Examination of Witnesses (Questions 100
- 119)
WEDNESDAY 16 MAY 2007
MR JOHN
WHEATLEY, MR
PAUL TRELOAR
AND MS
ANNA PEARSON
Q100 Chairman: Being disabled does
not automatically entitle you to DLA, does it?
Mr Treloar: It does not.
Q101 Michael Jabez Foster: You raised
concerns in all your submissions about the lack of synchronicity,
if that is the right word, in benefits delivery, particularly
between the Department, the DWP, the HMRC and local authorities.
Is there a model that could overcome that sort of difficulty?
Do we just have to have a Department of Income Maintenance or
something?
Mr Wheatley: There are pilots
going on involving co-location at the local level of Jobcentres
HMRC and local authorities. There is a pilot going on in the North
East. The problem is you have different standard operating models
for each of these organisations at the moment and Jobcentre Plus
is very firmly down the telephone route. You have to look at a
pattern of provision which would include co-location. It would
include much better common systems and, where that is not possible,
we need to have much clearer arrangements for closer, integrated
working. They also, I think, need to have expert people at the
front end who are able to understand the linkages and the different
rules for Housing and Council Tax Benefits, Child Benefit, Tax
Credits and all of the other benefits, and I think everything
really points to this, the fact that even people in work have
to understand the different reporting regimes for all those different
benefits that I just mentioned. Better sharing of information,
which Paul mentioned earlier: people just do not understand why,
if they tell the Child Benefit section they have moved, the Housing
Benefit section does not know that automatically. It is just beyond
the wit of most people.
Q102 Michael Jabez Foster: Is it
not the case that the DWP now do pass on the information to Housing
Benefit, for example? I know in our constituency office we get
people who have problems with Housing Benefit because the DWP
have not yet passed it on, but the structure is there already,
is it not?
Mr Wheatley: The structure is
there and the intention is there to do it. It does not happen
in all cases.
Mr Treloar: To pick up on Anna's
point around joint teams with the Pensions Service, certainly
from the perspective of disabled people, we think that would be
a good model in terms of things like fairer charging, for example,
where people have assessments on their fairer charging for social
care. One aspect of that is around encouraging benefit claims,
but there is not the integration when you do get the local authority
on board to get the local voluntary sector organisations on board
and actively go to people's homes and talk them and walk them
through these things. It is almost like back to the National Assistance
Board in the 1940s, where people were visited in their homes.
It makes sense for us if there could be some consideration given
to tying up some of these things so people get one visit and are
talked through the various aspects of what they are going to need
to consider, help to understand these linkages and help to understand
their responsibilities in terms of whom they have to notify and
what they have to notify if there are changes down the line. It
makes sense for the Department in saving money through errors
and mistakes being made and people not understanding what they
are taking on if they are making a claim for benefit, I think.
Q103 Michael Jabez Foster: It would
be amazingly expensive, would it not, to have a team coming from
different departments? Would you see one particular department
taking the lead in that sort of information-gathering?
Mr Treloar: That is a difficult
one. I think there is a role also for the voluntary sector. We
keep saying to the Department that there is a role for doing a
full benefits check for people at an early stage. That is something
that CAB advisers do regularly now. If someone comes in, they
have a debt they cannot pay, they are on a low income, the first
thing to do is to find out whether they are getting anything;
if so, what they are getting, what their circumstances are and
whether it might be worth their while claiming something else.
That is something that none of the other organisations in government
do at the moment. Jobcentre Plus does Better Off Calculations
but in our experience does not do them particularly well. If you
phone the Tax Credit Office, they are not going to talk you through
what your other benefit entitlements would be. The same goes for
local authorities. So you get a very disjointed approach if you
go just to one government organisation.
Q104 Michael Jabez Foster: It is
not really the Department's lack of synchronicity, is it? It is
more a question of the benefit itself. Taking the example you
gave of the Tax Credit Office, in the main, the Tax Credit advisor
does not know how it is calculated. He simply presses a button
and hopes it comes up with the right figure. That is not going
to be aided, is it, by cross-departmental co-operation? Is it
not simply that the benefits system itself is too complex?
Ms Pearson: I think the most important
thing here perhaps is data sharing and I think many people already
assume it is going on. For instance, a lot of older people we
talk to say, "Well, I've done my claim for Pension Credit.
Are they not going to check me for all these others?" They
do not understand that there are all these different departments
in different organisations doing those things. At the moment,
in a lot of cases, departments are not allowed to share that data,
so in essence they are not allowed to pass it on and make things
simple for the person. A classic example is the relationship between
HMRC and DWP. Pensioners, when they leave work, for the first
time ever they are out of the Pay As You Earn system, and immediately
they then have to deal with things like self-assessment forms,
which I think are generally acknowledged to be a bit of a nightmare.
They also have to manage their own tax affairs. It would be perfectly
possible, with the data that DWP holds on people, for them to
pass that over and almost act as a proxy for an employer; they
know the details of people's income and actually PAYE could be
operated in that way, using DWP as a proxy employer. There are
lots of examples of where information could be used better to
make sure there did not need to be HMRC officials on the ground
doing that or the third sector stepping in as much. To integrate
it completely might be very difficult but there are a lot of small
things that can be done to link better between departments.
Q105 Justine Greening: We have talked
a bit about some of the areas where we could have quite dramatic
and also incremental simplification. Obviously, the Government
is looking at this and there are a number of reviews happening.
You have the Industrial Injuries Disablement Benefit scheme, Independent
Living Fund, Disabled Facilities Grant programme, all being looked
at, plus the Lyons inquiry, not forgetting, of course, the Benefits
Simplification Unit. What do you think about all this? Is it ever
going to get the action group bible of benefits and tax credits
down below a thousand pages? Do you think we will ever get there?
Mr Treloar: Our Disability Rights
handbook has remained at 288 pages for a number of years. So it
is possible at a high level to summarise.
Q106 Justine Greening: A 288-page
summary!
Mr Treloar: Yes.
Q107 Justine Greening: In font 6,
presumably!
Mr Treloar: No, it is perfectly
readable. It has to be accessible for our customers. We did raise
this point in our response. We do think there is an absence of
any high-level strategy co-ordinating this, and I think the piecemeal
approach increases complexity each time. Sometimes, for example,
the Benefits Simplification Unit will make changes to one particular
aspect of the benefits system which can have unintended consequences
on other parts. John mentioned the linking rules earlier on, where
the linking rules have been extended for Incapacity Benefits to
104 weeks now, but there is a remaining Housing Benefit linking
rule which does not fit the same model. Each time one change is
made, it seems to pick up another one that needs to be made. We
could do with more high-level strategy to make sure these things
are more co-ordinated and do not produce those kinds of unexpected
results.
Mr Wheatley: Within DWP the creation
of the Benefits Simplification Unit has been a good thing. It
has the merit of requiring policy proposals to be run past the
Benefits Simplification Unit, so officials, if they are proposing
a change, have to say whether or not this measure is simplifying
or making more complex and justify it in some way.
Q108 Justine Greening: Was this in
place for the Welfare Reform Bill, where they left a load of people
on one existing benefit and created a new one?
Mr Wheatley: It was in place for
the Welfare Reform Bill, so it demonstrates that the Benefits
Simplification Unit does not necessarily have the last word in
relation to changes; it can be overruled, either by people in
the policy departments or by Ministers. Indeed, if they want to
do something, they can, even if it complicates the system. Some
of the things that were mentioned briefly in this year's Budget
show what the kind of approach is, which seems to me to be a slightly
over-simplistic way of looking at simplification: the changes
to backdating of DLA and AA, moving towards two weeks and getting
rid of the double-dating rule on forms whereby the claim will
start from the date the Disability Carers Service receive it back,
which might seem simpler but it is going to have unintended consequences
for claimants who will not be able to get advice, for example,
before putting their claim in so easily. Other things, like common
paydays, might move in the right direction. With welfare reform,
there was a missed opportunity to create automatic entitlement
to free prescriptions for everyone on a low income receiving ESA,
and instead leaving the position as now, where people have too
go through the Department of Health's Low Income Scheme in order
to claim. We are now in this rather ridiculous position where
people are entitled to free prescriptions if they are on Incapacity
Benefit but if they do not claim that entitlement, they can be
prosecuted for fraud if they tick the box that they are entitled
to free prescriptions. That was a change that this Government
introduced that extended the eligibility to those people but required
them to claim it, so there was a clear opportunity in the Welfare
Reform Bill to make that entitlement automatic which was missed,
rather crazily, I think.
Ms Pearson: I think the real problem
of the Benefits Simplification Unit that has come across in John
and Paul's comments is that it is simply not empowered to make
any big difference to the benefits system. It has what I would
describe as a relatively low status within the Department. It
does not really have high-level backing and, to be honest, it
can only look at specific measures which have no costs attached
to them; it cannot really take a strategic view of the whole system
and actually recommend proper changes which do not have these
sorts of unintended consequences, because you do need to look
holistically.
Q109 Justine Greening: It seemed
to me that what was required for that Unit was to have a clear
series of discussions about why complexity arose, possibly from
bad processes, maybe to do with payment dates, possibly from people
doing duplicate jobs on information, probably then looking at
IT systems, not talking when they could. There would be others
on top of that. They then needed to look at each individual benefit
agency and then go through a process of pulling it all together
and looking at cross-agency changes. To me, that might have been
a sensible way to do it, and then to have various options and
opportunities costed up in terms of pros and cons, risks, which
would have then provided a relatively robust criterion for saying
yes or no to those rigorously sought out opportunities. In fact,
what we have had instead was Simplification: Guide to Best
Practice, which is a manual, and I think what was required
was something more practical, in my terms.
Ms Pearson: I think it is profoundly
disappointing actually. It has been nibbling at the edges. The
Unit has no teeth and because it was not allowed to look at things
properly and actually tasked with looking at, say, the Disability
Carers Service, doing recommendations, it has had limited strength
and I think you are right; it could look at the process issues
within an area and cost them up, not only in terms of the cost
of perhaps making a change but the costs down the line at the
moment of that complexity. That has been very much missing in
their analysis. You cannot make a business case without looking
at what the costs are going to be down the line of not doing something.
Q110 Justine Greening: Moving on
from that, we visited New Zealand last year to look at employment
but actually, one of the things we talked to them about was this
new Working Age Allowance that they are bringing in and it will
then have some overlay benefits depending on particular circumstances.
They are going down their route to try to simplify it. That is
something even that the DWP talked about in its Green Paper. It
talked about moving, in the longer term, towards a single system
of benefits for all people of working age with appropriate additions.
Do you think that is something that could work? You, Anna, talked
about winners and losers, and when you talked about that, I think
you got to the heart of the problem, which is in many respects,
unfortunately, the politics around it. It is very easy to announce
a nice, discrete benefit that will make a particular group of
people who are going to get it very happy. It is less easy to
do a simplification process where some of those discrete groups
do not now get that benefit because they may be eligible for a
larger piece of an existing other benefit that they get. Do you
think we will be able to successfully move towards more of a single
benefit with these overlays as is happening in New Zealand?
Mr Treloar: We would want some
very robust modelling of winners and losers in terms of particularly
disabled working age adults, because they are one group who have
been moving more deeply into relative poverty over the last 10
years compared to people with children and compared to older people.
There are issues around universality of disability benefits which
we think could help to bridge some of that gap. So we are not
against it in principle but we would be, as I say, very keen to
see some robust modelling to make sure that the actual effects
on disabled working age adults were taken care of. We have research
which shows that disabled people have something like a £200
shortfall in terms of their extra needs, and the DWP's own research
from two years ago also found that disability benefits were failing
to meet the extra income needs of disabled people. I take Anna's
point in terms of winners and losers, that the gains might be
ameliorated by the losses to a degree, or vice versa, I suppose,
but when you have disabled people in work in poverty, for example.
I do not know; we are ambivalent at best at the moment around
it. It is such a massive undertaking that it is difficult to think
about it really at this stage from our point of view.
Ms Pearson: Just to clarify the
losers point, what I very much meant was that if you simplify
in a constructive way, someone may lose out by a few pounds, and
I think the benefit of more people getting it there is very clear.
If you are talking about bigger losses, it quickly becomes unacceptable
because so many of the benefits are already set at a level which
do not take people across the poverty line and which do not fulfil
the costs that they have to cover in their daily life. Speaking
from a pensioner's perspective, I think the issues of take-up
are more profound for that group. Some of the issues around income
and measuring that are simpler but you can do the read across
to the working age benefits. What has happened with Tax Credits
recently has been quite positive, in that they now allow a longer
period for which they are not going to assess changes in income
so people do not have to report every single change as it happens;
it is done more on a yearly basis rather than month-by-month,
which led to so many overpayments. That is something that has
been happening for some time in the Pensions Service; people's
incomes are only reassessed after five years and I know that is
because pensioners' incomes are more relatively stable but it
does make change of circumstance much easier. There are many ways
of doing that.
Mr Wheatley: I would agree. It
is such a "big bang" change that I think all groups
would want to see some analysis of the impact before rushing to
judgement. It is an attractive notion that you have a single benefit
with overlaying things on, but it does mean scrapping what we
have now and putting something else in place. It is much easier
to contemplate incremental changes, and there are plenty of things
which could and should be done to simplify in the short term.
Q111 Justine Greening: So your attitude
would be that we should really push ahead with a series of incremental
changes and see where that takes us and whether that can provide
the benefits before looking at something more dramatic?
Mr Wheatley: Yes, I think you
should look at groups of benefits that go to the same people and
work out how far you can match up the rules, how far you can get
rid of different requirements on reporting changes of circumstance,
for example, between Housing Benefit and Tax Credits, how far
you can get rid of the different rules and treatment of childcare
costs across benefits, how you can make the experience of pensioners,
working age people, people with families and children and disabled
people, how you can match up the experience of benefits for them
more easily. That would then allow you to move to conceptualising
what a single working age benefit would look like, rather than
starting completely from the other end, as I think perhaps David
Freud tried to do, and worked out that he needed at least a year
to restructure the system, rather than starting from an intellectual
point and saying "That is our starting point; what does the
system then look like?"
Q112 Justine Greening: One last,
difficult question for you all. We have talked about take-up and
I do think there is possibly a play-off between improving take-up
with a more cynical approach, but at the same time there are winners
and losers. What is more important to you: 100 people who lose
a few pounds and maybe a bit more than that but then 100 people
who get take-up who had nothing before and now get a benefit and
understand it, and all of those 200 understanding what they are
now getting and why? Is that better or what we have now, where
the 100 do not get anything, and the other 100 maybe get a bit
more than they might do if we had a more simple system that perhaps
was not quite so refined to take into account every single need
that they had?
Ms Pearson: For pensioners I would
take a slightly different point of view in terms of incremental
change versus radical. I think you do need a radical change. A
lot of effort has gone into promoting the system as it stands
and to trying to get help to people. There is more that could
be done, definitely; there are more slight changes that could
be made and they should probably be done in the short term, but
we do need to radically look at this. We cannot let millions of
people go without. If it did come down to some people losing a
couple of pounds versus people getting money that they have never
had before, I would definitely go for the latter. There is a particular
issue around ethnic groups and minority groups, who we know at
the moment are not claiming benefits in particularly large numbers.
There is no official data on it but all the evidence seems to
point to that. It is very hard to get to these communities and
it really takes a dedicated person to gain the trust of people,
take them through it and that can take a period of years. We have
a project working with Somali refugees in Manchester, which has
taken years to deliver. It is the only way of getting to those
people. I think we are seeing a growing diversity in our population
and soon a growing diversity in our older population. We need
a system which can deliver for those people, and that is not to
mention people who are profoundly isolated or housebound. For
me, only a system of either automatic payment of benefits would
work, or of course, our ideal preference would be that the state
pension was automatically up to Pension Credit. That has always
been our ideal choice, but we are working very much within the
bounds of what is perceived as being possible at the moment.
Mr Treloar: I suppose in terms
of benefit levels, if that proposal were taken forward, we would
want to see the work that Joseph Rowntree are doing currently
on minimum income standards also being incorporated into any kind
of proposal such as that to increase take-up at the expense of
some people losing a few pounds, to make sure that the loss of
that few pounds does not take people further into poverty, because
there are not any minimum income standards within the benefits
system, which we think is ...
Q113 Justine Greening: Obviously,
you are here representing different cohorts of people who claim
benefits and, in a sense, what I want to try and find out is what
you perceive as a bigger problem, that group that do not get benefits
because it is possibly too complicated for them to navigate their
way through; are you more concerned about them as a group, or
is it that incremental level that the existing group that are
able to get through the system and claim that is more important
in terms of your groups that you are representing?
Ms Pearson: I hope I have been
clear that ...
Q114 Justine Greening: I think you
have, yes, but I just wanted to be clear what you are trying to
drive at.
Mr Treloar: I think we would be
striving to maximise take-up for disabled people. It is as simple
as that, I suppose, from our point of view. The complexity in
the system, as I say, can be overcome to a degree by disabled
people's experience when they first come along at whichever point
they come into the benefits system.
Ms Pearson: It is slightly different
for disability benefits as well. You could not automate that process
because of the nature of it.
Q115 Justine Greening: I think it
is fair to say that with a simpler system, the savings from running
it could possibly be quite dramatic.
Mr Wheatley: It is difficult to
comment in the abstract. I am still trying to think what measure
would simplify it in order that people who do not get benefit
at the moment do get benefit, something that would fit your analogy.
Things that fit the definition about there being losers and gainers
that we would probably accept are things like John Hills' report
on Social Housing. He recommends looking at whether there should
be lower requirements on reporting of changes for Housing Benefit
to avoid the problem of people having to constantly recalculate
their Housing Benefit entitlement. That would create some losers
and some winners—I do not know that the analysis has been
done on that—but overall the benefits would be good. Increasing
Working Tax Credit to lift people entirely off Housing Benefit
and Council Tax Benefit would also be good, because for people
in work, we see clients who have to take days off work in order
to go down to the Housing Benefit Department even though they
are in a job. They are on a low income, they are still entitled
to HB but every time their earnings or their hours change, their
HB entitlement changes. There is simplification which would have
rough edges that could be quite easily contemplated because of
the benefits.
Q116 Chairman: Can I make a couple
of observations? Presumably, all three of you welcome the fact
that it is no longer a disciplinary offence in DWP to give benefit
advice to claimants, which it used to be 10 years ago?
Mr Wheatley: Yes.
Q117 Chairman: Secondly, on the New
Zealand experience, what we were also told was that the timetable
had slipped significantly and that the underlying philosophy of
a single age benefit was under question, so there is no guarantee
it is going ahead. On this question of winners and losers, much
of the complexity in the system, both in the rules and regulations
and administration, comes from legacies of previous benefits and
systems. When there is a major benefit change like ERSA, what
would be your view on, if you like, buying out people's rights
to stay on whatever they were on before and move to the new benefit,
so there may be a weekly cash loss but they get a lump sum of
£1,000 or £2,000 or whatever? Would you have a view
on that?
Mr Wheatley: I think it is something
that is worth considering. It is certainly a lot easier than having
transitional arrangement upon transitional arrangement. We are
still administering all sorts of different Incapacity Benefit
predecessors for people, and I think it would be quite a difficult
judgement for people, a whole new area for advice.
Q118 Chairman: You keep making a
bid for CAB staff. I have got that. We would maintain particularly
IT systems to deal with legacy cases that generate their own problems.
Mr Wheatley: It would be an interesting
development.
Q119 John Penrose: Chairman, on that
last point, I understand that the Benefits Simplification Unit
has actually done some calculations on precisely that cost and
it would be very interesting to get that information as part of
the evidence for this Committee if we could. Can I just pick up
on one point you made in response to some of Justine's questions
about the single working age benefit. I have difficulty understanding
why a single working age benefit with additional things that you
can apply for in specific cases would be inherently any simpler
than the system we have at the moment where you apply for individual
benefits. Why would it be inherently a simpler process, to start
off with?
Mr Wheatley: You are absolutely
right. At the moment we have a benefits system and regulations
and we also have a fairly substantial body of case law because
of the structure of the benefits system, with its commissioners'
decisions and judicial reviews and all the rest of it. You have
a raft of different rules that have grown up over the years and
you can imagine that, even if you swept the slate clean, you would
still have to have those rules which fine-tuned the targeting
of payment to individuals and families and that would in itself
grow over time.
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