Select Committee on Work and Pensions Written Evidence


Supplementary memorandum submitted by DWP

BENEFITS SIMPLIFICATION: FURTHER QUESTIONS

(1)  Better Off Calculations:

What percentage of Jobcentre Plus customers are currently given a Better Off Calculation?

  Jobcentre Plus does not routinely collect data on the percentage of customers currently given a Better Off Calculation for all customer groups and all interview types. At a national level, Jobcentre Plus has concentrated its interest on mandatory interviews where better off calculations are more likely to be undertaken when most appropriate to the customer's circumstances.

  Data for lone parents who have made a claim since the Jobcentre Plus regulations came into force shows a significant and consistent increase in the percentage of better off calculations conducted throughout 2006-07. A further study of all lone parents, including those making claims before the introduction of Jobcentre Plus regulations, has been undertaken as part of a drive to improve lone parent performance and shows not only that there has been a marked increase across 2006-07, but also that the percentage of better off calculations undertaken falls in line with expectations of them being conducted at the appropriate time—more BOCs are being undertaken in caseload and New Deal Lone Parent interviews where customers are actively receptive to move into employment.

  Detailed national lone parent information is provided in tabular form in Annex A. Jobcentre Plus has specifically targeted lone parents as part of a wider campaign to improve the lone parent Job Outcome Target. As a result of work to improve overall performance the same upward trend is being repeated for other customer groups where information is available.

IS THERE A NATIONAL STANDARD FOR THE PERCENTAGE OF CUSTOMERS WHO SHOULD RECEIVE A BETTER OFF CALCULATION?

  A generic, national minimum standard has been set at 20%. The intention behind the standard is to increase the volume of customers who receive advice about the extent to which they would be better off in work. Regions have the discretion and flexibility to upwardly vary this level to ensure that calculations are offered for those customers as and when it is considered appropriate. Advisory Services Managers use the Adviser Achievement Tool to regularly monitor their local performance against the national benchmark. The national standard will be kept under review.

  However, Jobcentre Plus would expect 100% of most customer groups to have had a better off calculation in the lifetime of their claim. There are difficulties in measuring BOC delivery because advisers have discretion as to when they conduct better off calculations and in recognition of this it is considered that a 20% expectation is reasonable.

  Jobcentre Plus is still developing its thinking in this area and, for certain groups, Jobcentre Plus has crystallised this expectation, for example, JSA customers are expected to have had a better off calculation by the 26th week of their claim and, for lone parents, calculations are expected to be reviewed at each interview to ensure the information is current.

Can this be broken down by region and by client group?

  Information is not routinely collected to cover all client groups or types of interviews. The information collected on lone parents at a national level can be reproduced on a regional level but it would take additional time to collate.

What guidance has been produced for Jobcentre Plus staff about who should get Better Off Calculations?

  There is currently no formal guidance available. Jobcentre plus is developing a Policy and Good Practice Guide, which will be available in the autumn. Instruction on the advantages of using better off calculations is delivered as part of the Personal Adviser Learning and Development Routeway, where it is stressed to learners that the primary role of BOC is to show that the customer is better off by taking up employment.

  Further background information about better off calculations is attached in annex B.

(2)  LEAN PATHFINDERS:

CAN THE COMMITTEE SEE A COPY OF THE FINAL ASSESSMENT OF THE LEAN PATHFINDERS?

  The evaluation report for the LEAN Pathfinders for Carers, Jobseeker's Allowance and Incapacity Benefit/ Disability Living Allowance will be produced in July. Once the summary of the evaluation has been compiled, a copy of this will be made available to the Committee.

  LEAN is being deployed across the Department in a managed way, which is why DWP introduced LEAN activity through the 3 Pathfinders and is now moving into Phase One activity. The Pathfinders told us a great deal about the challenges and opportunities that LEAN presents to the Department, Phase One activity begins building internal expertise. As LEAN is deployed the Department will begin to (i) develop internal LEAN experts and (ii) engage more and more people. In time this will provide an internal supply of LEAN talent which the Department can utilise.

  LEAN has a set of principles that place the customers and delivery staff at the heart of developing improved services and improved service levels. There is nothing particularly new about LEAN—the approach and many of the tools used will be familiar to staff and managers but taken as a whole, it is a radical departure from the way we have traditionally managed our services. It introduces new ways of working and new ways of managing our work which transform the experience of staff and managers.

Are the programmes themselves being re-run elsewhere; and precisely when and where, and on what timetable, is this going to happen?

  The next tranche of Continuous Improvement using LEAN techniques are due to commence from July onwards and will cover the following subject areas and locations:

  (i)  Social Fund—Chesterfield Benefit Delivery Centre

  (ii)  Change of Circumstances and Reviews and Triggers including links to Debt Management—Wrexham Benefit Delivery Centre

  (iii)  New Claims. A review of the end-to-end process for all new Jobseeker Allowance, Incapacity Benefit and Income Support claims building on the Jobseeker Allowance pathfinder experience in Newcastle

  (iv)  Work Focused Interviews/Fortnightly Job Reviews: London

  (v)  Disability & Carer's Service: Disability Living Allowance/Attendance Allowance Customer Acquisition—Cardiff Disability Benefit Centre

  (vi)  Disability and Carer's Service: Disability Living Allowance/Attendance Allowance Managing through to outcomes—Disability Carer's Processing Unit at Warbreck Hill, Blackpool.

(3)  TO WHAT EXTENT DOES LEAN INVOLVE CUSTOMERS?

  Customers are absolutely central to what the Department is doing. The Department has drawn on its extensive Customer Insight in developing its commitment to improving customer experience. The Department is putting its customers' needs at the very centre of what it does by using the experiences of customers and delivery staff to identify and test solutions and improvements

(4)  JOBCENTRE PLUS CORRESPONDENCE: WHAT IS TIMETABLE FOR THE REVIEW OF JOBCENTRE PLUS COMPUTER-GENERATED CORRESPONDENCE MENTIONED BY MR PLASKITT?

  A project will be established within Jobcentre Plus in summer 2007 to review system generated notifications. The review is expected to be completed by March 2008.

(5)  Page 1 estimates a buyout of transitional protection for Invalidity Benefit claimants at £2.5 billion. The Committee would like to see the figures, and an explanation of the assumptions, behind this estimate.

  Attached is a note at Annex C produced by the Department in June 2004 from which the estimate was taken. The 2004 figures have not been updated.

(6)  Please could the Department explain why caseload figures for Supplementary Benefit to Income Support and Income Support to Jobseeker's Allowance are not available.

  The Department cannot identify the current caseloads figures for the following "legacy benefits" for the following reasons:

    —  Supplementary Benefit changing to Income Support in 1988:

  DWP does not have datasets for Income Support going back as far as 1988, only clerical copies of old publications from which it is not possible to extract this information. We expect the caseload figures to be negligible.

    —  Income Support changing to Jobseekers Allowance in 1996:

  Transitional protection between Income Support and Jobseeker's Allowance was time limited and ended in April 97. At that point any customers on Income Support on the grounds of unemployment were all moved to Jobseeker's Allowance. There are therefore no "unemployed" customers still transitionally protected on Income Support.

  DWP regrets that some of the current caseloads figures for the "legacy benefits" which was supplied to the committee on 31 May were incorrect (they were linked to the wrong year—the 2006-07 figures quoted were in fact the 2005-06 caseloads). We apologise for this mistake. The correct caseloads are as follows:

    —  Widows Benefit changing to Bereavement Benefit in 2001: Widows Benefit caseload of 109,000* in 2006-07 (no change).

    —  End of new claims for Severe Disablement Allowance in 2001: caseload of 270,000* (227,000 working age, 42,000 pensioners**) in 2006-07.

    —  End of new claims for Invalidity Benefit in 1995: caseload of 360,000* in 2006-07.

*2006-07 caseloads taken from the Department's benefit projections.

** totals may not sum due to rounding.

(7)  HER MAJESTY'S REVENUE AND CUSTOMS (HMRC): ALTHOUGH THERE IS A MEMORANDUM OF UNDERSTANDING BETWEEN THE SOCIAL SECURITY ADVISORY COMMITTEE (SSAC) AND HMRC, SSAC DOES NOT HAVE THE SAME ROLE OVERSEEING HMRC BENEFITS AS IT DOES FOR THE DEPARTMENT'S BENEFITS. IS THERE SCOPE FOR SSAC'S REMIT TO BE EXPANDED?

  The Government has no plans to introduce legislation to extend the role of SSAC. The existing Memorandum of Understanding gives SSAC the opportunity to put full and frank advice to Treasury Ministers on the Tax Credit system.

(8)  REPORT BY OFF THE STREETS AND INTO WORK: THE COMMITTEE HAS HAD SIGHT OF A REPORT BY OFF THE STREETS AND INTO WORK ENTITLED THE COSTS AND BENEFITS OF WORK FOR SINGLE HOMELESS PEOPLE. DOES THE DEPARTMENT AGREE WITH ITS ANALYSIS.

  This report has been read with interest and it is noted that it contains a lot of detailed analysis. The Department does, however, wish to make the following points.

  The benefits system is geared towards moving people into work of 16 hours or more. Individuals working less than 16 hours are entitled to claim Jobseeker's Allowance or Income Support if their earnings are less than their applicable amount. While on the benefit they can make use of the earnings disregards in Jobseeker's Allowance and Income Support which allow customers to work a few hours and keep some amount of their earnings before they are taken into account in their benefit calculations. The in-work cost assumed by the Off the Streets analysis is held constant regardless of the numbers of hours worked. The Department does not believe this to be realistic. Establishing exact gains to work is usually dependent on the level of the in-work-costs which will vary widely between individuals

  Working 16 hours at the National Minimum Wage compares favourably with levels of out of work benefits. For example, individuals aged 25 and over receive £85.60 from 16 hours work at the National Minimum Wage (rising to £88.32 from 1 October 2008) compared with £59.15 from Income Support/Jobseeker's Allowance. Also, individuals on the development rate for 18-21 year olds receive £71.20 from 16 hours work at the National Minimum Wage (rising to £73.60 from 1 October) compared with £46.85 from Income Support/Jobseeker's Allowance.

  Tax credits are designed to make work pay for individuals who receive higher out of work benefits such as Income Support with the Disability Premium or Incapacity Benefit. The analysis assumes that individuals in receipt of these high levels of out of work benefits would not qualify for the relevant elements of Working Tax Credit and could be worse off when entering work. For example, an individual claiming Income Support with the Disability Premium would have an out of work income of £84.40 which is only slightly lower than the income they would receive from working 16 hours at the National Minimum Wage—£85.60. However, add to this Working Tax Credit of around £77, with the disabled worker element, and their weekly income from work increases to over £160.

  The Department does recognise that certain vulnerable groups may need extra support to help them return to work which is why DWP offers a number of transitional payments. For example, the package of help available under the Pathways to Work regime (which by April 2008 will have been rolled out nationally) contains a return to work credit of £40 which is available for up to 52 weeks for people earning less than £15,000 and is not subject to tax or national insurance deductions. A similar payment is available to lone parents in the areas where the In-Work Credit is being piloted. In London the In-Work Credit has been increased to £60 a week from July 2007 and is available to couples with children as well as lone parents.

  In general the housing benefit taper rates and disregards on earnings ensure that customers can keep some proportion of earnings as income rises above the applicable amount. In most cases the applicable amount in Housing Benefit is calculated under rules which are the same as (or more favourable than) those in Income Support and Jobseeker's Allowance so unless there has been another change of circumstances the taper will only apply to income in excess of the previous rate of benefit. This means that whilst the gains to work might be eroded by the tapering of Housing Benefit, they cannot be extinguished.



 
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