Examination of Witnesses (Questions 320
- 339)
MONDAY 18 JUNE 2007
JAMES PLASKITT
MP AND BRENDAN
O'GORMAN
Q320 Jenny Willott: Can I ask a group
of questions around benefit rules and the complexity associated
with them. We have got a lot of evidence from witnesses around
the difficulty in balancing a simple system with a system which
is not one size fits all and takes into account the complexity
of the individuals' lives and different circumstances. As the
Minister responsible for this, how responsive do you see that
the benefits system should be to different elements of people's
lives, and how does that balance out with the need for simplicity?
Mr Plaskitt: There is a tension
between the two, obviously, and there is a steady stream of demands
and requests coming to us, as Ministers, and to all of my colleagues,
to add yet more complexity to the system; of course there is.
A lot of it comes from colleagues in Parliament, of course. There
is a tension between the two and I think we have always been completely
open about that. If you wanted to be really extreme about this
and have a really radical shift towards simplicity, you would
simply iron out at a stroke many, many aspects of the system which
are there, as I say, for very good reasons but add to complexity,
and you make it a very, very blunt system indeed. Many people
would look at the consequences of that and say, "It's grotesquely
unfair," and probably it would be. What you want is a system
which plays fair by people, reflects the very different and very
complex circumstances which people present when they engage with
the benefits system, responds to specific needs in a way that
we would like to see, and all of that is pushing you towards more
and more complexity. On the other hand, what we are trying to
do, as I said in answer to earlier questions, is recognise that
some complexities are going to be there but try to make sure they
do not trip up anyone whom the system is trying to help. If anyone
has got to wrestle with complexity in the system it should be
our staff, not a customer. There is also then a category of complexity
that we want to take out because it has become redundant or irrelevant
or should not be there. It is a constant tension between the two,
but I think we have shifted the emphasis, ever since the Unit
was set up, firstly to try to ensure that we are not unnecessarily
adding further to complexities in the system, and that we are
actively trying to iron out complexities which are there for no
justifiable reason, and, where it is going to be complex, making
it as easy as possible to administer and ensuring that complexity
is not a nuisance to customers claiming what is their entitlement.
Q321 Jenny Willott: Means-testing,
the contributory principle and paying benefits to households rather
than individuals, all contribute to complexity within the system.
Is the Department looking at what could be done either to do away
completely with these principles or to mitigate the effects of
them and the complexity?
Mr Plaskitt: No. I think we accept
that there are going to be different bases for different benefits;
some are going to be universal, some are going to be contributory-based,
some household-based, and they are there for good reasons.
Q322 Jenny Willott: What are the
reasons?
Mr Plaskitt: You would have to
take it benefit by benefit to argue that. Clearly there are some
which are income-related because they are targeted. I think there
are always going to be different bases or foundation principles
for particular benefits, and those which help people who need
a boost to family income are going to differ from those which
support people who are trying to deal with the consequences of
disability. There are different types of situations people will
be in. Those which relate to age are going to differ perhaps from
those of old age and benefits relating to working age; they are
always going to differ. We should not say necessarily that there
has got to be only one, as it were, philosophical base for any
benefit, because I think you would end up with a system which
was not offering the kind of support which we would want to see
the system do. I think my message is that I would not want to
argue that complexity in and of itself is always going to be a
problem; complexity sometimes can be there for perfectly good,
justifiable reasons, because we are trying to achieve an outcome
which I think we would all sign up to. We have got to make sure
it is manageable and that there is not any there which is unnecessary
or unjustified.
Q323 Jenny Willott: Can I ask specifically
about the contributory principle, as one of the elements which
add to complexity. What are the arguments for retaining it; why
do we need that as a basis of working-age benefits?
Mr Plaskitt: One of the established
reasons why we have a contributory principle to the benefits system
is it is part of a contract, I think, implicit, is it not, between
the citizen and the state; the record of contribution leads to
an entitlement. I think it is part of the principle of some parts
of the welfare system and I do not think there is a plan to move
away from that.
Q324 Jenny Willott: Even if it takes
out quite a significant area of complexity?
Mr Plaskitt: It might take that
out but it will introduce massive elements of unfairness.
Q325 Jenny Willott: Looking at means-testing
specifically, the Social Security Advisory Committee suggested,
in their most recent Annual Report, that there could be scope
for reducing levels of means-testing without making the system
inequitable. Has the Department done any work on looking at how
that could be taken forward?
Mr Plaskitt: We are always looking
at the extent of means-testing, whether things can be done to
mitigate it; and, as you will know, from the reforms we have announced
to the State Pension system, those are very much targeted at addressing
an issue of means-testing in the system. If you are going to have
benefits which are targeted, as opposed to universal, there is
going to be an element of means-testing; that follows. What is
important for us is to make sure that it is done as fairly as
possible and, again, it does not have undue or unnecessary complexity
within it; but, as a principle, I think it is going to remain
a part of a benefits system in a working welfare state like ours.
Q326 Jenny Willott: Yes, but has
the Department looked at it? I was asking specifically about the
Social Security Advisory Committee (SSAC) and what they raised.
I am not suggesting, and they did not suggest, that means-testing
should be abolished totally, as part of the benefits system, but
they did say that there were areas where it could be reduced.
Has the Department looked into that particularly, as a result
of that?
Mr Plaskitt: Yes. SSAC make a
very useful contribution towards this whole process of benefit
simplification; they work very closely with the Unit and with
Ministers. Of course, we will always consider carefully recommendations
that they are making to us.
Q327 Jenny Willott: Is there going
to be a response on those particular points, or any further information
coming out from the Department around this area?
Mr Plaskitt: As I think I am saying
to you, there is a continuous dialogue going on with the Department
and between the Department and SSAC and others about all of these
issues.
Q328 Jenny Willott: It is not only
the dialogue I am interested in, it is the outcomes, is what I
am trying to get at?
Mr Plaskitt: You can see the outcomes
as we bring forward the reforms, benefit by benefit, across the
system, and you can see the results there.
Q329 Jenny Willott: Is there scope
for the benefits system to reduce the frequency of some of the
administrative functions? For example, longer time periods for
entitlement, so that people do not have to go through the checks
so frequently, reducing your requirements to report changes of
circumstances, and things like that, to take a chunk of the admin
out of it?
Mr Plaskitt: There is scope for
that, I think that is right. I think we can, and will, see reforms
to the lengths of time for which benefits are granted. We are
trying to take steps to reduce unnecessary reporting of changes
of circumstances and, as I say, we are trying to take steps to
ensure that once we have got information from customers we can
spread it across different parts of the Department which need
to have that information to avoid the necessity for repeat contact
with us. On the other hand, and these always have a balance within
them, it is important that where customers need to report a change
of circumstances to us they do so, otherwise you are going to
see another objective of the Department not making progress, namely
reducing error in the payments system. I have got to have due
regard to that, because all the time I have to have due regard
to the taxpayer and ensure that we are spending the money accurately
and correctly. There is a tension between those two, but I have
got to get the balance right, as far as I can, between those.
Q330 Jenny Willott: We went to look
at the United States, at some of the progress which they have
been making, they have got various initiatives around, trying
to simplify their system, and one of the examples which they brought
up related specifically to that, which was around reducing the
need to provide various pieces of documentation each time you
have to reapply or have your benefit reassessed, or whatever,
by in some place storing it electronically. Has the Department
looked into that?
Mr Plaskitt: Yes. As I say, we
do not want customers to have to report unnecessarily, we do not
want customers to have to report repeatedly when we have already
got the information; that is not offering a good quality of service.
I think, once we have got the internet system ready for roll-out
in 2008, the quality of information and support and advice that
we are going to be able to give to customers about their own individual
claims and the entitlements and the record attached to it will
move forward considerably from where it is now. All the time,
again, deploying the facilities which technology gives us, we
can improve the service to the customer, and I am sure we are
doing some things which mirror parts of the US reform, although,
I have to say, from what I know of the US system, many parts of
it are vastly more complex than ours.
Q331 Jenny Willott: I do not think
we would disagree on that. I think someone is going to ask you
some more questions about IT in a minute, but one of the key policies
which they have in the States, which it simplifies in some ways,
is that they have time-limited benefits in part of their system,
so you have a lifetime allowance and once you have reached the
end of your lifetime allowance it is cut off. Have the Government
examined the feasibility of doing something like that in the UK
and do you think such a system could be introduced, or indeed
should be introduced, in the UK?
Mr Plaskitt: No.
Q332 Jenny Willott: Have you looked
at it at all?
Mr Plaskitt: Obviously we have
looked at it, but the answer is no.
Jenny Willott: I am very relieved to
hear that. Thank you.
Q333 Chairman: Just on the administrative
intervention side, you pointed out that, is it, next April we
move to all benefits to be paid fortnightly in arrears; is there
any reason why that should not be monthly, or four-weekly?
Mr Plaskitt: I think there are
reasons why it should not be that: cash flow for benefit recipients
I think would be a problem, gaps where money might not be available
to the household. I think monthly in arrears might be a bit of
a stretch, frankly, and would not contribute to the kind of assistance
we are wanting to offer; fortnightly, however, I think is very
reasonable, we can achieve greater consistency across the system
on that. I think it fits with people's daily experiences anyway,
much more than monthly would.
Q334 Chairman: You see it really
as a budgeting issue for claimants?
Mr Plaskitt: I think there would
be a budgeting issue for claimants if payments were monthly in
arrears.
Q335 Chairman: I know they are slightly
different benefits but DLA is paid monthly, so is Mobility?
Mr Plaskitt: If we tried to apply
it across the whole of the benefits system, I think, in respect
of those which support low income, it could create problems.
Q336 Harry Cohen: I want to pick
up on the IT issues and, firstly, Jenny's penultimate question
about electronic records against paper records. When we went to
Newham Jobcentre, they told us it had both and there was duplication
in the system, basically, and a lot of the paper records went
off to be filed, presumably at great cost, by Capita. The reason
they gave was they needed the signature on the paper record; it
seemed a bit incredible, actually, you can get electronic signatures,
or whatever. Can this be sorted out; are you looking to go across
to just one system, maybe an electronic system, or does there
have to be this degree of electronic and paper in the system?
Mr Plaskitt: I think it is a transitional
phase at the moment, to be honest with you, moving from what was,
of course, a predominantly paper-based system to one which ultimately,
I think, will be far more electronically data-based, and I am
sure that electronic signatures will become part of the solution
in due course. I will ask Mr O'Gorman to add to that.
Mr O'Gorman: We are actually working
towards the creation of an electronic document storage system;
we are starting with that as part of the Pension Transformation
Programme in the Pension Service. We hope to have the basis for
such an arrangement detailed and ready to go out to tender and
spec at the beginning of next year. Once we have got that right
and we have the detail as we want it, that particular arrangement
will be available for the other agencies of the Department to
implement as they make changes in their processes.
Q337 Harry Cohen: That is an advance,
but clearly it has got to move on from there, but that is useful
to know. When we were in the United States and doing the grand
tour here, from Newham to the United States, we met Claudia Page,
who is the Director of this system support group, One-e-App, and
they have got this web-based system where a number of health and
social services benefits can be linked up onto one application
form, they have got one application process, they get the client
to fill in that one form and that is linked in to all the Government's
systems. Clearly, what is needed is sort of an alignment of the
rules, and perhaps your questions as well, if that process is
to work effectively. Is your Department working along similar
lines, are you looking to rationalise the application process
so that they can be linked?
Mr Plaskitt: Yes; quite a lot
is happening in that respect already. Crucial, firstly, is successful
data-sharing between different bits of our own Department, because,
as I say, we want to get to a state where we are not asking customers
to give information to us repeatedly; if it is within the system
that should be sufficient for us. That is crucial. As much harmonisation
of the rules, or consistency in the rules, between different benefits
is, of course, also very important. As I said, `my DWP' project,
which I think will start in 2008, will give customers an online
individual account; so I think it will amount to a substantial
step forward in terms of the quality of the support we can give
any individual customer. It should make the process quicker, it
should cut out repeat requests for information and should tie
up different entitlements if they cross more than one benefit
or a group of benefits. I do not know if it is exactly the same
system as you saw in the United States because I have not seen
that demonstrated, but it sounds as though it has certain similarities.
Q338 Harry Cohen: Some similarities
though, and I will come on to this online account for the client,
but I think the key feature is that the application form, or forms,
is on the web, perhaps accessible for the equivalent in the country,
like CAB, to help a client fill it in, and then gets transferred
to the Government, JSA, or whatever it is, it may even be passported
between Government. Are you working towards that, as an approach?
Mr Plaskitt: Yes; that is a perfectly
sensible principle. I think quite a lot of our forms are available
by downloading from websites already, as I understand it, that
is already the case and the technology is going to take us in
that direction. I think, yes, is the succinct answer to your question
on that.
Q339 Harry Cohen: That is helpful.
Can you tell us about the pilot which was done by the Pension
Service Solution Centre in Glasgow, which tested the automated
payment of Council Tax Benefit? Clearly, this is the point about
you apply for something, or you get on the system and you get
out another automatic payment, without you having to be in any
way proactive, as the claimant, that is; has that been successful,
trying to roll out this automatic benefit approach more widely?
Mr Plaskitt: It has been very
successful and it is a good example of where by using data which
is already in the Department we can offer a better service to
our customers. For example, knowing what we do know about pensioners
who have an entitlement to Pension Credit, we can scan that data
and, in all likelihood, a pensioner in receipt of Pension Credit,
certainly the guaranteed element, will have an entitlement to
Council Tax Benefit; we can see whether they have taken up that
entitlement or not. If not then we can do a direct contact with
that customer, to say, "According to information we have,
we reckon you have an entitlement to CTB; we don't see one in
payment and can we help you to secure that?" I think it has
been very successful. We did a very substantial scan. I think
170,000-odd we have written to directly. We have backed that up
also by making the claim form far simpler. There used to be a
26-page claim form for Council Tax Benefit, but it asked for the
same information that we have already inside the system to award
Pension Credit, so we were able to scrap the big form completely,
strip it down to a very, very simple, three-page form, so we have
got the basic information already. "Just give us some very,
very, very basic information and we can get your Council Tax Benefit
payment up and running once we have approved that documentation."
It is using the IT. We have started doing that. We will do repeat
scans of the system on new claimants; where that information comes
up we can flag it up, "This looks like it should be receiving
CTB." The only issue I would add, in relation to Council
Tax Benefit, getting it into payment, is, of course, that also
it involves local authorities handling it. We can do alot of stuff
at the centre. Then the next stage in data-sharing becomes critical,
i.e. between us and local authorities, Housing Benefit operations,
and that is working very well, the data-sharing there, and I think
you will see it leading to an increase in take-up of that benefit.
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