Select Committee on Work and Pensions Minutes of Evidence

Examination of Witnesses (Questions 155 - 159)

MONDAY 21 MAY 2007


  Q154  Chairman: Good afternoon and welcome everybody to this our third evidence session on benefit simplification. We are sorry to have kept you waiting but we seem to have lost two or three of our Committee members; we have tried to find them, but we will crack on anyway. Welcome to our three witnesses; it is good to have you with us. Ginny, no doubt you will know that we had a very good visit to Stratford; it was really good, so thank you for that.

  Ms Lunn: I heard about it. Thanks for coming; it was really good.

  Q155  Chairman: If I can kick off with just a general question, what is your opinion, is the UK benefits system just too complex?

  Mr Fothergill: There is huge complexity in the benefits system. I was just handing around this book, outside, in the corridor, which some people had not seen, and that is it; there are 1,500 pages in there, and that has grown, doubled in size, in the last 10 years, so that says everything, really. As far as I am concerned, it is not just the complexity of it, because some benefits actually are quite straightforward—Jobseeker's Allowance, Income Support, quite straightforward—it is the awareness of those benefits, that people do not understand. For the likes of people with that sort of life, even then you cannot really work out what the benefits system is about. I worked in it for 28½ years, I used to work for DWP, and even I do not know all about it.

  Q156  Chairman: So it is your fault? Thank you for that confession.

  Mr Fothergill: It is my fault; absolutely. It is very, very difficult to get your head round, but it is the awareness of it, because some of the benefits are very, very complicated, and some of the subtleties that are put into legislation, which hardly ever happen. I was also part of the DSS Social Security Bill in 1997 and we legislated for the tiniest expectation of something which would hardly ever happen, and that all gets chucked into legislation. If it were left out and we decided on those kinds of issues as they came up and then guidance, and whatever, came in actually to address that, that would be a lot easier. There are complexities, for sure, lots of complexities, but I think a lot of the benefits are quite straightforward, it is just the awareness, for people to know that they are there and what they are for.

  Ms Lunn: Also, we find that our Team Leaders, as you saw, spend so long themselves trying to work it all out that they cannot give proper advice to young people. I think it is as much about people working with those young people as the young people themselves so that proper advice can be given. If you think of a book like that, it takes a lot to get your head round that, does it not?

  Ms Howard: I think complexity in itself is not necessarily a bad thing but when it becomes dysfunctional it is difficult for clients to understand what they are or are not entitled to, and difficult from the point of view of someone administering it and understanding then what they are meant to be doing with it. That becomes a real problem. I suppose you have to be careful not to say complexity in itself is bad, but too much complexity or it is something that you cannot navigate through obviously becomes very problematic.

  Q157  Chairman: There is a line of argument that people's lives are complex, therefore inevitably you will get a complex benefits system. Is it possible still to have whatever necessary complexity there is but shield the claimant from that; so the poor old staff have a complex problem but the experience for the claimant is easy? Is it possible to do more to shield the claimant from that complexity?

  Mr Fothergill: I think there is still an issue about simplification of benefits but, as I say, I think the main benefits are not really that complicated; when you go into things like DLA then it is another story. I think the issue is about actually having someone to advocate on your behalf, or someone to navigate around the benefits systems for you; certainly we do that with some of our programmes. Our Transitional Spaces programme has coaches who work with people to enable them to understand the opportunities that are out there, not just benefits but for employment and housing as well. It is very much the awareness of this, and certainly we work with people who have multiple needs, homeless young people, and their capabilities of actually manoeuvring themselves around the benefits system it is very, very, very difficult and certainly they do need someone to work on their behalf. I am not saying forever; this is just developing roles and responsibilities really and educating people to know about the benefits system. There is another issue with front-line workers as well, because there really is a big requirement for upskilling front-line workers, Personal Advisers in Jobcentre Plus, key workers in hostels, especially in London, there is such a huge turnaround of staff there is hardly any retention of the skills that once were there. That is another really big issue for us.

  Ms Howard: I would agree with that; that is what our worry is about, shielding people from the complexity, about guiding them through that process and reassuring them, I suppose, that there is a way through it and that we can help them do that. I think there is more to be done. In terms of shielding; for example, if there were a one-stop shop or one route-way to the various agencies I think you could shield clients and make their experience much simpler, hiding the complexities from them, in a way.

  Ms Lunn: I agree. I do not think it is about hiding what is there, I think it is about how you work with them so they can understand it.

  Mr Fothergill: There is a whole issue about choice as well; we say people need choice but some people do not need that much choice, they just need to know what their entitlement is and what actually they should get and legally what is theirs. It almost breaks my heart, when I see that then they start splitting up benefits into different government departments and giving some to the Inland Revenue and retaining the rest in the Department for Work and Pensions. That is just kind of going away from the whole issue, as far as I am concerned, to different central government departments doing lots of sets of very important benefits.

  Ms Lunn: I think then the administration that goes with that, it is all being dealt with separately, so there is a cost.

  Mr Fothergill: There is the whole data-sharing issue as well. People have to present their personal information so many different times, to so many different organisations, not just those two, the Department of Health, and so on.

  Q158  Chairman: I take your point about the question of an advocate but when you have a Department which employs over 100,000 people do you not think it is more a case of getting them to do the job that they are paid to do, to provide a better customer experience, rather than running up another bill, somewhere else, to create a load of advocates to tell people their rights which these 100,000 people should already be telling them? I do not want to do anybody out of a job.

  Ms Howard: Upfront benefits advice given at the Jobcentre, for example, would be a simple solution, if people could go through the door and be told exactly what the situation is, get a better-off calculation. We did a survey with our clients before we came here today because we thought we had a lot of anecdotes but not many facts and only 27% had had a better-off calculation at their Jobcentre before they came to us for help, so they are not getting that advice and that information up front, which I think would make the journey easier and a lot less scary for people. People are scared of losing their benefits, and that could be quite a reassuring thing, if it were done properly.

  Ms Lunn: Our experience of using advisers, for example, is that the caseloads are just huge, absolutely huge, so I suppose it is the time they have got and the motivation they have to spend the right amount of time to help people, because that is part of the issue.

  Mr Fothergill: It is very much about the flexibility. Having worked there, and realising that Personal Advisers have 40 minutes to do their bit, and the Financial Advisers, who basically are just checking the accuracy of the claim forms, have 20 minutes, one hour is possibly long enough for certain people who have their lives sorted but certainly not for the type of people that we engage with, who have a whole raft of problems. It is interesting, talking about actually enabling the Personal Adviser to give all this advice. David Freud, in his recent report, readily admitted that Jobcentre Plus, year one, 95% of people get into work with hardly any direct help from Jobcentre Plus at all; recognising the fact that probably they do not have the skills to deal with people who have multiple disadvantages, who are on Incapacity Benefit, and actually handing over the whole responsibility for that to the private or voluntary sector to work within a costed basis for the next three years, to try to get them sustainable employment. Freud is saying almost the opposite, that he is recognising that Jobcentre Plus do not have the skills to deal with the people who are the hardest to help.

  Q159  Chairman: I think where possibly Freud fails is not recognising that the vast majority of new claimants at Jobcentre Plus have got recent experience of the labour market, you are not talking of people who have been away 10, 12, 15 years, they have come from either statutory sick pay or redundancy situations, so they have, more or less, come from the labour market to Jobcentre Plus, I think is the difference. Ginny, as you know, we heard from your people at Stratford. Abigail and Michael, are there any particular factors that you find with the people you are trying to help get back into work that this complexity affects?

  Ms Howard: I think the complexity affects people with complex situations themselves. There are a lot of our clients who have been out of work for a long time but have a fairly straightforward situation and for them the benefits system is kind of okay. I do not think any of them particularly relish the system but they do not find it a massive problem. It is our clients who do not fit neatly into boxes; they are not just the lone parent, it might be a lone parent with mental health issues, they are not just in want of cash because then it becomes complicated to work out what they are entitled to, what their eligibility is, where best they would be served. I think that is a problem. Another problem I think, as Michael has mentioned, is the interaction between the benefits system and the tax credit system, and getting the people into that transition from unemployment into employment is a big problem for our clients.

  Mr Fothergill: As far as the real issue there is concerned, certainly it is the ignorance of what benefits are there, and certainly, as far as in-work benefits are concerned, we have found from quite a lot of our research that people have absolutely no idea what in-work benefits they are entitled to. Certainly in relation to Housing Benefit, I have always found it remarkable that people do not know that they are entitled to this but then, when they do know they are entitled to it, they have also got a big shock coming their way because they lose 65 pence in the pound for every £1 over the figure they have earned. Something just has to be done about that, especially for hostel rates, which are so high you just cannot possibly afford to work. It is the inadequacy of knowing what benefits are out there. As far as the whole Working Tax Credit regime is concerned, even to me, finding out about how it works, that is an incredibly complicated benefit for the man on the street. Even if you do get it awarded then, in year one, if you were on benefits the year before you are assessed on nil income, so you get the full amount of Working Tax Credit; in year two it is reduced to almost nothing because then it is assessed on your year's work that you have been doing. People are just not aware of that, so they are living in this false reality of year one, of having this income, and in year two it disappears. It is the transparency of actually what the benefits do, really, and having a more realistic sort of tapering system, if you like.

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