Examination of Witnesses (Questions 180
MONDAY 21 MAY 2007
Q180 John Penrose: It is not that
it is wrong, it is that it is not being claimed?
Ms Lunn: Yes; we do not normally
know if it is wrong.
Mr Fothergill: I have sort of
known about the Ferret better-off calculator system since the
early 1990s, and it was not being used then but it was quite difficult
to use then, they had not worked out all the nuances to make it
a better piece of software. Certainly it is there, it is a well-recognised,
or it should be well-recognised, piece of software to assess someone's
benefit claim; but I think, as I said earlier, it takes a long
time to go through really complex claims and they are the ones
that people really want to know about. When they have got a whole
raft of different benefits, they are really interested to find
out exactly how that is going to translate into work, but Personal
Advisers really do not have the time to do that. We have got our
front-line service delivery, our Transitional Spaces project,
we have coaches there; they have used the Ferret software because
they are co-located in the Jobcentre Plus office. Okay, the person
who is using it is quite an expert in welfare benefits, but she
said she found it quite easy to use, although it does take some
Q181 John Penrose: It is not that
it misses out the fact that you lose your eligibility for free
eye care, or whatever it may be, it gets all that correct providing
you spend the time on it, is what you are saying?
Mr Fothergill: As long as the
input is fine.
Ms Howard: The system is as good
as the person administrating it, so if you have got a skilled
person who knows the right questions to ask and who is very thorough
about it I think it can be very useful; it is how it is done,
and also the honesty of the person being asked the questions.
Q182 John Penrose: We discovered
at Stratford as well you could do an awful lot with automatic
data population because an awful lot of the data is already known
about in other systems, which would cut down the time. Just to
summarise what the three of you are saying, are you saying that
actually if it is done properly it is broadly correct?
Mr Fothergill: Yes.
Ms Howard: That is certainly my
Q183 John Penrose: There is no systematic
problem with the better-off calculator, providing it is done properly?
Mr Fothergill: No. It is time
and data input, I think.
Q184 John Penrose: One of the things
which has been surprising me in our session so far is that when
we talk about tax rates and we talk about marginal tax rates people
talk very strongly about disincentives to work, and anything over
40% people starting saying, "Oh, well, you know, higher earners
will leave the country," or whatever it is. Yet when we talk
about benefits withdrawal rates we are talking blithely and glibly
about 65, 70, 80% rates of withdrawal, and yet we seem to be assuming
that if a better-off calculator says "Well, if you're ten
quid a week better off then you'll automatically want to go into
work," but if that is actually a 90% or 70% withdrawal rate
of benefit then I just wonder if you have got any evidence, any
facts, about at what stage that rate of withdrawal starts to affect
people's `back- to-work' decisions. Do they look at it in terms
of percentage withdrawal rates, or do they just say "It's
got to be above a certain pound value better off per week before
I'm going to go back into work"? Where does the threshold
start to bite?
Ms Lunn: I think there is so much
else going on, about getting up at a certain time of the day,
all the other things that go with working full-time, so you have
got to be earning quite a significant amount more than those benefits
I think for people to start feeling it is something they want
to do. I think that is what we find; it is about building that
confidence, to see all the other things you get from it, like
mixing with people, being able to progress, learn new skills,
I think you have got to get that through to people. We have introduced
a programme which is very much about working within the industry
so that they can get that experience, so that they can start to
feel confident with people. It is like we said before, if you
have got third generation unemployment and people have not been
used to working in those environments, it takes time. Money is
important, but it is all the other things as well.
Q185 John Penrose: We are talking
about the benefits system, for the moment, at least. Assuming
that you have done this great sales job and they are mentally
and emotionally prepared and wanting to work, and then you do
the better-off calculation, at what stage do they go, "Well,
that's all great, but actually it's just financially not worth
my while; I'd love to, but ... "? When does that start to
Ms Howard: It varies from person
to person. I would not like to generalise.
Mr Fothergill: It does. In that
report I was talking about earlier there was anecdotal evidence
to say, "I'm not going to get up for five days a week just
to work for an extra £10 on top of my benefit." I know
it is about benefits, but certain places do not support people
in work either, so people living in not so good hostels that have
not been through the Hostels Capital Improvement Programme do
not seem to want to do that either, and that is quite understandable
because it is not the right environment. There is quite a lot
of anecdotal evidence about, to say "I'm not going to work
Q186 John Penrose: I guess what I
am asking is, is there any quantified evidence about is it a minimum
amount per week, or is it a minimum percentage increase in what
they were getting before; what is the mental trigger? I guess
it may vary by different types of claim as well?
Mr Fothergill: I think, as Abigail
said, it is very much down to the individual circumstances, and
whether someone is actually supported through that period as well
and does know the reality of how better or worse off they are
going to be in that situation.
Q187 John Penrose: I understand,
Michael, you were saying earlier on, if someone has got a withdrawal
rate of 65% they are not going to want to go into work, that we
should try to improve that taper rate, I think was one of the
comments you made. The policy-makers' response to that is going
to be, "Well, how much of an improvement would it take and
how much is that going to cost?" That means we have got to
have some sort of quantification about, well, if it goes down
from 65% to 55%, how many more people are going to feel like it
is worthwhile going back into work and how much is that going
to cost the taxpayer; and I am struggling to find some sort of
quantification for that?
Mr Fothergill: That is quite a
complicated area which actually I do not think has particularly
been hit upon yet. My current job is developing the Right Deal
for Homeless People, which is a New Deal which was always mooted
years ago, but is actually an holistic service for homeless people,
and part of that would be a costed model to say, if all of these
things happen which need to happen, including this whole benefit
issue around Working Tax Credits and the Housing Benefit taper,
then this is how cost-neutral that will be to the Treasury. There
will be a report coming out at the end of this year, but I do
not know of any other ones.
Q188 John Penrose: I do not think
we have had any other information about this, but it strikes me
we are all making assumptions here about what the change in the
benefits taper will be, and actually no-one has yet come up with
any concrete evidence for us. I am afraid, you have got more anecdotal
back-up to the fact it is important but you have not got concrete
stuff either. We have already talked about the interaction between
benefits and tax credits and I think mentally you are considering
them as part of the same issue, you have to take them as an overall,
integrated system if you are going to assess the impact on the
decision to go back to work and to remain in work. What is the
opportunity for simplification then or for aligning those incentives
better if you have two different Cabinet ministers responsible
for each bit?
Mr Fothergill: It is quite interesting
to look at that, because obviously in the days when there were
the Benefits Agency and the Employment Service, which have now
been integrated into Jobcentre Plus, and you would think that
would work better because they are both working to the same government
department, but there is some kind of a point between benefits
provision and job provision where job basically, at the moment,
is king, really, and is about getting people into work. I think,
and certainly from my own experience, that X benefit staff feel
like the second-class citizens; in fact, the `plus' in Jobcentre.
It does not work. When you have had two separate organisations
administering two separate things, you have got these two areas
of expertise and they do not join, and then you would have people
sitting on the front line, in Jobcentre Plus, who historically
have been about jobs, expected to give benefits advice. Obviously,
with the cuts, the Gershon Review and the cuts in staff, there
is a whole raft of issues there as well about not having enough
people actually to do the job in the first instance. Certainly,
as far as separating out government organisations, as far as the
Inland Revenue is concerned, we have got a real, big issue at
OSW about this. As part of that into-work calculator, I am trying
to push the whole raft of trying to upskill front-line HMRC workers,
because historically these are not the type of people they have
been dealing with, and I challenge whether actually they have
the skills to deal with them, and that is a big issue in itself,
not actually understanding the complexities of people who are
in this situation.
Ms Lunn: I think I said already
earlier actually, I cannot quite understand why it has to be like
that. It would make much more sense to have it under one department.
Ms Howard: Certainly I think that
is how clients perceive it, as part of one system. I do not know
much about the interaction between the two, but certainly I think
it would make more sense to have a system that was a streamlined,
integrated system, as opposed to two separate entities.
Q189 Chairman: From each of you,
is it the case that, the clients that you are dealing with, they
look to yourselves for benefit advice, they do not expect to get
it anywhere else?
Ms Lunn: I think that the first
point is, whoever they are working with. As you saw, with the
Team programme, it is the issues that they suddenly face and so
they go to the person they are working with, and, as you saw,
our Team Leaders spend so long working with Jobcentre Plus staff,
trying to sort out the issues. They would not go to the Jobcentre
often, they would be looking for someone else to work with them
on the issues.
Ms Howard: I think many of our
clients would have expected to get it at Jobcentre Plus but did
not do so necessarily, and then, when they come to us, we start
to work with them, so expectations may be a different thing. Certainly
where they get the advice is either from us or we would signpost
them to Citizen's Advice or to another agency which might have
more expertise than we have.
Mr Fothergill: Certainly that
is the place where people should be going to get advice because
that is exactly what they are paid to give. As I said before,
it is quite a transient population within Jobcentre Plus and lots
of people move in and out of the jobs, and the skills base, I
am not saying everywhere, there are some very, very good people
out there, that is for sure, but there are also some people who
really do not know the complexities of it, and why should they
when they have been in the job for only six months or so. The
people we deal with, who are very vulnerable, do build up trust
with people and sometimes that takes a very, very long time, and
that is the person they will deal with, and they are quite scared
of officialdom. If you go into Jobcentre Plus and the first thing
someone is going to say to you is "Go and use a warm `phone
and speak to someone" wherever the centres are, in Cardiff,
or wherever they are, is not the issue for them. It gets worse
because, certainly the call centre in Pembroke Dock, in Cardiff,
Jobcentre Plus did not have the staff to man it, so they were
making people redundant who actually worked in this building.
The vast percentage of the staff who ended up manning the `phones
were people who had never worked for DWP or Jobcentre Plus and
were giving out benefit advice from a script, and had absolutely
no idea what they were talking about and could not go away from
the script if someone had different needs from your Joe Bloggs
customer. It was just horrendous, in the first instance, and I
do not know how much better it is now. Our customers do not find
it the most welcoming place really and they do need advocates
and people to act on their behalf.
Ms Lunn: As I said before, probably
it is the time that they need, which often they do not have.
Ms Howard: I think trust as well
is an important one. I think a lot of clients see the remit of
Jobcentre Plus being partly to get them off benefits, so sometimes
there is a bit of a trust issue.
Q190 Chairman: Is the issue the training
of individual advisers, or better-off calculators, or whoever
it is, or is it a communications problem within DWP generally?
I am quite amazed at how many times we have to point out to our
local Jobcentre that IB is now 104 weeks, it is not 52. If a basic
thing like that is not getting communicated, obviously there is
a problem somewhere, is there not? Is it more a communication
problem or is it a training problem, or is it a combination?
Ms Howard: I think it is a combination
of the two. We work across several different areas and we see
a lot of inconsistency from region to region in how certain rules
are implemented or certain processes are implemented. Also I think
skills is a big issue. They need to have a lot of expertise and
time in a job to build up that experience and understanding; so
I think definitely it is a combination of the two.
Mr Fothergill: I agree.
Q191 Chairman: We are talking here
about new claimants; if a new claimant thinks they have been either
badly advised or just let down, they are not then going to have
any confidence in things like the better-off calculation, are
they, so that is going to make your job even more difficult, getting
people back into work, is it not?
Mr Fothergill: I think that is
why there is that need for the way we deal with this into-work
calculator, because it is too complicated for people to use, it
is just too lengthy to use really for Personal Advisers. Also
I think, as an outside organisation, you have to buy it, which
organisations are not willing to do, because there are other calculators
out there which are quite simple but do not actually cover into-work,
they are more about Housing Benefit. St Mungo's have got one on
their website but it covers only a very, very small area of personal
circumstances. The trust and faith with people who have these
multiple needs is being lost; also, historically, Jobcentres and
Jobcentre staff, as was, never had to deal with people who were
on Incapacity Benefit. Obviously, with the introduction of the
Employment and Support Allowance, this is going to get more interesting
for Jobcentre Plus staff, because they are going to have a raft
of people with a whole raft of problems which they have never
had to cope with before because they were working with work-ready
Ms Howard: There is certainly
a lot of anxiety amongst clients and I think the worse your experience
is the more anxiety you have and the more reluctant you are to
think about employment.
Q192 Chairman: Abigail, the Wise
Group is a DWP contractor; does Wise Group see it as a core function
of its staff that they are experienced benefit advisers?
Ms Howard: It is not a core function
of their role but certainly they need to have a good understanding
of the benefits system to help their clients. I think we see their
key role as being supportive of people, in whatever way they need
to be supported to get a job.
Q193 Chairman: Does every one of
your staff have to be given that level of benefits knowledge or
do you designate two or three people, or whatever?
Ms Howard: Actually I do not know.
I think there are a few members of staff in each project who probably
have that knowledge but not every single member of staff has that
level of knowledge and expertise.
Q194 Chairman: Each of your organisations
essentially is about getting people in very difficult circumstances
back into work. Could we not cut through all this complexity if
we had, say, just a three-month roll-on of the existing benefits
and you kept your wages as well? Would that not help get over
a lot of this; or are you just preparing the way of the problem?
Ms Lunn: In some ways, I think
that is back to what we have talked about, but it is giving that
period of time where you build the confidence and the trust in
the people being able to work, so I think it would make it better,
if you did that.
Mr Fothergill: I think the roll-on
is important but not a block grant roll-on which remains at the
same amount for a considerable number of years. A short period
of time, or a tapered period of time, where gradually it rises
up to reality, because you cannot just give someone that and say,
"Okay, go into work but we'll still carry on paying 90% of
your rent," or "your rent in full," because it
is going to give them a completely false sense of reality. Then
if that stops suddenly, as with Working Tax Credit, you just do
not know where you are and you cannot afford to carry on working.
There have to be roles and responsibilities on both sides.
Q195 Chairman: If we stick just with
Housing Benefit, one of the issues is the disparity of the administrative
competence of different Housing Benefit authorities. If you are
looking to live in an area where they process a new claim within
four weeks probably you can cope with that; if it is one of those
that is taking 26 weeks, and particularly if you have got children,
are you really going to risk the roof over your head on a wing
and a prayer that the Housing Benefit will be sorted, probably
you are not. On this general thing of, particularly, Mike, what
you were saying about the second year, the in-work credit that
some groups of claimants get for the first year, does that just
compound this problem of the second year or actually does it help
to bridge that first-year gap?
Mr Fothergill: Obviously we are
talking about a particular client group who do not necessarily
have the opportunities to progress quickly in work. If someone
is going into work in the first year and they have got quite a
high rate of Working Tax Credit but then did progress and the
next year they got a reasonable pay rise which actually would
counteract that, and would carry on doing so, then they would
progress through work. As far as our customers are concerned,
the vast percentage of them are not necessarily going to progress
in year two or year three, they are still going to be on National
Minimum Wage, but, as I say, the Working Tax Credit disappears
completely, so it is not going to help anybody really. I do not
know what the answer to that is, whether you actually give the
person a chance and say, "Oh, go for it in year one and see
what happens." Realistically, actually to enable that person
to progress in work, they need all of this in-work support as
well and some kind of progression tool to enable them to move
up the ladder, and not just kind of dump them into work and say,
"Right, that's it, you've got a job; it's sorted," because
certainly it is not.
Ms Howard: Part of that is being
given skills in financial management and beginning to plan ahead
for that happening, and I think that is an area on which a lot
of work could be done.
Q196 Chairman: You may not have noticed
but DWP have introduced some simplification measures. What is
your experience of them; are they good, bad, you probably will
say they are not far enough, but have they been useful, the ones
that have been made?
Ms Howard: To be honest, I spoke
to people in my work and no-one knew about it. I have read about
it and I know some of the suggestions they have made seem very
sensible, but I do not think we have really noticed an effect
on a day to day basis, as yet.
Ms Lunn: The same for us; we have
not seen a lot.
Mr Fothergill: I think actually
it is quite interesting, because I `Googled' the Benefits Simplification
Unit quite a few times today and, apart from debates in the House,
I did not really get much at all, and the debates in the House
were all about the Employment and Support Allowance, which is
a whole raft of interesting issues in itself. There is also a
notion that there is one working-age benefit and taking away age
restrictions. For the life of me, ever since I worked in that
Department, I never understood why someone actually needed less
money at 24 than they do at 25, which is bizarre, and why they
need to pay less rent at 24 than they do at 25. As far as simplification
with the Employment and Support Allowance coming in, it seems
quite an interesting approach; my worry is about the whole conditionality
and sanctions element of the ESA and the holding rate and the
higher rate which, okay, is going to be slightly above the current
Incapacity Benefit rate, allegedly, but what hoops do people have
to jump through to get up to that higher rate. Also there is a
sliding scale between the holding rate and the higher rate, so,
to me, it is sounding like, okay, it is one benefit coming in
but then there are all these complexities throughout where you
have to satisfy certain conditions for work-related activity.
How all of that works, I do not know, it seems to be going in
one direction and then thinking, "Well, actually, we're going
to move away from that because of all the conditionality issues."
I have a real worry about people with mental health concerns being
asked to engage in work activities, which I think is only right
and good, but people not really understanding the multiple complexes
of people with mental health issues and actually treating them
in the right way and putting them into a situation that they cannot
Q197 Chairman: If I can throw just
a couple at you, which I hope you have got experience of; first
of all, the massive change to linking rules for people on IB,
it used to be eight weeks, now it is 104. That has got to be a
good simplification, I would have thought. Similarly, the changes,
limited though they are, to permitted working?
Mr Fothergill: ESA(?) is good,
IB is good, yes, both of those.
Ms Howard: I do think it makes
a massive difference, once people know about it.
Q198 Chairman: Mike, can I just check
something. It is alright if you are thinking about 24 and 25 year
olds; similarly, at the other end, is there any reason why people
over retirement age should get more? Be very careful.
Mr Fothergill: I will. David Freud
talked about getting rid of the term `pensioner' and getting rid
of retirement pension but paying something else in some other
way, which is interesting; so that is already out in the public
arena. The working age is obviously changing and increasing, and
the whole thing about limiting people working when they are 65
obviously we are moving away from as people get older. To answer
your question whether or not people at the age of 65 should get
more money or not, I do not know; that would open a whole new
can of worms really, would it not?
Q199 Chairman: I will not hold you
to it. As organisations yourselves, do you see it as inevitable
that you will become some sort of shield between the individual
and the system, or do you think it is just a consequence of the
way things are?
Ms Lunn: I suppose, as we work,
we would see ourselves trying to add value so that we can support
some of the best work we have done as well, we do have people
based in Jobcentre Plus, for example, and they can work alongside.
I think it is critical that anyone working for Jobcentre Plus
sees the value of what organisations like we all are can offer
to help in their work. I think, probably as you saw on your visit
last week, often it is seen as competition, or people are not
really sure of what you are doing and do not see it as helping
people get work, and I think they need really to understand what
value the voluntary sector can bring.
Mr Fothergill: I think there needs
to be a whole mindset change about how the VCS and Government
work together. Certainly both DWP and the VCS have specific skills
to deal with different types of people, and I think the expertise
should be used in the best way and funded in the best way, and
funded flexibly in the best way. It is not all about just job
outcomes, it is about soft outcomes and measuring people's progression
to work and I think we could work mutually much better together.
I think part of the Freud recommendation about hand-over period
and JCP dealing with year one and VCS dealing with years two to
four, or whatever period that may be, could work and be mutually
supportive and people could learn from each other. There is also
cross-skilling that needs to be done as well, because people need
to know the constraints that there are in Jobcentre Plus and they
have very rigid targets and a very short time in which to achieve
them, and that is what it is all about. I feel very, very sorry
for people working in that regime but also they have to realise
that clients with multiple needs need a much longer term to work
with, a much more flexible approach and much more flexible funding
which will actually support that.