House of COMMONS









Wednesday 17 December 2008


Evidence heard in Public Questions 1 - 85





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5. Transcribed by the Official Shorthand Writers to the Houses of Parliament:

W B Gurney & Sons LLP, Hope House, 45 Great Peter Street, London, SW1P 3LT

Telephone Number: 020 7233 1935

Oral Evidence

Taken before the Work and Pensions Committee

on Wednesday 17 December 2008

Members present

Mr Terry Rooney, in the Chair

Miss Ann Begg

Harry Cohen

John Howell

Mrs Joan Humble

Tom Levitt

Greg Mulholland


Memorandum submitted by Pension, Disability and Carers Service

Examination of Witnesses

Witnesses: Mr Terry Moran, Chief Executive, Ms Vivien Hopkins, Chief Operating Officer, and Mr Nigel Richardson, Customer and Partnership Director, Pension, Disability and Carers Service (PDCS), gave evidence.

Q1 Chairman: Good morning, everyone. Welcome to our evidence session for the Pension, Disability and Carers Service. Welcome Mr Moran to your team. It is a while since we have seen you. You have been promoted since then, so congratulations on your new appointment. Are you now part of the management team?

Mr Moran: Yes, I am, Chairman.

Q2 Chairman: This was of grave concern to us last time, I do recall.

Mr Moran: I do. I think within a month of that hearing Leigh Lewis made me a full member.

Q3 Chairman: We have an effect, it is nice to know. Perhaps I can kick off. We understand that the merger of the two departments cost just 200,000, which in my experience of mergers seems incredibly cheap. What went wrong?

Mr Moran: I think a lot of things went right. We did not approach this on the basis that we were going to go through a huge new branding exercise or anything like that. We wanted to maintain the existing brands that were out there and where a lot of money is often spent, and over time to ensure that we bring the services more effectively together. We are doing more saving of money as a result of bringing the two organisations together than spending money. By creating a single agency, rather than having two with two separate overheads, we think that will realise 5 million in a full year, once we have completed the process. I do not think anything has gone wrong on that. It has been on the basis that we have done it in a pragmatic, sensible way.

Q4 Chairman: Would you say it was a meaningful exercise?

Mr Moran: I do. As I hope we will come on to during the session, Chairman, we will be able to demonstrate some of the benefits that are being made now and we hope we will continue to make over time.

Q5 Chairman: You announced a couple of months ago a review of how the service is delivered. What is the score? Remind me of that. How is it going?

Mr Moran: I should say, by way of introduction to that, that we have not announced to our staff yet the outcome of that. Some of the discussions that I have now will be on the basis of the things we have been looking at rather than specifically what we are doing. The review that I think particularly colleagues may be interested in is what we are doing on the Pension Service side of the delivery of services. Many members will know that we have embarked on a seven-year plan for transforming those services to the NHS and some amazing things have been achieved - not least being able to make claims to benefit over the phone and sometimes getting the outcome of that there and then, in a 20-minute call. A fantastic achievement. But one of the things we have been seeing over the last year is that staff have found it increasingly demanding to achieve having full knowledge of State Pension and Pension Credit benefits. Therefore, if you get an inquiry over the phone or you receive follow-up evidence in paper form or, indeed, you receive a claim on paper, the role that required you to do all of that on the telephone and all of that with paper processing meant that staff were struggling to get hold of the full knowledge while at the same time delivering the service. Our experience was showing that it was taking us 20 weeks to get a member of staff to a fully productive level and then not accurately at the levels we needed. We had to step back and look at what all of that meant, to understand, could we, with the technologies that we have and which work great for us, deliver differently what we have to do on behalf of customers. That is what the review has been looking at. When it comes to the announcement early in the New Year, we will be confidently able to say that we are responding very much to the concerns that staff have shared with us about allowing them to do jobs that they feel they can do better, which is what they want. We want to continue to protect the advances that have been made already, like making claims over the phone effectively and quickly.

Q6 Chairman: What would you say the biggest, single benefit of this merger is for customers?

Mr Moran: We are only six/seven months into the new agency. First and foremost we started addressing the basics of delivery, so that we ensured that customers who have needs that go beyond either one of the two former agencies are better joined up. We are seeing already improvements in the work that is available, so that is considerably lower than it was a year ago. We are seeing the first signs of accuracy in payments of Pension Credit increasing. We are seeing, through our local service, increasing numbers of claims being taken for non pensioner benefits. For example, we are seeing Disability Living Allowance and Attendance Allowance claims rise in just this year alone forecast to be 11 per cent higher than last year as a result of activity we are generating by looking at the customer more holistically. I think those are some of the early signs of what we are doing. Over time, we want to ensure that the service people receive when they phone us will go beyond just the pensioner benefits and the Housing Benefits and the Council Tax Benefits that we can do over the phone, but that we will also trigger entitlements to other disability benefits, for example, where those exist.

Q7 Chairman: Are the Treasury happy with this 11 per cent increase?

Mr Moran: I do not consciously discuss it with them but these are claims that have been meaningfully generated and we are responding to that demand.

Chairman: We will watch this space.

Q8 Greg Mulholland: I would like to ask some questions about Pension Credit. The first thing concerns the figures between 2005-06 and 2006-07. Pensioner poverty has gone up quite markedly by 300,000 people to 2.5 million now. That is a very concerning figure and that is before housing costs. To what extent do you think that rise could be ameliorated if people were claiming Pension Credit? How much linkage do you think there is between those two figures?

Mr Moran: It is difficult to say, because I think there is a lot of research here that is not always consistent. We do know that there is a lot of unclaimed benefit. Some of it is Pension Credit and, in volume terms, the biggest proportion is Council Tax Benefit. I will invite Nigel in a moment to talk about what we have been doing, but one of the things with Pension Credit that we find repeatedly is that some of our customers who are on State Pension and who have an eligibility for Pension Credit from the information that we already know, when we have written to them to pursue their entitlement, they have declined it, for all sorts of reasons. Some of these people we have written to six times. We have worked with partner organisations like Age Concern, where we have done what we can locally to try to influence people to take up something that they welcome. The more we do in that space, I am not sure we are going to continue to succeed. Certainly the take-up target that we have this year in terms of the value of Pension Credit take-up and the volume of claims, the 250,000 extra, we are on target to hit, but we are doing so by being a little bit more imaginative about how we involve local communities and, indeed, the friends and families of people who may be eligible. We have identified 20 areas across the country where we think the greatest unmet need exists. I will invite Nigel to say a bit more on that.

Mr Richardson: It has become very clear that some of the traditional methods and techniques of mass media in terms of trying to influence some of these resistant groups has shown lots of diminishing returns. The economic equation of the cost to convert those has proved very, very difficult. As Terry highlighted, there are consistently numbers which we run into in our day jobs, particularly in the local service arena, which have borne out that the percentage of people who will turn away a benefit is in the high 20s, where often they can be entitled to it but not persuaded to take it. We are at an interesting point in our evolution of Pension Credit. Our evolution is taking us to a couple of things really. One is where we need to be much more targeted about this. We have recently been working through a targeting toolkit whereby we are able to identify pockets where we think there is a higher propensity of people to be eligible not to just Pension Credits but other credits regionally. We have also built a targeting toolkit based on every individual pensioner that we hold information from. In terms of modelling, those two axes have enabled us to come down on, as Terry mentioned, our 20 regions, but it is not just 20 regions, it will become part of our business as usual. The interesting point about how we want to take this forward is that we would like something we learned form the LinkAge Plus pilots to show up a lot more in those communities; that is, the communities where vulnerable people go has been proven to be a very effective way to get some of that resistance that people have in terms of take-up. Our approach is to work much more through our partners, our advocates, and our friends and families, having identified where we think those target groups are. The whole approach is saying, "Let's work through our partners, even some new partners that we have identified, and where people are comfortable in terms of what they do, in terms of their leisure activities." We are even looking at things like MECCA Bingo, for example. From some of our analysis we have seen that generations of family will often go into those areas, and it means that we can get some influence on people, to start to generate more take-up of benefits. Our partner network becomes much more of a detective network, as I like to think of it, going forward, and we want to make a real play on that. Interestingly, this very year we have seen that referrals by partners are up by 20 per cent, so we are starting to see some of that traction. That is very much our approach to Pension Credit.

Q9 Greg Mulholland: That is useful and insightful. Thank you for that. I would like to ask a question which I think will be very useful for the Committee and for the Government. Do you publish figures for the number of people you have asked if they would like to have Pension Credit and they have said no? I do not mean people who have responded, but people who have said, "No, thank you. I don't want it." Clearly we have the figures for the people who are not claiming who are eligible, but I think it would make sense to be saying, "Of those people, this proportion have said no, because that is their right to do that."

Mr Richardson: We do not routinely publish that, Mr Mulholland. I cannot recall whether anyone has ever asked us, through a PQ, for example, and whether that has ever got into the public domain in any meaningful way, but we certainly do not routinely publish it.

Q10 Greg Mulholland: It surprises me that government ministers have not picked up on that and I think it would be sensible for them to do so, frankly.

Mr Richardson: Understood.

Q11 Greg Mulholland: An opportunity that is not being taken is with the increasing use of call centres and call centre technology. Why are you not using telephony and that opportunity more to get out and contact people, in terms of the take up of all benefits, but particularly with Pension Credit?

Mr Richardson: That is very much in our plan. As part of this integrated approach, although the cornerstone is within communities, we would still expect to use some of the traditional media, telephony. Some outbound targeted telephony is part of what we want to invoke for those people. We have used our targeting toolkit at the individual level for those people, to try to persuade them in terms of the opportunities and take-up. Interestingly, that target is one whereby, again, we will be taking people where we can identify not just high eligibility to reasonable amounts but also what I call persuadability, because we have built extra information that leads us to think that we can rank that a lot better. Outbound telephony will be part of that.

Mr Moran: At the end of the day, somehow or other government doing this does not always work for some of our customers. That is why working with our partners and local communities is helpful, whether that is through a letter or a phone call. To tie up what I was saying earlier about the Council Tax Benefit, we have for a while now been taking claims for Council Tax Benefit at the same time as State Pension and Pension Credit claims, and we were, until just over a month ago, sending that form for the customer to fill in and sign and send on to the local authority. We learned that somewhere over half of those forms never found their way to local authorities, so customers were not sending them on or something else was going on and therefore they were missing out. From last month, for example, we now send out automatically to the local authority without the customer having to sign anything.

Q12 Greg Mulholland: Are you reasonably confident that you may be able to reverse the trend? In the 2007 figures we saw slippage in terms of both the targets to get Pension Credit to 2.3 million people and the guarantee to 2.2 million people by 2008. The trend was not going in the right direction. Do you think these new initiatives will take us to those targets, or do you think those targets are reasonable and the right ones?

Mr Moran: When any public service organisation like ours has a target, we do our absolute utmost to get it delivered. Do I have confidence that we could deliver that number? I could not just say yes, because that would be a comment that was not thought through.. We are identifying ways in which we are about reaching more of the people we have never reached before, and therefore we have a better opportunity of getting to it. Do we know whether all those things will work and deliver that number? We do not yet know.

Mr Richardson: The interesting thing we have learned much more about customer dynamics around Pension Credit is that it is a fact of life that there is an inherent resistance with certain groups of people. That is both shown up in social research but also in terms of our operational day-to-day environment. In terms of us being able to deploy a very effective approach, because this could become extremely costly we have to make sure we are keeping pace with our operation. Rather than driving lots of nugatory waste in terms of mass campaigning, which could end up in fraud and error perhaps within the operation, we do need to be very careful about how we step through this in an aligned way with our operations as we move towards this merged agency. I think some of these initiatives should help us to address some of the take-up issues and the potential that is there.

Q13 Greg Mulholland: Do you have figures on awareness amongst eligible people?

Mr Moran: Yes.

Q14 Greg Mulholland: The average sum being claimed is 28.40, which, although it does not sound like a huge amount of money, I am sure you would agree must be an absolutely enormously significant amount of money for the target group. Do you think people are aware of Pension Credit and Guarantee Credit and also of the amount of money that we are talking about, which could be very significant to them on a day-to-day basis?

Mr Richardson: We found from some past research - which is not right up to date but I think still holds true - that for those people on Pension Credit, eligible and non recipients, the awareness of the benefit is very high in terms of percentage. One of the things we are trying to do more and more in creating awareness is to be able to say more in the letters of promotion, that typical benefit awards are within this range or this threshold, so that is very much part of our awareness activity. The other activity that through our partners we are hoping to achieve is to increase the awareness of the Pension Service and also Disability and Carers Service as well, because although current levels of awareness are growing, we think we can do a lot more with that.

Q15 Chairman: Could I follow up on those people who tell you to go away and stop bothering them. As far as you are concerned, is that for ever, or do you come back to them? I am thinking typically of retired people who have savings. Those savings diminish over time and with the drop in interest rates they diminish even faster. Is there a recheck point at some time?

Mr Moran: We have written to some of them six times on that basis,.

Q16 Chairman: Yes, but that is over a relatively short period.

Mr Moran: I take your point: Do we plan for the future?

Q17 Chairman: Do you follow-up in, say, three years time or five years time?

Mr Moran: Yes, we do.

Q18 Chairman: Just a one-off reminder letter to them?

Mr Richardson: Yes, we do. Part of out contact strategy is we would take note of those people who we have not been successful with and then we would return to them. That is certainly the case in the face-to-face business as well, in terms of the local service, where we will go back to group of people at an anniversary date or something like that.

Q19 Chairman: So you will be keeping watch.

Mr Richardson: Yes.

Q20 Tom Levitt: Are these take-up and refusal figures available on a constituency level?

Mr Richardson: That is a good question. I am not sure. I would have to check.

Mr Moran: From the information we have available to us about customers, we know where those largest likely unmet need areas are. That is why, in the course of this next year, we will be focusing on 20 such areas once we have piloted an approach on one of them.

Q21 Chairman: Perhaps you could send to the Committee that breakdown, such as you have it, obviously totally anonymised.

Mr Moran: Yes. I would be happy to do so.

Q22 Harry Cohen: Let us follow that up with some specific groups. Londoners. The ICM poll for Age Concern said that one in eight people generally were unaware of Pension Credit. In London the number is one in five. That is a huge number.

Mr Moran: It is.

Q23 Harry Cohen: Why do you think that number is so high?

Mr Moran: Some of the work we are doing also demonstrates why some of the 20 areas are in London.

Mr Richardson: I think it is something we need to do more of in terms of building the awareness much more of a knowledge of those individual geographic regions. We will certainly be looking to take some of the areas within London in terms of invoking the strategy that we have just talked about.

Mr Moran: Some of it may be associated with ethnicity.

Q24 Harry Cohen: I am going to come on to that in a minute. Following on from what was said, are you not getting the message across in OAP centres in London? The biggest thing pensioners get is the Winter Fuel mail out in recent times. Did they get told of the Pension Credit in that mailing? Are you using local councils in London, GLA, and the Mayor? I do recall that at one point your service for Pension Credit was not based in London. It was in Glasgow, was it not?

Mr Moran: We do not have Pension Centre, but we do have a local service centre.

Q25 Harry Cohen: We were promised a lot of face-to-face visits when it was moved to Glasgow. What can you tell us about that? I am not sure that is happening to the extent it should be.

Mr Moran: Understood. There are two things to separate out. One is that the processing of claims does not take place in London but a local service does exist in London, as it does across the whole country. Where we are doing claims and benefits, where claims are taken locally through local visits, that exists today and has always existed in London, as it does everywhere else. The processing will take place somewhere else in one of the ten regional centres that exist.

Q26 Harry Cohen: Are you able to give us at some point some breakdown of this.

Mr Moran: Of local service activities?

Q27 Harry Cohen: Of local service activities.

Mr Moran: We certainly can, yes.

Q28 Harry Cohen: Certainly in London I would like to see that.

Mr Moran: We certainly can.

Q29 Harry Cohen: The two seem to go together, the low take-up and getting information.

Mr Moran: Understood. One of the things you mentioned was about centres, and that is where of course we want to work in the community with organisations that represent older people and, indeed, local authorities where appropriate. Lots of partnership agreements about helping bring awareness better to people's lives do exist in different ways across all the country, because we encourage the particular local service customer manager to negotiate and agree what that partnership for that particular area should be.

Mr Richardson: Some examples of some of the things we have done. In London, in terms of black and ethnic minority groups, the kinds of things, Mr Cohen, that go on, are in terms of the partnerships with the local authorities. For example, in Hackney there are information points in Jewish centres. In Islington, specifically for Pension Credit, there are Somali lunch clubs. In Edgware they are targeting Asian communities via multicultural groups. In Hendon there are multicultural centres. Also, we have alternative offices which we make use of. In Camden there are Cypriot women's organisations and in Tower Hamlets there is Refugees from Vietnam, just to give you the kind and variation of partnerships that are local service reps in the communities would look to strike. Going forward, we are trying to put more structure around that, to say what are the partnerships that we may be missing that we could take more opportunity with.

Ms Hopkins: Perhaps I could share some of the national figures on partnerships. We have 101 formal partnerships with local authorities, we have 510 alternative offices and 732 information points where people can come to us, so there is a lot of activity in the community. The things Nigel has talked about in London are representative of what happens all over the country, but specifically London with its special needs.

Mr Moran: We will follow up with the information.

Q30 Harry Cohen: On the black and ethnic minority communities, that same survey showed that 42 per cent were disappointed or complaining because it was not the right language or there were not sufficient languages to communicate the detail to them. What are you going to do about that?

Mr Moran: Certainly in terms of anybody who needs or wants to communicate with us in a language that is other than English, we can arrange that, and we do that through interpreters or Language Line, depending upon whether it is face-to-face or over the phone. In communications we have alternative formats too in terms of language. Where customers are experiencing that, we are perhaps not showing that we respond to it, but certainly if we are aware of it we can definitely respond to it.

Q31 Harry Cohen: There is just one more specific group I want to refer to, those about to retire. A poll showed that as well as those of extreme old age, over 80s and whatever, the newly retired were missing out on their Pension Credit that they were eligible to. As we have an economic downturn in the Stock Exchange probably, the people who are about to retire, who would have thought they were going to get a lot more, are probably going to get a lot less than they originally thought. That brings them into the eligibility for Pension Credit. What are you doing to reach out to them and let them know what they need to do?

Mr Richardson: That particular group is a very special group, as you rightly have highlighted. One of the things we are looking at there is what we call our orientation. Rather than have a process whereby it comes at us almost by surprise, we are trying to look at different types of communication on that path towards becoming pensioners, so we have a chance to engage them early, to ask them to talk to us about circumstances, so that we can make more of an assessment before they come over that threshold to become pensioners. We have recognised that in terms of that eligibility there, that if we could do that earlier and do it within that contact it would be more efficient for us.

Q32 Harry Cohen: There will be people coming up to retirement who are now worried. Can you not issue out a public appeal or public statement that says, "If you are worried and you might be eligible for Pension Credit, come and see us or arrange an appointment." Could you not be more proactive?

Mr Moran: We are in a way. Whether or not you feel this goes far enough, you will tell me. The current practice is that four months before people retire we write to them and tell them about what may be possible in terms of entitlement to claim their State Pension, for example, and other related interests. But we have been doing that for some time, and in one part of the country we are piloting suspending those written invitations and phoning up customers who are approaching four months before retirement age and booking an appointment, on the basis that we may know a little bit more about their potential eligibility, which may go beyond State Pension and possibly into Pension Credit, so that we can ensure we have the right person and then talking to them when the appointment is made. As I was mentioning earlier, one of the problems we have had is that the needs of the job at the moment have required almost all of our staff to have all of the knowledge all of the time, when in fact we ought to specialise a bit of it. Subject to what the evaluation of the pilot tells us, we think at the moment that the evidence is showing us very positive outcomes, so that that might be a way in which we will continue to deliver services across the whole country in future, but that is not yet a decision.

Q33 Chairman: Are we now back to being able to provide in QuickTime pension forecasts? Where are we with the dream of combined pension forecasting?

Mr Moran: Certainly on future pensions for State Pension that is online. You can do that on the phone or online. That has been there now for the last three months, since the changes to the systems were made. In terms of combined pension, I am afraid I am not sure. Does anybody know? I do not think that is in my near view, to be honest, because I am not aware of it, Chairman. Looking at your face, I think I need to follow up on that, do I not?

Chairman: You do.

Q34 Tom Levitt: I have three questions about your relationship with Jobcentre Plus, if I may. We have recently published a report on carers' needs and one of the bits of evidence we received was that high quality accurate information about carers' benefits is not always supplied by Jobcentres. Clearly there needs to be a higher awareness by Jobcentre staff of carers' benefits and maybe others too. What are you doing to address this?

Mr Moran: At one level - and we recognise that more could be done in that space - I know that Jobcentre Plus have already taken some steps to ensure that they are up-skilling their advice in the space of knowing what carer needs may be and how to spot them. As a result, they are accessing routinely now information that we have on our intranet site that shows them what are the ten "must knows" about being a carer and how to spot them, so they are taking positive steps. Inevitably there will be a variance of how that is understood over time. One of the things that as a new agency we are about to do with Jobcentre Plus is review our partnership agreement that we have with them about the things that we expect to do for each other in support of delivery of services and this will be one of the areas that we will particularly ensure that we will cover in the partnership agreement and then understand over time whether those needs that we agree to are actually being met.

Q35 Tom Levitt: Similarly - and this may be the same sort of question in fact - an analysis has been done of the DLA claims which are turned down and it has found that a disproportionately high number of those appear to have come from Jobcentre sources. Is that the same sort of thing happening there as well?

Mr Moran: It is. For members of staff in any part of the Department, this is a very complex social security system. To have the full knowledge that everybody may need to give absolutely the right advice every time I think is a very high demand, but we should continue to pursue it. To help staff and, indeed, members of the public, there is a benefit advisor on the internet. It takes you through some quite simple questions about your background, your circumstances, and for a range of, I think, 18 different benefits it can give you a likely outcome of potential need. Over time I expect us and not just the public to be accessing that more effectively systematically, so that when we have a customer sat before us we can be sure that we are not thinking because of our limited knowledge of DLA that this person may be entitled and then raise expectations only for those to be dashed. It is one of the areas we are particularly concerned about, because we do not want to have to do the work, quite honestly, and so the more that we can identify upstream why nugatory efforts and claims are being generated is something that we are currently doing quite a big piece of work on to understand. The Jobcentre Plus referrals are one of those areas.

Q36 Tom Levitt: One gets the impression from the figures that Jobcentre advice on DLA may be of a lower quality than welfare rights organisations and the Citizens Advice Bureau, for example.

Mr Moran: I think some of the evidence may suggest that and I think it is as a result of the work we will want to do with Jobcentre Plus. Indeed, now that there is a very real and very effective tool available sat on everybody's desk that can be accessed, I think that will help us a lot better. Only in the last three months have we got that very effective tool.

Q37 Tom Levitt: So it is as new as that. Given the reasons that were given for the merger of your two agencies into one and what you have just been telling us about Jobcentre Plus, when can we look to the merger of your agency and Jobcentre Plus? - perhaps under the Work and Pensions banner!

Mr Moran: I thought that might be coming. I always hesitate to speculate about the future. We do know that we have embarked on a strategy for the Department of Work and Pensions which is trying to build its strategy around customer needs through life events and experiences that will allow us then to deliver more effectively in one go. That is part of certainly the reason of this new agency and clearly there is an opportunity to take that further over time. Does that mean that we lose the agencies or the brands of the agencies or whatever? I do not know. But I am absolutely fairly confident that we will be joining up more effectively around those customers needs. Whatever boundaries of accountability exist to support that I think is an open question over time, because over the next five years anything could happen in that space, but we are clear about being focused around the customers' needs.

Q38 Tom Levitt: Clearly the philosophy is now much strongly that no one should be allowed to stray too far from the labour market.

Mr Moran: Indeed.

Q39 Tom Levitt: That is inherent in your strategy as well as choice.

Mr Moran: Indeed.

Q40 Miss Begg: I would like to pick up the point Tom has asserted and ask a few questions on Disability Living Allowance and specifically on the take-up. The advice from Jobcentre Plus with regard to eligibility for DLA is maybe quite poor because Jobcentre Plus staff look at DLA as an added income for those who are out of work and therefore are saying to people, "You can bump your income up by qualifying for DLA." Particularly if someone has a mental health problem, I am wondering if you have done any work to see whether DLA is an appropriate benefit for them. I suppose I should declare that I am eligible for higher rate mobility DLA myself. The basic misunderstanding about DLA is that it is not an income replacement, it is not an out-of-work benefit, and that maybe causes problems now that you have merged with the Pension Service and you are not dealing with people generally who are in work as much as Jobcentre Plus was. Also, qualification for DLA does not come because someone has a particular disability or impairment but because of the effect it has on their life. Is DLA the right benefit for someone, say, with mental health problems? They fear that if they go into work they are going to lose their DLA. We know that it is an in-work benefit, but if you have a mental health problem it is probable that you will lose DLA because you no longer fit the criteria of it having an effect on your ability to carry out your life functions without extra financial support.

Mr Moran: I think the invitation to answer invites me to stray into a bit of policy about it, and obviously that is not my area of specific interest. We tried, with the policy that exists today, to ensure that those who have eligibility can receive it at the right time and do not receive it when they are not entitled to it. The issues around in work/out of work I think is and has been, ever since DLA came in, a problem for us all. Consistent with the anecdote is that if anybody phones up to say that they are starting work, we tell them, "Then that's it, DLA is over." In fact, it is not a reportable change of circumstance in all the information that we send but everybody does feel they have to report it. In a way, I understand that. Do I think it is suitable for mental health cases? I do not know if I have an answer either way, to be honest Miss Begg.

Ms Hopkins: I think that is an unanswerable question for us. It is a fact that an increasing proportion of people who claim DLA will have mental illness as part of their group of disabilities. As high as 70 per cent will now declare that there are some mental health problems as well as whatever other disabilities they have.

Q41 Miss Begg: I realise this is a policy area, but obviously it is working against some of the Government's other target, which is to get people involved in work-related activity. So long as the eligibility criteria are based on the effects of the disability and not on the disability itself, then if you are in a wheelchair you cannot disguise that, if you are blind you cannot disguise that, and whether you are in or out of work it is not going to change, but the whole nature of mental health - and I a separating mental health from learning disability which does not change - means that if someone is engaged and is in work, they probably are much better, and the effect of their disability is not so on them. That is partly where the public perception is that if you are going into work you are going to lose all your benefits.

Mr Moran: I understand.

Q42 Miss Begg: Because it does happen because they are better and they no longer fit the criteria.

Mr Moran: Therefore, under the existing arrangements that must be what must happen. Whether or not there is a case to consider changing those arrangements, the extent to which the recent published White Paper will want to look at this broader space is something that I think colleagues will be more interested in in terms of the future direction of Working Age Benefits and whether or not we move down the path of a single benefit and what other additions to that may over time come in. That is one of the core issues within the White Paper.

Q43 Miss Begg: In the meantime, which is not a policy area, the take-up of DLA is still very low.

Mr Moran: Yes.

Q44 Miss Begg: What are you doing to improve that?

Mr Moran: I do not know whether it is low or not. We do know that ever since we have introduced DLA it has grown successfully every year. We know that we are refusing half of all claims. If I just think about those two facts, it does not feel like there is no knowledge out there about take-up not being taken. In certain cases in mental health and, indeed, in relation to children's disability, we know that there are issues certainly of knowledge and understanding that as an agency we want to do something about. The Committee will also know that, unlike Pension Credit, we do not have a specific target for take-up. Pension Credit is the only benefit that we have as a target. Our role and responsibility around DLA, for example, is ensuring that, where we can, we ensure that people have knowledge of it, that access to claiming it is as easy as possible, and that we do that as effectively as possible. That is our role in that but we do not have a take-up as such.

Q45 Miss Begg: Do you find that people only find out about DLA when they come in contact with the benefits system.

Mr Moran: They do.

Q46 Miss Begg: Because a lot who qualify have no relationship with the benefits system because they are in work or a child or whatever.

Mr Moran: Indeed. That is very true.

Q47 Miss Begg: It is only when they present that they discover they could have been claiming it for the last ten years.

Mr Moran: That is very true. As I was mentioning earlier, we know as a result of broadening the focus of local service that, instead of looking at whether there is a Pension Credit need and being focused on that, and then moving to the next one with a Pension Credit need, by taking these holistic benefit checks we are identifying more unmet need, particularly for attendance allowance for older people, whose disability or ability to cope with their disability or chronic illness over time has deteriorated but over such a long period of time that there has not been a meaningful point that anybody could identify. So there is inevitably unmet need on that basis.

Mr Richardson: I wanted to emphasise two points. One is the importance of partnership strategy in this, so that we do increase awareness of those benefits at the point when the customer will actually need them and what those benefits are all about. As Terry quite rightly said, we have found in terms of benefit take-up, irrespective of whether it is Pension Credit or Disability Benefit, they work very well in combination. In terms of take up of Pension Credit, for example, it is often when it is linked to a need that is in a disability space that we have some of the most effective take up of Pension Credit. They are almost interlinked, then, in a lot of respects. Certainly through our local service teams, very often when they do an assessment of their overall need you could end up with a multiple benefit entitlement. The whole approach is about increasing the awareness of those benefits at those points of detection, but then to have a proposition that tries to link them.

Q48 Miss Begg: Do you keep a watching brief, then, over policy changes elsewhere? I will give you a specific example. In Scotland, the Scottish Executive - or I think we have to call it the Scottish Government nowadays - changed the eligibility criteria for their bus passes. People who had physical and learning disabilities often would get a bus pass, in the same way as there was a pensioner bus pass, to give them either free bus travel or reduced-rate travel. That eligibility criteria was changed, so that the only people who could get the bus pass were those who were on upper rate DLA. A man came in to see me because he had lost his bus pass. He was born with cerebral palsy, had always worked, had always struggled around, but because he was getting a bit old, he was slightly less stable on his feet, and he was struggling to work. I took one look at him and said, "But surely you qualify for upper rate mobility DLA." He did not know, because he had always had his bus pass. It was a success: he applied and he has got it now - in fact he has got a lot more money than he had with his bus pass and a lot more flexibility. But this was someone who was struggling to be kept in work because his bus pass was about to be taken away from him, someone who is able to work and carry on. The DLA is a good benefit.

Mr Moran: Indeed.

Q49 Miss Begg: There is an example of a specific policy change that may have happened elsewhere in the country and be affecting people. He had the sense to come and see me - but how many others have just lost their bus passes and say, "Oh, well, I don't qualify for my bus pass"? - even though he is now obviously more disabled than he was a few years ago.

Mr Moran: It is a good example about where that problem can exist. I do not know that I have a single solution for that. Clearly the work that we do with organisations that support older and/or disabled people is something about ensuring that the information needs are passed on, and not just dealing with what support can be done in terms of medical or other sense.

Q50 Miss Begg: Presumably the Scottish Executive must have a list of those who qualified for a bus pass last year and do not qualify for a bus pass last year. The letters that were going out were purely from the Scottish Executive, which does not have the responsibility for benefits, so there was nothing in those letters to say, "But you might qualify for income support."

Mr Moran: I would like to follow that up, if I may, Miss Begg, to see to what extent there is an opportunity for us to work with that information, to know whether or not there is more we could do. I will certainly follow that up.

Q51 Miss Begg: The other thing is about the DLA and children. Obviously the eligibility criteria have widened for children but again it is the knowledge gap. What are you doing specifically to improve knowledge amongst families with disabled children that they now qualify for DLA?

Mr Moran: We have been doing quite a bit of work, not just as a result of the new agency but before that with the Department of Health, to understand how it is we can best help parents of disabled children to know what might exist out there. That is partly in the space of increasing prescription space. It is also partly about the work we can do locally with trusts and GPs, particularly about information being readily available. But it is a challenge for us.

Mr Richardson: The only thing I would add is that we are piloting a new flyer or leaflet around the children's situation, but it is very early days for that. It is a separate pilot.

Q52 Miss Begg: I know the ultimate decision will be a political one, but there is a campaign for those who are blind and partially sighted to have the upper rate mobility DLA. I have been campaigning for this myself. If the Government were to change its mind, is there anything from your side which would make it difficult to administer? In other words, would it make it difficult to apply the criteria, or are you happy from your side that if the Government says, "Yes, go ahead," you can find criteria that will be fair?

Ms Hopkins: I think deciding the criteria would be something that our policy people would work on. Could we apply it? Yes, we have the capacity. We would need to up-skill our decision-makers again, to make sure all our checking and everything follows through. But ultimately the design of the criteria is outside our remit.

Mr Moran: The simpler it is, the better we will welcome it, if I could put it like that. The clearer and less ambiguous any criteria is, the easier it is for us to ensure that our staff understand that as well as they need to and we need to, and that we get the better chance of getting it right first time. When it is ambiguous and then leaves discretion - and then there is judgment brought in which then means it could be reinterpreted at several stages in appeal, for example - that is a less attractive outcome. But if it is a very straightforward set of criteria, it will be a better place for the administration of it to be.

Ms Hopkins: Increasingly we are thinking about specialising decision making, because we have recognised over the years that the generic training and the generic approach is not always appropriate. We are very specifically at the moment looking at children, where the cases tend to be quite complex, and mental health cases, where the decision making can be quite complex. If there is ambiguity around the criteria, that might be another area. I would look very closely at that and decide whether I needed specialised decision-makers to make those decisions, but we will not know until and if we get them.

Q53 Chairman: On this issue - and of course it is not blindness but partially sightedness which is the area where the biggest problem will be - at what percentage of loss of sight would you automatically qualify? Do you have any figures on how many partially sighted people are already getting it?

Ms Hopkins: The coding that we have been using up until now does not. We have just changed to the IC-10 code, so we will in future. We do not at the moment have that kind of information written down.

Q54 Chairman: It is the case that an awful lot of partially sighted people do get it, it is just that they are not automatically entitled to it.

Mr Moran: Indeed. Again, we will follow that up, just in case there is something more positive we can say.

Q55 Mrs Humble: I would like to ask you some questions about staff. As you are well aware, many of your staff are my constituents in Blackpool.

Mr Moran: Indeed.

Q56 Mrs Humble: Perhaps we could start off with how they do their work. The Pension Service had its transformation programme begin in 2002. New IT systems are being introduced, but we have a mixture of the old legacy systems, new IT systems, some paper-based processes, and, as I understand it, you have undertaken a review of this whole area. We have had some concerns expressed to us by members of staff about the new IT systems. I just wonder where you are with your review, where you want to go with how your staff have delivered the service.

Mr Moran: I will repeat a little bit of what I said at the beginning, which is that because we have not announced the outcome of the review I rally do not want this to be the public announcement.

Q57 Mrs Humble: I was trying to trip you up there!

Mr Moran: I will gladly talk about the issues that we have identified. As far as the IT is concerned, I note that there has been some concern about the IT, but from our perspective, the IT that is there, the new camera that was put in for agents to use dealing with customers on the telephone in the former Pension Service, is good. It allows us to talk about the job roles that we want to create. The job role that had been created was one of expecting, whether it was State Pension, Pension Credit, whether it was a complex case or a simple case, whether it had to be dealt with on the phone or subsequently by PIN code, that you would be the person who would deal with it all. We have found that to be too demanding. Staff have said that very significantly to me on a number of visits and in discussions. Our accuracy and all of that tends to support that. When we are taking 20 weeks to get somebody to a productive level and then it is still not fully accurate, that is in any measure a very, very demanding role and not one that, even if we could achieve it, we could legitimately sustain over time, given that turnover happens. The idea that we would wait nearly six months for another new member of staff to be productive is not something that I think we could continue to sustain easily. We have stepped back, taken a review, involved a lot of people and, indeed, consulted quite widely with our staff, to say, "What do you think?" and we have looked at all of those thoughts. We believe we have to move away from the model that is currently planned. We will be saying more about that and about how we ensure that is done in more manageable chunks early next year, but I suspect it will be, I hope, from my understanding of what staff have said so far, one that they will welcome rather than feel unhappy about.

Q58 Mrs Humble: I think we are going to have to wait for your announcement, because I do not want to press you any further if all you are going to say to me is, "I can't say anything."

Mr Moran: It is not designed to do that, it is just that we are going through a consultation process right now on the proposals.

Q59 Mrs Humble: Can I move on to another issue and that is your sickness targets. You are missing sickness targets by quite an amount. Why?

Mr Moran: The why is always difficult to answer, but we are seeing now, in the former Pension Service, six successive months of improvement, and in the former DCS, 11 successive months of improvement. It is the best achievement of the three agencies in the Department - if I can refer to CMEC as an agency of the Department still. In terms of Jobcentre Plus, ourselves, and CMEC, we are better in what we are achieving at the moment. I think we are doing that because we are engaging with our people much better. I know that some people would say - indeed the unions have said this several times to me - that it is because we are bullying, through managers, people back to work. I genuinely do not accept that, because I think all of us are ordinary caring people and we would not want to put someone in that awkward place. When this has been said, I have asked for individual cases to be brought to me, or Vivien has, that we can investigate and look at - and I genuinely would - but those have not been forthcoming. We have a problem on attendance but we know it is now on what we call the "path of improvement" to the target of 8.2 days that we need to achieve in the next year. I will pause there, because you may not accept all of that, and I understand that.

Q60 Mrs Humble: I accept that there is a very difficult balance for you, because quite properly any efficiently run organisation wants to reduce the level of sickness absence but how you do that could cause distress to some staff who feel that their illness or disability has not been properly taken into account. You asked about individual cases. I have given individual cases to ministers over the past year. There is one particular area with regard to sickness absence that has been raised directly with me and that is those people who are registered or able to be registered under the DDA. In the past, certainly the Disability and Carers Service had a very generous sickness allowance for them. I cannot remember the exact number but it was something like about 30 days that they were allowed to have off before anybody really questioned why they were having it off. You have now withdrawn that more generous allowance and instead are looking at it, as I understand, on an individual basis, looking at the individual disability or illness and saying, "Given that you are likely to need x number of days."

Mr Moran: Sure.

Q61 Mrs Humble: However, for many of the staff, they feel that you are chasing them and not treating them fairly. What reassurances can you give us that you are trying to achieve that balance between maintaining the efficiency of the organisation and at the same time understanding that some of your staff, because of their particular circumstances, may exceed your eight days?

Mr Moran: I do think we do try to do that. It may be that my memory is failing me about the 30 days - Vivien may correct me or it may have preceded my time in DCS - but I have always wanted to work on the basis of reaching an individual assessment of a person's needs in terms of time out, if it is above what we would expect. When we talk about maintaining efficiency, I would rather it be framed as maintaining customer service. Having fewer people in work has an inevitable impact on the service that we offer. I do think it is a balance, you are right. It is balance between rights and responsibilities for anybody. We have a reasonable right to proceed with questions about absences and we have a reasonable expectation that the person would turn up when they can, and the individual has a reasonable expectation and right that we will do that meaningfully, caringly and in a reasonable way. I think in the vast majority of cases we must be doing that. In terms of staff engagement and how people are feeling in work, we do not have the greatest track record in public service in terms of people feeling proud or happy to be in work, but the underlying evidence on the quarterly surveys that we are doing is that it is heading in the right direction and improving. If we were doing something so overtly wrong or uncaring in the way that some may suggest we are, I do not think that would be the trend. We are seeing the trend start improving as a result of the engagement and our handing of things, and I just do not recognise it as a very big issue. Where and if we get it wrong - and I suspect inevitably we do sometimes, and I have seen some poor cases - I have intervened where It has been brought to my attention, on the basis that I am not quite sure we have done what we should have done - like any colleague would. But I do not think it is systematic in the way that some would seem to present it, that we are on the wrong side of that balance.

Ms Hopkins: First of all, I am afraid I do not recognise the 30-day provision.

Q62 Mrs Humble: Thirty days might be wrong, but I do remember at the beginning of the year - I have had at least half a dozen letters on this issue just in the last few months - that there was a much higher allocation than the target sickness level.

Ms Hopkins: I think that sometimes happens, that there has been a referral to the Occupational Health Service, when we come to an agreement. I want my staff to be at work when they are well enough to be at work. When they are really not well enough, I do not want them there. When they have more chronic or serious conditions and they want to return to work, we are trying to work with them, very often working with the TU - and we have had some success with it as well - and with the health providers to get an agreement so that we can get them back to work. We make a large number of adjustments every year to working conditions so that people can come back when they are able to. In the last few months I think we have got rather better than that. We do still get cases that do not go as well as they should for a variety of reasons. When those are drawn to my attention, just as when they are drawn to Terry's, I intervene personally, but increasingly we are using a case conference approach and we have seen success from it. The number of people currently off work and waiting for an adjustment to enable them to come back is now only three, for example, so we are making progress. We recognise that this is a very sophisticated subject. You cannot tackle long-term absence in a simple or single way. You have to look at each case individually and that is what we do. The statistic I am most pleased to see improvement is in all our staff who work in call centres, where typically there is a higher than average level of absence. That is coming down rather well in most of our centres, so I am pleased about that. I think we are making progress.

Q63 Mrs Humble: Can I pick up on your reference to occupational health. There was a very, very difficult time with the previous provider. You now have a new provider. Are things better? Again, I have had so many cases of people who have had to wait months, six months, for an assessment. Is that occupational health provider now improving the systems? Are your management linked into supporting that provider? Again, sometimes when, for example, desk adaptations are introduced to help somebody, there is no follow-up to ensure that that adaptation is doing the job it is supposed to.

Ms Hopkins: You are quite right, there was a problem with the form of contractor which is why we backed out of the contract. That meant that there were arrears, effectively. There were a lot of cases waiting to be looked at and the current contractor has dealt very effectively with those. There are very few cases outstanding for any length of time now. As I have said, we have just three. In terms of the adjustments, you are quite right that the follow up has not always been as consistent as it should have been. One of the things in which we have invested - we started in the disability and carers space in the old agency and we are moving across - is what we call DPOs, Disabled Persons' Officers, within each unit, working at local level and working with the suppliers and with our HR people to make sure that things are working, that the first thing happens soon enough, that we have got better than that, and that we do then check that what has been provided is appropriate and does not need further adaptations. It is still an area where we can and we will get better though.

Mrs Humble: Thank you.

Chairman: In relation to the Disabled Persons' Officers, of course a lot of disability is self-declared and if it is not declared you do not know. I am not asking you for a magical answer but I am just asking you to have that in the back of your mind for future reference.

Q64 John Howell: I would like to pick up on a number of other targets and performance issues. Looking through it, it seems to be that there are a number of targets that have either not been met or have slipped back. On the pension side, that tends to relate to claims processing and claims accuracy and on the disability side to customer satisfaction and some issues around tribunals and appeals. Of course, one of the targets that you are meeting is your headcount reduction. Are you prioritising the headcount reduction? Is the headcount reduction leading to the problems that we are seeing in those targets that you are not meeting?

Mr Moran: I understand where you are coming from. When we look at our overall performance, certainly this time last year we were, in the former Pension Service, struggling. This summer was a bad summer and it took us a while to deal with it. On the former DCMS side, more stable. I will just give you some headlines overall and then I will come back to more detail. I think we shared with you 19 targets that we have been measured against, ten of which have been fully met, year to date. Of the eight that are not being met, four are currently now being met, in month, and so are back on track. The remaining four are showing positive trends to achieve the target. All of our underlying metrics are moving in the right direction. Are the problems that we have because we did not prioritise the staffing well enough? I do not think it is that. One of the reasons for major disruptions, certainly in the Pension Service side, was that we were implementing the first significant wave of the new model of operating last summer and that led to a considerable number of issues. We undertook a fairly rigorous lessons learned exercise to understand what went wrong and why, and we are now recovering from that. We have slowed down that deployment because we started understanding that we were asking too much of our staff. On the accuracy of payment, we have a longstanding problem. This is our most significant challenge today. For State Pension, for example, it has only been met once for the last six years. For Pension Credit it was met only once, in the very first year it was introduced, 2002-03, and has declined ever since in terms of overall quality of decision, except for last year, where we started, as a result of the efforts we were making, to improve it. On State Pension we think we are absolutely within a shout of possibly ending the year with it being met. On Pension Credit we saw it met for the first time last month. The position I would invite the Committee to observe is that we have had our problems, but the underlying metrics that we are tracking, beyond what the absolutes say on the top of the tin, are all pointing in the right direction. We believe that is a trend that we can sustain rather than it be one that we expect to be problematic. I do think, as a result of that, the pressures that staff have felt under as a result of what we see in the outcome of the review on the Pension Service side, for example, will mean that we allow staff to be given the best possible chance of doing the job that they want to do, which is to serve the customer better, which means that it will also be productive/accurate first time.

Ms Hopkins: As Chief Operating Officer, I can tell you that I have not made achieving the headcount my prioritised target. It is a target which we all need to achieve. I take my life in my hands, sitting next to Terry, in saying this, but it is not my top priority. My top priority is to deliver the right service to our customers. That is what we are focused on. We have difficulties with recruiting in some areas. We have quite high turnover in some of our centres. It is easing a bit now, for obvious reasons, but we are constantly recruiting to keep the numbers up. There is this constant issue, if you like, where you are recruiting and training, and Terry mentioned in the pension space, in particular, the model that we were operating which brought with it a very heavy training demand. Whilst you are training people, they are not as productive as you want them to be. My strategy, since the formation of the new agency, has been quite simple. The first thing was to drive down the amount of work on hand, not backlogs, as such, but work available, work where there is some action in progress and we should be clearing it. Over the past six months you will see that in many cases it has halved in relation to State Pension and Pension Credit, and it is well below the internal tolerance level that I set for DLA and AA and CA. Perversely, that affects the average clearance time target: because it is an average target, it sometime works against you when you have low levels of work on hand. The reason for doing that was that I wanted the people who work for us to feel better, to feel that what they could do was manageable. I had a whole load of strategies for doing that and, thankfully, they have paid off. Also, because what we have demonstrated is that despite the headcount target we have capacity. If you look at our work on hand at the moment and our results, they are showing that we do have some capacity. I am recycling that capacity into the accuracy agenda. Accuracy is my highest priority and the highest priority for my staff, and it is a very welcome message for them as well. It is what they want to hear. I have been using the capacity created by reducing the amount of work outstanding to up-skill staff, to give them much more technical training and to focus on the top causes of error in Pension Credit, for example, so each centre has a proper plan, there are proper measures, there is accountability, there is recognition for improvement and all the rest of it.

Q65 John Howell: I think you have partly answered the next question I was going to ask, which was about how you prioritise your targets. You have said accuracy is your main priority there. I wonder if you would just like to say a bit more about how that prioritisation takes place.

Ms Hopkins: It is very simple really. I plan constantly, and the prioritisation comes from working out, I suppose, what is important to customers and what is important to the Department, set in the context of an efficiency agenda which is also quite demanding. I see all the things being interwoven. It is not difficult for me to sit down and think that if we get everything that we do right first time, that supports the efficiency agenda, because of course it is much cheaper, and it makes my staff feel better, so it supports the engagement agenda. It means, first and foremost, we are delivering a better service to customers. If they are getting the right outcome first time, the chances are they will also get it more quickly. That enables us to think about what else we can do as well. It is a fairly simple philosophy. I do not have to sit down and work it out a lot. I keep it under constant review, so that each month I am just checking that we are attending to those priority areas, and then anything else that bubbles up, because things come up that you then have to attend to. I hope I am answering your question.

Q66 John Howell: Yes, I think you are, but with even 19 targets it is still quite a lot. What are the top three?

Ms Hopkins: I suppose I do not distinguish between them because they are all targets, but for me the top priority to achieve is to get up to speed on the targets that are stretching us and that we are not quite meeting yet. That is nearly all in the accuracy space. For me, the top priority is to get that accuracy. That is where we get the biggest pay off for everybody.

Mr Moran: There is no doubt that all the evidence shows us - those who have been around these types of services for many years - that the more you do right first time, the opportunity, the less work you generate. It is a pretty factual but obvious statement. There is a tendency and a pressure at times for people - and I understand why - to move the case and the claim very quickly because there is another one waiting. The very strong message that I try to give everybody is that, in the end, if we have to show that we are not hitting the clearance time targets because we are focusing on a quality agenda, I absolutely have the confidence in knowing that once you get the quality agenda right the clearance times come back and up. The target about which I feel least comfortable talking to this Committee is of failing on quality, because, in the end, we are not doing what we should. We can meet all the clearance time targets by rushing it through - that is the easiest thing to do in the world - but it is quality of the decision and the service that we offer is paramount and when we get that better we start to see all the other things fall into play.

Q67 John Howell: If you look to the future now, you have already said, I think, that the impact of the economic downturn is likely to affect your resources. Can you say a bit more about that and what the implications of that would be for your ability to cut costs?

Mr Moran: At one level as an agency, the assessment we have carried out so far on the economic downturn suggests minimal impacts on the forecast that we are talking about. Those could be wrong of course, but it is minimal. The biggest impact for us - and I think it is the Department at its best - is that the Department is looking at what support it can give to Jobcentre Plus whose work of course is rising very dramatically. This Agency is committed from January to releasing 200 people - 100 volunteers from around the country and 100 people in one of our pension centres - where they will support Jobcentre Plus during what we expect to be a fairly pressurised time as a result of the economy and of course the seasonal impact of work that will flow as a result of jobs being lost post the Christmas and New Year issues. That is why we are now looking at how we absorb those. We have volunteered those numbers; we have not been asked to deliver those numbers and those are the numbers we have volunteered because we believe that we can absorb the impact for a period of three months, which is what the agreement is, during their most difficult time. That is the biggest issue we are facing as a result of the economic downturn.

Q68 John Howell: And future cost cutting?

Mr Moran: We already have our planned staffing reductions scored between now and the end of 2010/11, so that overall in the period of the spending review will be another 3,000 less for the joint Agency. As a result of the economic downturn, I think that colleagues will know that there is a one-and-a-half per cent additional efficiency requirement in year three of that spending review and at the moment everybody is expected to absorb that and we think that we can by the time that comes up on the basis of the work that we are doing today.

Q69 Chairman: I would like to pick up on one target. The cases to tribunal, no more than 45 per cent to be overturned.. Whenever this is raised, the standard response - and I do not mean to be pejorative - is, well, they always present more evidence at the tribunal than the decision maker had. Certainly a couple of years ago, it was the policy that nobody from the Department attended the tribunal and, to me, that makes your chances of winning extremely difficult. Is that still the policy?

Mr Moran: If I get this wrong, Vivien will no doubt correct me, but I think that the policy is that we attend one in ten and we attend one in ten on the basis of the more complex. When we undertook a pilot exercise in the former DCS as to what was the impact of having a presenting officer there or not, surprisingly - and I think that it is surprising - there was very little difference in the overall outcomes about having a physical presence there representing the Agency at all, which surprised us all, to be perfectly honest, on the basis that, if it was going to make a dramatic difference, then there was a case to be made as to whether we should be deploying more people on it and therefore there was the resource issue. However, the evidence did not support that view at all. There is clearly a factor where, when new evidence is presented to the Tribunal, it is additional and therefore it can have an impact. Certainly what we have seen over I think the period of the lifetime of DCS - and I am just looking at the numbers - the award rates overall got worse. We allowed fewer cases. In 2004, it was 49.8 per cent of all decisions being made and, in 2008, it was 45.6 per cent. Disputes obviously arose on that basis but very marginally: 23.3 per cent to 24.9 per cent. DLA cases that went to tribunals were 82,000 in 2004 down to 70,000 in 2008. The reason why was that we looked at each of those decisions much more carefully. When it came to what was the overturn rate then of those cases that finally arrived there, it was lower because we had actually scrutinised each initial decision and 48 per cent were overturned in 2004 and 43 per cent in 2008. So, there is a trend there which suggests that there is better quality decision making that was also reviewed at the appropriate stage before letting it go to appeal, but we still see a very high turnover rate because these are judgments that called on the evidence that is before us and sometimes it is new evidence.

Q70 Chairman: I understand that. Absolutely, the quality agenda if the decision is right in the first place. I think that it is only about four per cent of decisions ever go to a tribunal anyway.

Mr Moran: Yes.

Q71 Chairman: It is not the case that 50 per cent of decisions are getting overturned.

Mr Moran: Indeed.

Q72 Chairman: I am surprised at what you say about your internal evidence on representation in that there is a great deal of evidence that, when a claimant is represented, the chances of winning goes up 300 to 400 per cent.

Mr Moran: Yes.

Q73 Chairman: I am amazed that the reverse is true for yourselves. I do not want to make an issue of it. I just think that it is something you need to bear in mind.

Mr Moran: We were genuinely surprised but I am going to check. How long ago was that review?

Ms Hopkins: That was over a year ago. One of the pieces of work we are doing at the moment is that we are looking at which cases we should best present because there is a definition of complex cases and what we are finding, when we actually had a look at it, was that those defined as complex were not necessarily the ones where a presenting officer would add the greatest value. We are still looking at the moment as part of our whole quality initiative at the ones where we really need to field somebody for and that work is ongoing, so it is still a live issue for us. I am very anxious that we should get someone to the Tribunal when it really would add value for ourselves and for the customer and it is deciding when that is.

Chairman: I will watch this space.

Q74 Miss Begg: I have a question on the Pension service customer service but I also have a question that I meant to ask when I was asking my earlier questions on DLA and also the relationship that you have with the Jobcentre Plus on an individual case basis where a decision that is taken by your service particularly on eligibility for DLA may impact on the way in which the individual is treated when they then come in front of Jobcentre Plus and I will give a constituency specific example. A woman with epilepsy who I think was on middle rate DLA care but, when reassessed, that was removed from her. She was also on income support and, when she went back to Jobcentre Plus, not only was she losing her DLA which was quite a percentage of her income but she was no longer receiving any disability benefit. Therefore, the disability premium on her income support was about to be cut, so she was finding that her income was cut in half and because she was no longer on disability benefit but now on income support, she was not going to go through any of the pathways to work and things which might have helped her as a disabled person. She still has epilepsy - it may be better controlled - but she no longer hits any of the thresholds to qualify for the disability benefit. Does your Agency on that individual's behalf actually almost put a case to Jobcentre Plus and those dealing with the benefits to say, "This person has this history" and therefore not argue that she necessarily gets a disability premium on income support but certainly in terms of job search and everything, she should be tagged differently from someone who is middle aged and out of work?

Mr Moran: No, we do not.

Q75 Miss Begg: Should you?

Mr Moran: That is one of the things that, as the new Agency, as we start looking at how our partnership work with Jobcentre Plus should be better, certainly in the space of joining up around the customers, as we were talking about earlier, that is one of the classic areas where we want to find ways in which we can be supportive because one of my lessons from being the Chief Executive of DCS that over time I regret we did not make the progress on is actually being supportive of Jobcentre Plus where we have a shared customer who may or may not be in a space of either coming from work or going to work and the impact DLA and all of that may be having. We did not make the progress that in the end I think we ought to have and should have made and that is therefore something I want us to try and do better this time.

Q76 Miss Begg: She cannot understand suddenly why her income has just disappeared.

Mr Moran: I understand that.

Q77 Miss Begg: And she still has the underlying medical condition. The question I was going to ask is with regard to the Pension service customer service. We have had that some of your call centres are struggling with complicated cases but particularly where there is benefits interaction and fluctuating earnings. What are you doing to tackle this complex business?

Ms Hopkins: I think it is a fact that some of them were struggling with some of the complexity and Tony has already talked about the review of the operating model which we have not yet announced, but one of the things that we are trying to do is to design the complexity out by deciding that we will handle calls differently. In other words, the aim will be that rather than trying to do everything with one person, we try to do it all in one call which might involve passing someone on to someone who is more expert in a particular aspect. That is the philosophy. In general, some of the issues around call centre performance were to do with volumes of calls which in turn was to do with the volume of work. Having driven down the volume of work, the volume of calls is coming down correspondingly, which gives each person a little more time and sometimes that is all that is needed as well. The whole programme of upskilling people, giving them better skills and giving them more capacity to do the job and having an operating model which supports that is what I think is going to make the difference over the next year or so.

Q78 Miss Begg: Will that be faster because we have also heard complaints about delays? Within customer services, around 37 per cent of dissatisfied customers were unhappy about delays on sorting out problems. Will that take care of all of those delays or are there other reasons for delays?

Ms Hopkins: Clearly, that is the plan. Sometimes delay is caused by the need to gather further evidence. Complex cases sometimes take longer and that is regardless of which benefit you are talking about. Delays as a result of us not getting round to it I believe - and I have to believe - will increasingly be a feature of the past and not the future because, with keeping the work available low and ensuring that each action that needs to be taken is taken at the earliest point and having a skilled workforce which is properly targeted in a specialised way when it needs to be should all add up to ensure that we provide a better, faster and more accurate service. There will always be the odd one that slips through the net unfortunately.

Mr Moran: It is just where there is a sharing of the metric because one of the memoranda that you have from PCSE talks about 147,000 items of pension credits change as work outstanding in April. That is 71,000 at the end of November as a result of the progress that has been made in the intervening months. Inevitably when you do not have that level of activity outstanding or waiting to be actioned, you have less activity coming through on your phones because there is not a need to chase it. So, we are in a much better place than we were even six months ago.

Q79 Miss Begg: The point that the PCS makes is that you get more up to date ---

Mr Moran: Repeat calls.

Q80 Miss Begg: If people have fluctuating conditions, a delay makes that even worse because, by the time you have caught up with them, their conditions have changed again and the situation may become even more complex if you are not efficient.

Mr Moran: Yes.

Q81 Mrs Humble: I have a few final questions on Carers Allowance and fraud and error. The Committee, as you heard earlier, carried out a detailed inquiry into carers and we looked especially at the Carers Allowance. Carers Allowance is similar to DLA in the sense that it is self-reporting. So, as earlier with the questions on DLA, it is very difficult to assess levels of take-up and what they ought to be, it is a similar problem for the Carers Allowance. It may well be that there are people out there who should be claiming Carers Allowance who are not and, as our report identified, some of them do not see themselves as carers with a capital C. What are you doing to address that?

Mr Moran: I think that the biggest single thing we have done - and to what extent it is successful I am not entirely sure - is that three years ago in the DCS as was, in every award letter for attendance allowance or DLA care that was awarded we signposted to that person, "If you have a carer, please, pass them this letter because they may be entitled to Carers Allowance". So, each time we made a new award or renewal ward, it signposted to whoever was receiving that letter to bring it to the attention of the person who may be providing primary care so that they can then make inquiries about Carers Allowance. For every time that we made that award to signal that I think is the most positive thing that we could do and have sustained doing.

Q82 Mrs Humble: Worryingly, the other side of the issue is the level of fraud for Carers Allowance because that is estimated at 3.9 per cent which is a lot higher than the other benefits. Do you have any idea why?

Mr Moran: I suspect - and it is a long time since there has been a review of Carers Allowance and we will be considering early next year alongside other options whether or not Carers Allowance should have a data review because that data is based on information which is now more than ten years old - that it is possible that some of that is around where earnings change, hours of work change and those things where perhaps they have not been reported in the way that they should. Because it is such old evidence in estimate terms, I do not know whether it is a rival(?) or not and, as I have said, next year we are looking at whether or not Carers Allowance should be the subject of a benefit review that we have done for other benefits but not for Carers Allowance for over ten years.

Q83 Mrs Humble: Finally, the official error for pension credit is 2.6 per cent which is a lot higher than any other benefit. None of them officially approaches two per cent, the overall majority in fact; it is under one per cent for most of them. Why such a high level of official error for pension credit and is there anything that you can do about it?

Mr Moran: We are doing a lot but I will not steal Vivien's thunder.

Ms Hopkins: I was talking about priorities earlier and that is why this is my top priority.

Q84 Mrs Humble: Your accuracy.

Ms Hopkins: Yes. There is no question about the fact that we need to get it right and then we need to keep it right. Of course, we have a strategy which sets out how we will do that. There is a lot of activity already. I will break it down into two things. One is, what are we doing to make sure that the awards that we make now are correct? I have talked about first of all giving our staff more time through dealing with the capacity issues. That in itself makes a very important contribution. The second thing is to refresh their basic skills in order that they know what they are dealing with. Pension credit, as you know, is a complex benefit to administer and to explain to people. Then what we are doing is targeting the top causes of error. We have very clear information about what the causes of error are. Not surprisingly, they are in the earning space and things like that. So, we are giving targeted training and checking and follow-up action and in a very bespoke way because different centres have different causes of error. So, in each centre, we are making absolutely sure that we are targeting with appropriate training and checking the right causes of error. The new model which will enable us to specialise in complex areas will also be helpful. By having a small number of people very, very highly trained and skilled and supported to deal with the most complex cases will in itself support the reducing error strategy. Whilst overall the results are disappointing, what we have seen in the first six months of this year is that in the first three months things were much as they were and in the second three months that activity is starting to pay off and we are just starting to see improvements in accuracy and that is very helpful because they are coming through in a sustained way and it is looking better as we go forward. I said earlier that that is what everyone wants to do. Our staff would rather get things right than get them wrong. I am encouraged by what is happening because I can see a real improving trend and I am committed to the level and the appropriateness of the activity and I know that when we implement our new model that will make a difference. That is about getting it right now. The other issue is about what is already out there and the percentage of the load that might not be correct. What we are also doing is carrying out a significant programme of activity and we have specialised much of this to identify correct cases out there. For example, in non-state pension cases, we have already reviewed all the ones that we have identified. We scan our live load to pick out the ones that look as if they might be wrong. We have reviewed all of those and corrected them. We have a large number of expiring pension credit awards, nearly two million. Each expiring award gives an opportunity to check that we have it right and that we are putting it right. So, there is a significant amount of activity going into that. Then there is other targeted activity using the General Matching Service and things like that. So, that is dealing with the error in the live load.

Mrs Humble: Thank you for that detailed answer.

Q85 Chairman: I think that is just about the end but one quick question. On the pension credit, the change to the backdating, I do not expect you to comment on the policy but has that had any impact, either positive or adverse, on the workload and your decisions and things?

Mr Moran: It is not had an impact on the workload but it is a very welcome thing for staff to deal with because the 12 months was always a more complex case because you had to understand what had happened in the previous 12 months in terms of income, savings and all of that and, with it being three months, it is an easier case to now administer than it was when it was 12 months. So, there is that sort of impact and we do expect the change itself to contribute to some of the error that Mrs Humble was just talking about in terms of reducing that value of error because we will not be making similar errors in that complex type of case.

Chairman: Finally, I refuse to use the word "vulnerable" because I think it is insulting but you do have an extremely sensitive caseload and I think that, by and large, we are very grateful for the improvements that are there and we hope they continue. Good luck in the future but we will be returning to some of these issues which I am sure will not surprise you. Thank you very much.