We all know that, sadly, despite significant extra funding going in to social care in this country, needs are not being met. More than 70 per cent. of English local authorities restrict access to support to just those who
meet the highest eligibility criteria. We all have constituents who should receive support in the form of social care, but who find it difficult to access. Some are denied it by rising charges. That is a long-standing problem, which has been recognised in the Governments independent living strategy, by the Commission for Social Care Inspection, by the Local Government Association and many others. Some needs that should be met so that disabled people and others can participate equally in society are not being met. In addition, hon. Members will need no explanation, but the present system of social care is also appallingly bureaucratic, wasteful and inefficient. There are also inconsistencies between local authorities, which gives rise to an important issue for employment.
Each local authority can set up its own system of support and its own care package for individual residents. Those packages are not portable from one local authority to another. One can get assessed for a care package in Lambeth, but if one were to move to Southwark to be nearer a place of work or closer to family and friends, one would have to be assessed all over again. If we are talking about peoples responsible behaviour, we also need to talk about their rights. How on earth can it make sense for care packages to be reassessed simply because people have moved from one local authority to another? I hope that the Government will legislate to make care packages portable as quickly as possible. Without that, it will be much more difficult for people to consider moving in order to secure employment. The right to independent living should therefore be a prerequisite to successful welfare reform. As I say, people cannot be expected to find and sustain a job without an adequate support package that gives them the necessary freedom and choice.
Let me move on to the role of the private and voluntary sectors. I welcome the Green Papers focus on outcomesits view that in supporting individuals into sustained employment, the important thing is the outcome rather than the organisations that happen to provide that support. Many voluntary sector organisationsMencap and many othersprovide excellent support for disabled people, not least in their efforts to secure employment. I have no difficulty at all in saying that job centres cannot do everything today, as it is obviously true. I wish they could do more, but they cannot do everything. There is expertise in the voluntary and private sectors and it is right for the Government to harness it in order to give disabled people the support they need to secure employment.
I, too, however, have concerns about the contracts and I would certainly like some reassurance from the Minister that the contracting mechanism will ensure the desired outcome and not just support those closest to the labour market. The hon. Member for Forest of Dean raised that point earlier; I do not like phrases such as cherry picking, but it is one that people use, even in this context. The Government must have firm control over contractual arrangements to ensure that we get the best result from taxpayers money. We are increasingly having to support people who are a fair distance away from the labour market; they should not be left behind in the process.
I have a couple of concerns about the Green Paper. The gateway under the work capability assessment is tightening. The Department has mentioned a possible
10 per cent. increase in disallowance. I am concerned that the former incapacity benefit regime, which was widely described, including by Ministers, as one of the tightest regimes in Europe in its gateway and for jumping through the hoops, is to be tightened even further. I would appreciate the Ministers confirmation that I have completely misunderstood that and that there is no question whatever of the new gateway being tighter.
I would also like an assurance that no one will be on a lesser benefit under the new regime than under the old one. Having looked at the numbers and having passed some of them to the Departmentthe Disability Benefits Consortium has produced some detailed workI do not think that that is strictly true. A couple of years ago, we were told that employment support allowance rates would be set above the long-term incapacity benefit rate, which implied that nobody could possibly be worse off. I repeat that I would like an assurance that I have completely misunderstood the position and that I am out of my depth on it. I hope I am wrong, because we are talking about people on low incomes, living in poverty. Making them worse off would be unacceptable.
It is said that we are all Keynesians now. It is not true, not least because, sadly, not many people have read what the learned gentlemanand liberalsaid. Rising unemployment significantly changes the context of welfare reform. It is not only about putting more effort into supporting people into work, as it is about running the economy at the macro level. I have to confessno, I am proud of it, so I am not confessingthat I believe that Keynes and many others of his generation were absolutely right that when in a recession we should not simply use fiscal policy to drift into a slightly higher deficit in order to accommodate changes, which I believe to be the Oppositions position. If we want to get out of the recession, we should rather allow the deficit to rise as a matter of policy, either through higher public spending and/or lower taxation.
It was once said that we cannot spend our way out of a recession, but if anyone can tell me how to get out of a recession without more spending, I will buy them a very good present. Extra spending has to come from somewhere: it might come from exports; it might come from consumption or private investment; otherwise, it has to come from the Government. If this lesson has not been learnedthroughout the worldwe face an even bigger problem than I thought.
I say genuinely that we must ensure not only that disabled people have skills to secure available jobs, but that more jobs are available, which requires a proactive policy. That is precisely what the Government have arguedthat they will bring forward capital projects and look at ways of helping the economy out of a recession. I happen to agree that many of todays programmes could be targeted for extra resources. One of the great virtues of increasing opportunities, either through employment or benefit payments, is that they go through to people on lower incomes, who by and large tend to spend the money. Having tax cuts for the rich is not a very clever way of trying to boost the economy during a recession.
In conclusion, I strongly support the Governments proposals to increase opportunities for education, training and employment for disabled people. The Government
have made very significant progress over recent years, and I repeat that that is the reason why fewer disabled people of working age are unemployed than was the case previously. We need to look further into having a more generous in-work and out-of-work benefit system and we need to simplify it in order to increase take-up. Most of all, we need to make rapid progress on independent living. That is necessary ifas is the aspiration of the Government and, I hope, of us alldisabled people are to have the same choice, control and freedom over their lives as other citizens.
We have recently had several debates on similar subjects, and unfortunately I think we are likely to have many more over the coming months and years. I wish to focus today on the measures that are needed to help people to get back into work and the barriers that are stopping that happening. Members know of the multitude of problems that there are in the job market at present so I shall not rehearse them all, but it is clear that the effects of the credit crunch are starting to take hold in the real economy: we have rising unemployment figures and, most worryingly in terms of this debate, the number of vacancies is now just over 600,000, which is a drop of 40,000 from the previous quarter. That is a significant decrease, and it is a worrying sign for those trying to get off welfare and into work.
There is also an underlying problem with worklessness, which Labour has not tackled effectively enough over the past 11 years. In some groups, worklessness has even increased under a Labour Government. For example, almost 1.3 million young people aged between 16 and 24 are not in work or full-time education. That is 19 per cent. more than in 1997. That, too, is a worrying sign.
David Freuds report highlighted the importance of early intervention in helping people into work, and the need to tackle issues at an early stage. To their credit, the Government seem to recognise this. They have included in the Green Paper a proposal to fast-track to the supported job search stage those with a history of long-term unemployment and 18-year-olds who are not in education, employment or training. Government figures show that 38 per cent. of people who have spent 12 months on jobseekers allowance expect never to work again, and the longer people are on benefits the more likely they are to think they are not going to work. That is a destructive cycle, so early intervention is crucial, particularly in supporting those who are the hardest to get back into work. Early intervention can help to tackle issues such as intergenerational poverty, serious skills shortages, alcohol or drug dependency or mental health problems. Leaving people with such problems sitting on benefits for months and months before anything is done is completely counter-productive and a total waste of their talent.
We also know that delaying intervention can cause serious problems for people who later try to get into work. However, although the Government appear to know that, the Green Paper sets out a rigid programme for the stages at which interventions can happen, and the flexible new deal will allow tailored support of a
more specific nature only after someone has been on benefits for 12 months. That is a long time for people to be out of work before there is an attempt to tackle the problem. I also understand that six months will pass before they are offered basic job search support if they have not already been able to get into work.
Evidence on the new deal points to declining performance. There has been a significant drop in the proportion of people getting into immediate employment at the end of programmes. That is the case for all the programmes, but it is worse in some than in others. More than half those on the new deal for young people went into immediate employment in 1998, but the proportion is now less than a third. In 2001, more than one third of those on the new deal for lone parents got into immediate employment, whereas the proportion now is less than one in seven. This is a worrying indication of what is happening in the job market, and I am concerned that it will be even worse for young people in future. Whereas in the past a young person would go on to the new deal for young people after six months, after April they will no longer be entitled to access that support then; they will have to wait until November, when they will have been out of work for 12 months, before they are entitled to access that support. That is a counter-productive move, and I would like the Minister to clarify what will be done to make sure we do not waste the talents of those people as they are sitting on benefits waiting for the support they need to get back into work.
The hon. Member for Forest of Dean (Mr. Harper) mentioned the sustainability of jobs. There is an emphasis in the welfare reform Green Paper on getting people off benefits and into work as soon as possible. That is generally a positive thing, of course. However, the Government figures show a churn of 25 per cent. One in four people who move off JSA are back on it again within three months, and, according to Her Majestys Revenue and Customs figures, four out of 10 are back on JSA within six months. There are clearly underlying issues preventing those people from being able to access sustainable employment, and I believe that early intervention is the only way to identify and address the underlying causes that are stopping people getting sustainable jobs and helping themselves out of poverty. The churn of people going in and out of work does not do any good, especially for children. When I was a member of the Work and Pensions Committee, we heard some interesting evidence on the effect on childrens aspirations of their parents going in and out of work on a regular basis. The Government must tackle that.
Under the Governments proposals in the Green Paper, it is unclear how people who pass in and out of work will fit into the timetable. Will they, for example, be expected to go back to six months of self-help at the beginning, when they sign on to JSA for the second, third or fourth time? Will that be the case even if it is clear to the personal adviser that they have serious skills shortages or there are other underlying issues that need to be tackled to enable that person to stay in a sustainable job? If that does not get taken into account, we will not be able to reduce the number of people stuck in this cycle, going in and out of work.
I take on board the hon. Ladys point about the importance of timing the intervention correctly. However, does she agree that just doing that is not
enough, and when the intervention comes it may be necessary to have a different scale of intervention for people who have multiple barriers between themselves and the job market? There is great concern that the Governments proposals offer a flat-rate budget for each jobseeker regardless of the scale of the difficulties they face. Many countriessuch as Holland, which the hon. Lady visited when she was a member of the Committeehave a greater variety of measures and a sliding-scale budget that can be applied to match different peoples requirements and to overcome the different barriers they face.
The hon. Gentleman also flags up the fact that there needs to be discretion at the level of the personal advisers, so they can identify when somebody has particularly complex needs and may require more than one intervention. Some of the decision making should be devolved to a lower level to enable the people who are involved with an individual to make the decisions that are best designed to get them back into work, rather than have a one-size-fits-all approach, which is a problem with the Government proposals.
Let me deal now with the commissioning process. The Work and Pensions Committee, of which the hon. Gentleman is still a member, recently took evidence from a range of organisations, including the Social Market Foundation, the Employment Related Services Association, A4e, Serco and the Association of Chief Executives of Voluntary Organisations. I have also been talking to providers about issues concerning the commissioning process and the contracts the Government are putting forward. My understanding is that providers broadly agree that the Departments funding model will not meet the Governments objectivesfor example, of delivering personalised support for all clients and involving specialist and third-sector providers. Members have raised the issue of the need for specialist providers to be able to offer support to those with specialist needs. That applies particularly to those who have physical difficulties or mental health issues, and that may present problems in terms of the contract.
Providers appear to be backing up the Social Market Foundations argument that the proposed funding model does not incentivise providers to support those who are furthest from the job marketthe point just made by the hon. Gentleman. The Governments estimate in the tendering process is to achieve a 55 per cent. employment rate at 13 weeks, so 55 per cent. of all those going through the process have to be in work for a minimum of three months before the provider gets the full payment. The SMF said in September that that was over-ambitious, and that was before the most recent figures, which show that unemployment for the three months to August has risen at the fastest rate for 17 years. That makes the target of 55 per cent. even less realistic than it was before; however, the Department has not revised the target rate of employment that it is expecting from providers, which gives rise to a number of concerns.
Another very important issue is that providers do not have confidence that the contracts for which they are bidding will be profitable. If the targets that the Department
expects to be achieved are completely unrealistic, it will be very difficult for providers to achieve them, which could undermine the whole exercise. Providers could go bust in the middle of a contract because they are unable to sustain the work that they are doing on the money they are getting back from the Government; or they could pull out mid-contract simply because it is not financially viable and that is the only way to avoid going under.
We already know that the economy is in a worrying state. The Chartered Institute of Personnel and Development suggests that the worst is still to come and, according to most estimates, unemployment is going to rise significantly. In the last quarter, an average of 1,600 people were made redundant every day. That shows that the changes in the job market are rapid, which has the potential to undermine the involvement of the private and voluntary sectors. They will find it even harder to provide services if the contract is not based on a realistic funding model.
We also need to be realistic and honest about the prospects of those who are already furthest from the job marketthe long-term unemployed, those on incapacity benefit, those with very low skills levels. As unemployment gets worse over the next months and years, those falling out of work as a result of the economic downturn are the people most likely to be able to get back into work when conditions improve. They will be closest to the job market, more likely to have up-to-date skills, and so on. If we are not careful, we will have the same people out of work by the end of this recession as we have now. It will be even harder for those already out of work to find jobs in a narrowing jobs market, so to deal with that issue it is absolutely crucial that the contracts and the funding model are right.
The contracts need to ensure that those who are currently unemployed can get back into work, and that they get the necessary support. That also means looking at those coming off incapacity benefit or employment and support allowance and going back into the jobs market, who will have additional needs. We need to ensure that the contracts take into account the additional needs of those who will be furthest away from work.
At the moment, providers are saying that there is no room in the budgets for which they are being asked to tender for medical support for people with minor mental health problemsthose, for example, with an alcohol or drug problem, or who need cognitive behavioural therapy to help them back into work. As more and more people fall out of incapacity benefit or the ESA and on to jobseekers allowance instead, there will be a pool of people on JSA who will need such support; it will not just be people who are going through pathways to work. Because of the way in which the Government propose to draft the contracts, there is not enough headroom for providers to fund such support.
I turn now to an issue raised by the hon. Members for Kingswood and for Weston-super-Mare (John Penrose). There is not enough money in the contracts to provide support for those furthest away from the job market and with the most complex needs. Because there is a flat rate, those closest to the job market will be the ones creamed off by providers, because they will be able to get them back into work. Given the contracting job
market, it will be even more important that funding is available to tackle the really hard-to-reach people, in order to make it profitable for providersin the private and voluntary sectorsto support those furthest from the job market in getting back into work. I should be grateful if, when he concludes the debate, the Minister said what the Department is doing to take into account the changing labour market conditions when they look at the contracts for the flexible new deal. If we do not take the changing circumstances into account, there could be a real problem in the next 12 months or so with the contracts that the Government intend to put out.
Finally, there is a knock-on impact on Jobcentre Plus. Many Members, from all parts of the House, have raised concerns about overstretch for Jobcentre Plus staff. A number of people are concerned that the Governments stripping down of the Jobcentre Plus network and staff during times of economic prosperity is looking increasingly unsustainable. Since 2002, 491 Jobcentre Plus offices have closed and at least another 12 closures are planned in the foreseeable future. That is having a real impact on accessibility of staff and the services provided by Jobcentre Plus. That is particularly true of many rural areas, where it has become increasingly difficult for people to travel to their local jobcentre to access support services.
Jonathan Shaw: The hon. Lady will be aware of our manifesto commitment at the last election. We said that we wanted to divert resources from Whitehall into front-line services. Does she not support that?
Jenny Willott: I absolutely do, but I should be grateful if the Minister clarified whether he is saying that every single one of the jobs lost over the past three years is based in Whitehall, rather than in jobcentres around the country. In the light of the 491 closures over the past six years, it is clear that plenty of front-line jobs have been lost in that figure of 30,000 figure, as well as back-office jobs.
As the claimant count is rising significantly, the work load of the remaining Jobcentre Plus staff is increasing dramatically. Between 2004 and 2008, there has been a 33 per cent. increase in the number of JSA claimants per full-time equivalent member of Jobcentre Plus staff. That is a massive increase in the burden of work that such staff are expected to do. If personal advisers are taking on increased work loads, it makes it much harder for them to give the personal support that individuals need to enable them to get back into work. The impact of these reductions is already being seen in the effect on claimants. For example, the number of outstanding JSA claims across the UK at the end of September had risen to 66,000up from 42,000 in December 2004. That is a big increase in the number of people waiting for their claims to be decided. On the social fund, rising processing times for crisis loans have reached nearly two days, and there has been a 50 per cent. rise in crisis loan applications over the past year. Clearly, there is a massive increase in the Jobcentre Plus work load, and we should be concerned about the deteriorating economys impact on that issue.