Examination of Witnesses (Questions 20
- 39)
WEDNESDAY 2 MAY 2007
MS FRAN
BENNETT, MR
DONALD HIRSCH
AND MS
SUE ROYSTON
Q20 Chairman: But there are still
around four million getting the benefit; so four million people
have succeeded. Just because they fail, it does not mean to say
that they are entitled.
Ms Royston: No, it does not mean
to say that they are entitled, but there must be some who are.
Q21 Miss Begg: The final question
I have is about cross-government measures, and whether there is
enough being done across departments. I think you have said that
there are problems within the Department; that you have specialists
in the different benefits but nobody looking strategically across
the whole range of benefits. Is that problem exacerbated by the
fact that now we have HMRC effectively paying benefits, or things
like tax credits? We know that it is a frustration of this Committee
that the tax credit system is outwith our remit, but at the same
time it does impact on the benefits that people are able to pay
as well. So what is the effect of it, what should be the solution
to it, and how can the Government tackle it?
Ms Bennett: 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. The fact
that your remit is limited to exclude tax credits, and the same
officially with the Social Security Advisory Committee—I
know that there is a memorandum of understanding—is a real
drawback for the holistic examination of both policy and administrative
simplification. It may be that the research which the DWP is suggesting,
which is a result of its Capability Review—the insight perspective,
so that they are asking claimants more about their preferences
and behaviours—is a way in to looking at things more holistically
than has been done in the past; but it is certainly essential,
I think.
Mr Hirsch: This issue has become
more important since 2003, particularly for people with children
and who are outside work, because they are now getting some of
their income through tax credits. To them it looks like a benefit,
and it is part of an income which also includes benefits on the
adult side, Income Support side. It has replaced something which
was provided through Income Support. 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.
Ms Royston: There are a number
of things that could be done—areas in which HMRC could work
with DWP to align benefits and Tax Credits. In the long term,
there has to be a simpler solution. It is just too complicated.
There are a lot of things that could be worked on, however. Can
I give you four different examples of—
Q22 Chairman: No! You can give us
one.
Ms Royston: Looking at someone
who has a tax credit overpayment and they have been paid Housing
Benefit and Council Tax Benefit, if they have been overpaid £1,000
tax credits, the Housing Benefit and Council Tax Benefit will
have clawed back—because they will have seen that as income
coming in—£850 of that. The person will therefore have
had only £150 more than they should. If something happens
and the tax credit is recovered—if, for instance, it is
a lone parent and the tax overpayment is discovered when she becomes
ill and has to go back on to Income Support, and she is getting
full Housing Benefit and full Council Tax Benefit then—HMRC
will have to claw back £1,000. She will not get anything
extra from Housing Benefit and Council Tax Benefit. So a lone
parent, going back on Income Support because she is ill, will
pay back £850 more than she actually was paid. I do not think
that situation can possibly exist. That is so unfair—that
somebody is actually paying back more money than they have gained
from the system. There are a number of other ways customers can
lose out. People can lose Housing Benefit and Council Tax Benefit
because of the way childcare costs are paid. We did a calculation
using fairly average figures for someone on a low income—the
figures we used gave £1,600 Housing Benefit and Council Tax
Benefit for the year. However, given the way childcare is paid—and
the non-alignment between tax credit and Housing Benefit—if
you calculate what she actually gets, it is only £1,100.
Q23 Miss Begg: Is that basically
a problem because the two sides of that do not speak to one another
or are unable to, because of the way government departments and
local government—
Ms Royston: I have seen that obviously
there are some people speaking to one another. There are some
meetings; but there needs to be much more committed engagement
between the two sides, because there are so many anomalies that
clients get caught in the middle of.
Q24 Miss Begg: Are these anomalies
being addressed at the moment, as far as you aware?
Ms Royston: I think the DWP is
trying, but I do think that the Government needs to look at them
urgently. 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.
Q25 Mrs Humble: In answer to questions
from the Chairman, you identified that one of the key issues for
benefits simplification is not actually simplifying benefits but
simplifying the experience of the claimant. I want to explore
that a little further with you. We have had a lot of changes in
the way that benefits are delivered, in increasingly going over
to contact centres. Do you think that increased use of contact
centres and telephony, rather than face-to-face, helps or hinders
the process of trying to improve the experience of the claimant?
Ms Royston: I think that it is
very much that one size does not fit all. There are a lot of claimants
for whom the contact centre is better; it is easier for them;
it is a straightforward process, and they prefer doing the claim
by telephone. However, there is a significant minority for whom
it is not better; they find it impossible to make the telephone
call. A client with mental health problems, for instance—his
mother had found out that he had to make the call. He found long
phone calls very difficult; he kept putting it off and putting
it off, until his mum had to take time off work to actually sit
with him. Perhaps if the alternatives were advertised and, when
she had asked, she had been told, "If there's a problem,
you can make a claim an alternate way. You can make a claim by
phone; you can make a claim on a form"—or, if that
is not possible for some people, a home visit would be necessary—I
think it is important that there are alternatives. For most people,
telephone is fine; but it is important that alternatives are there
and, what is more, that the alternatives are advertised, so that
people do not put off claiming because they think that there is
only one method.
Q26 Mrs Humble: Can I explore further
those two different ways of claiming? One of the advantages of
telephony for Pension Credit is that, although the calculations
to determine eligibility to Pension Credit can be complex, the
individuals telephoning the Pensions Agency are just given information;
they do not have to do the calculation. Somebody at the other
end is doing the calculation and so ordinarily, from the claimant's
point of view, it is a fairly simple process, so long as they
have all the necessary information available to give to the officer
at the other end. You mentioned earlier that the lives of many
pensioners are less complex than those of people of working age.
Is there a way of improving the script that operatives follow
for working-age benefit claimants, so that they can take into
account that wider complexity and deliver an improved service
to those claimants?
Ms Royston: I think the answer
is that, in the long term, an expert is needed at the front of
the process. At the moment, the person at the contact centre deliberately
has no expertise in benefits whatever. You need an expert at the
front of the process, together with an expert computer system.
However, the script could be a lot simpler if they had someone
who understood the system but also had the script or a benefit
calculator as a back-up. The combination of the two would make
a big difference. For me, one of the big things the Department
could offer is a benefit check, so that—like the example
I gave at the beginning—all the benefits that the person
was entitled to receive would be seen at the beginning.
Q27 Mrs Humble: The other aspect
you were talking about was more face-to-face contact.
Ms Royston: Yes.
Q28 Mrs Humble: And/or fill in a
form.
Ms Royston: Yes.
Q29 Mrs Humble: However, we have
seen a reduction in the opportunity for face-to-face contact,
fewer outreach services and, in fact, often the CAB or local authority
welfare organisations offering more of that sort of service. Is
it just that it is not advertised or is it that, even if people
do know about it, they do not get those face-to-face services?
Ms Royston: They do not get those
face-to-face services. For instance, the Pension Service does
offer a face-to-face service for those people who feel they cannot
cope with the telephone. If working age benefits had something
similar for people who genuinely could not cope with the telephone,
there would be an opportunity to work with partner organisations
like Citizen's Advice and perhaps offer some face-to-face interviews
through CABs.
Q30 Mrs Humble: Can I move on and
ask a question about the complexity of the system? You mentioned
earlier that there are complexities in the system that also impact
upon claimants. Where can we have a balance between making sure
that the claim forms, or the process of claiming, ask all the
necessary questions and that there is sufficient verification
within the system to ensure that people are claiming correctly
and reporting circumstances as necessary? Also, on the other hand,
looking at reducing that complexity as part of the process but
knowing that it will then be a blunter service, which may not
deal with the complexities of individuals' lives—and also
may leave the Department open to greater fraud. How can we balance
that system?
Ms Royston: For instance, one
point of contact for a change of circumstances would make claimants'
lives much easier but it would also stop overpayments. Someone
came into a CAB. Somehow the benefits system had registered incorrectly
that their child was no longer there; and, as a result, all their
benefits had stopped. It took the adviser three hours to report
to five different benefits to get their benefits back into payment.
That was with all our contact numbers and our knowing exactly
where to go and who to reach. It would have been impossible for
the claimant to do that on his own, and yet all his benefits had
stopped. If there was one point of contact, it would make it much
simpler for the claimant but it would also stop overpayments.
It is where somebody reports, "I have done some extra work"
to one department and then thinks that that goes through, but
it does not get passed on. I think that it would therefore help
in both ways. That is just another of the ways in which the complexity
could be masked. From all the disability groups and the welfare
rights groups I have talked to, the sharing of information was
a huge request. It probably came top of the list.
Q31 Mrs Humble: The irony, of course,
is that most claimants think that information is actually shared
and do not realise that they have to knock on several doors.
Ms Royston: Yes, absolutely.
Ms Bennett: I absolutely agree
with Sue, but it is also about the design of benefits and tax
credits to begin with, is it not, and how much you do have to
report changes in circumstances? Some benefits which are jointly
assessed, i.e. means-tested, for couples in particular, mean a
much greater burden of changes of circumstances because it is
both members of the couple; whereas if you have your individual
entitlement to benefit and your partner's income and circumstances
do not affect that, then it cuts out a whole area of reporting
of changes of circumstances to begin with and you do not have
to report changes of circumstances in terms of whether you are
a couple or not, for example. It is very much to do with the design
of benefits. There was a big debate, led by the Rowntree Foundation
when the tax credits came in in 2003, about exactly the question
you have posed: to what extent benefits and tax credits—in
that case tax credits—should be responsive to changes in
circumstances, and to what extent they should give a rate which
did not vary and which gave some stability. What I would probably
draw from the experience of the last few years is that claimants
value greatly security and stability of income. In particular,
claimants with children do not want to put their children at risk
of benefit changing or being withdrawn. Particularly in terms
of housing, the stability of Housing Benefit is absolutely critical.
I think that we need to take that quite seriously. We may have
undervalued, for example, the advantages of the six-months' unchanging
amount which was given under the old Working Families Tax Credit
and Family Credit systems. It used to be a year under Family Income
Supplement. It obviously has its disadvantages, because if your
needs increased while that was being paid you did not get any
more income; although they changed it more recently, to say that
if you had an extra baby you would get more during that six months.
It meant that that Working Families Tax Credit or Family Credit
operated like a non means-tested benefit for six months, and it
gave claimants a secure income, with a floor to build on. It is
possible that we have tried to mirror that by making the disregard
in tax credits 10 times more than it was before, and I am not
quite sure that that was the right way to go. We underestimated
the importance of a stable income, and we underestimated the fluctuations
in income of low-income people—as the research from the
Centre for Analysis of Social Exclusion showed quite recently.
Flexibility of benefits does not always have to mean following
every change in your income immediately. Flexibility can also
be gained for claimants by some security and stability of income.
Q32 Mrs Humble: I will bring you
in in a minute, Donald, because a reference was made to some research
that your organisation has done. Do your remarks also mirror the
point that you were making earlier about differentiating between
deserving and undeserving poor? The benefits system has always
been constructed in such a way that those small changes have been
responded to immediately, because this is money that the taxpayer
is giving to people who are not working and who were, in the old
days of Supplementary Benefit, and even now on Income Support
are sometimes characterised as being undeserving poor. Whereas
the tax system, through various tax allowances and now through
tax credits, is seen as giving support to people who are deserving,
because they are out in the workplace. How can we get the two
together and deliver a seamless service to people who may want
to move from one to the other but, above all—going back
to Anne Begg's earlier questions—want to have a simple view
of what is out there for them?
Ms Bennett: Ultimately, a lot
of work has to be done on public attitudes towards people on benefit
and public attitudes towards people in poverty. Whilst the Government
wanted to move people on to tax credits in order to make it feel
like they were part of the body of taxpayers—and I can quite
understand why the Government wanted to do that—it may have
meant that the people left on benefits are seen, if you like,
as even more different from the population as a whole, precisely
because that tax credits move has made people in work on tax credits
be closer to the taxpaying population. I think that, in the end,
public attitudes are the crucial thing we have to tackle if we
want to do more about poverty and more about increasing the generosity
of, as Donald said, what is the rather mean benefits system that
we have.
Q33 Mrs Humble: Donald, do you want
to comment on our mean benefits system, or, rather, on how our
claimants are dealt with?
Mr Hirsch: A lot of issues have
arisen. I basically agree with what Fran has said. In particular,
what the experience of the last few years has shown with the new
tax credits is that you cannot get rid of stigma simply by re-labelling
something. To many people, trying to claim means-tested tax credits
would perhaps feel as demeaning as if it were a benefit, because
they are having to jump through so many hoops. At the same time,
one really has to question—as I think Fran was implying—whether
it was wise to introduce something which people who are fairly
well-off taxpayers, particularly who are self-employed, have been
used to for some time, namely having a kind of retrospective assessment
within the system which has required a lot of repayments. A simpler
system, from the point of view of people on low incomes who are
claiming tax credits, is to have something which is not retrospective,
which makes an assessment which is a once-and-for-all assessment.
Indeed, the work that Fran referred to, which the Joseph Rowntree
Foundation did prior to the introduction of that system, looked
at different countries, including in particular Canada and Australia,
which had comparable types of measures. It asked whether we should
be like Canada, who make it a once-and-for-all assessment on your
previous year's income, or should we make it like Australia, where
you adjust retrospectively. The answer was that there had been
huge political disasters in Australia, and that we should pause
about whether we introduced that system. We did introduce it,
and we know what the results were. One does have to think about
simplicity, in terms of not constantly having to make these adjustments—knowing
where you are. I think that in retrospect we have to say that
this has introduced a new type of complexity, in terms of this
long-term retrospective element.
Q34 Mrs Humble: The logical conclusion
of everything that you have been saying, if we are looking at
simplifying the benefits system from the point of view of the
claimant, is to have the one-stop shop: to have one place for
somebody to go. Then all the government departments, everybody
who provides support to individuals, can be represented there;
there can be somebody offering advice. How feasible is that? Over
recent years, the DWP has moved much more to a system of personal
advisers, whether it is for lone parents or people with disability
or people claiming JSA. How successful has that personal adviser
system been, and could we build upon that, to have somebody who
could put through all of this complexity for the claimant?
Ms Royston: Possibly. I could
not give you a definitive answer on that; I am not sure of the
numbers and so on. I do think that it is possible to have an expert
at the front of the process. CAB volunteers, after training, have
to advise with the help of a benefit calculator. It would be possible
to have a shortened script plus a benefit calculator, and I do
think that it would be possible to advise on more benefits from
that—with the use of IT. I do think that is possible, therefore.
I think that lone parent advisers are very helpful when people
have them, but not everybody within the system will have access.
Obviously for some people coming to the system it is very straightforward:
they have been in work; they are out of work for four or five
weeks; they just want JSA; they are living with their parents.
It is as simple as that, and then they are back into work again.
However, there are some people with very complex lives, where
I think that some form of advice or information about what benefits
they are entitled to is necessary.
Q35 Mrs Humble: "IT", of
course, is a rude word for many of us on this Committee! Seriously,
however, are there any possibilities of using better information
technology to help the claimant? For example, digitising material
for the computer, so that you have the well-trained individual
offering that advice to a claimant. Is it feasible to have that
information on a computer, where they could look at the whole
picture?
Ms Royston: The thing is that
the script has to be so complicated if you have somebody who knows
absolutely nothing about the benefits system. You are in fact
looking at slightly less complicated IT if you have somebody who
knows something about the system. I am not an IT expert. I do
think that the DWP wants to move towards some of this; for instance,
the idea of an entitlement record. They are moving towards something
like that, and it would be very helpful. In the past when somebody
came in, the claimant used to get out their order book; you would
look at the order book and you would see exactly what they were
on. Often now, claimants do not know what benefits they are on:
there are so many and they are so confusing. That leads to problems
in all sorts of ways, in underpayments and overpayments, as a
result. It would need to be an entitlement record so that the
claimant could see the entire financial package they are on. CIS
is part of the way already, because it has the benefits there.
The DWP is working towards it, and things like that will be very
helpful. If, out of that, can come one point of contact for a
change of circumstances, it will make an enormous difference.
If the claimant has to give the information to the system just
once and that information can then be shared between the different
benefits—if they change their work hours, again they give
that information once and it is shared—that has advantages
for both the DWP and for the customer.
Ms Bennett: Personal advisers,
when they are good, have been shown in evaluation to be very much
appreciated by claimants. The reason may be partly because it
is the first time somebody in authority has actually been there
to sit and listen to this person's concerns. That is really important,
and I think that when they show respect to claimants it is really
appreciated. When the Public Accounts Committee suggested that
the Government should introduce a statutory duty to advise claimants
on individual entitlements, which in a sense is the kind of thing
you are suggesting, the response was fairly negative; it was that
it would be very resource-intensive, and advice is only based
on the information volunteered by the claimant or available to
staff at the time. It was not exactly welcomed, therefore. Also,
I would want to re-emphasise that it is the design and the complexity
of benefits themselves that is incredibly important. 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. In a sense, it has come about possibly
by default, possibly by design, because the increased generosity
of tax credits has pushed more people off Housing Benefit and
Council Tax Benefit. That in itself may be a good thing or a bad
thing, but administratively it has made a lot of claimants' lives
less complex, just because they do not have to deal with, in particular,
Housing Benefit as- well-as tax credits. There are some things
you can do to certain benefits or tax credits which can, if you
like, lift people out of the situation in which they need that
very holistic labour intensive service from somebody.
Q36 Michael Jabez Foster: I was horrified
when you said, some time ago, that it took about two or three
hours to complete a form by an expert and what that cost. Have
you any idea of the global cost of advice agencies? I appreciate
a lot of it is volunteering work, but what does it cost?
Ms Royston: I could go away and
find out.
Q37 Michael Jabez Foster: I would
be interested to know, because, clearly, it does seem to suggest
that if we could simplify the system it would be more manageable
for the advice agencies and maybe there could even be savings
in costs in terms of what is spent.
Ms Royston: Yes. It is so complicated
to fill out. To give an example, if a parent has a blind child,
if they go shopping and buy a dress for their daughter, that does
not count as care; if they take their daughter with them to the
shop and describe the dress and help her buy it because she cannot
see the colours and shape and so on, then that does count as care.
How can parents understand that? There are very good reasons in
case-law why one counts as care and the other does not, but for
a parent completing a form, it is very difficult. There is a whole
welter of things they do for a child; it is almost impossible
for them to know which to put on the form. Elderly people will
frequently put down hoovering and shopping but will not put down
that they sat up all night because they cannot get in and out
of bed because there is nobody there. They do not get that help
so they think that help does not count. It takes a lot of time
and effort to actually get to know the person enough to get the
right information out of them so that you get the right information
on the form. The sort of situation where we do see the person
refused is where the person has put down all this shopping, and
so on, that their relatives and friends do but actually have not
put down the problems they have on their own or the care needs
that they did not realise count.
Ms Bennett: In the simplification
plan, the DWP does recognise in one bit that reducing the cost
to advisers is actually an issue as well as reducing the costs
to claimants. So, there is an opening there to build on perhaps.
You could put it in the sort of invest-to-save bracket. I am involved
with another hat on with my local advice centre near Oxford. Advice
centres are supported by charitable funds as well as by Government.
It is not just government money, in fact it is often very little
government money and local government quite a lot, but the increasing
need for advice is being supported by charitable trusts who, you
could argue, had better uses for their money than that.
Chairman: You could imagine the outcry
if the Government said, "We have simplified the system; therefore
the CAB does not need as much payment as it did in the old days"!
Q38 Harry Cohen: I want to ask about
communications. The DWP are busy reducing the volume of leaflets,
which sounds a very good thing, except, as you have said, the
complexity has not gone away, it has probably become greater.
There is not a reduction in the number of benefits for example.
So, is it a good thing? What is your view about the reduction
of leaflets in this context?
Ms Royston: I think the reduction
of leaflets does help if they are geared to the right thing: because
the more leaflets you have, the more complicated it is to find
the right ones. You have a whole span of leaflets its difficult
to find the right thing. Leaflets are one aspect, but leaflets
are not the total answer to dealing with complexity for claimants.
Not all people will find it easy to plough their way through.
Q39 Harry Cohen: Will not some of
the benefits that some people will be entitled to be missed off
the totality of leaflets?
Ms Royston: Yes. People have more
complicated lives, and perhaps the leaflet would be going down
one route and they would miss out the fact that there are other
issues as well.
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