Select Committee on Work and Pensions Written Evidence

Memorandum submitted by PCS


  1.  The Public and Commercial Services Union (PCS) is the largest trade union in both the civil service and the Department for Work and Pensions (DWP). PCS represents over 330,000 people including 80,000 in the DWP.

  2.  PCS welcomes the Select Committee's inquiry and is happy to supplement this submission with further information and oral evidence.

  3.  PCS welcomes any new policy that will improve the service that our members are able to provide for benefit claimants. Simplifying the benefit system should be one such policy. However, we are concerned that the motive behind this initiative may be finding financial savings in both benefit expenditure and administration, rather than improving the benefit system for citizens.

  4.  We believe that any debate around simplifying the benefit system should start with the elimination of poverty, especially child poverty, as its primary consideration. The value of benefits has been allowed to decline year on year as a result of the policy of annual increases being linked to prices rather than wages. The result is that benefits levels are now scandalously low and effectively condemn millions of citizens into a life of poverty. Any proposals to simplify the benefits system must recognise this point and be designed to address it.

  5.  PCS is also concerned that the ongoing cuts in DWP staffing levels and the DWP estate, and the importance that DWP and ministers attach to meeting headcount reduction targets at the expense of service delivery, will distort and damage any serious simplification plans. Proper staffing levels and resources, including investment in appropriate staff training, are an essential element of the process.


  6.  Since the Welfare State was created there have been regular reviews, changes and initiatives that have impacted on the benefit system. These changes have tended to be tacked onto the existing basic system, particularly since the computerisation of the various business units. Under-achieving computer systems have led to a significant variation in how people are paid benefits. Staff and managers are compelled to devise "workarounds" to enable customers to be paid correctly and on time. The lessons of recent failed computer systems in DWP must be learnt. Control of the development and delivery of the IT required for benefit simplification must be retained inside DWP. Any reliance on the major IT companies whose promises to deliver state of the art systems have too often turned out to be empty, must be kept to a minimum.

  7.  The cancellation of the Benefit Replacement Project has forced DWP to adapt existing computer systems to cope with new changes to the benefit system (eg Employment Support Allowance). One of these existing IT systems is the Customer Management System (CMS) that has been discussed at previous Select Committee inquiries. Given the discredited reputation of the CMS system it is essential that lessons are learnt from its introduction as part of any benefit system simplification. This can only be done by the IT needs of the business being looked at holistically with the necessary planning and financial investment being in place.

  8.  In terms of changes to the benefit system the most fundamental change came in 1988 with the introduction of Income Support and the Social Fund. Income Support did simplify the old Supplementary Benefit system but only by abolishing a range of additional entitlements that effectively cut the overall value of the benefit. This version of benefit simplification, based on achieving benefit savings and thereby increasing poverty, should not be used as the model for future reform.

  9.  The introduction of Social Fund on the other hand both complicated the system and contributed to increased poverty by replacing grants with loans for essential items like beds and cookers. Social Fund is expensive to administer and, due to the budget caps placed on Social Fund budgets, delivers different outcomes in different locations. Above all it forces the poorest in society to get into debt just so they can have access to the basic requirements of modern life. Any simplification of the benefit system should include a return to a grant-based system for essential items for Income Support (or its equivalent) recipients.


  10.  All of DWP businesses now rely to a considerable degree on contact centres as a primary communication tool with claimants. Yet staff working in contact centres are discouraged from developing a wide knowledge of the benefit system as this can lead to calls being longer than targets permit. Consequently staff are frequently unable to answer benefit queries. Investment is desperately needed to make DWP's contact centre network work effectively. Investment in staffing levels is needed to end the oppressive working culture where IT systems dictate when staff can leave their desk or take a day off. Investment in staff training is also required to ensure claimants can get the full information they need from a single phone call.

  11.  The new contact centre organisation undermines improved customer service by the over-emphasis placed on measuring performance by monitoring the processes (eg length of calls with claimants) rather than the outcome that the claimant receives. Staff need to be given back the discretion to decide how much time they should spend on each individual call. Each call is different as each claimant is different. People understand this but IT systems do not. An essential requirement of any simplification must be that claimants can understand their entitlements as they relate to their particular circumstances. This will require well-trained staff with the time and resources to deliver this essential service. Real investment in staff dealing direct with customers by the method of communication most suited to the claimant will not just deliver the right benefit at the right time to the customer. It can also lead to decreases in complaints and appeals that at present divert precious staff resources from ensuring they pay the benefit correctly and on time at the initial claim stage.

  12.  The new Jobcentre Plus structure is actually creating barriers to effective communication with claimants. The contact centres that take the initial call are now physically and organisationally separated from both the benefit delivery centre where the claim is later processed and the Jobcentre where the unemployed go to sign on. This reorganisation was done in the name of efficiency, yet little thought was given to the customer who has to interact with three separate parts of the organisation where previously their claim was dealt with at one location, where they could call in and talk to someone about their claim if they wanted to. Callers to Jobcentres are now actively discouraged by Jobcentre Plus and claimants who call into a Jobcentre hoping to discuss their claim are turned away. In addition the network of visiting officers that DWP used to have to check on and explain benefit entitlement has been almost completely eradicated.

  13.  The consequences of these changes has been to make customer service worse not better. A major overhaul of the benefit system would be difficult to achieve effectively within the new Jobcentre Plus structure where proactive customer service provision to champion benefit take-up barely exists.


  14.  Working people pay heavily into the National Insurance scheme. As a consequence they have a legitimate expectation of financial security when unable to work. The rates of benefit therefore need to be increased in line with wages not prices to provide this and to prevent the slide into poverty that unemployment or incapacity too often means.

  15.  Universal benefits are popular and simple to both claim and administer. Child Benefit has a near 100% take-up rate, and is an effective tool against child poverty.

  16.  Means-tested benefits on the other hand are necessarily complicated to both claim and administer as they have to be adjusted for, often quite minor, changes of circumstances on a regular basis. This is best shown by the tax credit system. It is widely acknowledged that the complexity of the tax credit system puts off many people who are entitled to tax credits from claiming them.

  17.  Above all there has to be a recognition that for many reasons there will always be people who are not able to work at any one time. It is not enough to say that they should find work as the route out of poverty. The Government must also ensure that those reliant on benefits must be assured of an income that lifts them out of poverty.


  18.  The DWP Simplification Plan emphasises the benefits for customers and for the Department of simplification. However it does so by placing undue emphasis on efficiency savings, less regulatory processes and staffing reductions. Instead the emphasis behind simplification should be how it can be used to eliminate poverty through well-resourced public services organised with the customer's needs at the forefront.

  19.  Our members working in DWP have been particularly hard hit by the Government's efficiency programme and subsequent job cuts. This has resulted in many of our members moving from work onto welfare through redundancies and greater use of temporary workers. Those remaining face increased workloads, greater pressure to meet targets, increased stress and collapsing staff morale.

  20.  The privatisation of DWP's support services like file storage and leaflet provision has led to staff being transferred into the private sector only to be made compulsorily redundant by their new employer within weeks. This enables DWP to claim it is achieving the staff reductions without compulsory redundancies, but instead it is using privatisation to force redundancies via the back door

  21.  The consequences of this drive to reduce staff, estate and costs in DWP are affecting DWP customers too. The closure of rural Jobcentres may make for a simpler and cheaper system but it ignores the extra cost for the customer forced to travel further to sign on and meet their advisers. As described above the contact centre system may be cheaper to run but is not designed with the customer's interests in mind.

  22.  In the Pension Service the efficiency savings are pushing the system close to collapse and depriving many of the most vulnerable members of society from their correct entitlement. At present in the main pension centres responsible for processing pension claims there are between 10,000 and 30,000 pieces of post awaiting action. At one Pension centre there are 10,000 new state pension and pension credit claims awaiting payment. This system desperately needs increased resources. Instead DWP this week have announced the closure of the Pension centre in Bath with the loss of nearly 400 jobs.

  23.  The Freud report takes the potential damage to the DWP a stage further. The report calls for the privatisation of all of Jobcentre Plus' employment services for those who have been on benefit over one year. PCS believes this to be unjustified based on the past achievements of Jobcentre Plus in reducing unemployment, including the long term unemployed. We can see no benefit in complicating the system by creating a new network of private and voluntary service providers for the unemployed. Multiple providers of DWP services will confuse claimants and muddy the accountability between DWP and the provider for key decisions such as benefit conditionality. It is a huge gamble to rely on inexperienced, untried and untested service providers as Freud recommends. It is a huge mistake to do this when there is already within Jobcentre Plus a large cadre of trained and experienced advisers with a track record of delivering huge reductions to unemployment through policies such as the New Deal.

5 April 2007

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