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6 May 2008 : Column 212WH—continued
The hon. Gentleman raised a number of other issues, not just with the benefit system but with the Child Support Agency and the situation of absent parents paying for their children; all the sorts of things that can impact on whether someone moves back into work.
Mr. Allen: I agree with much of what the hon. Gentleman has said. There is one specific area where the benefit system interacts most negatively with people’s desire to work. That is where we are forcing someone who wants to take a job to gamble with their future benefits. If someone takes a job, comes off all their benefits and that job then falls through, they would have to start from scratch again with all the form-filling and bureaucracy. It could take many weeks and months to recoup the position that they had before they took that gamble of taking a job. Removing that “gamble” element from our welfare to work programme would be one of the key measures that both major parties could address and work on together.
Mr. Harper: I am grateful to the hon. Gentleman for making that point. He is absolutely right; one of the challenges that we face is how we can design benefit systems to recognise the fact that most people are honest, decent and want to work, and that the number of people who will abuse those systems is relatively small. How we correctly design those systems to reflect the facts, without leaving ourselves open to those people who would abuse them and take the taxpayer for a ride, is the challenge that we face. However, the hon. Gentleman is quite right; we need to design benefit systems so that they give people who want to work every encouragement to do so and do not leave them feeling that, if they take that gamble and make that leap of faith, they will come off so much worse afterwards.
One of the things that we really need to do is embed working. I think that all parties agreed today that work is generally better for people than not working. It is not just better for their financial position, but for their health and general well-being. Embedding that idea is something that we need to do when we look at these issues.
I am very pleased that earlier today my right hon. Friend the Member for Witney (Mr. Cameron) made it clear that a future Conservative Government would have welfare reform and welfare to work strategies as one of their three priorities. The hon. Member for Nottingham, North outlined the scope of that challenge.
One of the key things that the hon. Gentleman and the hon. Member for Rochdale (Paul Rowen) alluded to was the funding situation for many of these programmes. Perhaps the Under-Secretary would cover that in his remarks, as I am still not entirely clear how some of the programmes are funded. I understand that, to a limited extent, the savings that are made as people come off benefit and move into work can be reinvested in programmes and strategies, certainly city strategies, but that is not the case across the piece. At present, savings from benefits cannot be used to fund the programmes. In effect, that limits the scale of the ambition of the Government’s welfare to work strategy.
My hon. Friend the Member for Tatton (Mr. Osborne), the shadow Chancellor, made it clear that a Conservative
Government would allow the Department for Work and Pensions to use savings from benefits to invest in the programme and therefore be much more ambitious about getting all those on incapacity benefit who can work back into work. In the Budget this year, the Government alluded to doing that, but it is not clear whether they have. It would be helpful if the Under-Secretary commented on that. The hon. Member for Nottingham, North touched on the extent to which getting people back into work can help alleviate poverty.
Mr. Allen: I welcome you to the Chair, Mr. Cook, but just before the hon. Gentleman moves on to his next point, will he say whether he believes that it would be possible, were people to be retained in employment, that any bonus payments made to companies that had achieved a six-month, one-year or 18-month period of employment would not necessarily return to the DWP but would either be retained by the private company or voluntary sector organisation delivering the service or by the city strategy organisation? In other words, will the localities be rewarded for supporting such initiatives, rather than the Government taking a cut if the localities are successful?
Mr. Harper: That is an interesting question. I believe I am right in saying that the hon. Gentleman’s strategic partnership or a similar local organisation is actually one of the Government’s welfare to work providers. Indeed, he said something that my party made clear in its strategy. We want to use the private and voluntary sectors and pay by results if they get people back into work for a sustained period. The work that they will have to put in and how we will measure that may depend on the amount of effort required for an individual—it is clear that one size does not fit all. In the design and detail of contracts, we will have to look at where the resources stay.
The hon. Gentleman’s suggestion was a good one for two reasons: first, local providers—in his case, his local strategic partnership—would be given an incentive to do the work; secondly, and importantly, the money would stay in the locality. No doubt we will be thinking over the next couple of years about the extent to which welfare reform can be done locally and not just nationally.
An interesting outcome of the trials in the United States, where such things can be tried at a federal and state level, was that doing things locally drove success. It was not a great big federal bureaucracy trying to do everything from the centre, but pushing power and programmes down not just to the state but to the city and town. That is one of the things that has not been done very well in this country. The hon. Gentleman’s question and some of the things that he is doing in Nottingham may well indicate how we could do that and how welfare reform and welfare to work strategies could be carried out more successfully at the local level in future.
It is interesting that, despite the Government’s focus on poverty and their making it a priority, the number of families in severe poverty, which is defined as below 40 per cent. of median income, has grown from 1.4 million to 1.8 million since their baseline year of 1998-99. That is on their own figures. Indeed, the number of families below 60 per cent. of median income has gone up by 200,000 in that period. Clearly, that is the national
number, and it applies to places other than cities. The Department has admitted that it will not hit its child poverty targets, and it is clear that a more successful welfare to work strategy will be crucial in doing so.
I have one or two other questions for the Minister. In a previous question session, I asked the Secretary of State about the Government’s policy of reassessing all existing incapacity benefit claimants between 2010 and 2013. How many extra pathways to work opportunities will there be over and above those that have already been announced? The Secretary of State was not able to answer that, so it would be helpful if the Minister did so.
The hon. Member for Rochdale briefly touched on the age profile of people on incapacity benefit. The Government have said—obviously, this is important for cities as well as elsewhere—that they want to get 1 million people off incapacity benefit by 2015. At present, about 650,000 to 700,000 people on incapacity benefit are aged between 57 and 64, and they will have retired by 2015. Can the Minister confirm whether 700,000 of the target of 1 million will be achieved purely by the passing of time—700,000 people will have retired and therefore will not be eligible for incapacity benefit—or whether the 1 million are over and above that? It would be interesting not just from a city perspective but from an across-the-country perspective to know that.
The House owes the hon. Member for Nottingham, North a debt not just for raising this issue but for the work that he does locally, as that will provide an interesting opportunity to look at how effectively city strategies can work and how effectively local organisations and the central Government can tackle deep-seated challenges in cities across our country.
12.7 pm
The Parliamentary Under-Secretary of State for Work and Pensions (Mr. James Plaskitt): To pick up the point on which the hon. Member for Forest of Dean (Mr. Harper) ended, we do indeed owe a debt to my hon. Friend the Member for Nottingham, North (Mr. Allen) for bringing this debate to the Chamber and for reminding us what a difference it can make in a constituency and an area if the local Member of Parliament is fully engaged with service delivery, as he is in Nottingham and other Members are in other areas.
We are also indebted to my hon. Friend for ably illustrating just how effective the city strategy is when everyone gets behind it and innovation is allowed to come through. That is exactly what we had in mind when we launched the strategy. To pick up another point made by the hon. Member for Forest of Dean, as anybody would expect, it is one thing for the Government to write the general rules of welfare provision and to provide the framework, but individual areas have different and distinct needs and aspirations. The secret is to have the mix of standardised broad rules and a good deal of flexibility at the point of delivery, so that the system is better targeted and more effective in dealing with specific local issues. I pay tribute to my hon. Friend the Member for Nottingham, North for securing this debate, for his personal engagement with the subject, and for playing a leading role in the work in his own city.
My hon. Friend said that he was reviewing progress so far. He asked for more and confessed that Nottingham was being greedy as a result of his doing so. I do not
think that that is true. What he expressed is not greed, but ambition on behalf of his city and the people of Nottingham. It is absolutely right that he should have that sort of ambition for his city and it is right that he comes to the Department and the Government generally to ask, “Having learned from what we have done already, how do we take this further, achieve more and make even more progress?” That is exactly the right way to respond, and if he thinks that that is being greedy, I encourage him to go on being greedy.
I would like to put the matter in context before I address the issues that my hon. Friend and others have raised. It is true to say that, so far under our Government, employment has risen throughout the economy to a record 74.9 per cent. In the course of achieving that, we have helped 1 million people to come off out-of-work benefits and to move into work. There have also been big improvements in relation to the employment of some of the most disadvantaged groups in society—for example, there have been big gains in employment for lone parents, older people and people with disabilities. Although real progress has been made towards achieving higher levels of employment and moving people off welfare and into work, as my hon. Friend and other hon. Members have said there has not been enough progress, and I would echo that. Of course, more needs to be done—he is right about that. Despite the successes that we have had, as he has described in Nottingham, there remain pockets of significant disadvantage and worklessness where extra support and perhaps a different approach will be needed to reach the target of 80 per cent. overall employment.
A recent report on Nottingham showed that we will not succeed in tackling deprivation until we raise the aspirations of young people and adults throughout the area. As he said—I agree with him on this—there remains a culture of underachievement in too many communities. That point was also made by the hon. Member for Forest of Dean. That culture of underachievement is often combined with a strong sense of dependency that becomes deeply ingrained and pervades generations. We must break that cycle and move it into the virtuous cycle about which my hon. Friend spoke.
That is why I am so pleased that Nottingham is an early intervention city—my hon. Friend was right about that. My Department has emphasised and supported that work and shares his ambitions about what it might deliver for his city. In that regard, he rightly emphasised the importance of data sharing. In pathfinder areas, we have put in place a memorandum of understanding between all parties that is designed to assist data sharing. As he knows, we have problems with that in terms of security, but once those problems are resolved satisfactorily and we are making good progress, data should flow smoothly between different bodies, which is essential to making the whole programme work.
As I have said, we have launched the city strategy pathfinders in areas such as Nottingham, and through innovation, improved partnership working and aligning resources, the pathfinders are making a real difference to tackling unemployment in such areas. In all pathfinder areas to date, lone parents, people from ethnic minorities, people claiming benefits because of health problems and older workers are receiving more specifically targeted support that is relevant to their circumstances to help them to find work. All the partnerships have agreed on
targets of reducing the numbers on benefit by 3 per cent. by May 2009 and increasing the local employment rate by an exactly equivalent amount. Those are pretty stretching targets that will be met only through successful partnership working.
Pathfinders have already made great progress in successfully pulling together the right mix of organisations and employers so that they can meet their employment targets. For example, Jobcentre Plus advisers are already working with Prison Service and other agency staff to help ex-offenders to move directly into sustainable employment. In Liverpool, the pathfinder is working in partnership with Connexions and Halton council to deliver an information and communications technology apprenticeship programme that is targeted at 16 to 18-year-olds who are not in education, employment or training. They are provided with training and a placement in a local company, which means they are immediately picked up and supported at the critical time.
My hon. Friend asked about progress to date and in the future. I am pleased to say that an interim evaluation report on progress in all the pathfinders will be published soon—this month, in fact. Following on from that, the full report will be available by October, so he and others will soon be able to see the Department’s analysis and evaluation of how the pathfinders are progressing. I can add more to that: already, the pathfinders have highlighted the importance of local partners working closely with central Government to deliver successful local solutions to employment issues. Those involved with pathfinders are already emphasising a point that my hon. Friend made: that it is important to make connections run wider than the issues and services that are seen as immediately relevant to employment. For example, services could be linked to organisations that deal with health, criminality and disorder. It is not just about ensuring that there is joint working locally and centrally; working needs to be extended widely across each of the pathfinder areas.
City strategy status provides the pathfinders with the credibility and status to deal with matters that had not previously been satisfactorily addressed—for example, by local strategic partnerships—as well as additional resources, such as a dedicated £4 million from the regional development agency budget, to tackle worklessness. The work of the partnerships is beginning to unlock other avenues that were not previously available. Throughout the next year we will continue to discuss options for the future with all the pathfinder areas.
My hon. Friend mentioned the important matter of commissioning and I would like to deal with the points he made. That matter was also mentioned by the hon. Member for Rochdale (Paul Rowen), and a question was asked about how local partners can play a larger role in the commissioning of services. The Department’s new commissioning strategy is a major step forward in modernising and strengthening the welfare to work market. By incentivising and rewarding providers for securing sustainable job outcomes, we have opened the door for local partners, such as city strategy pathfinders, to play a more active role in the commissioning process. We hope that that will ensure that local providers have the discretion to deliver a more flexible and personalised service to customers. I can already report that consortium
leads have worked with my officials during the commissioning process for new pathways, new European social fund contracts, and the new deal for disabled people. In fact in the roll-out of the private sector-led pathways to work, local providers are contractually obliged to work with the city strategy pathfinders. That has been taking place since the first phase of the work was rolled out in December 2007.
The hon. Member for Rochdale pleaded for contracting to be pushed down to local level, as he feared that otherwise the contractors might be too large to respond to local needs. I urge him to revisit the document that we published on commissioning. He should understand the distinction between the lead providers that oversee large areas and the plethora of smaller providers with local ability to which the leads might sub-let work. The advantages of both need to be drawn together. It is not the case that there will only be providers that are large enough to handle the tasks involved but perhaps not sufficiently fleet of foot to deal with local circumstances. The way in which the system has been constructed should answer his point.
Hon. Members rightly drew attention to the 16-hour rule and stressed features of the rule that cause concern. I believe that everyone understands why we need such a rule; indeed, no one suggested that we should not have one. However, mention was made of the consequential difficulties that can arise under a 16-hour rule and the rule’s ability to trip us up in respect of welfare to work. I can tell my hon. Friend the Member for Nottingham, North that Ministers wrestle with the issue pretty regularly, so I fully understand the points he made. They form part of my daily agenda, and I sometimes feel that I am working more than 16 hours trying to solve the issue.
I agree that it is vital that those claiming jobseeker’s allowance should be able to take up the training that they need to help them to enter employment. The employer-led pre-recruitment packages that my hon. Friend mentioned are a perfect example of the training opportunities that we want to encourage. We want to engage with any sector or employer that could provide such training through a local employment partnership. It is a promising area, and I am pleased that my hon. Friend placed the stress on it that he did. It has great potential.
Interestingly, we do not need to relax every aspect of the 16-hour study rule in order to enable people to take that type of training. We already have the flexibility to transfer an individual taking up such an opportunity to a training allowance. That removes the requirement on them to be available and actively seeking work, while still protecting their benefits. For example, the employability skills programme offers a mixture of basic and vocational skills to JSA customers; it will be available to support 11,000 people in the way I described. Those customers will not receive a lesser amount of money. In fact, they will receive an additional training premium, and they will usually get help with child care and travel costs.
As we announced last November, we will increase access to such training allowances for individuals who have been unemployed for more than six months, to enable them to undertake full-time, employment-focused training for up to eight weeks. That is a significant increase on the two weeks of full-time training allowed under normal jobseeker’s allowance rules. We expect to test that new flexibility in the west midlands later this
year, and to roll it out nationally in 2009-10, using the lessons learned from the west midlands pilot.
I assure my hon. Friend that we are continuing to consider a range of ways to increase access to full-time training for jobseeker's allowance claimants, including further specific relaxations of the 16-hour rule if it helps to support their move into employment. I hope that I have reassured my hon. Friend and the hon. Member for Forest of Dean regarding the importance of continuing work on the 16-hour rule.
My hon. Friend also mentioned establishing a forum on making work pay—another interesting idea. I note the suggestion for a forum in his area, but I think that he envisages it being deployed more widely. The idea has already been suggested by a number of the pathfinders. I agree with my hon. Friend that it would provide a better understanding of how to tackle the practical and attitudinal barriers faced by a number of disadvantaged groups.
The 15 pathfinders have established a network that enables them to share good practice and promote innovative thinking between themselves. In the light of that, I have asked my officials to meet representatives of the pathfinders to establish how that network can further help my Department to develop policies to tackle worklessness among the most disadvantaged. While still adhering to universal rules, which we must have, we can engineer additional techniques to ensure that those rules, for which there are perfectly defensible reasons, do not trip us up when dealing with groups that have specific needs.
Hon. Members have spoken about the difficulties that people can have when considering a move from benefit into work. My hon. Friend was right to say that it is a gamble that people have to take, but we must be able to reassure people who are considering potential jobs that if things do not work out, they will not have to go back to square one and face the prospect of a complete lack of funding for the family while the benefit system kicks back into action. It is about defining the run-on of benefit, or a quick reclaim should a job not work out after a certain time. Elements of that are already in place. It is already possible for people to get support quickly should a job not work out.
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