matched the impact the Department had been having on fraud.[38] He hoped that the counter-error strategy noted above would begin to show progress shortly:

"The figures which are published on error of course have quite a lag in them, so the recent ones have not shown particularly significant progress, although the last issue of figures did show a further £100 million fall, I think, in the error estimates, which was encouraging."[39]

STRONGER AND CLEARER INCENTIVES TO WORK

30. As well as leading to errors - and the consequent increase in appeals and the workload for decision-makers - complexity leads to uncertainty and indecision for claimants. This is particularly important as people start to consider whether or not to enter the labour market. We cover this in more detail in the later section of this report on work incentives, but it was an issue on which we received a substantial amount of evidence.

31. Sue Royston, from Citizens Advice (and secondee to the Benefit Simplification Unit), spoke powerfully of the impact that complex bureaucracy can have on individual motivation, saying "Everyone wants those who are able to go back to work to return to work but, for people caught in messes like this, it does significantly affect their lives."[40]

32. Donald Hirsch of the JRF agreed, commenting "the particular risk of having complexity … is not realising what you could be entitled to in work. Even though on paper it looks like you are better off, you do not realise it"[41] and concluding:

"it creates a kind of conservatism really. It creates the opposite of flexibility. If you are getting something and you have an opportunity to do something else, you are afraid of changing your status. That is particularly also to do with the difficulties we have in huge distinctions between your status when you are working and not working."[42]

33. And Paul Treloar of Disability Alliance took the view that the interactions between benefits "actively work against people thinking 'This is something that I can manage and achieve' because of the concern around losing benefits or losing income and not fully understanding the situation."[43]

ACHIEVING POLICY OBJECTIVES AND EFFICIENCY

34. Complexity becomes a problem for Government when it acts as a barrier to what it wants to achieve, especially in welfare to work. And therefore simplification, and viewing services from the claimants' point of view, must not be looked at in isolation. It may, firstly, form a useful tool in the process of efficiency savings, as noted by Sir David Varney in his report on Service Transformation:

"The taxpayer can benefit too. The Gershon Review identified £21.5 billion of efficiency savings to be released by 2007-08, primarily through improved procurement, shared corporate office services and business process redesign. While there remain significant opportunities to release further savings in these areas over the 2007 CSR years and beyond, there are also opportunities to join up front-line, first-contact service delivery around the needs of the citizen and business. This will release further savings through the reduction of duplication in front-line service delivery. Over the longer term these benefits will also be felt in the back office that supports these front-line contacts, as there are likely to be major opportunities for sharing and rationalisation."

The DWP commented in its memorandum:

"There are also financial advantages to simplification in improved efficiency, reductions in customer and staff error, fewer complaints and fewer appeals."[44]

35. Secondly, the DWP has - rightly - prioritised the reduction of child poverty, with an ambitious objective to eradicate child poverty by 2020, and halve the number of children in relative low-income households between 1998-99 and 2010-11.[45] But it is vulnerable people, often furthest from the labour market, who have the most complex needs and therefore are most likely to be affected by the labyrinthine nature of the system. As Sir David Varney observed: "It is often the most vulnerable citizens who have to do the most joining up between the public service islands and much of it could be avoided."[46]

36. Concentrating on the benefits system, the NAO concluded that the risk of complexity impacting on the customer increased with:

"Regular interaction with agency
"More than one benefit claimed
"Multiple agencies handling claims
"Requirement to support changes
"High evidence requirements
"Complex personal circumstances."[47]

Case studies: "A client at a CAB local to us came in. He had serious mental health problems and he came in because of debt problems that were exacerbating his mental health problems. When the debt worker looked at his benefits, they found that he had been on Incapacity Benefit for some time. He has an age addition and so, when he had applied for Incapacity Benefit, he was quite rightly told that he was not entitled to Income Support because his income was higher than the Income Support level. He had understood that. His community psychiatric nurse suggested last September that he applied for DLA and helped him complete the DLA form. DLA was awarded and backdated. Nobody told him about Income Support. How could he possibly be expected to know that, because the system had given him more money in the form of DLA, he was now entitled to a means-tested benefit that he had not been entitled to before? Customers cannot possibly understand that degree of complexity."[48]

"Single parent, cares for two disabled teenage boys, aged 18 and 19, both with learning difficulties. She is the appointee for them and gets Carers Allowance and Income Support (IS). The boys get DLA and Incapacity Benefit (IBY). When the sons had been on IB(Y) for 28 weeks, they went on to the short term higher rate of £70.05pw, which was 5p pw more than the £70.00 pw IS level. As they were floated off IS, they both counted as non-dependants for Housing Benefit (HB), and client's HB claim attracted two non-dependant deductions. The sons gained 10p p.w. IB(Y) and the client lost £14.80 pw on HB. Our intervention managed to get client a Discretionary Housing Payment from the LA, but this is not a right, is difficult to get and needs to be reclaimed periodically."[49]

"Clients are a disabled pensioner and their partner. They each have a full retirement pension. With the small occupational pensions that they have, they are just above the threshold for getting Pension Credit but they get partial help with rent and council tax. The disabled person claims Attendance Allowance which is successfully awarded.

The carer is then told about Carer's Allowance and makes a claim. It then has to be explained to the carer that they will get a letter disallowing their claim, as their retirement pension is higher than the Carer's Allowance. Armed with that letter, they then have to reapply for Pension Credit and may now qualify because of the inclusion of a carer premium in the calculation. If Pension Credit is awarded, they will get additional Housing and Council Tax Benefit. If Pension Credit is not awarded, the carer should still get some additional Housing Benefit and Council Tax Benefit on application.

It is almost impossible to explain this sequence of events to a lay person. Advisers are telling them that, if their income goes up, by virtue of the attendance allowance, they have to claim an additional benefit that we know in advance they will not get, in order to get fresh or higher entitlement to other benefits that were previously refused or reduced because their income was too high!"[50]

Rationalisation of means-testing in the benefits system

37. In Britain, means-tested benefits account for over a third of all social security benefits spending, and over half for people of working age.[51] Means-tested benefits are based on assessing the needs of the family unit - parents and dependent children - and not on any individual assessment of need.

38. The main purpose of the means-test is to improve the financial situation of the poorest in society by allowing money to be targeted at those who need it most. Means-testing offers a more economical approach to welfare than would a purely universal system, particularly in reducing the burden on the taxpayer. However, despite its merits in targeting money at those who are most vulnerable, we were told that means-testing is responsible for a considerable amount of complexity.

39. The Institute for Fiscal Studies (IFS) Green Budget takes an annual look at the tax and spending choices open to the Government before the official Budget. In 2006, the IFS argued that "traditional means-tested benefits are seen as unacceptably complicated and stigmatising,"[52]

40. Sue Royston suggested that there was substantial consensus:

"There was quite wide agreement, certainly in the evidence I have seen for example, that means-testing, including joint assessment and the declaration of changes in circumstances and income, is quite a key element in complexity. Of course, that is more about excluding people and targeting on fewer people than it is about meeting a huge range of complex needs."[53]

41. This reflects the answers of Fran Bennett and Donald Hirsch, who unanimously agreed that the amount of means-testing in the benefits system should be reduced.[54]

42. Whilst means-testing is effective in controlling the cost of the benefits system, the need to claim one's entitlement and then meet an income/assets test may deter some low-income households from taking up their entitlements. For example, it is estimated that around half of pensioners living in private households in Great Britain are eligible for means-tested benefits. Of those entitled to Savings Credit, only 43 to 50 per cent are estimated to be claiming.[55]

MEANS-TESTING OF PENSION AGE BENEFITS

43. Some efforts have been made by the Department to reduce levels of means-testing, particularly for pensioners. The Pensions Bill aims to fulfil the Government's ambition to reduce means-testing so that personal savings can demonstrated as worthwhile. The Government expects that raising the Basic State Pension in line with earnings will preserve its value and reduce the number of people on means-tested Pension Credit to 30% by 2050 compared to 70% without reform. The strategy aims to encourage people without a pension to save. [56]

44. The Pensions Policy Institute (PPI) informed us that it will investigate the impact of means-tested benefits on savings behaviour in the context of the Government's introduction of auto-enrolment into Personal Accounts[57] but in the meantime, PPI expressed its disappointment that:

"even after the current proposals in the Pensions Bill come into force the problem of complexity in the state pension and the uncertainty that it generates will remain."[58]

INTERACTION BETWEEN MEANS-TESTED BENEFITS, UNIVERSAL BENEFITS AND CONTRIBUTION-BASED BENEFITS

45. We were told that complexity caused by means-testing extends further than just pension-age benefits. Its impact is compounded by the way it relates to other benefits, namely universal and contribution-based financial assistance. Paul Treloar from Disability Alliance suggested that more universality could resolve some of these problems:

"I think that is where with means-tested benefits the problems arise, because they look to exclude people from entitlement, and the interactions between means-tested benefits, universal benefits and contribution-based benefits … If there were more universality within the benefits system, trying to include people, and, as I said earlier on, the DWP looking to identify entitlements rather than relying on people to identify those entitlements themselves, you could make some gains but that requires the political will."[59]

46. Other witnesses also claimed there was too much means-testing in the current system. Fran Bennett suggested:

"The number of people who will need that very resource-intensive expert help would be enormously reduced if you had, for example, less means testing, less joint assessment, and therefore fewer changes of circumstance to report."[60]

47. The Joseph Rowntree Foundation commented:

"There is wide consensus that a growth in means-testing has made it harder for the benefits system to do its job well. This is partly because of stigma, partly because of complexity introduced by the testing of means and partly because of potential disincentives to earn or to save."[61]

48. As alternatives to means-testing the Joseph Rowntree Foundation proposed that the Government should channel resources into universal benefits whose claimants are more likely than average to be poor. As example of this was child benefit for larger families."[62]

49. We questioned the Minister on the feasibility of reducing the amount of means-testing in the benefits system. However, it remains unclear following the discussion whether the Government are interested in pursuing such reform.[63] The Minister told us:

"We are always looking at the extent of means-testing, whether things can be done to mitigate it; and, as you will know, from the reforms we have announced to the State Pensions system, those are very much targeted as addressing an issue of means-testing in the system. If you are going to have benefits which are targeted, as opposed to universal, there is going to be an element of means-testing; that follows."[64]

50. Other organisations highlighted potential difficulties with removing means-testing and developing a universal benefits system. Whilst Disability Alliance's Paul Treloar accepted the complexity that means-testing can create, he commented:

"Universal benefits such as child benefit show very high rates of take-up but the corollary of this approach is that assistance cannot be targeted beyond certain basic criteria e.g. having a child. It takes no account of need."[65]

51. We appreciate the value of means-tested elements of the benefits system that target assistance at those people most in need of financial support. Having said that, evidence to this inquiry suggested that there is a direct correlation between the amount of means-testing and the complexity in the system. We recommend that the Government specifically evaluates the current caseload of means-testing in the system as part of its simplification efforts and where possible, reduces it. We particularly consider that, in order to achieve simplification, priority should be given to alignment of rules for different benefit eligibility.

The contributory principle

52. The contributory principle has been a part of the benefits system since the 1940's Beveridge reforms. Beveridge's plan was for a comprehensive scheme, based on flat-rate contributions which would lead to a flat-rate benefit that would insure against unemployment, sickness and old age. As a work-based system, if a person was in work they paid the 'stamp' so that should they lose their job, they would receive the social security payment. Beveridge's flat rate system was abolished in the 1960s and today, National Insurance Contributions are based on a percentage of earnings above a threshold.[66]

53. Research has mapped the evolution of the contributory principle and there is agreement amongst commentators that there has been a decline in its impact:

"What we have is in fact a very weak contributory principle: benefits mainly depend on the fact of having made contributions, but people can receive 'contributory benefits' without having made contributions, and can be ruled out of entitlement despite having made contributions."[67]

54. Nonetheless, there is public support for the contributory system.[68] During the evidence session, the Minister acknowledged this as a key reason for retaining it:

"One of the established reasons why we have a contributory principle to the benefits system is it is part of a contract, I think, implicit, is it not, between the citizen and the state; the record of contribution leads to an entitlement. I think it is part of the principle of some parts of the welfare system and I do not think there is a plan to move away from that."[69]

55. We accept that the contributory principle is valued by many as a contract between the state and the individual and reflects the Government's rights and responsibilities agenda. However, the contributory principle adds an additional layer to the current system and research suggests it is no longer as relevant to the benefits system as it once was. We therefore recommend that the Government reviews whether or not the contributory principle remains a relevant part of the modern benefit structure.

Responding to the challenge of complexity

56. The existing system, with its benefits paid according to different principles and rules, is clearly complex and in need of change. We believe that measures to simplify the benefits system could, if done sympathetically and systematically, contribute to the Department's wider objectives, and improve the lives of millions of claimants. The Government should be taking as its starting point a review of:

Whether all existing benefits are necessary;

Whether some benefits could be merged;

The interaction between benefits and how the qualifying arrangements differ; and

The overall purpose of the benefits system.

We assess progress in the next section of this report.

1 Ev 191, para 2 Back

2 www.dwp.gov.uk/publications/dwp/dmg/ Back

3 National Audit Office, Department for Work and Pensions: Dealing with the complexity of the benefits system, HC (2005-06) 592 Back

4 Committee of Public Accounts, Thirty-Sixth Report of Session 2005-06, Tackling the complexity of the benefits system, HC 765 Back

5 DWP, A new deal for welfare: Empowering people to work, January 2006 Back