Examination of Witnesses (Questions 1-19)
RT HON
ED BALLS
MP, RT HON
YVETTE COOPER
MP, RT HON
BEVERLEY HUGHES
MP, RT HON
JAMES PURNELL
MP AND RT
HON STEPHEN
TIMMS MP
9 JUNE 2008
Q1 Chairman: May I welcome this
rather large ministerial team to our proceedings? The occasion
is historic, and I cannot remember any Select Committee ever having
such a large number of Cabinet and other Ministers. I apologise
to Stephen Timms. We were not sure whether he was coming, but
we are delighted that he is here, and he will receive a name plate
in a moment. I also welcome—I shall not give titles—Yvette
Cooper, James Purnell, Ed Balls and Beverley Hughes to our proceedings.
Secretary of State, you will orchestrate from your side who comes
back and when?
Ed Balls: Within the realm of
the possible.
Chairman: I will override you if and
when necessary
Ed Balls: I will back down immediately.
Q2 Chairman: I want to remind
you that when you gave evidence to this Committee last time you
said that your role and the Department's future would depend on
what leverage you could bring to the job in persuading other Cabinet
members to agree with you and to work together. Having reminded
you of that, I invite you to say a few words to open our proceedings.
Ed Balls: Thank you, Mr Chairman.
As you say, it is unprecedented to have so many Cabinet and other
Ministers before one Select Committee. The credit goes not only
to you and to your investigation into the Children's Plan from
around Christmas, but to Fiona Mactaggart, whose hard questioning
at the time led to the idea that we needed to investigate the
issues across Departments. It is appropriate that the Committee
that looks at the Department for Children, Schools and Families
should be the first to investigate the new machinery, and in particular
our long-term actions on child poverty. It is central to our new
Department to tackle the long-term causes of poverty and to promote
the well-being, health and happiness of every child. I am sure
that, when the Chancellor appears before the Treasury Committee,
he is scrutinised on the details of Budget decisions. It is right
that our Department should be questioned by you on the long-term
impact of our policies on child poverty and child well-being.
It is also the case that, in both the short-term and long-term,
this is very much a collective endeavour. The child poverty Public
Service Agreement targets are jointly owned by my Department,
the Department for Work and Pensions and the Treasury. That is
why, when it was suggested that we should have such an inquiry,
we thought that it was right to have Cabinet-level representatives
from the DWP—we have James here as well as the Minister
for Employment and Welfare Reform, Stephen Timms—the Chief
Secretary to the Treasury, and Bev Hughes, who is Minister for
Children, Young People and Families and attends Cabinet for discussions
of all matters to do with children and child poverty. This is
very much a joint endeavour. As we discussed when I appeared last
time, we cannot achieve any of our long-term goals with regard
to child health, well-being, happiness and progress without close
co-operation with other Departments. In the creation of the new
Child Poverty Unit (CPU), we have seen that degree of close co-operation.
I know that you will want to talk to us about that today. Also,
the document Ending child poverty: everybody's business,
which we published on Budget day, was a joint endeavour of the
three Departments—Treasury, DWP and DCSF. On re-reading
it over the weekend, I have to say that it is really good document
and shows the degree of intellectual rigour and policy understanding
that is in that joint unit. Because of the joint work, we were
able to make the progress that we made at the time of Budget 2008.
We are all driven by the fact that the levels of child poverty
have been unacceptably high in Britain. In 1997, it was at the
highest level of any European country. There had been a doubling
of child poverty from the previous 18 years. In the past 10 years,
we seen a dramatic fall of 600,00 children living in relative
poverty. In the years where we have comparable data, we have seen
the largest fall in child poverty of any European country. We
were all disappointed when the last published statistics showed
a small rise in child poverty. That is why we were determined
to redouble our efforts, and that is what happened through our
joint work at the time of the Budget. It was a significant step
forward in the short-term. Last year's Budget measures[1]
will take out 500,000 children from poverty over the next two
or three years. Also, the money that was put on the table—again,
in a joint way—for the long-term work has been another step.
Some £125 million has been made available to finance pilots
over the next three years. Those pilots will consider a range
of different issues around work, parenting, child support, child
development and the take-up of tax credits. The Budget document,
both short and long-term, showed the joint work of the three Departments.
As the Committee knows, the Households Below Average Income statistics
for 2006-07, which include figures on child poverty last year,
are due to be released tomorrow morning. We as Ministers are aware
of the content of those statistics, but the protocols of the independent
national statistics organisation mean that we cannot reveal those
numbers to the Committee, much as we would like to. The timing
of the release of those statistics tomorrow was made by National
Statistics, independent of us and after the timing of today's
hearing had been decided. I apologise that we cannot get into
that detail, but I hope that we will be able to look at the long-term
issues that arise from our track record on child poverty over
the last 10 years and the last Budget. As I said, we are determined
to redouble our efforts. It is a moral imperative for our country
that we meet our targets to abolish child poverty in a generation
and halve it by 2010. That commitment is shared across all Departments.
We work and discuss those issues regularly and closely and we
are pleased that you chose this issue for the DCSF Committee to
investigate today.
Q3 Chairman: Thank you, Secretary
of State. Some of us were on a previous Committee and know quite
a lot about the job in terms of the schools part of the remit.
We were determined that, with the new Committee covering children
and families, we would do it thoroughly right across the piece.
We are already well into a major inquiry about looked-after children
and children in care, and we will be meeting with some of you
during that inquiry. We were determined that, if the Government
were correct in establishing the new Department, it should be
a lead Department with a remit to cover all children's issues—we
are terribly disappointed that there is no one from Health here.
That is teasing you a little, Secretary of State.
Ed Balls: It was not possible
to fit them in.
Q4 Chairman: It was not quite
possible. This is an historic day in the sense that we cannot
have the stats that you would like to give us tomorrow, but we
did have a rather disturbing report—published this morning
and leaked in the weekend press—from the Children's Commissioners
in England, Northern Ireland, Wales and Scotland on this subject.
It is rather strange. The Government are committed to ending child
poverty and, many of us would say, have started to tackle it in
a workman-like way and have achieved very much. I was at a Carnegie
Foundation and Sutton Trust seminar in New York the week before
last, where many of the American researchers doing international
research were full of praise for what the UK has been doing and
has achieved. How do you balance the voices that say that very
serious beginnings have begun on this matter when compared with
what the Children's Commissioners said this morning? How would
you answer that?
Ed Balls: First, I would say that
we have made substantial progress but that there is a long way
to go. That is true whether you are talking about the raising
of school standards or reductions in child poverty. We have probably
exceeded our expectations of the progress that we could make in
the years that we have had, but there is still further to go.
Secondly, this morning the Children's Commissioners made it clear
that the creation of the new Department, the bringing together
of policies for children and young people into one Department,
and the joint responsibilities regarding crime, sports, poverty
and children's health are a substantial step forward and a way
of integrating policy better. They said that the majority of children
are happy, doing well and thriving, and they are right about that.
In our society, the danger is that we tend to talk down the achievements
of our children and young people, when there are many great things
being done across the country by children in school, in volunteering
and more widely. It was also pointed out that we still have a
high level of children who are incarcerated because of youth crime.
That level has stayed stable but is still higher than in some
other countries. We are very focused, as a new Department, on
improving the quality of children's education, on resettlement
when children leave imprisonment and particularly on tackling
the causes of youth crime. That is exactly what our Department
is all about. We are responding to the concerns that many had,
including the Children's Commissioner, in the agenda that we set
out in the Children's Plan. We cannot write the headlines or the
stories, and I would anticipate that the Children's Commissioners
themselves would have been disappointed with some of the negative
ways in which their comments were reported. Overall, the picture
is very positive for children and young people in our society,
but there is still some way to go to make this the best place
in the world for children to grow up in, and that is our Department's
mission.
Q5 Chairman: Thank you for that,
Secretary of State. May I switch to the Secretary of State for
Work and Pensions? I was considering the Department for Work and
Pensions today. We are very lucky to have this session on the
back of a very good report by our sister Committee, the Select
Committee on Work and Pensions. You gave evidence to its inquiry.
May I say that from reading that report, it seems that plunging
into poverty is very easy for someone who becomes a single parent
unit? That applies usually to a female single parent. How can
we ever address that? In the area that we know best, some educational
assistants earn £13,815 on average. Retail cashiers and checkout
operators earn £11,700. Other educational assistants earn
£10,698. Are we ever going to be able to crack poverty if
single parents have to rely on such low wages? I am talking not
just about people working in classrooms as classroom assistants
but about people working at the checkouts in Tesco's or Sainsbury's.
Are we ever going to crack this?
James Purnell: I think that, yes,
we can. That is precisely why the minimum wage and tax credits
are so important—so that there is a floor on wages and so
that tax credits can top up people's wages. We believe firmly
that getting people into work is their best route out of poverty,
but not the only one. We try to get as many people as possible
into work but, as we made clear in the document that was referred
to earlier, we also have a strategy for getting people who are
not in work above the poverty line. We need to do both. The point
that you made about New York is interesting. I was there talking
to Mayor Bloomberg's deputy mayor about the matter, and they are
considering their definition of child poverty. They found the
very idea of having a target based on relative poverty quite surprising,
because you are effectively always running up a down escalator,
but I think that it is right to have that target, even if it means
that sometimes, as you say, the headlines are difficult. It means
that more children can be lifted out of poverty, because it is
a tough target to meet. It is the right target to meet, because
we believe that poverty is partly about material deprivation,
but it is also about the amount of income that you have relative
to everybody else.
Q6 Chairman: Let us move, then,
to the Chief Secretary. Is it not a problem for an incoming government
to have such bold aspirations? Are not a Labour Government always
going to be criticised, if not crucified, for lagging behind what
we said we were going to achieve? You must look at what this will
really mean for this country's public expenditure and recoil in
horror at the thought of how much money it will take to really
achieve the rest of this goal.
Yvette Cooper: In fact, the money
that we are investing in children's life chances and opportunities
for the future, and in support for families on low incomes, has
immense returns in those children's opportunities in life later
on and in what happens to them not just in the next couple of
years but in 10, 20, 30, 40 years to come. That is why I think
that this is the right target and the right approach for us to
have. Yes, it is challenging—make no mistake about that.
We know that if we had done nothing for the past 10 or 11 years
and simply uprated the 1997 tax and benefits system, we would
have seen 1.7 million more children in poverty as a result. We
are having to do a lot to address wider economic or social trends,
but it is right that we should do so and that it should be a priority
across Government. It is far better to have a challenging target
that stretches us and everyone in the Government who has to work
to it than to have a target that we can meet easily and that,
as a result, will not make as much difference to as many families
and children throughout the country.
Q7 Chairman: We talk about raising
aspiration. I am not sure that the Secretary of State for Children,
Schools and Families totally appreciated the report on Testing
and Assessment, although he thought that it was thorough.
When we start investing in a particular goal in respect of public
policy, we see that there is a lot of low-hanging fruit that is
easier to do something about. We have some easy, good returns
and perhaps some good press releases, but the second and third
ways of getting to the more difficult areas of poverty become
harder. Will it not just be more and more difficult to get the
rest of the children out of poverty?
Yvette Cooper: In the document
to which Ed referred, we set out the need to start working now
on how to reach the 2020 target and to look at different approaches,
piloting and ways in which to do things. It cannot simply be about
tax credits, hugely important as they are. It must also be about
addressing some of the causes of family poverty or people being
on low income. That is why we want to go further and help more
people into work and also look more widely at some of the pilot
programmes that the DCSF and the DWP have been working on particularly,
so that we can learn lessons to be able to inform the next decade
about progress, too.
Q8 Chairman: Thank you for that,
Yvette. Stephen, I refer to one of the things running through
the DWP report for me as a Member of Parliament for a Yorkshire
constituency. I am picking on you because you are the only Minister
here who represents a London constituency. We boast that London
is now the leading city in the world. Indeed, people said that
when I was in New York. Yet, the DWP report says that, in inner
London, the problems of child poverty are the very worst. Why
is that? In the richest of cities, why do we have the greatest
problem?
Stephen Timms: It is a very striking
contrast. The London Child Poverty Commission drew attention to
that in its report a couple of months ago. The number of jobs
in London over the past 10 years has gone up by about one sixth,
but the employment rate has hardly shifted at all in that period.
The employment rate in London as a region is the lowest of all
the regions. Bev Hughes and I are working together at the moment
on a policy response to what can be done to shift those numbers.
It means primarily helping many more people living in London get
into the jobs that are being created here. There are barriers
and difficulties, but if we look at comparable inner city areas
around the United Kingdom, the picture is quite similar. London
is not unique in that respect. What is different is the fact that
London is a region, and that the scale of the worklessness leads
to the figures that you have rightly highlighted.
Q9 Chairman: Lastly, Beverley
Hughes, can I ask you a brief question about children's centres
and the activity in the country in respect of new initiatives
and after schools clubs, in particular? It really stabs you in
the heart if you read in a report that certain aspects of provisions
seem as though they are only for poor children, so they are being
stigmatised. Does it worry you that the kind of provision that
we are giving to extend the support to poor families could become
stigmatised and defeat the purpose?
Beverley Hughes: First, I appreciate
the fact that you have seen—as I knew you would—that
those broader policy initiatives are very much part of the Government's
approach to ending child poverty. That approach includes the nationwide
network of children's centres that we will have shortly, every
school offering extended activities and, indeed, giving local
authorities a clear role in relation to a local commitment to
child poverty—many have now taken up that role through local
area agreements and so on. In terms of sustaining whatever approaches
we introduce, such as fiscal measures and the like, it is critically
important that we get in very early. We know that children from
poor backgrounds, who may be very bright cognitively, none the
less can fall behind children from wealthier backgrounds by the
age of 22 months, so it is important that we have strong early
years policies. Children's centres and extended schools, by definition,
will be universal services. We will have a children's centre in
every area by 2010 and there are almost 3,000 already, starting
off in the most disadvantaged areas. Now that the level of provision
is substantial and has reached a critical mass in both children's
centres and extended schools—half of all schools are now
extended; half of secondary schools and three quarters of all
primary schools—the challenge is to ensure that in the context
of a universal service, the most disadvantaged children reap the
most benefit from those services. In relation to children's centres
that means that the outreach is strong, that we use health visitors
to identify families whose children can benefit, and that we make
sure that those families are introduced to children's centre services.
I visited a children's centre in a disadvantaged part of Liverpool
last week and saw there the work that was being done to make that
happen. However, there are certain groups, particularly teenage
mothers, who do not easily find their way to children's centres—we
know that; it is quite daunting if you are a very young woman.
That is why we have provided more funding for two extra outreach
workers in every centre. We are working with health staff, who
are often already accepted by such families and are the first
point of contact. Such staff can ensure that those people get
into children's centres and that their families benefit from the
services.
Chairman: I think we have warmed you
all up. I am, after all, the warm-up act in this Committee. Let
us start drilling down.
Q10 Mr Heppell: I noticed that
in your introduction, Ed, you talked about joint responsibility,
joint ownership, joint endeavour. I must say that many years ago,
in 1981, I had a bad experience with joint working. We set up
a sub-committee called joint education, social services and leisure,
recognising that the boundaries were blurred between all of those.
Although we probably did some good things in our initial enthusiasm,
in the end the director and chair of education tried to protect
their little empire; the director and chair of social services
protected their empire; and leisure services protected their empire.
I will not say that the sub-committee was a failure, but the bottom
line is that it ceased to exist. What will be different about
your joint working? You have a joint responsibility for the delivery
agreement PSA 9. What are the mechanisms for negotiating the policies
around that area? How do you come to decisions on those and how
do you execute those decisions? A few examples of how that has
worked would be helpful—one from your Department and one
from the Treasury.
Chairman: I got a wink from Yvette to
say that she wishes to open up on that question. Is that all right
with you?
Ed Balls: Definitely.
Chairman: I hate to come between the
two of you.
Yvette Cooper: I think that the
best example is the way in which we worked in the run up to the
Budget. The Child Poverty Unit is in place, which has staff from
all three Departments and works on child poverty across the board.
In particular, we have the work for the 2010 target and the PSA
target, which has a PSA board of officials—every PSA target
has a board of officials to monitor progress. That board meets
quarterly, includes all three Departments and is chaired by the
Treasury. We also have joint responsibility, as you say, for the
longer term, for the 2020 target too. So there is a huge amount
of close working between the three Departments, both in the Child
Poverty Unit itself and in other parts of our Departments that
support the Child Poverty Unit and need to work with it. The Budget
document that Ed referred to earlier was drawn up very much by
the Child Poverty Unit. It was published as part of the Budget
documents. Not only were the three Departments so closely involved
in drawing up the document but they were involved in the discussion
of the analysis behind the position on child poverty and the position
for different groups, and drawing up different options too. Therefore,
when the Chancellor came to make the final decisions on fiscal
and tax measures, which obviously will always be his decisions
as part of Budgets and pre-Budget reports, he was informed by
the joint analysis and by a series of discussions with other Ministers—DWP
and DCSF Ministers—as well as by the kind of official-level
work that had gone on.
Q11 Mr Heppell: I am just wondering
if there is a different viewpoint from the Departments. Is that
how you see it operating?
James Purnell: That is exactly
how it operates. In a way, it would be wrong to pick out any individual
examples, because that suggests that this is an occasional thing
that happens. Actually, we get joint policy advice and the great
virtue of that is that it is based on the same analysis of what
the evidence shows and what the implications of the policy are,
and then we get advice coming up to us. Some of those issues,
as Yvette said, will be decisions for the Chancellor; the rest
will be decisions for us to take together. So, with the pilots
that we announced alongside the Budget, they are being taken forward
by the Child Poverty Unit and we will take collective decisions
on how to manage them. So it is a seamless process, not just every
now and then if there is a crisis or a particularly high-profile
initiative; it is all the way through. Regarding anything that
impacts on child poverty, the Child Poverty Unit gives us joint
advice.
Q12 Mr Heppell: May I explore
that a bit further? Because there are effectively two Departments
and the Treasury in the CPU, is it not the case that the Treasury
has almost like two vetoes? You can veto something at the CPU
stage or at the Chancellor's stage. Am I reading that wrongly?
I mean, if there is a dispute, who would resolve it within the
CPU?
Ed Balls: I think that, in some
ways, it is the other way round. The Treasury is responsible for
meeting the 2010 and 2020 targets, but it cannot do that unless
it also has the support of the DWP getting single parents into
work and our Department supporting child care through children's
centres and then the long-term education work. So I think that
it is as much the Treasury ensuring that we rise to the challenge
in terms of our contribution of policy, rather than the other
way round. The other thing that I would say is that in different
policy areas, you have different ways of doing joint working,
but the one thing that does not work is simply having a committee
or a Minister with a title and assuming that that will make a
difference. As I said when I came to the Committee last time round,
we have a number of different kinds of joint responsibility. So,
in the case of youth justice and the Youth Justice Board, every
policy decision is now being made and signed off jointly by our
Department and the Ministry of Justice on the operation of the
youth justice system. That is a very intense form of joint working,
probably going further than we have ever gone before. On something
like children's health, we are closely working on the strategy,
involving our Department and the Department of Health, but a lot
of the levers will be pulled by primary care trusts around the
country and by hospitals and GPs. In the case of child poverty,
it is more a case that the Treasury has some powerful levers through
tax credits and the way that the system operates; DWP has some
in terms of the way in which the Employment Service operates,
and we do in terms of the way that children's services and the
education system operate. None of us individually can meet our
objective, but if all of us do our part then collectively we can
meet the objective. There, what actually matters is whether or
not there is a common set of goals; whether or not there is a
common set of analysis, and whether or not there are accountability
structures within Government, which is what the PSA boards are
about, and outside Government, which is what this Committee is
about, to ensure that if any of us are recalcitrant that becomes
quickly known, understood and dealt with. However, it is less
about joint decisions and more about ensuring that everybody does
their bit, because there is not one lever that meets the objective
required; there are a number of different policies from different
parts of the policy world coming together.
Q13 Mr Heppell: The Chief Secretary
said that there were representatives in the CPU from the DWP,
the DCSF and the Treasury.
Yvette Cooper: Yes.
Q14 Mr Heppell: Okay. So what
is the logic of having the CPU in the DCSF? Why is that not in
the Treasury or the DWP? Is it just convenience?
James Purnell: It could have been
in any of the three. I do not know which of the officials who
brief us are originally from the DCSF or the DWP. What Ed says
is absolutely right: this happens in many different policy areas.
When we did school sports together, we received joint submissions
and took joint decisions.
Q15 Mr Heppell: If the targets
are not met, who should I blame? To whom can I go and say, "You
are responsible"? Where do I look, if things are not working?
Is there a joint responsibility? I see James nodding.
Yvette Cooper: Ultimately, the
Government share responsibility for a series of things. PSA targets
are set out as part of the Spending Review to ensure results on
the key things that the Government have focused on. For example,
the Treasury has the lead responsibility for the PSA 2010 target,
but the programme and target are shared. Of course, you will hold
all of us to account, which is exactly why we are working together.
We all need to work together in order to deliver results.
Ed Balls: It is different between
2010 and 2020. The former is much closer, and the underlying causes
are harder to address in a short period. Raising the proportion
of single parents in work in 2020 will be very important. Many
of those single parents currently will be aged five and upwards
and in school. What will matter is what happens in their primary
school teaching and secondary schools. Will they stay on at school?
Will they get a skill and an apprenticeship? What kind of family
and parental support will they get? What will happen when they
become parents and try and balance that with work and family life?
What will that mean for what they get from the Employment Service
and the way in which the child care element of the tax credits
interact? Those things will be decisive in determining the teenage
parent employment rate in 2020. Whether we get there will depend
on whether we make the rights calls for seven-year-olds as well
as on whether the Employment Service is delivering for teenage
parents in 10 years. In that sense, it genuinely is about holding
us to account for the long-term decisions that we make now.
Q16 Mr Heppell: One last thing—in
some respects, this is obvious: if, for instance, you could see
that you were not reaching the 2010 target, would the Treasury
be willing to release further resources to get you there? I know
that that is like asking, "How long is a piece of string?"
Would the influence of the two Departments be stronger as a result
of the CPU?
Yvette Cooper: In the Budget,
we found an extra £1 billion to support action on child poverty
and a series of measures that have come in. That is a time when
the fiscal position is tighter than it has been in previous years
and comes on top of the measures in the pre-Budget report and
the Budget. Those policy announcements and the previous Budget
will allow us to help 500,000 children out of poverty. That is
a result of making that extra investment and, in part, of being
able to use the additional revenues from alcohol duty. We found
revenue there to be put into helping out of poverty families with
kids. Obviously, you would not expect us to speculate on future
pre-Budget reports and Budgets—that is not the way that
we approach tax and fiscal measures. However, the Treasury has
demonstrated a very strong commitment to investing money in supporting
children growing up on the lowest incomes. Giving evidence to
the Treasury Committee, only last week, the Chancellor said that
we must not be deterred from our child poverty targets. They are
hugely important to us.
Q17 Chairman: We are having to
revert to first names because it is too complicated. Yvette, I
do not want to accuse you of trying to pull the wool over our
eyes, but the evidence of the Select Committee on Work and Pensions
is that, according to the DWP, it is intended that the CPU "will
make more efficient and effective use of the talents and expertise
of the staff in the two Departments to take the Government's child
poverty strategy to its next stage of development." Witnesses
to the Committee welcomed the CPU, but some expressed concern
about its remit and specifically about the "lack of Treasury
involvement." Come on, that is not quite how you—
Yvette Cooper: We have changed
the position since that evidence was given, and three Treasury
officials are now part of the Child Poverty Unit. They are not
co-located in the DCSF, but they attend all the weekly team meetings
and are part of the programme of work so that all three Departments
can work closely. They were, previously, working very closely
with officials in the CPU, but as part of the work that we did
in the run-up to the Budget, and given the close working that
we had and needed at that time, the Chancellor decided it would
be right to have Treasury officials be part of the CPU as well.
Q18 Chairman: What about ministerial
involvement?
Yvette Cooper: Yes, there was
ministerial involvement as a result, because, the CPU and the
PSA board—a board of officials that meets quarterly—reports
to a tripartite group of Ministers, which includes Ed and James
and is chaired by the Chancellor.
Q19 Chairman: Was that a result,
James, of the Select Committee report? Did it have any influence?
James Purnell: Yes; Ed asked Alistair
and Alistair agreed—I was at the meeting.
1 Note by witness: The measures in question
are those in the Budget 2007, Budget 2008 and last year's pre-Budget
Report (PBR). Back
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