Conclusions and recommendations
1. 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. (Paragraph
51)
2. 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 (Paragraph 55)
3. 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. (Paragraph
56)
4. We conclude that
there is a lack of vision and drive within DWP and across Government
to simplify the benefits system, and we share the reservations
of a number of witnesses about what the Benefit Simplification
Unit can achieve under its current structure. We commend the
role it is playing preventing further complexity being introduced
into the system, but this is a very long way from having a plan
to systematically introduce simplification, and from the DWP Permanent
Secretary's "very clear simplification ambition." The
fact that the BSU's Simplification Guide imposes a unique condition,
"if resources permit", on "spring cleans"
of particular rules or processes is disappointing, but indicative.
(Paragraph 79)
5. Our predecessor
Committee recommended in 2004 that "the Department establishes
a high level working group chaired by Ministers, comprising IT
suppliers, social policy experts and other relevant parties, including
representatives of client groups and front-line staff, to make
recommendations on how policies can be simplified." We believe
that this recommendation retains considerable merit. (Paragraph
80)
6. Engaging the expertise
of front-line staff should be a high priority for the Benefit
Simplification Unit. There needs to be a proactive policy of
gathering ideas and then acting on them to change processes. (Paragraph
86)
7. We welcome the
DWP's decision to roll out the Lean Pathfinders more widely.
We ask DWP to report progress to us, including how the emerging
best practice from these Pathfinders will be rolled out nationwide,
and how lessons will be learned across different benefits. We
also ask DWP to consider greater formal claimant participation
in these projects, for example through the work of Jobcentre Plus
External Relations Managers and local liaison groups. (Paragraph
94)
8. We ask the DWP
to clarify whether it is planning to conclude its study of the
scope for producing a complexity index. If so, the suggestions
on measuring 'costs of compliance' made by Fran Bennett (University
of Oxford) and Mike Brewer (Institute for Fiscal Studies) should
be part of that study, if not, DWP should explain why. Our view
is that, given the high levels of complexity and the limited progress
made so far, running programmes to reduce complexity should be
a higher priority for Government. (Paragraph 100)
9. We are surprised
by the decision of DWP not to publish the report prepared by Sue
Royston, who was seconded from Citizens Advice to the BSU for
nine months, or even to place the report on its website, as this
was an extensive piece of work which drew contributions from external
organisations, involved liaison and the involvement of claimants
and their advocates, and is likely to result, from the comments
of the Minister, in some significant changes to the system. We
ask DWP to reconsider this decision. (Paragraph 105)
10. We were refused
access to the quarterly reports on complexity that are given to
the DWP management team. We are disappointed at the DWP's decision,
and press again for these documents to be submitted to us for
scrutiny, if necessary on a confidential basis. We also press
the DWP to ensure that BSU progress reports are placed on its
website, in order to give the Unit a higher external profile.
(Paragraph 108)
11. As part of this
inquiry we met a series of claimants and even Jobcentre Plus staff
who found it impossible to get through to the new Jobcentre Plus
Benefit Delivery Centres. Unlike calls to Contact Centres these
calls are charged at 0845 rates and are not free. Coupled with
delays in the system, this has resulted in hardship and distress
for many vulnerable people. DWP should take action to resolve
these problems immediately. (Paragraph 118)
12. Engagement with
those who are out of the labour market is crucial, and Better-Off
Calculations are an essential tool in this process. At the same
time, their complexity illustrates the opaqueness of our current
benefits and tax credits system. We recommend that all staff who
carry out Better-Off Calculations are given additional training
to ensure that the information they give to claimants is accurate,
and that the IT systems are reviewed to make them easier to use
and to ensure that Better-Off Calculations accurately reflect
likely tax credits payments. The Committee would also welcome
assurances from Jobcentre Plus that Better-Off Calculations are
a priority and that staff are encouraged not just to undertake
claimant assessments but to appreciate fully the value of the
calculation in giving people the incentive to return to work.
(Paragraph 127)
13. We believe that
Better-Off Calculations can help claimants make informed choices
about work by setting out clearly any in-work entitlements for
which they may be eligible. We recommend that the Government
ensures that all working-age claimants are given a Better-Off
Calculation at the appropriate time, and that it sets higher national
targets for how many claimants receive them. (Paragraph 132)
14. We conclude that
any attempt to simplify the benefits system must take tax credits
into account. However, it is difficult to see how this will be
achieved at a policy-making level. The Benefit Simplification
Unit only has responsibility for DWP benefits and while there
is joint HMRC/DWP work underway to improve data sharing and operational
processes, there is no Government Minister, department or unit
which is attempting to address the combined and overlapping complexities
of the benefits and tax credits systems. This omission must be
urgently addressed. (Paragraph 148)
15. We believe that
the Social Security Advisory Committee is a valuable and experienced
resource that provides critical examination of the DWP benefits
and HMRC's Tax Credits systems and would have a role in joining
up HMRC and DWP thinking. We urge the Government to ensure that
both Departments engage with the Social Security Advisory Committee
as a means of collaboratively addressing complex interactions
between the respective systems, reconsider formally extending
the Social Security Advisory Committee's remit to include Tax
Credits, and arrange for a joint review of the Memorandum of Understanding
to be conducted as soon as possible. (Paragraph 149)
16. The DWP has acknowledged
in its own research that it must do more to ensure that claimants
are aware of Housing Benefit as an in-work benefit. We urge the
Government to work with local authorities to examine how best
to raise awareness amongst benefit claimants and low wage earners
and to act upon this swiftly (Paragraph 155)
17. We recommend that
the Government undertakes research to investigate whether there
remain some groups of claimants for whom work does not offer the
best route out of poverty, and more detailed analysis of the impact
of high Marginal Deduction Rates in parts of the benefits system
on overall work incentives. (Paragraph 176)
18. The Committee
awaits the Government's response to David Freud's review of welfare
system but even at this early stage considers that, should the
Government extend the role of contractors in delivering frontline
services for claimants, it should be incumbent on providers to
undertake benefits training for staff. (Paragraph 178)
19. We agree with
Sue Royston that looking at customer journeys could be a good
way of shedding light on the claimant experience, and as such
should be a useful tool for the new Customer Insight Team. (Paragraph
192)
20. We welcome Sir
David Varney's recommendation that a Government-wide change of
circumstance service should be established by 2010. Given that
the DWP has such an important role in the delivery of the Varney
review through the 'Tell Us Once' project, we believe that successful
implementation should be incorporated as part of the Department's
targets, and closely monitored as proposed by Sir David Varney.
(Paragraph 207)
21. Tell Us Once is
limited to a relatively narrow area, so we welcome the Minister's
commitment to introduce a single point of contact for changes
of circumstances across DWP, including for housing benefit, and
ask the Department to set out a timetable of its wider work to
achieve this, including the One:Time Solution and the Customer
Information System. It is essential that a single point of contact
is developed to facilitate both the easy communication of changes
in circumstances by claimants and a prompt response from agencies.
This will help claimants to avoid unnecessary hardship, such
as the threat of eviction. (Paragraph 208)
22. We welcome the
fact that progress is being made towards the introduction of an
electronic document storage facility in the Pension Service, and
ask DWP to keep us informed of progress with this important project.
(Paragraph 209)
23. We look forward
to the Government's response to the Freud review, and trust that
it will include an assessment of the feasibility of his suggestion
that Jobcentre Plus offices should become one-stop-shops for a
range of government services. In the meantime, DWP does need
to ensure that its links with other agencies who have direct contact
with vulnerable people, such as health visitors and local authorities,
are strong, and that help and advice about benefits is widely
available. (Paragraph 218)
24. Jobcentre Plus
needs staff on the front-line who have a degree of expertise in
the benefits system and are not tightly bound to the script. The
analogy we would draw here is with a triage nurse in an Accident
and Emergency Department. It would be inefficient if staff in
Jobcentre Plus contact centres, who will be dealing with routine
calls most of the time, were fully trained-up experts in the benefits
system. But they should be better trained than they are now,
to provide a more informed and flexible service to claimants and
save work further down the line. Jobcentre Plus should learn
the lessons of its sister Agencies, particularly the Pension Service,
on this. (Paragraph 226)
25. Given the points
we have made already about the importance of improving the interface
between in-work and out-of-work benefits, the joint DWP/HMRC pilot
to develop service improvements sounds promising and we welcome
the fact that it is being extended.(Paragraph 230)
26. We ask DWP to
consider whether its 'My DWP' project should include the function
to submit applications for benefits online using a secure system
with links to the DWP's own processing systems, along the lines
of the One-e-App process used in parts of the USA. We also ask
DWP to set out the legislative background to the need for a signature
on claim forms, which is often described as a barrier to on-line
applications. (Paragraph 241)
27. We welcome the
Minister's interest in the quality and comprehensibility of computer-generated
letters, and the news that Jobcentre Plus is to begin a review
of its correspondence, which has been the subject of much criticism
during this inquiry. This review must lead to an action plan
to improve the quality of these letters, and the action plan should
be forwarded to us. (Paragraph 252)
28. We agree with
the Minister that Statements of Entitlement are the right way
forward, replacing an important piece of information for claimants
that disappeared when Order Books did. DWP should work to implement
this measure as soon as possible, as part of the wider 'my DWP'
project. (Paragraph 256)
29. DWP must put the
claimant at the heart of the simplification process, and it is
clear that there is much potential for improving the customer
experience - and internal DWP processes - without changing the
rules. We welcome the work done by DWP to date on this, particularly
the Lean Pathfinders. However, it is not enough to rely on 'masking'
complexity; there is a need to go further and address the rules
of the different benefits and the structure of the system itself.
(Paragraph 262)
30. We welcome the
changes to rules and time periods the Government has made so far,
but during our inquiry we have received evidence to suggest that
amendments have not gone far enough. In order to achieve simplification
priority should be given to alignment of rules for different benefits,
including means-tested benefits. We recommend that the Government
recognises this and outlines its intentions on alignment over
the next five years, together with reasons for areas of inaction.
(Paragraph 282)
31. We agree that
claimants should expect to report changes in their circumstances
to the relevant agency. However, witnesses have made a strong
case for the Government to examine the frequency with which claimants
must fulfil this expectation. We therefore recommend that the
Government undertakes a systematic review of the rules for reporting
changes of circumstances and the impact of existing reporting
periods, particularly for Housing Benefit. (Paragraph 295)
32. We recommend that,
following the publication of the Joseph Rowntree Foundation's
research into different systems of uprating, the Government undertakes
an assessment of the impact on claimants of different uprating
measures and the consequences for poverty eradication. (Paragraph
298)
33. We recommend that
the Government publishes the findings of the Pension Service Solution
Centre project into automatic benefits payments and examines the
feasibility of introducing automatic claims and payments to other
parts of the benefits system. (Paragraph 302)
34. We were disappointed
to learn of the problems being experienced in the operation of
the Customer Account Management System. We are particularly concerned
about the implications this may have for the introduction of Employment
and Support Allowance, which will operate using this model. We
recommend that the Government urgently investigates these issues
in order to avoid the IT problems that have been associated with
DWP systems in the past. (Paragraph 306)
35. The Committee
asks that the Government provide a clear rationale to explain
its future plans for the Customer Management System and considers
the impact of the serial introduction of short-lived IT systems
on the administrative complexity of the benefits system. (Paragraph
311)
36. We recommend that
the Government do more to ensure that incremental simplification
measures do not have unintended consequences for different parts
of the benefits system. Just as policy proposals for benefits
are now channelled through the Benefit Simplification Unit to
assess their impact on complexity, the Committee recommends that
proposals for simplification undergo a similarly vigorous impact
assessment process. (Paragraph 314)
37. We accept that
the Minister did not wish to pre-empt the Government's response
to the Freud review during our evidence session but we were very
disappointed that he could not present a clear long-term vision
for the simplification reforms of the benefits system or comment
on the principle of a single working age benefit. This was particularly
the case given that discussions about the possibility of a single
working age benefit pre-dates the Freud review on the Government's
policy agenda. (Paragraph 329)
38. The Institute
of Public Policy Research has set out one option for the radical
reform of the benefits system. In the absence of a strong Departmental
vision we have endeavoured to spark a debate by developing a suggested
outline for a simplified Single Working Age Benefit, which is
attached at Annex A. This sketches out an alternative option
to that proposed by IPPR by extending the single working age benefit
to provide in-work support, thus replacing tax credits. We recommend
that the Government study these proposals and respond setting
out which elements it agrees with and, most importantly, what
alternatives it would propose for those facets it does not accept.
We accept that fundamental changes such as those outlined would
require a great deal more detailed development before they would
be ready, but we would reiterate our disappointment that there
is no obvious debate or vision being developed and, accordingly,
offer this as a starting point. (Paragraph 342)
39. We were disappointed
that the Department does not appear to have undertaken comprehensive
cost benefit analyses of legacy benefits in the system. We would
recommend that the Government examines the benefits of buying
out transitional arrangements in much greater detail than appears
to have been done so far to determine whether this measure could
simplify the benefits system. (Paragraph 354)
40. The Minister advised
us that the Government had considered and rejected time-limited
benefits. During our visit to the USA we were told there had been
very little research on the impact of time limits on claimants,
including those who did not obtain employment, but that some research
is due to be published later this year. We welcome the Government's
rejection of time limits but consider it prudent that it reviews
the expected research on the US experience. (Paragraph 369)
41. We were impressed
with the Electronic Benefit Transfer (EBT) Card that we saw in
California and we would urge the Government to consider what lessons
can be learned from this system for the UK. (Paragraph 371)
42. We recommend that
DWP and the Benefit Simplification Unit examines in detail measures
which have been taken to simplify benefits in other countries.
In particular, we recommend that the Government considers trends
in Australia and New Zealand, particularly if and when they make
any decisions on more fundamental reform of the benefits system.
(Paragraph 378)
43. Throughout this
inquiry we have heard evidence of substantial dysfunctional complexity
in the UK benefits system. Reports by the National Audit Office,
Public Accounts Committee and the Department, as well as the contributions
we received, all alluded to this. Incremental change, alignments
of rules and improving the service for claimants certainly have
a role to play in addressing these problems but there is still
a long way to go. (Paragraph 379)
44. Our concern is
that the current DWP approach addresses only the tip of the iceberg,
looking at new policies but not necessarily the existing structure,
examining parts of the system in isolation. Without a wholesale
review of all benefits, and tax credits, their interactions and
idiosyncrasies, meaningful simplification will never be achieved.
We do not believe that the Benefit Simplification Unit can do
this in its current form. (Paragraph 380)
45. We recommended
earlier in this report that a high-level group should be established
in the short-term to make suggestions for simplification. We also
believe that the Government should establish a Welfare Commission,
similar in format and remit to the Pensions Commission, which
can take a holistic view, model alternative systems, and come
up with a considered blueprint for a way forward. A benefits
system which DWP staff, claimants and welfare rights advisers
have a hope of understanding is in everyone's best interests.
(Paragraph 381)
| 
