Examination of Witnesses (Question Numbers
80-88)
DEPARTMENT FOR
WORK AND
PENSIONS
Q80 Mr Davidson: Fine. If you let
us have a note on that.[9]
Sir Leigh Lewis: Just one thing
of course to say because I think it is so important I must say
it: we do devote huge energy to increasing take-up.
Q81 Mr Davidson: I understand that.
I just wanted to clarify whether or not there is any cross-fertilisation.
The other point is about appeals. I am somewhat surprised at the
fact you do not seem to methodically monitor what happens at appeals
and the extent to which you lose judgments. Maybe you could give
us a note indicating what information you have about that.[10]
I am particularly interested in clarifying the extent to which
the result of an appeal depends upon who was representing the
individual and whether or not people were represented by a CAB
or another agency. I do not know whether Legal Aid has managed
to get into this area and whether or not there are any records
of that and whether or not somebody who is unrepresented from
a modest educational background really gets a much worse deal
in terms of their appeals than anybody else. That would be helpful.
Sir Leigh Lewis: In preparing
for this hearing I did actually go into this and the truth is
we do not have as good information on appeals as I think we should
have so it is one of the things I am asking the team to address.
Q82 Mr Davidson: The final point
I wanted to make and I mentioned it earlier on, every time your
Department comes in front of us it does seem to be populated by
normal people in contrast to the Foreign Office which is full
of people from public school and Oxbridge. Can you give us any
explanation as to why that might be?
Sir Leigh Lewis: Having come from
a grammar school and Liverpool University, I am not sure that
I want desperately to get into this. I do not have those figures
to hand. Look, I am a Permanent Secretary of some standing across
the Civil Service and I think we have left some of those things
behind, Mr Davidson. What we value in the Civil Service today
right across the Civil Service is people with ability who can
do the job that the Government wants them to do completely irrespective
of their background.
Q83 Mr Davidson: You think you have
left these things behind. Maybe you could give me a note[11]
because I have asked for the same note from the Foreign Office
of what percentage of your top board, say the top ten or top 20,
were Oxbridge and public school just so that I can compare it
and see the extent to which they are similar or different and
the extent to which the Foreign Office has left these things behind,
Sir Leigh Lewis: I will try and
do that.
Chairman: Which is worse, Oxbridge or
public school?
Mr Davidson: It is a toss up really,
is it not, but if you have got both of them then really!
Q84 Chairman: You remember I asked
you earlier about this target and I said it was rather an easy
target. In January 2009 you took a decision to redeploy 300 of
1,900 Debt Management staff for a six-month period. Presumably
as you achieved this target with 300 people missing next year's
target should be proportionately higher, should it not?
Sir Leigh Lewis: Yes, I absolutely
believe that it should because the target this year would have
been higher if we had not taken a decision, which I absolutely
believe was the right decision incidentally, to enable Jobcentre
Plus to use up to those 300 staff temporarily. It is worth saying
that between them we estimate they have taken over a third of
a million claims to Jobseeker's Allowance. One of the reasons
we have been able to keep absolutely on top of the very large
growth in numbers is because as a department we did take very
early decisions to shift our resources where they were absolutely
needed. The basic answer to your question is yes, all of those
staff will be back at the end of this month and we are at the
28th today and of course when we come to look at next year's target
we will be looking at a full complement of staff again.
Q85 Chairman: Have you ever considered
charging interest on long-term debt to incentivise early payment
as other debt collection agencies do?
Sir Leigh Lewis: I just wonder,
Chairman, whether you have been sat in my room and I did not notice
because it is a good question that I have asked in preparing for
this hearing and it is one of the things I have asked that our
review should cover. We do not at the moment but I think it is
a very good question.
Mr Codling: We presently do not
have the legislative power to do that.
Q86 Chairman: You were asked earlier
about selling debt. Could you just go into that a bit because
a lot of other organisations do that.
Sir Leigh Lewis: I do not want
to present myself as a great expert on debt recovery in the private
sector because I am certainly not, but a lot of other organisations,
retailers and others, which by their nature end up with people
owing them money at a certain point, will sell some or all of
their debt book to a more specialist organisation for something
in the pound, so they will sell that debt for whatever it is in
the pound. That has the advantage for them of giving them a definite
figure. It is not the 100 pence in the pound that they are owed
but it is something, and then that organisation, if it does well,
recovers more than that amount, and if it does not it recovers
less and it takes the risk. I think that is something that is
worth us looking at.
Mr Codling: We have looked at
that before, Chairman, a couple of years ago without it demonstrating
a good business case, but I think we should look at it again.
Mr Morse: It just occurs to me
as you look at the aging debt the net present value of that book
must be quite low, so every year—
Mr Codling: About 700 million.
The balance sheet value of our £1.8 billion debt when it
is impaired and discounted is £700 million compared to the
£1.8 billion.
Mr Morse: I am now doing a very
simple and totally wrong bit of arithmetic, but if you think about
it there is an annual impairment of the book of debt because it
is sitting there every year and having long-term debt, although
it is not having a cash charge, is actually costing a very significant
amount each year in the depreciation of the value of the debt
book. I know you are not disagreeing with me about that but what
I am saying therefore is if you are making a business case for
doing something with the debt book it is not difficult to find
one side of the equation which is the very considerable degradation
in the value of the debt that you have on your books.
Mr Codling: It has already happened.
Mr Morse: Yes, but it continues
to happen, does it not, every year?
Mr Codling: Yes.
Sir Leigh Lewis: I think this
is a really interesting question. We would need to consult with
our colleagues in the Treasury. It is not a decision that we should
take alone. I am interested in this. The key question has to be,
and I am sure the Comptroller and Auditor General would agree,
does it represent value for money to the public? That has to be
the key question.
Chairman: This has engendered another
couple of questions from Mr Davidson.
Q87 Mr Davidson: Can I just clarify
on this because I am a bit worried that going down this road might
develop silo working. How many of the people whose debt might
be sold on would already have multiple debts so they would be
in debt to the council for council tax or rent and so on and to
what extent would selling the debt on to perhaps more aggressive
collectors simply allow your debt to leap ahead of other people's
debt with no actual general benefit to the public purse but just
simply a shuffle around, and to what extent would any business
case be developed in consultation and co-ordination with other
potential debtors?
Sir Leigh Lewis: I absolutely
do not want to give you an impression that we have thought further
about this than we have. All I have done is I have said that this
is a question worth exploring and I think we should explore it.
I think the kind of questions that you have put forward are all
extremely pertinent ones that we should consider as part of that.
I do think the question is worth exploring.
Q88 Mr Mitchell: This brings to mind
nightmare visions of securitisation of debt, special purpose vehicles
flogging it on and bringing about a big bubble like the banks.
I suppose this is for the NAO: is there a register of debts owed
to government? It is possible to conceive that somebody who is
fiddling their taxes or has a tax debt or somebody who has a tax
credit debt or somebody who has got a jobseeker's debt or whatever
or housing fiddles are co-ordinated in a register of government
fiddlers?
Mr Morse: I am not sure a fiddle
register is something I recognise, Mr Mitchell. I think the truth
is that it is possible to have systems running across agencies
that would allow you to see what the total amount of debt was,
if you can identify the individuals accurately, and that is a
big "if". Do not under-estimate the cost of achieving
that. It is a desirable place to get to, I think my colleagues
in DWP would agree, but do not underestimate how hard it would
be to get there. Yes, theoretically you should be able to say
what are the total debts someone has. Certainly you find in the
private sector credit rating agencies do that sort of thing. Could
we do it? I think we would find it quite difficult and costly
but it might be somewhere we might reach ultimately. That is my
best answer.
Mr Codling: We are doing some
work with HMRC to identify mutual debtors and to see if we can
assist in recovery on either side.
Ms Hinds: We would be interested
in looking at that work because it is quite a new level of co-operation
between two significant agencies and I think there will be a lot
of learning out of that that may inform future developments.
Mr Mitchell: Of course after May we will
all be on it as well!
Chairman: That concludes our hearing
on a happy note. Thank you very much, Sir Leigh, as always, for
the effective way you have sought to answer our questions. Undoubtedly
you have now got a more efficient indication of debt but the fact
is that your recovery is not keeping pace with overpayments. We
now have a total debt owed by benefit recipients of the Department
of £1.8 billion so as you are only recovering at a very slow
pace obviously from people I am sure our report will focus on
the urgent need for you to concentrate help and effort at the
beginning of this process so that people do not build up debt.
We have had a discussion about selling debt. I will not burnish
my already right-wing reputation by saying as well as considering
selling debt you should also consider selling your debtors into
slavery. That is not a question.
Mr Davidson: I know he is not joking!
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