Publications on the internet
Welfare Reform Bill
|©Parliamentary copyright||Prepared 3rd May 2011|
Publications on the internet
Welfare Reform Bill
Welfare Reform Bill
The Committee consisted of the following Members:
James Rhys, Committee Clerk
† attended the Committee
‘(4) Before he has fixed the appointed day, the Secretary of State shall publish a report on access to welfare advice, including advice for those unable to use the Internet, and shall satisfy himself on the basis of the report that provision is adequate to support migration to Universal Credit.’.—(Ms Buck.)
Ms Karen Buck (Westminster North) (Lab): I was warming to my theme by the end of this morning’s sitting. It is nice to see that the hon. Member for Truro and Falmouth appears to have brought sufficient paperwork to enable her to intervene extensively during my contribution. We all look forward to that.
Although we have many hopeful expectations for universal credit, particularly in relation to the advantages of integration and simplification, it would be a grave mistake to proceed without an assurance, which is what the amendment requires, that the welfare advice sector has sufficient capacity to deal with the advice and representation needs of its clients.
The context is that the advice sector, particularly the element associated with the legal aid budget, is under unprecedented attack. I will return to that in a moment. The most worrying thing about this debate’s framework is that, at the very time that we are undertaking a massive transitional process to a new and untested benefit system, the means by which clients are able to access advice and representation are fast disappearing. I am sure that that is of grave concern to the Minister and that he will want to support the amendment, because he will want to be satisfied about the system’s capacity. That is the first grave concern—the undermining of the ability to respond to the challenges of universal credit and the transitional process leading up to it.
Transitions always lead to a huge increase in demand, because people are unclear about the changes to their circumstances and do not want to be worse off as a consequence. We talked this morning about elements of universal credit, and we have talked throughout the Committee about those parts of universal credit that lack fundamental clarity. Certainly, at the moment, claimants in the system lack clarity. We have also talked about the strands of universal credit that are of most concern to us. There is the council tax benefit, and we will talk next week about the social fund. We have talked about a number of aspects associated with the conditionality regime.
I want to make some comments and ask some questions about universal credit. One of the assumptions of the White Paper that underpins the Bill is that the default position for access to universal credit will be through digital communication. The Minister needs to clarify how the Department and the independent advice sector will be able to respond to the needs of people who are not able to access the system digitally.
The Government are right that the growth of the internet provides us with enormous potential to improve the quality of service to clients. It is obviously infinitely preferable for the many people who can to be able to submit their claims and note changes of circumstance via a digital medium; it is also possible that the Government will be able to save money, which would be agreeable. We would expect those who have easy access to the internet and the skills to use it to be able to do that. We welcome giving universal credit the capacity to enable people to access it digitally and all the benefits that flow from that.
No one is saying that the Government’s argument is that there will be 100% expectation of internet access to universal credit, but will the Minister clarify how the Government intend to protect the interests of, and provide advice, assistance and face-to-face communication for, those individuals who are not able to do that? We want the Minister to tell us today how he will be able to report to Parliament on the capacity within the system to meet the needs of people who do not have internet access.
We know that the numbers involved are very substantial. Currently, 7 million people do not have internet access. Of course, that figure is weighted towards older people; a high proportion of those 7 million people will be pensioners. None the less, millions of people of working age do not have internet access. We know that one in five people aged between 55 and 65 do not have internet access and that almost one in three households with incomes below £10,400 do not.
We also know that there is a very strong bias within the system against the north of England and that in cities with highly mobile and complex populations, which include people for whom English is not a first language, even having the physical capacity to access the internet does not mean that people will be able to submit their claims, submit information about changes of circumstances or deal with queries comfortably and easily through the internet. The Department has made it absolutely clear that there will be capacity within the system to meet the needs of people without internet access. However, one of the central purposes of the amendment is to ask how that capacity will be established and monitored, and how we can be assured that the capacity will be available within the system to meet the needs of those people.
I must say that that is somewhat lacking in specificity. Mr Moran went on to say in that evidence session that we have years in which to make preparations for all these things. But we do not have years—we know how fast time flies when one is preparing for massive legislative
Can the Minister tell us today what research has been done on this issue? At the time of that evidence session for the Work and Pensions Committee in February, we were given an indication that research was being undertaken. What research is being carried out into the balance of online access and other forms of access, including face-to-face access and telephone access, for those people seeking to make claims or to register changes of circumstances? It would be very helpful to know when we will have a clear indication of the Department’s thinking on how that balance will be developed.
Will there be a target for online claims? The White Paper said that digital access will be the default option. However, I am absolutely sure—perhaps the Minister will challenge me on this—that there will be a target and that somewhere within the system a set of planning assumptions will be made about what proportion of new claims and what proportion of new circumstances being registered will be done online. Otherwise, I fail to understand how the Department will be able to plan the resources to meet the demand that it acknowledges will undoubtedly exist for face-to-face advice and assistance.
If there is no such target, how will that planning be undertaken? How will the Department assure itself that it has sufficient staffing capacity, including where those staff will be, to respond to people—whether that is providing continuing assistance through online assistance, a national phone service or the face-to-face capacity in some local offices, which is critically important?
Whether clients of universal credit will have a right to access services other than by going online is another question that I would like the Minister to answer. Will access to personal and face-to-face services be automatically granted should a client request it, or will that be restricted to certain categories of clients? If so, how will those categories be chosen? For the purposes of planning staff levels, what assumptions are being made about the average amount of face time that will be available per client and client group? Does the Minister anticipate an increase in the client case load for Jobcentre Plus advisers, compared with the current system? They will need to know how their work load will unfold.
On Tuesday, the Minister spoke sincerely and eloquently—I felt the sincerity of what he was saying—about the importance of utilising the judgment of advisers when it comes to applying sanctions and making judgments on conditionality. Will the Minister tell the Committee how he will satisfy Parliament that such discretion can be applied properly when such a large proportion of all communication is assumed to be digital?
We will probably discuss the social fund next week, but in the impact assessment for that, the Department made it clear that one reason for proceeding with the localisation of social fund applications is that a national phone service has proved to be inadequate for the purposes of making discretionary judgments about fines and appeals. How can we be sure to get that right? If we do not get it right, we will have more, rather than fewer, bad initial decisions. The problem of bad initial decision
There is a raft of questions about the implications of using default digital communication. I do not argue against the majority of communications taking place in that way, but we need to know how many people are expected to require face-to-face communication, and how that will be planned for. In the run-up to universal credit, we want to know that Jobcentre Plus will have the capacity to make discretionary decisions and good initial judgments. If that is the case, it will undoubtedly benefit the wider welfare rights agenda.
Those concerns need to be factored into the report that would be required by the amendment. We know, however, that all transitions are problematic. There has never been a major change to the tax and benefit system, however well intentioned and planned, that did not lead to a consequential increase in demand for advice and representation, at least in the short term. We discussed that this morning in the context of tax credits, and it was also true of the introduction of supplementary benefit. There will be a need for information, and as we enter into the universal credit system during the mid years of the decade and beyond, it will be in the Department’s interest to ensure that we have the capacity to respond to that need. It will be a learning process, and if we learn better and more quickly from demands for advice than perhaps we have done previously, the universal credit system will be better.
None of us wants to see a repeat of the Child Support Agency, which was an example of an initiative in the early 1990s that was almost consensual in parliamentary terms. We all saw the need for it, agreed with the principle and could see the benefits of the system, yet effectively it collapsed. Many MPs will remember sitting on such Committees, although newer Members will not have had that experience. Well into the early years of the last decade, we were dealing with a substantial parliamentary case load arising from the Child Support Agency, despite the fact that there was considerable consensual debate on the matter in Parliament beforehand.
The story of the Titanic was that it was an unsinkable ship, which was why nobody thought to put enough lifeboats on it. No one is suggesting that universal credit is a Titanic—quite the reverse—but it is absolutely essential that sufficient lifeboats are provided because we do not know and cannot say exactly what the demand is likely to be. However, we can be confident that, at least temporarily, there will be an increase in demand for welfare advice and assistance. We do not know how much of that will be met face to face and whether inquiries will be dealt with within the DWP itself.
Also, importantly, there are many elements within the universal credit that are likely to lead to an increase—possibly transitionally, but in some cases structurally—in the demand for additional advice and assistance over the longer term. One of those elements is the issue of housing costs and the reduction in housing support, which we discussed at considerable length in Committee and will possibly come back to next week. The extent to which the Government are proposing reductions in
There will be a far greater reliance on the discretionary housing payments scheme. That is absolutely what the Government expect to happen. They want more discretionary decisions on housing claims to be taken at a local authority level. However, any element of discretionary payments within the system always and invariably leads to more challenges precisely because people will have a subjective view on the extent to which a discretionary benefit should apply to them. Of course, that is complicated further by the fact that every local authority will potentially have different criteria for determining discretionary housing payments and many—a substantial minority—of universal credit claimants will be mobile and will move between different areas. The rules that will apply to people living in Hull are completely different from those that will apply if they then go to live in Watford. People will therefore make multiple applications for discretionary housing benefits in a way that they would not if the total demand for DHB was not inevitably rising because of the shortfalls in housing benefit.
We have talked to some extent about the increase in conditionality and elements of the sanctions regime. We expressed our concern about the potential for a three-year maximum disentitlement to benefit. However, what I would say in the context of the amendment is that if those people who would have been willing or able to accept a short-term loss of benefit because of a high-level sanction under the old regime see the potential for those sanctions cumulatively building to a three-year loss of benefit, they are far more likely to challenge those initial sanctions. It is therefore extremely likely that the higher stakes involved in the sanctions regime will lead to an increase in the number of appeals and challenges to the decision.
Next week, we will come on to debate the social fund, to which we have just referred. However, I am afraid that the localisation of crisis loans and community care loans will predictably mean a nightmare of challenges and appeals. There are many reasons why, the most obvious of which is the extent to which the localisation of what is effectively a national system will lead to a significant minority of people not having a local connection. For example, if someone does not have a local connection and they apply to local authority A for a crisis loan, it might say, “But you are someone fleeing domestic violence” or, say, a rough sleeper who has been made homeless, “And you left local authority B in order to make your application. You are rightly the responsibility of local authority B.”
It will be inevitable and structural that local authorities will seek to deter people from making applications at a local level. We already see that in the homelessness legislation, but that legislation at least provides for local authority A to house someone pending an inquiry before it refers them back to local authority B, from which they originally came. As the Bill stands, there will be no such system within the social fund. If someone is destitute and applies to a local authority to which they have no connection, or does not meet that authority’s criteria, they will appeal against that decision or will need advice and representation—in numbers that far exceed any that are likely now—to find a way to correct a decision that they believe to be wrong.
We discussed the localisation of council tax benefit a couple of weeks ago, and we heard the criticism that localisation went to the heart of the universal credit’s claims to be a single, integrated benefits system. Different regimes will apply in different local authorities. In fact, I was looking only last week at the report drawn up by my local authority, Westminster, which is seeking the opportunity to reduce the number of those on council tax benefit in its area. We are inevitably looking at different rules and regimes for benefit entitlement.
The people who are most likely to seek advice and representation and to challenge that decision will be the people who are mobile. They will be the people moving from Camden to Westminster, or from Newcastle to Liverpool. Actually, that last one is a bad example, because they will be people moving to a neighbouring local authority. They will be people who have a job, and are seeking to maximise the benefit of being in work. However, crossing the border from one local authority to its neighbour will potentially lead them into a totally different benefits regime, and they may well find that they cannot afford to work anymore. They may then find that they are immediately sanctioned and subject to conditionality, and they may wish to appeal against that. It is extremely likely that they will do so. If we add to the single universal credit mix all these multiple localisations, including at least two important strands of the benefit system—the social fund and council tax benefit—those layers will lead to an explosion of requests for advice at the very least, and potentially more formal requests for assistance and appeals.
As I said earlier, that is all the more problematic because the advice and legal aid sector is facing an unprecedented squeeze. I spoke about the Child Support Agency and the tax credit system and the undoubted problems that successive Governments have had to deal with, but at least both those major problematic changes in the benefits system were cushioned by the existence of a healthy legal aid sector that was able to represent people who needed help. As things stand, with the Green Paper on legal aid reforms and the pressure of local authorities’ spending cuts, we will be introducing universal credit, greater sanctions and conditionality, and a plethora of localisation agendas without having that security blanket of legal aid.
The numbers are truly staggering. On the welfare benefits side alone, 143,000 cases were assisted with legal aid just last year, yet the current Ministry of Justice proposals will remove legal aid entirely, taking benefits advice out of its scope. That means that people with genuine cases will be far less likely to be able to receive justice and representation than they are now. Universal credit delivery will be the poorer for it, because it will not be able to hear ways in which the service could be improved.
Kate Green (Stretford and Urmston) (Lab): I am grateful to my hon. Friend, who makes a powerful case. We know that the advice sector feels very anxious about the issues that she has raised. Does she not agree that a further complexity for benefits recipients, particularly those who are obtaining advice under legal aid schemes and from advice agencies at present, is that problems come in clusters? That makes it all the more difficult for a claimant to disentangle their housing, child support, welfare benefits or other problems without expert assistance.
All Members, newer and older, will be familiar with the sight of a constituent with a carrier bag who has come to see us about debts and problems that have led to a potential repossession of their home, or about a disbenefit or sanction that has been applied to them. All those problems multiply and compound one another. Sometimes, we Members of Parliament are able to help—we are possibly a little underrated as one of the arms of the advice and assistance service. I know that we all do our best, but we are not trained or resourced to be specialist advisers. Above all, we are not trained and resourced to represent people with genuine cases who need representation. I am sure that all of us have turned at some stage to a citizens advice bureau, our local law centres—if we are lucky enough to have them—or other voluntary advice agencies to ask for help representing people, or challenging a bad decision.
When people are represented by a specialist or an independent adviser, the outcome is strikingly different. Recent parliamentary questions confirmed how important that is; the difference in the success rates for those represented in first-tier tribunals and those who are litigants in person is absolutely staggering. 51,000 cases were won at first-tier appeals. Those people would not have been represented at all if the cuts in legal aid had been in place. They were, by definition, victorious in their appeals, and their cases were therefore genuine. Such people would not get help—apart from a very small number of examples where a case is allowed, perhaps because it raises an exceptional question of policy—but they would not have been successful at their tribunals had they not received representation.
We are entering a universal credit system in which, as things stand, people cannot be represented through legal aid, and possibly not through Citizens Advice or other advice organisations dependent on other sources of funding—for example, the London grants scheme, or local authority grants, which are all squeezed and are all reducing their capacity to fund advice. I will pre-empt the hon. Member for Dover by making the point that that is extremely poor business sense, because all the evidence demonstrates that having good benefits advice in place is good value for money. I have the figures here; for every £1 spent on welfare advice and representation, the state saves £8.80. If there is a false economy, it is not representing people through legal aid and other advice services in social welfare law across the piece, but especially in the area of benefits advice, and yet we face the situation that I have described.
Kate Green: Does my hon. Friend agree that the problem is not only the absence of advice? Bad advice is also extremely damaging to the interests of claimants and value for money for the state, and leads to unpicking problems later. People may be tempted to seek poor quality or unqualified advice in the absence of more formal and rigorous advice, which is also a cause for concern.
Ms Buck: That is absolutely right, because there always have been, and still are, unscrupulous advisers out there who will give poor assistance to people seeking representation and appeals. It is bad economics, because
The view across the board—from those who are concerned purely with the interests of clients to those who are concerned with the efficacy of the advice, the representation and the judicial system—is that this is a bad move. By taking universal credit into unchartered waters, we are taking massive risks. At a time when both the advice sector and the judicial sector are under massive pressure, we have a universal credit that leaves swathes of policy unclear, which will mean that much of the Bill will have to be clarified later in regulations. Subsequent regulations will leave advisers struggling to interpret the constant changes in the legislation.
There are a number of difficult inconsistencies in the regime. The central thrust of the Bill is about clarity, integration and simplification, but confusion will result from localism. There will be a harsher regime of conditionality and sanctions—sanctions that should rightly apply to those who seek to evade their duties. No one on the Opposition Benches would argue with that. However, such a regime will inevitably catch within it a number of people who have simply committed an innocent error, or who are innocent victims of bad decision making or institutional failure on the part of Government. I am not implying that this Government will be any worse than previous Governments. Even if they are better than previous Governments in this respect, there will still be hundreds of thousands of people every single year who will be innocent victims of bad decision making, contradictions, errors in the policy, or failures that arise from the workings of the IT systems. It is fanciful to pretend otherwise.
What we seek, therefore, is a simple, cost-free amendment that requires the Secretary of State to tell Parliament what provision is being made across the piece to ensure that those who need it get face-to-face communication with the DWP as they make their claims and declare a change of circumstances; independent access to advice; and independent representation in the tribunals and judicial system where necessary. Given the problems with budget-setting for legal aid and advice, and our concerns about a number of problems within the universal credit, I would have thought that this was a simple, easy amendment for the Minister to accept, and I look forward to him doing exactly that.
I want to make a couple of points. The first is about the importance of welfare rights advice in relation to the Government’s broader anti-poverty agenda, because it is important that we keep reminding ourselves that the purpose of these reforms—a purpose the Opposition endorse—is to make serious inroads into poverty. Indeed, the Minister has made important claims for the extent of poverty reduction expected as a result of the universal credit. It would be highly regrettable if the Government’s projected gains in poverty reduction were compromised by people’s inability to take up their entitlement under the universal credit, therefore defeating the Government’s own purposes.
I suggest that it is important for all of the universal credit proposals to be poverty-proofed. The amendment is about poverty-proofing by ensuring that the infrastructure for advice and information relating to the benefit is properly in place. As I said, there has never been enough advice, and advice agencies across the country are now struggling all the more in the face of a range of cuts and redesigns to the services they are offering. This is against the backdrop of local authority cuts; the coming cuts to the legal aid budget; and the likely reduction in funding for debt advice, as, for example, it is not clear what will happen to the Financial Inclusion Fund after next year. Rights agencies are doing their best to maintain levels of advice, and to operate more efficiently and redesign and reconfigure their services to meet these funding cuts. None the less, they are increasingly struggling to meet the needs that exist. In my own borough, the local authority welfare rights unit, the law centre and the citizens advice bureau—all of whom do excellent work for people in need of benefits advice—are seriously concerned about how they will meet the level of need they can see will exist.
My hon. Friend the Member for Westminster North specifically mentioned our concerns about the proposed cuts to the legal aid budget, and the wholesale removal of categories of social welfare law. With regard to the universal credit, we are particularly concerned about the wholesale removal of legal aid in relation to benefits problems. The Government have suggested that the loss of legal aid funding will not cause too much difficulty to the social welfare sector because other advice agencies will be able to take up the slack. From my own knowledge of those advice agencies, and indeed in their own words, that is highly unlikely.
In evidence to the Justice Committee earlier this year Age UK, the Child Poverty Action Group and the Free Representation Unit all made absolutely clear that, for
As my hon. Friend points out, we as MPs are unlikely to be able to take up the slack. We lack the expertise. We lack the capacity. Our constituency offices are not generously staffed. I speak for my staff and I am sure I speak for the staff of all hon. Members when I say that our constituency caseworkers provide us with excellent support, but none the less, as my hon. Friend said, both from a capacity point of view and when it comes to difficult technical questions, they, too, need to refer to the experts and we are concerned that that expertise will no longer be there.
I endorse what my hon. Friend says about the difficulties with transitions. We have heard from Ministers over many months that there may in time be less need for advice in relation to universal credit because it will be simpler. But even beyond the transition period, it probably will not prove simple to experience it, at least for some of our more disadvantaged benefits claimants or those with complex needs.
We have debated issues in recent weeks where there is likely to be some confusion, complexity and possibly contention. They include determining in a couple who is the main carer of a child and who should therefore receive the payment for children. There is the issue of overpayments and the recovery of overpayments, which was rehearsed eloquently and at some length this morning by my right hon. Friend the Member for East Ham. There are also issues that have not yet been discussed and on which I hope to table some amendments relating to the position of European Union nationals. They are likely in many cases to be entitled to claim under universal credit, but there are always complex issues of residence and entitlement and I can say from my experience that a very considerable amount of welfare rights advice has had to be deployed on this in recent years. I do not expect that to change.
Kate Green: It is not a matter of whether I support it, it is matter of legal entitlement. We are signed up to a set of treaties about the free movement of labour and that includes entitlement to labour market benefits in the EU countries subject to those treaties. We have been able to negotiate some periods where full rights have not been introduced immediately for new accession states, but those rights are not in place indefinitely. I make no judgment on whether EU nationals in this context ought to have those rights. I simply point out that in the current legal framework they have those rights and we have to ensure that they are exercised appropriately. Indeed, some of them may not have rights to some
Other issues which I think will be complicated, either as a result of the introduction of universal credit or other welfare reforms that the Government are making, include the changes to housing benefits which my hon. Friend the Member for Westminster North mentioned. I would also highlight in that context changing roles in relation to non-dependents and child care, where we are still completely unclear, as are the Government, as to what sort of proposals we will have for the payment of child care support. A range of changes is coming through to disability entitlements, many of which we have rehearsed and more of which we will discuss in Committee. As my hon. Friend pointed out, the changing sanctioning regime is also highly likely to create a demand for more support and advice.
Welfare rights units and welfare rights agencies do not only seek to deal with problems. They also have a proactive and preventive role in helping to increase take-up. I am pleased that the Minister has placed so much emphasis on their wish to see take-up maximised under universal credit. In my experience, independent welfare rights agencies have had a very significant role to play in helping to maximise take-up to ensure that people are aware of their entitlements, to conduct programmes of education and information, to encourage people to feel confident about making claims for benefits to which they are entitled, and to support them in making those claims, particularly where those claims are for more complex or discretionary elements of the benefits system. I want and expect Ministers to say that, as part of their own purpose to maximise take-up, which I welcome, they want to ensure that the independent advice sector is properly resourced to help them in that endeavour. With the cuts that are coming down the line, however, I fear that it will not be.
The other area that I particularly want to mention about the significance of welfare rights advice is a philosophical one about the relative bargaining strength of the citizen and the state. Inevitably, there is an imbalance of power—what is called an inequality of arms in the legal context—between the might of the state, which is well resourced, well informed, holding all the cards and making decisions about a claimant’s entitlement, and the individual. No matter how well informed an individual may be about his or her own entitlements, that inequality exists, and that is exacerbated when the individual is disadvantaged, vulnerable or desperate. Those making claims for financial assistance are, in a sense, always desperate, because if that claim is not properly executed, they could be left destitute, homeless or, at the least, under considerable financial pressure and at risk of falling into debt.
It is not right for that inequality of bargaining power to be left unaddressed, nor is it right to say that Jobcentre Plus advisers or Work programme providers can meet the need of advocacy on behalf of the claimant, because they are part of the system. There may come a time when the claimant needs to be able to access advice that is 100% independent of the state. That independence in the welfare rights sector is something that we all want to see protected. It is something that we should guard
I echo the comments of my hon. Friend the Member for Westminster North about appeals and the concerns that we have that universal credit may, at least for a time, generate a higher level of appeals. In a tribunal setting, it is particularly important that the individual is well represented. I am aware that Ministers, particularly those in the Ministry of Justice, have often made the case that it is perfectly possible to go to tribunal without legal representation, but, as my hon. Friend has pointed out, the best results and greatest efficiency are achieved when people are appropriately represented. If people are not well represented, many cases may end up in tribunal that would never get there if they had been dealt with by an expert professional earlier on in the process.
We know that there are already a significant number of appeals arriving at tribunal as a result of Department for Work and Pensions decision-making procedures, and we are particularly aware, going back to the transition point, that this happens when new procedures and benefits are introduced. The work capability assessment is a good example of how a transition period is always problematic and is likely to lead to much higher volumes of appeals. I recognise and welcome the efforts that the Government are making to improve that decision-making process, but, at least for a time, we are seeing a substantial number of appeals going through as that new test beds down.
We are also well aware that disability living allowance is an area where there has been a high level of success on appeal, because the benefit is complicated. We look forward to the debate in the next few days on the reform of disability living allowance, but nothing that I have seen so far suggests that it will be a simpler benefit to claim than it is now. It will be different in a number of respects in its intention, philosophy and design, but I am concerned that it will not be much simpler for people to ensure that they are equipped to claim it. We can expect, at least initially, a substantial level of appeals following the introduction of the personal independence payment.
If we fail to put in place good quality welfare rights advice, which ensures that individuals are always able to access their financial rights and entitlements in full, we will pile up costs in the system; we will disadvantage individuals; and, importantly, we will undermine work incentives. If people have to spend time trying to sort out their basic benefit entitlement, they will not be in a position to go out and look for work.
The amendment is important for all the reasons that I have outlined. It requires Government to make absolutely clear the consideration that they have given to all those issues and concerns, and the steps that they are taking to address them, ahead of the migration to universal credit, rather than waiting for the problems to pile up and seeking to address them at that stage.
I conclude by asking the Minister to clarify how that planning is currently taking place across Government and across Departments. I ask that specifically because in oral questions last month to the Secretary of State for Justice I asked how it could be right
precisely when universal credit was being introduced, and I expressed the concerns that I and my hon. Friends are expressing today. The Under-Secretary of State for Justice, the hon. Member for Huntingdon (Mr Djanogly) responded:
“there could be an issue with more benefit claims coming through from the Department for Work and Pensions and we are working closely with that Department to ensure that we maintain a smooth service.”—[Official Report, 29 March 2011; Vol. 526, c. 159.]
I would be grateful if the Minister could explain what is meant by that. Is it is a smooth service to deliver advice? Is it a smooth service to handle appeals? Is it a smooth service to do both? Who will pick up the cost of the increase in benefits claims, the likelihood of which the Under-Secretary of State for Justice and the Ministry of Justice appear to recognise? Will it be the Department for Work and Pensions or the tribunal service? What quantification of that cost has been made? What offsetting savings from providing good upstream welfare rights advice has the Minister taken into account? It seems to me that there would be sensible, value-for-money reasons, as my hon. Friend the Member for Westminster North has said, for getting this right first time.
Yvonne Fovargue (Makerfield) (Lab): I remember working on advice about the change from supplementary benefit to income support, on the change from invalidity benefit to incapacity benefit and on the change to tax credits. At all those times demand for advice increased because the benefit system supports the most vulnerable, for whom a small change in income means a tremendous amount.
Such people are the most aware of the imbalance of power, which my hon. Friend the Member for Stretford and Urmston has referred to, between the state and the individual, and they need to go to a trusted agency that they feel can redress that balance of power. They do not usually want to go to a faceless agency that they have not heard of before. They do not want to go to the agency that administers the benefit; they want to go to a trusted brand such as a law centre, a citizens advice bureau or a local advice agency that has built up that trust over the years and has probably dealt with a number of their issues, which may have had nothing to do with benefits, before.
Advice agencies are already seeing an increase in questions about what will happen to disability benefits and to universal credit. What is going to happen to people’s benefits? As I said, these are the people for whom a small change in income means the most, and
People who come to advice agencies usually have not one but a number of problems. If they are not getting the right amount of benefit, and they have not done so for a number of years, they are likely to have problems with debt and often will have gone to loan sharks. Not providing correct welfare benefit advice at an early stage increases the likelihood of loan sharking, debt and housing repossessions, as has been mentioned before. Those issues have a cost to the state, as well as a cost to the individual.
The removal of the social welfare law will affect 97% of advice agencies, which are not what the Government refer to as fat-cat lawyers, but local advice agencies. Some 50% of advice agencies surveyed say that they do not expect to be able to provide the service that they are providing now in two years’ time.
I can give a practical example of a bureau losing funding. A bureau that I worked in lost its social welfare contract last year. The number of welfare benefit advisers went down from nine to three. We had just about reached the stage at which we could get people an appointment within three weeks. People are still waiting three weeks and when they are not getting the correct amount of benefit, that is three more weeks without the correct amount of money to live on.
My local bureau in Wigan, which I now represent, has already written to me saying that if it were to lose its social welfare law contract at the same time as the introduction of universal credit, it would not be able to deal with any welfare benefit cases of a specialist level. The Government say that such cases are not serious and not complex, so it will not matter because other agencies or volunteers can pick them up. I assure the Government that volunteers work best when supported by specialist welfare benefit advisers, because they are trained and can shadow the advisers.
Although the system will be simplified, the application process will still be complex. People will need support with the application process. Yes, volunteers will be able to do that, but only when they are supported by specialist advisers and are thoroughly trained. Completing application forms correctly will save time for the Government agency. Going back to an individual time after time to ask them to fill in the form again, or to ask them what they mean by a particular answer, will be costly, time-consuming and completely pointless if the advice is available.
I agree with my hon. Friend the Member for Stretford and Urmston about the importance of locally tailored advice. People want advice about their local circumstances. They need to know about the social fund, council tax benefits and discretion. All the advice needs to be locally tailored.
I return to the point about specialist advice. We talk about test cases, which may well go through, but we need a specialist adviser at the beginning to identify cases that could be important, not only for the individual who has come into the agency, but for other individuals across the country. Without that we would never have had the Mallinson decision, which did so much for blind and partially sighted people.
I now go on to the social policy area. Advice agencies not only deliver advice, but provide an invaluable service to the Government by telling them the unintended consequences of legislation. Something can look perfectly sensible in a Bill—as with tax credits, unfortunately—but the operation on the ground can have unintended consequences. Advice agency networks, such as the Advice Services Alliance and Citizens Advice, get together to provide reports to Government so that legislation can be changed, because unintended consequences have caused misery for a number of people across the country. Not having such networks will mean that we lose all contact with those consequences, and individuals will be left struggling. The cost of not receiving the advice will be higher than the cost of providing it.
I have looked at debt advice, and I have already said that if benefit claimants do not receive the right advice to claim their benefits, they are more likely to get into debt. One bureau that I know of has proved that a number of suicides can be prevented by debt advice; three suicides were prevented in the past year, which would have cost the state of some £500,000. That is simply a monetary cost of the suicides.
For the small cost of advice, we would gain a considerable amount in preventive work, and that work will come on to the state. People will be coming to our surgeries, and I absolutely believe that we are not equipped to deal with that at all. Case workers do a fantastic job: in my own case, we have the Citizens Advice information system, but it only takes us so far because we are not specialists.
To lose the specialists and rely simply on volunteers—however well trained—will mean that people will lose access to the highest level of advice. I do not believe that that can possibly be a saving. Before we implement any new system, we should ensure that people have access to advice. It is no use giving people rights without allowing them the means to exercise those rights. Equally, people can be told their responsibilities. As my hon. Friends have mentioned, they can be advised whether they have a case or not.
The system will simply clog up with people who believe they have a case because a man in the pub told them they had the right to do something. It happens all the time: you hear people coming in and saying, “But they told me I was entitled to this benefit.” A good welfare benefits adviser could say, “Actually, that isn’t the case, I’m afraid. You will have to go away and we can look at other options.” These people will go ahead and take their cases to tribunal; the system will be delayed.
I support the amendment and simply say that there has to be adequate welfare benefits advice at the introduction of any new system and throughout any system of advice; it will not just stop. There will always be new claimants who need it. Face-to-face advice and all ways of accessing advice are important. It is not good enough simply to have a telephone advice line because people often do not want to speak to a telephone advice line. If they are in debt, they quite often have pay-as-you-go phones and cut themselves off at certain periods because they cannot afford to pay those bills.
Face-to-face advice is valued by a considerable number of people, including the most vulnerable. Not only do
Sheila Gilmore (Edinburgh East) (Lab): I am no Luddite about using the internet and when I was a councillor and executive member for housing in Edinburgh, we used a system of both paper and internet applications for our housing application system. We used a choice system; we were the first Scottish local authority to go over entirely to such a system. There were people who said, “Oh, this will never work. People will never be able to get access.”
I have to say that those who were over-pessimistic were wrong. The number of applications that came in was much higher than even we had anticipated. But underneath that, we also found that a number of those applications were coming in because people had gone to places to get advice and use the facilities to find out how to set about the issue. People were not necessarily sitting at home doing that.
The other consideration is the complexity. The Government are very keen to talk about this as a universal benefit, although I would describe it best as a single benefit. But if it is a single benefit, it is a single benefit with many arms and legs. In the debates that we have had on various aspects of it, it was quite clear that there were complexities. It might be wrong to assume that, just because increasing numbers of people have, for example, used internet applications for job seeker’s allowance claims in recent years, this will be just as simple. On the whole, the former is a more straightforward benefit; it does not have these various arms and legs—the housing aspects, the child care aspects, the child payments and the disability payments—because they come through applications for other benefits. The jobseeker’s allowance application is much more straightforward.
I presume that other aspects of what people have to do when claiming benefits will be carried over. One of the things that we have observed with housing benefits over the past 10 or more years is the increasing amount of verification that people have been asked to produce to make claims and establish their entitlement to housing benefit for their property. They have to get information from their landlord and if they do not produce information, they are not able to get the benefit to which they would otherwise have been entitled. The help that people can get to prepare all that and know what they should put together at any one time can be invaluable and save a tremendous amount of time. We have found that, where that has been done at a council office or housing association level, the whole process was speeded up, because people got advice.
I am not saying that we cannot use new technology—it could be extremely helpful—but the process will probably still be difficult, given the complexities of the benefit, which will have to deal with many different aspects and circumstances. We cannot assume that people do not need good levels of advice. As my hon. Friends have already said, the saving to the system of having good advice in the first place, as opposed to picking up the pieces afterwards, is invaluable.
I am sure that many Members know just how difficult it can be to get good advice. In my city at the moment, people have to wait up to six or eight weeks for an appointment at the advice shop run by the local council, which is a far from easy situation if they are in difficult circumstances. The voluntary group that often picks up some cases in the city—people are desperate and go to them because they cannot get an appointment with the larger agency—is struggling to survive at the moment.
At my most recent meeting with the group in the past month, its representatives indicated that they may not be able to survive. Our citizens advice bureaux have, I suspect, always survived on a shoestring, albeit effectively, but they are concerned about the kind of service that they can offer. On that basis, we would be foolish if we did not make sure that there is a real chain of advice that is delivered—where possible, locally, and not by having to look something up or by reading documentation to check someone’s eligibility and the exact information required.
I think that, at times, we all find completing forms to be not as easy as it seems. I find the census form challenging in places, because some of the questions are difficult to fit into one’s circumstances. I struggled to decide where I lived at one point and how that fitted into the form. I have a lot of education and I still struggled with the form. I hope that we can agree that it would be valuable to be in a position to say, with confidence, that, when the new benefit comes into being, advice will be available to those who need it.
The Minister of State, Department for Work and Pensions (Chris Grayling): I have listened carefully to the broad range of contributions made by Opposition members of the Committee. I appreciate that they feel strongly about legal aid budgets and the decisions associated with them, and about what will happen to Citizens Advice and related advice services in future.
I pay tribute to the work of our citizens advice bureaux. They are an extremely important facility in our society. I have had discussions with Citizens Advice. Members will be aware that we have already extended a hand of welcome to the Prince’s Trust to put volunteer bureaux and desks in jobcentres. When it is appropriate and possible to do so and it helps local citizens advice bureaux to spread costs, I am very happy to see them either moving into or having a presence in jobcentres as well. The partnership between the two is extremely important.
However, the big point that has been missing from all the Opposition’s comments during the past hour and 10 minutes is the fact that this is a simplification exercise and it will be easier and quicker to interact with the benefit system. There will be fewer interactions because, as people move into and out of work, many of the adjustments to what they receive will take place automatically as a result of the flow of real-time data when there is a change of circumstance.
That is particularly the case for people who are currently receiving support through the tax credit system. One of the issues around that system has been the need to report on an annualised basis, so that an assessment of tax credits can be made on the basis of the previous year’s income. As a result, great complexity has arisen. All that will now happen on an automated basis.
Of course, a substantial proportion of claimants also move on to and off benefits regularly. Many of the first claims for universal credit will be new claims from people who are going through exactly the same process as they would normally in terms of sitting down with an adviser in a Jobcentre Plus office or making contact by telephone. Having done so, those people will have a relationship with the DWP—the welfare state—that will be much less complex and will require fewer interactions than would previously have been the case as they move on to and off benefits, and enter and leave a mini-job. Jobcentre Plus advisers will not have to do one of the most time consuming things that they currently do: assess whether an individual is better off in work.
Opposition Members also seem to have forgotten some of the good work that they did in government. I pay tribute to all the people who work for Jobcentre Plus because they have demonstrated over the past two or three years that they are very good at rising to a challenge. When Jobcentre Plus dealt with a large number of claims at the start of the recession, it handled the situation with great skill and in a way that was impressive, smooth and ensured that difficult times were dealt with as effectively as could possibly have been expected.
Kate Green: I share the Minister’s appreciation of the efforts of Jobcentre Plus staff. I, too, think that they rose incredibly impressively to the challenges of an increased case load during the recession. However, does he not accept that, conversely, problems with the work capability assessment, at least initially, have recently demonstrated the difficulties for Jobcentre Plus, its agencies and agents when handling the introduction of new procedures? That is not a reflection of the staff’s abilities or commitment; it is simply the case that the challenge of change often—if not invariably—brings such difficulties in its wake.
Chris Grayling: There is no doubt that the work capability assessment system we inherited had shortcomings. However, that relates to a different situation from processing a benefit claim, which is what we are talking about this afternoon in the context of the introduction of the universal credit. We are talking about a very different part of the process. Universal credit simplifies that process.
Sheila Gilmore: Aspects such as the current employment support allowance will fall within universal credit. Therefore, surely many of the processes will still have to take place because the proposal encompasses all those aspects. It is not correct to say that universal credit is completely different.
Chris Grayling: The hon. Lady seems not to understand that, yes, of course, a new claim—a first claim—made under either the current system or for universal credit requires someone to go through the process of sitting down with an adviser, talking to an adviser on the phone or submitting an online application. However, with the introduction of universal credit, if somebody enters work for three or four weeks and leaves again, the system can adjust automatically. They will have to sit down and continue the job search process but, by definition, universal credit uses real-time data and requires fewer interactions because the system can adjust
Kate Green: Does the Minister not accept that, although we welcome the use of real-time information and a much more responsive benefit, which is what he suggests that we will have, the speed at which information has to be processed will be much greater, and that actually increases the demands on Jobcentre Plus?
Chris Grayling: Much will be done on an automated basis. Some changes of circumstance can be handled automatically, so although there is significant pressure on the organisation in introducing universal credit, that also leads to a reduction of activity in other areas. The question that underlies the amendment is not about legal aid or the future of Citizens Advice, but about whether the Jobcentre Plus organisation has the ability to provide adequate interaction with individual claimants to ensure that their claims are processed and handled as accurately as possible.
I say this to Opposition Members: we have set aside £2 billion to manage the process of universal credit’s reaching maturity in the latter part of the current spending review period. We have made a substantial investment, not simply in establishing universal credit, but in the resulting transition arrangements. We know that, as an organisation, Jobcentre Plus has the ability to respond to rapid change; it did so very effectively at the start of the recession. We already provide extensive advice to claimants through Jobcentre Plus itself, through Her Majesty’s Revenue and Customs, and through local authorities via a variety of other means. We have, of course, inherited the mechanisms to provide advice online though Directgov, including the online benefits adviser, which currently provides customers with advice on entitlement to up to 28 benefits, pensions and tax credits.
The important point was made about the different channels of access, and of course we accept that not everyone can access the internet. We certainly have a goal of increasing online access to benefits. That is in keeping with the growth of online activity in our society as a whole, and it is right and proper that we keep pace with that change. We have no intention of removing the right of access to a face-to-face application. Nor do we intend to remove the right to an application over a telephone line, which is a common activity for Jobcentre Plus. They have the biggest virtual call centre in Europe, giving applicants access to a substantial number of advisers, and if one office is full, the telephone call simply transfers to the next. There is a big resource there to provide people with the right mix of access.
Kate Green: Will the Minister tell us how Directgov and Jobcentre Plus helplines will be used to enable access to information about what is going on at local authority level, in terms of the replacement for the social fund and the local handling of council tax benefit?
I am very confident that the organisation has the scope to deal with a major project. It is a simplification project that will ultimately reduce the number of interactions with the welfare state. We will use all available resources and channels, many of which were established thoughtfully and carefully by the previous Government, and have delivered good advice to people for a long time. They are all still in place, and will be there for the transition to universal credit.
We will ensure that all those sources of advice will include information on universal credit, and how potential claimants can access support if they think they are eligible. We will provide information about the migration to universal credit and how it affects current claimants. We will provide information on how we give additional support to those who require it when they migrate from the existing benefits to universal credit, including help with accessing and using online channels, and advice for those who cannot use online channels.
It is a matter for us to get right within Jobcentre Plus. We have got to ensure that the transition is smooth and that the information is provided. We are not considering people who walk in off the street. To a substantial extent, they are existing claimants, people we are already dealing with. In some cases, they will be in a position in which circumstances do not change, the amount of money received does not change and the migration is virtually automatic.
I give the Committee an absolute assurance that we will put in place the appropriate support that is needed. We will use the channels that are already there, many of which we inherited from the previous Government, to deliver that support, advice and guidance to ensure that we get it right. At the end of the day, the process is a simplification, it does not make the system more complex.
Yvonne Fovargue: I may be pre-empting the Minister, but how is he going to deal with the number of appeals? The majority of cases that came through the doors of my bureau were of people who felt that they had been placed in the wrong group. They felt that they should have been in the support element or that they should not have been in the work-related activity group. Appealing a decision made by Jobcentre Plus is not something that Jobcentre Plus can do itself, and people do not believe that, as good as Jobcentre Plus staff are, they will appeal their own decisions. So where are those people going to go?
Chris Grayling: When we consider clause 99, we will discuss appeals. The amendment does not specifically address the appeals process, so I will not cover appeals extensively. I will deal with them in greater depth when we get to that point in the Bill.
We are putting in place additional capacity to deal with the migration from incapacity benefit. We are introducing reconsideration to try to reduce the number
One should give credit to other Governments when they have done a reasonable job, and I think the Jobcentre Plus organisation that we inherited is pretty good. The previous Government should be pleased with what they achieved in building it. I am confident that they have left us the tools and the foundation we need to do a good job of the transition. We clearly have to put in place the additional tools necessary to do that over the next few years. We have the budget in place and, with all respect to the motivation of Opposition Members, I fear that the amendment is simply not necessary.
Ms Buck: I confess to being disappointed because, among other things, if the Minister was so confident of his case, he would not have found it difficult to accept an amendment that merely requires him to satisfy himself and Parliament that the provision will be in place. I am also disappointed that he misheard, or chose to mishear, my initial contribution, because I made it clear that universal credit has the considerable merits of integration and simplification, which we support. I accept that that is the case, and I accept that, after a transitional period—although one hopes earlier rather than later—there will be a falling-off in the need for advice and representation on that.
As my hon. Friends have made clear in their helpful and important contributions, this is by no means the only aspect of universal credit and the associated elements of the benefit system that will integrate with it in which problems are likely to occur, and advice and representation are likely to be necessary. We talked about council tax benefit, the social fund and localisation and complexity. We talked about the increase in conditionality, which is where I expect significant demand, increased pressure in the system and decisions to be challenged.
We discussed issues with overpayments. My hon. Friend the Member for Stretford and Urmston made the point that overpayments are particularly serious when it comes to child care payments, which will not be subject to real-time calculations. I do not think that some of those overpayment problems will be reduced. We also talked about discretionary housing benefit and the role of discretion.
In some cases, those problems will remain the same. In others, if only in the transitional period, there is likely to be increased demand—possibly quite significantly increased demand—in the system. It seems that the Minister has decided not to have the lifeboats. If the Titanic had had enough lifeboats, the story would have been rather different. If people had merely got their feet wet, we would not have had a calamity, and we would possibly have been spared Leonardo DiCaprio attempting an Irish accent.
All sensible decision making must involve adequate safeguards. With the system and staff that the Minister is paying tribute to, as we all do, there are currently 143,000 legal-aided cases in the welfare benefit system alone—without transition, without upheaval, without
‘(4) Before he has fixed the appointed day, the Secretary of State shall initiate and respond to a consultation on the treatment within universal credit of the following—
(a) childcare provision,
(b) eligibility for passported benefits, including free school meals and free medical prescriptions,
(c) the treatment of the self-employed, and
(d) the treatment of savings income.’.
The amendment highlights the fact that we are in a striking and unusual position for such a Committee in that several of the key decisions about how the system for which we are legislating will work have not yet been made. That is not just a theoretical point or a point about parliamentary niceties; it means that, unfortunately, we cannot scrutinise the legislation, because Ministers have not yet decided what the legislation is. It means that, for example, the implementation of the IT to make all this happen cannot fully go ahead yet, because nobody knows what the IT will do.
I want to be brief, but I shall say something about child care, which has already been mentioned a couple of times today. The Secretary of State was frank in his evidence to the Committee before we began scrutinising the Bill, and he told us that Ministers have not yet been able to come up with a proposal on child care. We understand the problem: Ministers want to give funding to help with child care to a much larger group of people than has received it up to now, but they do not want to spend any more money on it. That appears to mean that
It is a serious problem in scrutinising this legislation that we still do not know what those arrangements will be. I asked the Secretary of State about that specifically at the Department’s most recent oral questions in the Chamber on 28 March, and he replied that,
Kate Green: Does my right hon. Friend agree that it is particularly important that we have such a consultation because there seems to be some misinformation about child care provision? This morning the hon. Member for Dover suggested that the number of child care places had decreased between 2003 and 2008, but in fact the number increased by 61%. Although that includes school places, even excluding those, an increase of approximately 33% occurred in the number of available places.
Stephen Timms: I am grateful to my hon. Friend for that helpful correction to the information that was given to the Committee earlier, which accords much better with my observations and understanding. None of the consultation that I thought that the Secretary of State announced on 28 March has taken place.
Charlie Elphicke: I cited a figure of approximately 1.3 million, and it is quite true that I got that slightly wrong. The total number of places for child care in 2009, according to the child care and early years survey that was conducted that year by the Department for Children, Schools and Families, was 1,671,000. That was, indeed, slightly up from 2006, when the figure was 1,619,100, so it was a rise of about 30,000. My key point was that the increase in the modern world of having both parents work means that a greater need exists for child care. It is not a partisan point; it is a bipartisan point that we need more help with child care and more understanding of the pressures of modern family life.
Stephen Timms: I am grateful to the hon. Gentleman for his frankness in telling us that he was mistaken earlier, and that the figures had increased. I agree that the need for child care is growing and needs to be met. Child care is crucial, and it is an impediment to the work of the Committee that we still do not know what the arrangements will be. It is not only child care—paragraph (b) in the amendment refers to eligibility for passported benefits. We do not know who will be entitled to free school meals, and we have no idea about the arrangements for the other passported benefits. Those gaps are a serious problem.
Kate Green: In that context, does my right hon. Friend agree that although it is welcome that we heard last week from the Minister that the Secretary of State plans to seek the advice of the Social Security Advisory
Stephen Timms: That is certainly a worry, and I would have hoped that there could be some wider discussion, although I look forward to receiving the advice that the SSAC will provide. As we are required to establish whether the Bill will ensure that everybody is better off in work than out of work, we need to know who will be entitled to free school meals, because that makes a large difference to whether people are better off in work. At the moment, we have no clue about what those rules will be.
Chris Grayling: I am sure that the right hon. Gentleman will be pleased to know that I agree with him about the need to consult. However, I am afraid that his amendment has the wrong effect in seeking to do that. We intend to consult on several specific issues before implementing the universal credit; indeed, in some respects, we have already done so. We have already said that 2013 is the planned start date for new claims. In the meantime, we have a number of issues to work through properly. Clearly, it is our goal to have a smooth launch and to address completely and satisfactorily some of the issues that have been raised in this debate and in response to our previous consultation. Of course, we have already consulted on the original Green Paper and on the White Paper.
The problem with doing as the right hon. Gentleman suggests now is that we will have gone through those consultations. We will then have a statutory responsibility to do them all over again because, of course, the Bill will not become law until later this year. I reassure him that we are doing that work now. For example, let us consider the issue of child care. We are, indeed, moving ahead with a consultation; we will be holding a series of seminars with key stakeholders and I hope that he and his colleagues will feel free to take part—they will certainly receive an invitation. We intend to hold those seminars during the summer, so that we can examine the best options to support parents to meet the cost of child care in the future. We will certainly be writing to him and his colleagues to invite them to take part, and we will be inviting a variety of organisations to take part and make recommendations to us.
Passported benefits are, of course, a complex matter because it is outwith the Department’s remit. That is one of the reasons we have asked the Social Security Advisory Committee to consider it. We are working closely with the devolved Administrations and other Departments that are responsible for those benefits, such as the Department for Education in terms of eligibility for free school meals. That Department may also carry out some consultation. However, we are looking to SAC, which is resourced and has a secretariat funded by the Government, to make recommendations to us. Given the nature of the issue and the expertise that exists on SAC, it seemed appropriate to ask it to make recommendations to the Government. Again, once those recommendations are produced, we will be very happy to receive the views of the right hon. Gentleman and his colleagues.
On the capital rules of universal credit, we have been much clearer about our intentions. We have had a detailed debate and I have no doubt that we will have further debates. However, we believe that we have taken a decision on what we are going to do on that front and therefore further consultation is not appropriate. With regards to self-employment, as the right hon. Gentleman knows, we will continue to talk to the various groups that have raised concerns. We are effectively consulting on that issue right now. We intend to make decisions as soon as we possibly can and, again, we will seek his input.
Stephen Timms: I thank the Minister for making some helpful points. May I take him back to child care for a moment? He said that the Government intend to consult over the summer. The Secretary of State told us in his evidence to the Committee that he will make proposals on child care before the Bill leaves Committee. Does that intention still stand? In other words, will the consultation over the summer be on the basis of proposals that the Government have made by that time?
Chris Grayling: When I talk about the summer, it is easy to be distracted by the hot weather of the past few days and to think we are already there. We are starting that process now and we will be sending out invitations to seminars shortly. We will circulate information as quickly as we possibly can. We want to get it right and to get input from the right hon. Gentleman and colleagues. We will move ahead as quickly as we can, but we also want to get the matter right, so we do not want to rush it and make a hasty decision. It is certainly our intention to bring forward recommendations as quickly as we can. I know that my colleague, the Secretary of State, is working on establishing those seminar discussions as we speak.
Stephen Timms: I am grateful to the Minister for that assurance, but does it remain the Government’s intention that those proposals will be available to the Committee before it ceases its scrutiny work?
Chris Grayling: I cannot give the right hon. Gentleman an absolute answer. It depends on whether we have made appropriate progress in the discussions. I would like to give as much information on as many aspects of the Bill as we possibly can. We will start to introduce draft regulations in the next few days. Indeed, we have the first set of draft regulations, which we will make available to the Committee almost imminently. I will be providing him with as much information as we possibly can as we go through the process of considering the Bill. Of course, I will do the same for his colleagues in the other place as the Bill goes through there. My undertaking is to provide him with as much information as I can, as quickly as I can, and that will continue to be the case.
We have taken a consultative approach, and I hope that it has been bipartisan, too. I know we will have some debates in the Committee about the detail, but I genuinely welcome the bipartisan approach taken towards the principle of universal credit. We have already extended access to detailed information about the IT systems to
My concern, however, is that the amendment ties us into what are apparently a further set of consultations after we have gone through this process this year. I do not want us to be in a position where we have made all the decisions, have consulted, and have had the input of the right hon. Gentleman and his colleagues, but then we reach Royal Assent and there is a statutory duty to do the whole thing all over again. That would not be helpful. I hope, therefore, that he will accept my assurance that we will consult as much as possible, because we want the proposals to be durable. We want people to have confidence in the legislation, and we want it to last. The right hon. Gentleman should have no fears about our willingness to consult, or about our being open about the consequences of those consultations. We will publish the input that we have had, and we will be as transparent as possible.
Stephen Timms: The Minister has made some interesting points. As this is a probing amendment, I will certainly not press it to a vote, but I would like to record that I would be very dismayed if the commitment that the Secretary of State made to the Committee—that we would have the proposals on child care before we conclude our work—is not honoured. That would be a very serious omission, because the whole point of the Committee is to scrutinise whether people will always be better off in work, which is clearly the Government’s intention. If we do not have all the facts about the costs of child care, we cannot assess whether that intent will be delivered. However, there is no point in pursuing that matter further today, so I beg to ask leave to withdraw the amendment.
‘(4) Before he has fixed the appointed day, the Secretary of State shall satisfy himself on the basis of an appropriate pilot that the system for Universal Credit functions satisfactorily.’.
I am very concerned about the IT system that will support universal credit, and I must say that I am now even more worried about it given the complacent response from the Minister to the concerns that were raised earlier by my hon. Friends about available advice. From what the Minister says and from what others on the Government side sometimes say, I gather that there is a sense that they have come up with a panacea to all the problems with which we are familiar in the welfare system. A few minutes ago, he told us that advice will not be necessary because it will all be automated. I do not want to be unkind, but that view is naive. The Government have not come up with a panacea; there will still be a lot of problems, and they have not all been
The Minister said that we should not worry too much about advice, because the Government will spend £2 billion on IT. Where has the Minister been for the past decade, if that really is his view? Given the timetable that has been announced, we are facing the danger of some serious problems in terms of the deliverability of the system and the IT that supports it.
For some time, I have had a bit of a bee in my bonnet about this particular point, but I am glad to say that others are expressing similar concerns. For example, the Child Poverty Action Group stated:
“The universal credit requires an IT project on a major scale and it will be very difficult to avoid technical problems with such a major change. The risk to families is particularly great because all the payments they are entitled to will be put into one pot, so an error in one part of the system could mean they are left utterly destitute with nothing at all. We are concerned that the current timetabling of the implementation is too fast given this risk.”
“In a previous session… the Secretary of State gave evidence that the IT changes required would not constitute a major project and the White Paper suggests it will be along the lines of that used for employment and support allowance.
We are sceptical not only about this claim, but also about the timescale given for the introduction of Universal Credit especially given its reliance on HMRC’s ability to PAYE real time data in place.”
“Although Universal Credit is claimed to be simpler than the existing system, there will still be considerable complexity in the rules and the interactions between benefits outside of Universal Credit. The use of real time earnings data from HMRC gives rise to another possible area of error which is once again outside the control of the claimant”.
“risks of timing, in particular those associated with the development of the HMRC PAYE system which will be needed for UC to function as intended. Dame Lesley Strathie, Permanent Secretary and Chief Executive, HM Revenue and Customs appeared before the Public Accounts Committee in November and it seems clear, from evidence at that session, that there are very serious issues about the length of time it will take to have a fully functioning system in operation”.
Kate Green: Does my hon. Friend agree that a further cause for concern, even if the IT designs work perfectly and to the time scale, is that it is not even Ministers’ ambition to bring all employers on to that real-time
Stephen Timms: I hope the Minister will shed some light on this, because my understanding—I may well be wrong—is that it is the Department’s intention that all new claims for benefit will be treated as claims for universal credit from October 2013. If that is to be achieved, it will mean that every single person’s application will go through this IT system from October 2013.
I well understand my hon. Friend being sceptical about whether that will be achieved, because, if not, I cannot see how these applications can be treated as applications for universal credit as opposed to the previous benefits. I certainly would welcome some clarification from the Minister on that specific point.
“There are concerns that the PAYE2 system may suffer from the poor quality of data. HMRC must work with employers to ensure that they submit timely and accurate data to a far greater degree than at present. This is particularly important when greater numbers of staff undertaking part-time work may increase the data burden on employers”.
Charlie Elphicke: When, like all other members of this committee, my life is not sunk in welfare reform statistics and number-crunching, I am sometimes a member of the Public Administration Committee, where we review these sorts of issues. Almost every example the right hon. Gentleman raises is quite correct and accurate. The IT procurement by Government has been shocking: disgraceful, wasteful, incompetent and failing. The new Government have been looking at this carefully, as has the Select Committee and it seems that a central part of the problem in the past has been an oligopoly of IT providers. The movement to smaller and more fleet-of-foot IT providers who can be more “can do” and efficient will quickly help to improve things immeasurably.
Stephen Timms: The hon. Gentleman makes some interesting points and I will come to them in a moment. I must thank him. There have been some very good examples of public sector IT systems that have worked extremely well, including some conspicuous examples in the Department for Work and Pensions. There have also been some projects which fit his description. It is a mixed record. This project is an exceptionally complicated one. That is why I am fearful about whether it can be delivered in the timetable that the Government have set out.
Harriett Baldwin (West Worcestershire) (Con): It would be interesting to learn whether the right hon. Gentleman thinks that the current HMRC IT system would meet the standards that he would require from this pilot.
Stephen Timms: I shall make some points about the HMRC system. I had responsibility as a Minister for this Department—I occupied the Minister’s office for a time—and I was also responsible for HMRC. The praise that I directed towards the DWP and its record on IT systems would certainly be much harder to point in the
“It does therefore appear to VocaLink to be essential, from the viewpoint of developing the Universal Credit on the timetable envisaged, that DWP should engage with HMRC: to ensure that PAYE Reform remains on track to be delivered in time… to ensure that the interface between DWP’s and HMRC’s systems enables DWP to make efficient and effective use of RTI; to ensure that PAYE Reform is taken forward in such a way that it can straightforwardly both achieve the aspirations of HMRC to improve the functioning of PAYE and meet the requirements of DWP in respect of the Universal Credit”.
I thought that that was an extraordinary claim. This will be an immense IT project. Rewriting the entire benefits system is not going to be a major IT project—what on earth was whoever wrote that thinking of? All of us know the difficulties with tax credit. That will be just one module of this system. This will be an enormous project; it is hard, frankly, to think of anything that will be bigger in terms of public sector IT. It will be very large. It will be difficult to get right and it will be difficult to deliver on time. It is not very good to start out, as the Green Paper did, by being in denial about its being a major IT project.
I spoke to the Secretary of State about the issue last autumn and I want to give credit where credit is due. He has consistently been open to discussing the issue and he has, unusually and commendably, given me the opportunity to visit the Department to discuss the challenge with officials. I have done that now on two separate occasions. I have high regard for the officials I spoke to, the officials I worked with when was I was in the Minister’s office. They explained to me their confidence that this system can be delivered on time. However, I do not share their view.
After I met the officials in the autumn, I wrote to the Secretary of State setting out the basis for my scepticism, and he provided a full and courteous reply to my letter. He referred in particular to some concept feasibility work carried out by Intellect, the IT trade organisation, which he said had endorsed the Government’s approach.
Intellect might be criticised by the hon. Member for Dover for representing the clique of suppliers to which he referred, but I have a high regard for it. I worked closely with Intellect when I was a Minister at the Department of Trade and Industry, and I asked it whether it endorsed the approach and the time scale that the Government have set out. The director general of Intellect, who I know, did not say yes or no; he advised me to read the report that it had provided to the Department.
The Department initially told me that I could not read the report because it was commercially confidential. When I asked the Secretary of State, however, he immediately said that I could. I am grateful to him for that. The Intellect report is an interesting document. It starts by presenting a question:
The report makes interesting reading, and it cogently sets out the reasons for the scepticism of that third group; its thinking is much clearer in the report than the more optimistic views expressed by the others. The report gives part of the explanation for the scepticism of that third group of suppliers:
“Eight months for the core development is possible if done properly using agile, but unrealistic given the number of additional traditional interfaces, and in particular the one from HMRC. The split dependency on HMRC for a key component of the deliverable, and with no control over that programme of work, is likely to result in failure to meet the prescribed timescales.''
During evidence before the Select Committee, I asked the Cabinet Secretary whether he thought it had been a success—he was the permanent secretary at the time—and he assured me that it was a wonderful success and the whole of HMRC had been integrated. That gave me cause for concern. Nevertheless, Ministers, and increasingly civil servants, understand the need for computers to be able to talk to each other across platforms. That seems to be a key priority of the Government’s so-called agile management system that the right hon. Gentleman describes.
Stephen Timms: Agile development seems to be key to whether this is deliverable. I mention, by the by, that the Intellect report makes the point that, yes, more can be achieved with the agile approach to IT development, whatever that is, than with conventional approaches. Intellect gives the example of British Airways, which has done much more with the agile approach than with previous approaches. It makes the point, however, that British Airways had five years of culture change before it started on those agile approaches, and I am afraid that the Government have had none. The hon. Gentleman
“notwithstanding everything I have said about data quality, real-time will never be designed for 100% of the population—that is impossible. I believe that building the technology will be the lesser of all the challenges. I believe that we need to work with businesses for probably about two years and have a plan incrementally to bring them on board this system, if we want to do it well.”
That is a rather different impression to that which we are given in the Green Paper, and elsewhere—that this is all going to be fine and everything will be running and humming smoothly by October 2013.
“The DWP will be using real-time payments information in order to deliver the universal credit within two years, but you are saying that over those two years is when you will start to talk to people.”
There is clearly a difference of view between the two Departments, and I think that Dame Lesley Strathie is absolutely right. The danger is that Ministers have set a time scale that is not realistic. There is then enormous pressure on officials to say, “Yes, it can be done.” We have often seen in the past what happens in reality when that approach is taken. I commend the permanent secretary to HMRC for saying what is true. We are talking about a much bigger and significantly longer-term task than Ministers have so far recognised.
It is not only the time scale that she comments on; she makes the point that it is never going to be 100% accurate. A few minutes ago, the Minister was telling us that we should not worry about anyone needing advice because it will all be automated, yet the permanent secretary to HMRC, who will be responsible for delivering this automation, has pointed out to him—and us—that it is not going to be 100% accurate. Indeed, that would be impossible.
How accurate will the system be? Well, it says in the documentation that came out with the spending review last October in the name of the Treasury, the DWP and HMRC, talking about using real-time PAYE information to inform tax credit calculations, that:
What is going to happen to universal credit calculations, bearing in mind that those have to be undertaken not just once a year but every single month? What will happen to the 10% that are wrong, and how will they be corrected? With reference to our earlier debate, where will those on the receiving end of these wrong calculations go to try to sort out the problems that result? These are big and difficult issues that are going to take a significant time to resolve.
One other important point on which I would be grateful for the Minister’s comments is this: surely it will be necessary for this real-time PAYE system to collect data on hours as well as on cash received per month? Let us leave aside for a moment the requirements of in-work conditionality. We have had exchanges about that previously, and it is still not clear to me how people in jobcentres are going to establish whether people are working more hours or fewer hours without those hours data being collected by the system as well.
There is, however, another point here. The benefit cap, which we will debate in a few days’ time, will not apply, as I understand it, if a couple work more than 24 hours a week between them. For people who are in the frame of the benefit cap, as a fair number of working claimants will be, the universal credit calculation will need to work, first of all, by assessing the amount of universal credit that will be payable—other things being equal—and then by considering, if that amount is above the cap, whether the benefit cap applies.
Establishing that will require applying the 24-hours test. To do that, I think, the number of hours worked by one of the couple and then the other will have to be added up, and it seems that that will be possible only if the system knows how many hours both of the couple have worked. I may be wrong, and there may be some other way to apply that 24-hours-a-week test, but I cannot see what that would be. Will the real-time PAYE system—I agree with the hon. Member for Dover that that is certainly one of the serious weak points in all this—collect hours data as well as pay data? If not, how will the IT system know whether to apply the benefit cap each month when it calculates people’s universal credit entitlement?
Kate Green: Does my right hon. Friend share my puzzlement at how a system that is drawing on data collected by Her Majesty’s Revenue and Customs, which assesses PAYE on an individual basis, will be able to combine information about individuals when they are a couple in a joint household?
Stephen Timms: My hon. Friend asks an interesting question, and I hand it straight to the Minister. I look forward to hearing his answer. I suppose that something could be done with national insurance numbers within the universal credit system, but it will not be easy.
The original justification for the ambitious timetable was that the task was similar in scale to the implementation of employment and support allowance. I am familiar with that because, for some of the period while the ESA system was being built, I was the responsible Minister. In that case, policy was complete on Second Reading. It was a stretch and not an easy task by any means, but implementation followed successfully two and a quarter years later. In the case of universal credit, implementation is due just over two and a half years after Second Reading, so the period is three months longer.
However, against that, the scale is much bigger, because the entire benefit system will be rewritten. Secondly, unlike in employment and support allowance, key policy decisions, as we have been discussing, have still not been made. We do not know what is happening about child care, self-employed people or passported benefits, so nobody can be getting on with developing the IT to do those parts of the calculations because nobody knows what those calculations will be.
Thirdly, to return to the point made by the hon. Member for Dover—Intellect drew attention to this as well—there is a crucial and difficult dependency on the system at Her Majesty’s Revenue and Customs, and the permanent secretary has drawn attention to some of the constraints there. Finally, the Department does not have any previous experience of agile development. To say that doing it by agile will solve all the problems strikes me as over-optimistic.
I have a further major worry about council tax benefit, the exclusion of which from universal credit is a setback for reform. We were initially told that local authorities would not need real-time earnings data. The Local Government Association told the Committee that it was negotiating to obtain them. It is hard to see how local authorities could manage without such data when working out their own localised version of council tax benefit. When the Minister commented on that earlier today, he said that it would all depend on how they worked out their council tax benefit calculations. I am sure that that is true, but it is hard to see how they could do such calculations every month without access to real-time pay-as-you-earn data. The LGA certainly thinks that they need those data.
That creates a large number of further interfaces. There will be not only one difficult interface now with HMRC, but another interface with every single local authority in the country. Who knows precisely what the state of the systems at the local authority end of that interface will be? Nobody can start writing those systems yet, because, as the Minister told us, the Government are still some way from legislating for the new localised council tax benefit systems. The system will have to interface with all those.
The proposals also create a large new data privacy problem, because if the PAYE data will be shared with local authorities, highly sensitive personal data will be available to staff in every local authority in the country. That certainly adds to the concern that Intellect has expressed in its report about security and the potential for fraud.
Ms Buck: On data protection, is my right hon. Friend even more concerned about the instances where many—possibly most—local authorities have contracted out the management of their existing benefit systems and have contracts that go beyond the introduction of universal credit? It will be a question of sharing data not only with local authorities but potentially with contracted organisations.
Stephen Timms: My hon. Friend is quite right. I am happy to be corrected, but it seems to me that this is a big and worrying new data privacy problem. He is absolutely right to say that it goes further even than I
There is a real problem here about the feasibility of the timetable—not about the approach; not about the rightness of the intent that is being set out—for delivering the proposal. If that intent is maintained for the time being, we are heading for some serious problems. They can be averted, but that requires some courage on the part of Ministers and a recognition that the system is not going to be capable of handling all new applications from October 2013, which I understand to be the current intention. It may appear rather rash on my part to say that the system will not be ready by October 2013, but I feel fairly confident in making that assertion.
Acceptance of the amendment will help Ministers to avoid the consequences of undue over-optimism. Ploughing on with an over-optimistic time scale is a recipe for disaster. The consequences for the reputation of the Government would be bad, but the consequences for the well-being of those who depend on the benefit system could be catastrophic. The amendment provides an opportunity to reflect on this before pressing ahead with something that, in truth, will not be achievable.
Chris Grayling: The right hon. Gentleman has put a lot of thought into this. I understand the concerns that he has raised. I do not share them, but I do not deny his sincerity in proposing them. I will touch on some of the issues that he raised, but let me start with the amendment and the recommendation that we should have a pilot phase before we move to the full introduction of universal credit. The reason why I do not agree with the detail of the amendment, although I know he has used it as a vehicle to raise broader issues than simply this, is close to the central issue of our discussion of the use of agile technology. For those who do not fully understand the approach that we are taking, let me give a brief explanation.
The best way to describe our approach is that we are building the software for this in layers. There are 250 different pathways for people signing up for universal credit—different sets of circumstances that would come together to create an entitlement for universal credit. We are building those layers one at a time. We have already started to develop the simplest, most straightforward pathways within the system. Over the next two to three years, we will build layer upon layer to encompass the different variations that can exist within a universal credit claim.
In many respects, we are testing each of those pathways at each stage of the development of the product. We are not creating a single engine and then firing it up on one day. We are putting in each component and making it run as we put it in place before we move on to make the next component run. That is the basic principle of agile technology, and we have used that principle in the Department, although not in the current form, through the departmental lean programme. We have engaged
When we move to the implementation phase, we will do the same thing in some respects. We will start with new claims and then build a group at a time. We will start beyond those new claims with people in the tax credit system and then move on either regionally or on a group basis to migrate people one step at a time. This is not a big bang. It is not like day one of tax credits where people were either entitled to tax credits or not. We will migrate people one step at a time over a four-to-five-year period. Therefore, I do not recognise some aspects of the right hon. Gentleman’s concerns.
This process can be refined and adjusted—we do not intend to do so—but it is a step-by-step process that runs throughout both the development of the software and systems that will deliver universal credit and the implementation of universal credit itself. Therefore, a pilot phase would not add very much. It is difficult to see how one could construct a pilot within the phased roll-out that I have described, and I do not think it necessary.
Stephen Timms: The Minister says that this is not a big bang, but can he confirm that the Government intend that all new applications for benefit should be treated as universal credit applications within this system from October 2013?
Chris Grayling: Of course, that is the case, but the right hon. Gentleman will recognise that these are simply new claimants. The proposal does not encompass the millions of households that are currently in receipt of tax credits or existing out-of-work benefits, so it relates only to one group of the claimants with whom we will deal in any year. We will migrate our way, step by step, through many millions of households over a period of up to five years.
This is not a question of needing to get to a point in October 2013 where everything happens in one go overnight, as happened with tax credits. People were either entitled to tax credits or they were not. Such credits did not exist previously; along they came; and a big bang approach was necessary. That is why I do not think it right to try to carve out an additional pilot stage, given the layered approach that we are taking to the development of the software and to implementation.
I accept that the debate about the starting point and the IT systems are rather different, and I should like to answer one or two of the right hon. Gentleman’s points, but he has ranged slightly beyond the core purpose of the amendment and I wanted to start by addressing that specific point.
On the software programme itself, we have already started building the IT infrastructure that we need to deliver universal credit. Substantially, it is a development that uses systems that we already have in place. From the departmental point of view, we have components that will be either enhanced, such as our admin platform, or reused almost as is, such as our payment and accounting system.
Clearly, the universal credit real-time earnings element will need to be developed, but that will also use well-known components that are used elsewhere on the DWP estate. As a Member of Parliament who represents a party that is committed to recycling, the right hon. Gentleman will be delighted to know that many parts of the system that will be needed for universal credit will use the systems that he put in place for the employment and support allowance.
On the systems that are being developed within HMRC, the right hon. Gentleman is right that they are moving ahead, but I do not recognise some of the dates that he has mentioned. HMRC will go ahead with a pilot in less than a year’s time, with volunteer employers and software developers. Remaining employers are expected to be on real-time information systems by April 2013. All employers are expected to be using that system by October 2013, to coincide with the start of universal credit.
The Cabinet Office has looked at the joint-working arrangements between the two Departments and has praised us. Believe me, having gone through the process of getting the Work programme contracts up and running, I know that there is a lot of scrutiny from elsewhere in the Government, and so far we have had the thumbs-up. Indeed, I have sat with officials in the Cabinet Office who have praised both the leadership of universal credit and the progress being made, which is extremely important. So our view is so far, so good.
The right hon. Gentleman rightly raises questions about the Government’s ability to deliver major projects on time. I understand why he has done that. He is bruised by many years of being part of a Government who failed to deliver major projects on time. In my view, with clarity of purpose, effective ministerial leadership and a vision of what we are trying to achieve, without the propensity to chop and change many times along the way, it is possible to deliver projects on time. We have just gone through the process of Work programme contracting, and we confounded the initial expectations of officials and actually completed the process some months earlier than they said that they could.
Margaret Curran (Glasgow East) (Lab): On that very matter, the Minister will be aware of a substantial controversy about the misapplication of the process of the Work programme in Scotland and of the Wise Group making strong representations. I would urge the Minister not to be sweeping in his comments about the Work programme.
Chris Grayling: What I would say very directly to the hon. Lady is that it would not be appropriate for a Minister to seek to gerrymander a contracting process. The contracting process for the Work programme was carried out by officials. It was independently audited. It reached a result based on the criteria that were set out for the bids. The winning bids won. She would not expect me, or any other Minister, to seek to intervene in the contracting process, to gerrymander it for political convenience. Although I might have liked to see an additional social enterprise provider in the private contractors, it would have been utterly wrong for me to try to change a fair, open and independently audited contracting process. That is all I have to say on the matter.
To return to the point in hand, I suspect that the right hon. Member for East Ham and I will have this discussion on many occasions over the next couple of years. I hope and believe that he is wrong. We welcome his scrutiny and the difficult questions that he is asking. It is his job to do that and it helps to keep us and our officials on our toes. I do not believe that he is right to hold those concerns. In preparing to lead the Bill through the House, I have asked many questions about these issues. This can be done. It will require a lot of effort, determination and commitment. Most fundamentally, however, given layering approach that I have described, a pilot is not appropriate or necessary to deliver the project.
We will continue to offer the right hon. Gentleman the opportunities that we have offered so far to share his concerns with us and to explain to him what we are doing. I think that we are on the right track. I have lot of a confidence in the team of officials. In particular, the right hon. Gentleman raised concerns about what was in place before ESA was introduced. The difference this time is the agile approach and the fact that we are building the systems one layer at a time.
It is not necessary for every decision on every aspect of policy to be made before we begin to build those layers. The straightforward bits of the system can be done first, and the more complex cases can be layered on top. That gives us time to work through some of the issues that we are discussing in Committee and in the Department to try to get them right, and we can build the other layers on top at the end.
Stephen Timms: One of the weaknesses in the Minister’s case is that there is no experience of using agile techniques in central Government—certainly not in the DWP—and to say that we have found a new way of doing things that will solve all the previous problems is unduly optimistic. I want to press him on a specific point that I put to him earlier. Will the real-time PAYE system collect hours data, as well as money data? If not, how will the 24-hours-a-week working couples test be applied?
Chris Grayling: We are unlikely to do it on an hours basis. There are a number of ways that we could do it; we could relate hours to the minimum wage and achieve a formula, for example. We are unlikely to seek to use the system to collect hours worked—I think it would be extremely difficult to do that—but we are considering the best way to set the appropriate parameters.
Stephen Timms: Unless the Government assume that everyone is working for the minimum wage, such a formula will not apply the test of whether a couple works 24 hours a week between them that the Government have said that they intend to apply. I cannot understand how that can be done without hours data.
Chris Grayling: We have to work out the most sensible way of doing things. One option, in setting a threshold that people have to pass to reach a certain state—for example, the point at which an individual is no longer subject to in-work conditionality—is to set an earnings threshold that is equivalent to a number of hours in a full working week on the minimum wage and to say that, when someone reaches that threshold, they are no
Stephen Timms: I can understand why the Government would not want to collect hours data; seeking to do so would cause real difficulty. Is the Minister saying that the proposal that a couple will be exempted from the benefit cap only if between them they work more than 24 hours a week might not be applied and that something else might be applied instead?
Chris Grayling: Clearly, we need to set a relationship between hours and amount of money earned. There are only two permutations. Either we calculate the number of hours or the amounts of money, or we find a mechanism to relate the two. We are unlikely to collect hours data, but we might seek to create a formula that linked the two. If someone earns more than the equivalent of the minimum wage for a defined full-time week, they move beyond in-work conditionality. That is an example of how we can set a formula that moves people beyond a certain point in relation to a number of hours without counting them. It would be quite impractical to count them, but we can create a formula that links an income and a number of hours and sets a threshold in cash terms. We will probably want to come up with a formula of that kind. I will happily provide the right hon. Gentleman with more information as we take those decisions.
Chris Grayling: Apologies; I have scribbled it down, but I failed to come to it. That is relatively straightforward. If two people are registered as a couple in a household, a stream of earnings data will come in for both of them and the system will simply examine the household income together. If the hon. Lady and her partner are on universal credit, the system will track real-time earnings data for her and her partner, and it will make a household calculation based on the fact that they are registered as a couple in a household. It will be a simple mechanism.
I hope that that has at least answered the questions. I accept that the right hon. Gentleman will not be satisfied by my optimism as opposed to his concerns and pessimism, but I have explained why I do not think that a pilot is an appropriate vehicle. No doubt we will return, on Report and subsequently, to discussing the progress that we are making, and I hope to prove that the right hon. Gentleman was wrong to be pessimistic. For the moment, however, I do not believe that the amendment is the right way forward.
Stephen Timms: The Minister says that this is not a big bang, but I think that it is. What the system will have to do, and the Minister has confirmed this in his remarks, is handle each new application for benefit from October 2013. If there is a problem at that time, it will not be
The Minister is right: we do not agree about this, but my scepticism is well grounded in my experience of such matters. I understand his view that the world is completely different from the way it was a year ago, but I do not think that he is right, and I urge my hon. Friends to support the amendment.
‘(4) The Secretary of State shall commission a report about the implications of Universal Credit for unemployment data, before he has fixed the appointed day.’.
I shall speak about the amendment rather more briefly. As you will recall, Mr Weir, the previous Conservative Government were famous for the number of changes they made to the definition of the unemployment claimant count, all of which had the effect—perhaps unsurprisingly—of reducing the number of people who were stated to be unemployed. What will the current Government do about the claimant count? It is an important national statistic, showing the number of people who claim jobseeker’s allowance, which we are abolishing. As JSA will no longer exist, what will the Government do about publishing data on the number of people who claim benefit as a result of being out of work? Will there be a continuous sequence of data or statistics of some kind that would be consistent with those that are published at the moment about JSA? Once universal credit has been introduced, what will the Government publish in place of the JSA claimant count?
Chris Grayling: As the right hon. Gentleman started with a reminder of history, I will remind him of some more recent history. The previous Government alleged that they had abolished long-term unemployment by moving young claimants on to training allowance for a couple of weeks, then moving them back on to JSA, and claiming that as a return to zero day unemployment. There is more than one way of viewing history, but he raises a serious point. What is different now is that all
The right hon. Gentleman is absolutely right that ending JSA will inevitably lead to a statistical change, simply because we will not be counting JSA claimants any more. We intend to work closely with the ONS to consider the impacts and develop alternative measures of unemployment to complement the standard definition given by the ILO, which of course will remain unchanged. The headline figure quoted month after month will remain. We see this as a decision that really must be endorsed and supported by the ONS.
Personally, I think that it should be relatively straightforward to continue a similar definition to the current one. We will need to be able to identify the number of people on universal credit who are unemployed and looking for work through the requirement to sign on fortnightly and undertake a job search through Jobcentre Plus. I assure the right hon. Gentleman that we will reach a very transparent conclusion with the ONS, explain why and how we are taking the steps that we take, and make public the findings and recommendations for future measures of unemployment. It will be totally transparent, and I hope that we will come up with a measure in which hon. Members of all parties and members of the public outside this place, will have full confidence.
Stephen Timms: I certainly share those aspirations. In fact, it is a little disappointing that the Government have not been able to think a little further about what they will do about this, though helpfully the Minister has acknowledged the need to do it, and to agree it with the ONS and others. I beg to ask leave to withdraw the amendment.
‘(c) any award made under this subsection shall be uprated at the same rate as other universal credit awards.’.
‘(4) Where the award for universal credit is set by virtue of subsection (3), these arrangements will be maintained except in prescribed circumstances.’.
Stephen Timms: This group brings us to the important topic of the transitional protection that existing benefit recipients will be offered when universal credit is introduced. The Government’s intentions are clear, at least at the
“The Government has confirmed that there will be no losers as a result of the move to universal credit where the circumstances remain the same, and this power would be used to offer cash protection of the total amount currently received under the benefit and tax credit system.”
That sounds good, and we are all pleased that that is the case. It does, however, leave a number of important questions unanswered. In particular, when the Government say that there will be no losers where the circumstances remain the same; what counts as a change of circumstance that invalidates the promise of no losers? That is what I hope to establish in discussing the amendments.
We understand the theory that people will not be worse off on transition unless their circumstances change. There will be a cash protection for them, and as benefit rates are increased over time, their entitlement under universal credit will catch up with what they receive under the old system. At that point their protection will no longer apply, it will no longer be needed, and they will be on universal credit alongside everybody else. That raises some important questions to which we do not know the answers. I hope that the Minister will be able to give us those answers.
What kind of change in circumstance will negate the promise of protection? If somebody receives a pay rise, for example, it would mean that their benefit entitlement under both the old system and the new system would be different. Will that count as a change of circumstance? If so, would the no-loser promise no longer apply? What if their relationship status changes? If their relationship breaks down, or if they enter a new relationship, would that invalidate the no-loser promise? What about the birth of a child or simply changing job, even if the new job offers the same pay as the old job? What about a change of hours—we have touched on that—or child care costs going up? Do all, some or any of those count as a change of circumstance that would invalidate the protection promise?
Kate Green: As hon. Members will be beginning to recognise, I obsess about changes of circumstance in relation to child care, because I have seen the difficulties they cause. Is it not an area in which we know there will be changes of circumstance because for many parents, the cost of child care in term time is different from that in the school holidays?
Stephen Timms: My hon. Friend is right. If one takes a broad interpretation of the term “change of circumstance”, most people have several of those every year. The promise that nobody will lose out from the move to universal credit is pretty meaningless if it applies only for a few weeks until the next minor change of circumstance.
Another question is how long the promise will apply. Will it apply indefinitely? Will people be protected for ever if, because of their particular circumstances, they would benefit from that protection? A few minutes ago, I mentioned Intellect’s point that, in its view, achieving full transition of existing claimants to universal credit over four years could be impossible if the commitment is going to stay in place permanently. I must say that I
Amendment 119 simply requires that the regulations providing for transition must rather than may be provided. Amendment 125 raises an important concern, because paragraph (3)(a) directly contradicts the assurances that Ministers have given. Ministers have assured us that recipients should not be worse off because of the change to universal credit, but paragraph (3)(a) says that they will not be worse off by more than a “prescribed amount”. That is a very different proposition. When Ministers say that there will be no losers, do they mean it? If so, why is there a provision in the Bill that states that people will not be worse off by more than a prescribed amount?
“It is not the Government’s current intention to pay less than the existing award, but this power could be used for example to ignore very minor changes in award between the two systems, such as by a margin of £5.”
That appears to be saying, “Well, if it’s only £5 a week less, nobody will notice and it won’t cause any problems.” For a lot of people losing £5 will be a serious problem. I am glad that the note says that the Government do not intend to pay less, but I am worried that the Bill contains a provision to set a threshold, such as £5, that says, “Well, if it’s only a £5 loss nobody is going to bother.” I am afraid that people will bother.
I hope that the Minister will accept amendment 125, and so deprive himself of the wriggle room that the Bill gives him in clear contradiction of the assurance that he and his right hon. Friend the Secretary of State for Work and Pensions gave that there will be no losers. I hope that the amendment will be accepted to confirm that that is the intention.
Amendment 120 would require payments under the transitional arrangements to be uprated in the same way as other payments under universal credit. As I understand it, that is different from the Minister’s intention, which is—I hope he will tell me whether I am right—that the protection offered will be in cash terms only. As inflation affects what is being paid, universal credit will, sadly, go up in line with the consumer prices index only, but that will eventually catch up with the amount of benefit that people were receiving under the old system. Amendment 120 would secure real-terms, not just cash, protection.
Finally, amendment 121 takes us back to the questions that I asked at the beginning about what exactly constitutes a change of circumstance, and it proposes that the Government set out in regulations the things that would enable transitional protection to be dropped. What are the changes that someone would have to go through to be no longer confident of being protected by the promise that no one will lose? As it is, we just do not know what will amount to such a change in circumstances. As I said in response to my hon. Friend the Member for Stretford and Urmston, if any change of circumstance negates transitional protection, the promises that Ministers are giving are frankly meaningless, because many people have many changes of circumstance in a year.
Chris Grayling: I am happy to respond to the right hon. Gentleman’s series of questions. Schedule 6 provides illustrative detail on how we will handle the transition from the current benefit and tax system to universal credit. For many claimants, universal credit will provide support that is the same as, or higher than, that in the current system. We think that 2.7 million households stand to receive a higher amount under universal credit. Some people could, of course, be entitled to less under universal credit, and we are clear—it is a cast-iron commitment—that there will be transitional protection in place in cases where the amount of universal credit is less than the previous entitlement. We need the flexibility to make that work as effectively as possible. It is a transition that requires careful thought and planning. The illustration of how we may use the powers in the schedule is not a definitive programme. It has to cover a range of options to provide that flexibility, but it is a genuine offer. I am happy to give that clear commitment on behalf of the Government, and we are committed to fulfilling it.
We are considering the precise details of the cash protection—for example, when it is appropriate for transitional protection to be reduced or to cease, and what circumstances might trigger that—and we will provide more information in due course. I will, however, give some clear illustrations to the right hon. Gentleman, as he requested. I want to ensure that we get this right and that people moving from the current system to the new system are sufficiently cushioned from the changes in a way that is both affordable and fair.
Amendment 119 simply seeks to confirm that transitional protection will be offered. It is not necessary to put that in primary legislation, because it is already an integral part of the package, and there is a clear commitment to it. We will ensure that people are not worse off as a result of the transition from the past system to the new.
Amendment 125 aims to ensure that any amount of cash protection paid is not limited. We are not planning to set a limit, and no limit is set out in our plans. The paragraph that the right hon. Gentleman seeks to amend clearly indicates that regulations can ensure that the transitional protection is enough to make sure that there is no reduction as a result of the transfer to universal credit. We have the regulations that will do the job that he wants. That is our preferred approach, to revisit the bookcase: to create a system that is flexible, in exactly the same way that he and his colleagues sought to do when they introduced ESA and previous welfare reforms, by making sure that a lot of the detail was put in secondary legislation.
Stephen Timms: I am genuinely puzzled by that. The Minister reaffirms the firm commitment that he and his right hon. Friend the Secretary of State gave that there will be no losers, yet the Bill says that there can be losers, but not by more than the prescribed amount. Why is that provision in there if the Minister is standing by the firm assurance that there will be no losers? Surely he should accept the amendment and remove that flexibility.
Chris Grayling: We plan to provide transitional protection even when it amounts to a few pence, so the amendment is an unnecessary extra to the Bill. We have had this exact conversation in reverse in the past, as I said on the very first day of debate on the Bill. This is about building the bookcase, not populating it in its entirety.
Amendment 121 seeks to ensure that cash protection will continue to be paid until certain circumstances arise. We intend to pay a transitional protection for as long as it is needed, and I should emphasise that there is no time limit on this. It can be paid for a long period of time.
The right hon. Gentleman asked what a change of circumstance is. We will provide a much more detailed list later, as that is intended to be a major change. Reaching the upper threshold for the capital limit, for example, is a change of circumstance. Moving into a mini-job for two or three days is not a change of circumstance, because the basic principle of universal credit has to be the ability to operate reasonably flexibly. There will be a number of things that represent a major change of circumstance, but a tweak or an inflationary increase in annual child care costs is not the kind of thing that will mean that a person will lose a large chunk of their protection. We will take a common-sense approach. When there is a material and significant change in circumstance, the transitional protection will end. When there is a minor change that results from a natural part of the system—an inflationary increase or whatever—we will clearly use common sense.
Ms Buck: The Minister clearly has an idea about what would not constitute a change of circumstance. Does he anticipate that a change in household formation, such as a new baby or a partner moving in, would trigger a change of circumstance?
Chris Grayling: I do not want to give the hon. Lady a definitive answer, because we have not finalised the list of all the things that could be a change of circumstance. We will apply common sense. A major change of circumstance, such as the reaching of the capital threshold, will be a trigger point, but a minor change will not. We will publish regulations, and there will be debates about what those change of circumstances can and should be. I hope that I have given the hon. Lady the sense that a minor change, such as an inflation increase to the annual child care bill or entry into a short-term job, will not lead to the loss of transitional protection.
Bear in mind that the whole principle behind the introduction of universal credit is that we encourage people to take mini-jobs. It is clearly not sensible for someone who takes a mini-job to lose all their transitional protection. If they make a major employment change, that may be different. We will apply common sense; when there is a material change in someone’s life, that is the point at which their transitional protection will come to an end. We will give full information about that and provide an opportunity for the House to debate the matter.
Chris Grayling: That depends on the scale. We will have to use common sense. A major change in a person’s employment situation could include them moving from unemployment into a reasonably well-paid job that
Chris Grayling: That is clearly a decision that we will have to take in the near future, and I can give an undertaking that we will provide information to the House when we do that. I have given the commitment throughout this debate that we will provide further information. We have sent regular bulletins to Committee members as we make progress on the issue, and we will continue to do that.
Amendment 120 would ensure that any cash protection applied to an award is uprated. Let us be clear that it is not our intention to uprate cash protection along with the rest of the entitlement. There may be a few people whose circumstances will not change and for whom a cash protection top-up will be paid for an extended period, but we expect that the cash protection will erode step by step over time. We think this is a fair and balanced approach in what are challenging times financially. To take the approach set out in amendment 120 would potentially amount to a spending commitment that we do not feel able to make. I do not know whether the right hon. Gentleman feels that his party’s financial plans would permit it to make that spending commitment. We have taken a clear policy decision that it will not be uprated, and that is the right approach to take.
Ms Buck: This is a fascinating area. We look forward to considering it in more detail. From the Minister’s conversations with the Department for Communities and Local Government about council tax decentralisation, can he tell us whether the changes in circumstances that would apply to council tax recipients will be the same as those that will apply to universal credit?
Chris Grayling: By definition, the localisation of council tax benefit and the development of individual localised schemes would mean that it would be impossible to apply a national rule to every localised scheme, so it is not my expectation that that would be the case. We are dealing with the protections available in universal credit and the successors to council tax benefit, and the support provided therein will be a local matter for local authorities to decide. That is what localisation is all about, I am afraid. It is about local decision making on how to deliver support to people.
The change is all about acting fairly and reasonably and effecting a smooth transfer to universal credit. The purpose of a significant change to the benefit and tax credit system is to drive work incentives and offer greater simplicity to claimants, not to make people worse off. We have been clear that we will provide transitional support. That is an absolute undertaking
Stephen Timms: I think the Minister gave the hon. Member for North Antrim a commitment to publish a list of what amounts to a change of circumstance before the Bill leaves the House—in other words, by Report and Third Reading. Can he confirm that that is the time scale he envisages for that promise?
Chris Grayling: I have said that I will provide that information at the earliest opportunity. It is something that we will work on quite carefully. I will provide it to the Committee and to Members at the earliest possible opportunity, just as we will provide other details as early as possible. Certainly, I would expect us to be able to provide more information on that as the Bill progresses and before it leaves Parliament.
Stephen Timms: That was not quite as helpful a commitment as I had hoped for. Obviously I am disappointed by that and by the vagueness of the response but I do not propose to push the matter to a vote. I beg to ask leave to withdraw the amendment.
‘by the Secretary of State or the Welsh Ministers’—(Chris Grayling.)
‘(2A) Regulations made under the following parts shall be subject to the affirmative procedure: section 9(2), section 10(3), section 11(4).’.
‘(2A) Regulations made under the following parts shall be subject to the affirmative procedure: section 5(1)(a) and section 5(2)(a).’.
‘(2A) Regulations made under the following parts shall be subject to the affirmative procedure: section 8(3).’.
‘(2A) Regulations made under the following parts shall be subject to the affirmative procedure: section 11(3).’.
‘(2A) Regulations made under the following parts shall be subject to the affirmative procedure: section 12.’.
‘(2A) Regulations made under the following parts shall be subject to the affirmative procedure: section 25, section 26, section 27, section 28, schedule 6(5).’.
‘(2A) Regulations made under the following parts shall be subject to the affirmative procedure: schedule 1(4).’.
‘(2A) Regulations made under the following parts shall be subject to the affirmative procedure: schedule 6(4)(3).’.
‘(2A) Regulations made under the following parts shall be subject to the affirmative procedure: Clause 19, subsections (2), (3) and (4).’.
‘(2A) Regulations made under section 11(5) shall be subject to the affirmative resolution procedure.’.
‘(2) In section 37 of the Jobseekers Act 1995 (Parliamentary control), in subsection (1) at end insert—
“(d) regulations made under sections 19, 19A, 19C, 6J, or 6K.”.’.
‘In section 26 of the Welfare Reform Act 2007, in subsection (1), at end insert:
“(e) regulations made under sections 11D and 11J.”.’.
Stephen Timms: The Minister has frequently told us that we are not here to write the books but just to build the bookcase, but a few days ago he gave us some encouragement when he said that he recognises that MPs need the chance to look at the books and approve them before they take their place on the shelves, even if subsequent changes to them do not get the same degree of scrutiny.
The amendments draw attention to some regulations that I hope the Minister recognises as falling into the category of needing to be considered under the affirmative, rather than the negative, procedure before they are put on to the statute book, particularly those regulations for which the notes provided tell us nothing like enough. If, before I tabled these amendments, I had heard the Minister’s answer to the previous amendment, I would certainly have added the regulations made under that clause to my list, but I had not. The amendments therefore cover clause 5(1)(a) and (2)(a) on the amount of savings that universal credit recipients, including those in work, can have before they lose their universal credit; clause 8(3), on the taper rate; clause 9(2) about the amounts payable under universal credit; clause 10(3) about the amounts payable in respect of children; clause 11(3), (4) and (5) on the regulations prescribing housing support, including mortgage interest support; clauses 12 and 19(2) on how caring will be handled in universal credit and in cases of limited capability for work; clause 19(3) on in-work conditionality, and the Minister accepted that the note on the regulations was particularly vague on that clause, and it certainly warrants scrutiny before going further; clause 19(4) about the treatment of couples; clause 22 on exceptions to the
Chris Grayling: I have listened to what the right hon. Gentleman has said this afternoon and in an earlier part of the debate. As he knows, we have had the discussion in reverse in the past. I have some sympathy with what he says, but I am not planning to accept his shopping list this afternoon. I want to go through it carefully to see what the right approach is. I am minded to do what the previous Government did with some of the major welfare reform changes they introduced: that is, to have some provisions initially subject to an affirmative resolution, so that when the measures are first brought before the House they are a matter of proactive debate. To have an ongoing requirement subsequently to use the affirmative procedure for what will become routine annual changes would not be appropriate. It would be unduly time-consuming and would deprive researchers for Opposition Members of opportunities to look out for statutory instruments as they are laid, so that they can be prayed against. That is a job to be done by the Opposition and I do not plan to help them out entirely.
None the less, I do accept what the right hon. Gentleman has said. I will look carefully at the provisions he has highlighted and I will commit to table a Government amendment on Report, setting out provisions where the affirmative procedure will be used for the first round of regulations followed by subsequent regulations. I am happy to discuss with him in the meantime those matters he feels most strongly about. If he will bear with me until Report, I have given my commitment on that.
‘( ) Regulations made by the Scottish Ministers under section 33 are subject to—
(a) the affirmative procedure, if they contain provision amending or repealing primary legislation, and
(b) the negative procedure, in any other case.’—(Chris Grayling.)
‘(4A) A claimant shall not be invited to accept a claimant commitment by an employment officer unless the employment officer has taken steps to ensure, and is satisfied, that the claimant will have the necessary type and level of personalised support, and access to localised support, to enable them to comply with the claimant commitment and to obtain employment, or to undertake work or work related activity.’.
The amendment relates to matters raised by my hon. Friend the Member for Glasgow Central in amendment 43. It is designed to ensure that claimants in receipt of JSA, as opposed to the new universal credit, are able to access the necessary personalised and localised support to enable them to move into employment or undertake work-related activity.
We are all aware that people may face substantial barriers to moving into employment: young people, for example, may come from unstable family backgrounds; disabled people face particular barriers; lone parents have a different, though complex, set of barriers to moving into employment; and, importantly, people with addiction and substance-misuse problems may face a particular set of challenges and need intensive support to prepare for and move into employment. It is a matter of common agreement among all parties that that support must be personalised, individualised and largely tailor-made and provided on a one-to-one basis locally if we are to help such people to move successfully into sustainable long-term employment. Ultimately, it is good not just for the individual, but for the local community in the widest sense when such people can access appropriate support that increases the likelihood of their sustained participation in work.
Along with my hon. Friends, I am aware of the wide range of private and voluntary sector organisations that will deliver such support through the new Work programme, the prime contractors for which have just been chosen. We know that, as has been Ministers’ intention throughout, specialist providers, including third sector providers, will be given a role in the delivery of the Work programme. We also welcome the Minister’s commitment that Jobcentre Plus staff will have more flexibility to determine particular challenges faced by individuals and to understand the broader issues affecting their community or locality as a whole. For example, if youth unemployment is seen as a particularly large problem in an area, the local Jobcentre Plus will be able to direct its funds to tackle that.
We welcome the increased flexibility that will be available within the Work programme for the longer-term unemployed to access support and for Jobcentre Plus to deal with identified local needs, but it is important that co-operation and provision are in place at local level to ensure that local and individual needs can be met. The amendment would ensure that we do not move to such a hands-off market model that we end up with gaps in the support that people need to meet the requirements of the new welfare scheme. In particular, I tabled the amendment to explore with the Minister the extent to which the Government will continue to implement specific schemes to tackle specific barriers to work, rather than simply rely on the market to generate bottom-up provision.
During the recess, we heard much from the Government about the number of people receiving incapacity benefit who have alcohol and drug addiction problems. It was noted that some people with such issues have been receiving incapacity benefit for more than a decade. Some of us were concerned about exactly what the thrust was of presenting those statistics. I certainly hope that it was not to suggest that such people should not receive benefits, as removing their means of subsistence is likely to plunge them further into addiction, with all the problems that that brings; I also hope that it was not intended to create a blame culture. People often fall into habits of substance misuse due to significant external pressures that make them more susceptible to being challenged by abuse problems.
Kate Green: The point is that a work capability assessment will be put in place to assess whether people are capable of work, or have physical or mental health barriers that mean that they are at a different point in that journey, or are unable to undertake the journey at all. There is little point trying to second-guess a work capability assessment that is formulated not around the name of a condition, but around the capacity for employment. I welcome that. We have, obviously, had difficulty with the implementation of the assessment, but it asks absolutely the right questions and it recognises that people have a complex range of health needs. When the work capability assessment works well—we welcome the attention that the Government have given to improving how it works—it will ensure that our aim is not to put labels on people and then determine what happens to their benefits, but to unpick the barriers to their moving into employment, and focus support and attention on those.
Kate Green: There is certainly the possibility for alcohol and drug-dependent benefit claimants to be in receipt of, for example, incapacity benefit, but there has always been and continues to be a set of tests that determine their entitlement to that benefit. The amendment does not suggest that the tests should not be in place and that there should be a blanket prohibition on alcoholics securing the financial support of the state to help them to subsist while we seek to provide the support to move them out of their addiction dependency and to dismantle that and the other barriers they might face to moving into employment. My personal view is that, in the long run, it will be good for the individual and cost-effective for the state to spend the money up front on doing as much as we can to dismantle those barriers, including ensuring that people have a basic level of subsistence while we move them closer to, and ultimately into, the labour market.
Kate Green: I am very grateful to hear you say that, Mr Weir. I would love to have the debate, but this might not be the place for it. Suffice it to say that the objective of the welfare reforms is to move people who are currently detached from the labour market towards, and ultimately into, employment. We have a work capability assessment that addresses what the barriers might be, and enables both a calculation of benefit entitlement and the development of a tailor-made programme of support—which is the subject of the amendment, Mr Weir—to be put together for that individual. The purpose of the amendment is to ensure that that tailor-made support is in place.
To come to the nub of the matter, concerns are being expressed among charitable organisations that cracks might be appearing, with unemployed people not able to get the help that they need. For example, DrugScope has highlighted that two support programmes for people with drug and alcohol problems are being discontinued, with no new referrals to the progress2work scheme after 1 June 2011 and no further funding for dedicated Jobcentre Plus drug co-ordinators. I would be grateful if the Minister explained how confident he is that the new provision being put in place through the Work programme and other models will ensure that that expert and tailor-made support continues to be available in a different form, so that we have a proper means of dealing with and supporting people who often have multiple and complex problems associated with alcohol and drug dependency.
Chris Grayling: I understand the hon. Lady’s point, and her amendment is, in fact, technically flawed because it would apply the requirement simply to jobseeker’s allowance for two years and not subsequently to universal credit claimants, which is why I could not accept it in its current form. Let me be absolutely clear: the support that we provide through the Work programme will be open to all claimants who reach the appropriate threshold, which means that it is available to all ESA recipients, all adult jobseekers who have been out of work for longer than 12 months, and all younger jobseekers who have been out of work for longer than nine months, and there will also be a block of jobseekers for whom earlier access is made available because they have particularly challenging circumstances. There is no question, therefore, of there being gaps in that element of the provision.
The contracts last for five years, but they are effectively seven-year contracts, because the last referrals to the Work programme take place after four years and 364 days, and they are for two years. I hope, as we all do, that it is successful; I hope that the next Government, of whatever persuasion, will be minded to retender the process and renew the principles of the Work programme, and I hope that it will deliver the kind of support that the hon. Lady wants.
We have created a varied pricing structure to ensure that there is a real incentive to work with the hardest-to-help groups. We have also put in place minimum agreed standards; each of the bidders has set out the minimum support that they will provide to every claimant to avoid creaming and parking, whereby a bunch of the claimants are simply put in a room at the end of the corridor and nothing is done with them. I hope and believe that we have put in place safeguards to ensure that there are no cracks to fall through in the Work programme.
For those at an earlier stage of their job search—the hon. Lady referred to the work provided through progress2work—we have devolved funding to the front line of Jobcentre Plus through the flexible fund. We are saying to front-line Jobcentre Plus advisers and the teams in our districts that they know what is best suited to the needs of their areas. The challenges that are faced by Jobcentre Plus teams in Surrey are very different from those faced by teams in inner-city areas, and I want them to have the flexibility to tailor programmes accordingly. In some parts of the country, that may mean spending money on support for professionals, and in other parts it may involve providing support for people who have addiction challenges. Those decisions should be taken on the front line by people who understand the real need in their area, rather than applying a one-size-fits-all plan, which has always been the danger with the previous approach.
It is my hope and belief that we have not left any cracks; if we find cracks, we will seek to fill them. The structure of the Work programme should give an incentive to providers to work with everyone, and certainly people who reach those thresholds will be referred to the Work programme. I hope that that addresses the points that the hon. Lady has raised.
Sheila Gilmore: Will the Minister address the claimant commitment and support? Listening to him, it would appear that those personalised and localised support mechanisms will be in place, so what would be the objection to linking that to the claimant commitment, as the amendment suggests?
Chris Grayling: There are two reasons. First, there is the technical reason that I have just explained—if it were made to this part of the Bill, the amendment would simply add the claimant commitment to the current jobseeker’s allowance structure until jobseeker’s allowance is superseded in 2013. In 2013, the requirement that we are considering would disappear and would not apply to universal credit, which I do not think is sensible.
Secondly, the claimant commitment will apply to people in the early days of their job search. For the first few months, we give people light-touch support and the freedom to shape their own job search, and the support that we provide kicks in only when someone begins to find a challenge in the job search. That is sensible, because some people will want to claim unemployment benefit and jobseeker’s allowance and will take some time to sort themselves out, but they will not want or need proactive support from the resources that we provide. They would not need the money that we would be committing to them if we did so, and it would be an unnecessary use of public money. There comes a moment, however, when people struggle in the recruitment process,
Kate Green: I am certainly grateful for some of the assurances that the Minister has given us. I welcome his confirmation that, if people meet the criteria for inclusion in the benefit and support offered by Jobcentre Plus through the Work programme, they will receive that support. I welcome his assurances about the demands that are being placed on Work programme providers. I am sure that those providers will be keen to put all that support in place, and that the specialist providers who subcontract to them will be particularly keen to ensure that it is effective and of good quality. I also welcome his commitment to ensuring that devolved funding will be given to the front line in Jobcentre Plus to provide for appropriate support at an earlier stage, before claimants access the Work programme.
If I may note this in passing, Mr Weir, it is unfortunate that those welcome assurances are made against the backdrop of the inexplicable publicity about the numbers of people who are drug or alcohol-dependent and are in receipt of the benefit. I worry that that may send the wrong signal to Jobcentre Plus about how it should spend that devolved front-line funding. It might take that as an indication that Ministers do not think it right to spend money on people who are drug or alcohol-dependent, because they are in some way seen as not worthy of, or not entitled to financial or other forms of support. I am sure that that is not the Minister’s intention.
Chris Grayling: The hon. Lady might not have heard them, but may I ask her to take note of all my comments last week about how we are now extending the payment-by-results principle to the drug and alcohol treatment arena? We will contract specialist organisations to deliver rehabilitation on a payment-by-results basis to try to deliver some of the same benefits that we hope to provide through the Work programme, and to help people move to the Work programme.
Kate Green: I am grateful for that assurance, and I hope that it receives as much publicity as other comments that have emanated from the Department in recent weeks about that client group. We have received a helpful set of assurances from the Minister this afternoon, and, therefore, I beg to ask leave to withdraw the amendment.
‘, who in the case of disabled claimants must have access to sufficient skills and expertise to ensure that any requirements are appropriate to the claimant’s circumstances.’.
This probing amendment was tabled at the suggestion of Mind. It reflects the concern that has often been echoed in Committee, not least by the Minister, that the
Chris Grayling: I should like to address the amendment very simply. I have made no bones about my concerns about mental health issues as we have gone through this debate. I have had several discussions with Mind and other mental health charities since I entered my current role. I regard getting this right as enormously important.
One thing that has given me great pleasure in recent weeks is seeing some of the leading mental health charities, including Mind, in the list of organisations that will participate in the Work programme. That has to be a good thing. They have great expertise, and their presence will add a dimension to the Work programme that it would not otherwise have, so I am pleased that they will be part of it.
The amendment relates to how we provide support to people through Jobcentre Plus. It is important that Jobcentre Plus continues to develop skills in that area. I have already informed the Committee about my clear goal that we should continue to strengthen the experience of decision makers in Jobcentre Plus on mental health matters. The role of the disability employment advisers is particularly important. We have some very experienced professionals in Jobcentre Plus. It is very much our intention that that role should continue. Moreover, in the ongoing training provided to Jobcentre Plus staff, we should seek to increase awareness of disability and mental health issues more generally. I know that the previous Government began that work, and they have played their part in raising knowledge, awareness and understanding. The charitable groups that make representations to us have also played an important role in raising awareness of such issues. My message to the Committee and to those groups that are listening to this debate is that we see it as extremely important for people with disabilities and with mental health problems to have access to advisers who can give them the guidance that they need.
I certainly think that, through the Work programme, we will bring on board a level of expertise that we have not had previously, because of the specialist organisations that will be part of it. I am very happy, however, to give the right hon. Gentleman the assurances he seeks. He and I both regard this matter as important, and our concerns are shared by Members of all parties. It will continue to be a priority.
Stephen Timms: I am grateful to the Minister for his reassurances. It will be difficult and I know that there will still be problems in future, but I am reassured by the confirmation that he has given about the continuing
(a) Decision makers employed in Jobcentres and in private jobseeker contractors shall take into account all relevant facts and circumstances when considering the imposition of any sanction or penalty on a claimant;
(b) The claimant shall provide the decision maker with a statement of income, expenditure and debts;
(c) The decision maker may signpost the claimant who has debts to a relevant adviser;
(d) A claimant who is mentally or physically ill may provide the decision taker with written medical evidence from the relevant doctor, consultant or hospital;
(e) A claimant who is pregnant may provide evidence of a pregnancy test.’.
Clause 46 deals, again, with higher-level sanctions. Under the Government’s proposals, it will be possible for individuals to be in a position whereby they are sanctioned for up to three years, which makes it particularly important that sanctioning decisions are taken with all the available facts in front of the decision maker, and that proper consideration is given. The amendment seeks to achieve that aim.
It is also based on the presumption that it is better to get the decision right first time, with all the known circumstances taken into account, than for the decision maker to make a decision without looking at all the relevant facts. Ultimately, that could lead to the claimant’s lodging an appeal against a decision. Appeals are both time-consuming and expensive for the Government, and they are far less likely if all the facts and circumstances are properly taken into account before a decision on imposing a sanction is made.
I would like some clarification from the Minister about a general point on clause 46, which indicates that sanctions will be applied where the claimant has been unable to demonstrate that they had a good reason for failing to take up employment or participating in appropriate activity. I would like the Minister to assure us that the understanding of what constitutes a good reason will be based on full consideration of all the relevant evidence. That includes, I think, looking at the implications for an individual of some of the consequences of applying a sanction, and how such consequences can be addressed and mitigated. In particular, there are the implications of getting further into debt for an individual who is facing a sanction or is in receipt of a hardship payment that they subsequently have to repay. Debt is
Equally, we think it is important that, in the application of a sanction, physical and mental health is taken into account within a wider set of health conditions. For example, the requirement for a woman’s pregnancy to be taken into account when applying sanctions is important, because a sanction that cuts into what I would argue are the already inadequate benefits that pregnant women may be in receipt of will have consequences for the unborn child. If we deplete the pregnant mother’s financial resources, she will of course find it more difficult to afford the healthy diet that is so essential during pregnancy to ensure a healthy birth.
Kate Green: That is not what the amendment says. It says that that is a factor to be considered by the decision maker. We are clearly talking about a sanction applied to an adult, but it will have implications for her unborn child. Decision makers should give thought to the broadest possible context when looking at how sanctions can be effective in achieving their objective, which is to bring that woman back into compliance with work search requirements. That, too, will have to be considered in the context of her pregnancy.
It is also important to understand that, as I said earlier, leading people into debt may actually inhibit their ability to move back towards employment, not least because creditors, or the bailiffs and debt collectors who act on their behalf, will often up the ante in terms of how they seek to recover payment of a debt as people move into paid work. Repayment arrangements that were put in place perfectly happily while claimants were out of work and in receipt of out-of-work benefits can suddenly fall apart when the creditor discovers that the claimant has moved into employment, albeit probably low-paid and possibly sporadic employment. Decision makers should think about that, particularly as people move back into work, to ensure that the chances of them sustaining employment are not weakened. There is considerable evidence that the impact of debt on people’s mental health is substantial and significant, and mental ill health means that people are less likely to move into employment.
I am aware of the underlying issue that the hon. Member for Dover is really getting at, which is: am I saying that people who have particular health or well-being needs should never suffer sanctions? I am actually asking for a set of considerations about the way in which the sanctions are applied and the impact that they will have, which is exactly the same as, for example, the approach taken in the magistrates court when they are imposing, or being asked to review or revise, a financial penalty.
The fines must be proportionate and take account of circumstances. They never remove all income, and I accept what we heard earlier from the Minister—that benefits for children and so on will be protected, even when all the payments are integrated into a single credit. I welcome that. I would, however, be grateful for clarity from the Minister about whether, in the integrated universal credit, there will be any automatic, wholesale
Zacchaeus 2000 is well known to hon. Members for its work with people at high risk of falling into debt and facing benefits sanctions. It highlights a case of suicide, reported by the local government ombudsman, in which the claimant had his income stopped—in this case in error—by the jobcentre. It was an accidental sanction, if you like, and for some reason it had the knock-on effect of stopping both his council tax benefit and his housing benefit. I am not clear why that followed automatically, but it did. In the present environment, those benefits are separate, but it is arguably more likely that such a situation could arise when we enter the world of a single and integrated universal credit. In the case of that individual, the council tax arrears were enforced with maximum power. So great was his fear and concern about the situation that he hanged himself, leaving a note stating that he simply had too much debt and did not know how to deal with it.
I would be grateful for the Minister’s assurance that the fullest possible consideration will be given to all the relevant circumstances leading up to the imposition of a sanction, and to the consequences of the application of that sanction. Although I am not looking for a blanket assurance that sanctions will never be applied to particular categories of claimant, my concern is to ensure that those factors are properly taken into account. This is not only a compassionate society, but a society that wants to move people back into employment as quickly as possible.
Chris Grayling: I am happy to offer the hon. Lady many of the assurances that she is seeking. There are specific reasons why I am unable to accept the amendment, but I sense that it is a probing amendment in any case.
Before I address the amendment, I want to touch on an important point. The current drafting of the provision implies that private contractors will have the right to issue sanctions, which of course is not the case. We have no intention of taking sanctioning powers away from Jobcentre Plus. There is a technical reason related to section 19 of the Jobseekers Act 1995 that would make the amendment problematic, but I sense that the hon. Lady is only seeking reassurance.
I want to make it clear, particularly in relation to the more substantial sanctions, that we expect full consideration of all the relevant evidence. That is the guidance that will be given, and is given, to Jobcentre Plus decision makers. Even under the current system, we expect such information to be taken into account, to the extent that in cases where there are suspected mental health problems, our decision makers will even undertake a home visit so that they can truly understand the circumstances of the person concerned.
I also remind the hon. Lady that we are not talking about a total withdrawal of benefits. We are only talking about withdrawing the equivalent of JSA, which will be at the standard amount within the universal credit. The sanctions regime does not apply to housing benefit and its successor, and it does not apply to the child-related
Where I differ from the hon. Lady is that I do not think we can apply different rules to people with problematic financial situations. If Jobcentre Plus advisers are aware that someone has a problem, with debt for example, they already look, where possible, to refer them to a specialist support project or support worker. That might be the local citizens advice bureau or someone within Jobcentre Plus. Our staff look out for individuals who need particular help.
Yvonne Fovargue: I am interested to hear that people with debts may be referred to Jobcentre Plus. It is not my understanding that Jobcentre Plus deals with people’s debt to the extent of assisting them. The other issue is that referring people without ensuring that appointments are available within a reasonable period of time is not sufficient, particularly because a number of funding streams for debt advice are finishing within the next year. The availability of debt advice will be extremely limited. Referring someone with a pay-as-you-go mobile to a telephone helpline, even a freephone number, is not adequate, because such calls are quite often charged at a high rate.
Chris Grayling: The hon. Lady, who has experience of such matters, makes some sensible points. That is one of the reasons why I am looking to offer space in Jobcentre Plus offices to additional services. We are already in the process of moving, for example, credit unions into Jobcentre Plus offices in some locations. We are bringing in volunteer bureaux through the Prince’s Trust desk that I described. That is why I have said to the chief executive of Citizens Advice nationally that I would welcome discussions about whether we can bring either a CAB presence or, in some cases, an entire bureau into a Jobcentre. I want to see a much closer working partnership between Jobcentre Plus and individual organisations that provide support.
Equally, I want a savvy group of people in Jobcentre Plus who can first signpost people on where to go for help and advice. The presence of voluntary sector organisations in Jobcentre Plus offices has the dual benefits of providing an extra resource for claimants and spreading knowledge within Jobcentre Plus. The closer that we can get to a one-stop shop for guidance, advice and support, the better. I absolutely hear what the hon. Member for Makerfield says, and I want to see the skills grow and develop.
What I cannot accept is the principle that someone’s financial circumstances should mean that they avoid a sanction. That cannot be right. We have to send out the message that people have to help themselves. If they refuse to participate or turn down a reasonable job offer, there will inevitably be consequences.
My message to the hon. Member for Stretford and Urmston is that what she is asking for is already there. If someone provides evidence of a pregnancy, or that they have a health condition that has impacted on their circumstances, those factors will be taken into account.
Kate Green: I am grateful for the Minister’s assurances and the tone in which he responded to the amendment. I would like to raise a couple of points that remain important. I note what he said about claimants who are in financial difficulty and who already have substantial debts, which sanctioning could make worse. My hon. Friend the Member for Makerfield made some important, helpful points about how difficult it can be for people to get themselves out of debt when good-quality advice, for one reason or another, is not readily and speedily available.
It is a pity that the Minister is taking such a hard-line approach. I understand where he is coming from: he does not wish to allow people to run up enormous debts and then have to say, “We cannot sanction you because you got yourself into this difficult situation.” However, the truth is that people fall into debt primarily because they are on such low incomes to start with and face difficulty meeting their obligations. My concern is that the application of a sanction will exacerbate that situation and make it even less likely for them to move into employment and start to get themselves out of debt.
What lies at the heart of my amendment is not a moral argument, but an argument of efficacy. As I have said, that is exactly the approach taken in magistrates courts. Rather than push people into a likelihood of greater criminal behaviour, they take the sensible view that whatever the reasons for someone getting into that bad situation, it is not their role to make that situation even worse.
Finally, on the point that the Minister has rightly reminded me of, he has already given a commitment to the Committee that private contractors will not be responsible for taking sanctioning decisions—that such decisions will be taken within Jobcentre Plus. That is welcome, and I am pleased that we have that assurance. Clearly, it will be important that the decision maker does not take the information given by the Work programme provider simply at face value. It will be for the decision maker to seek out all the necessary evidence to inform the decision about sanctioning, in line with the issues that the Minister has pleasingly recognised.
Charlie Elphicke: The Minister has previously pointed out that Atos decisions are not just routinely followed, as they would have been under the old tick-box regime. Decisions are now reviewed and a much more intrinsic view is taken. That is to be welcomed.
Kate Green: I welcome the progress that we have made, following Professor Harrington’s very helpful report, to move from simply a tick-box exercise towards—I am not sure that we have got all the way there yet—the decision maker in Jobcentre Plus using the Atos test as one element of the decision and not as the decision. As the hon. Gentleman says, that is absolutely right, and we want that model to be replicated in sanctioning decisions.
I am grateful to the Minister for the assurances that he has given, with the caveat that I should like him to take a more flexible approach in relation to personal indebtedness. However, we have received some good assurances this afternoon about the approach to sanctioning and the role of the decision maker in Jobcentre Plus. Having received those assurances, I beg to ask leave to withdraw the amendment.
‘(8) Regulations will provide for an appeal mechanism.’.
‘(12) Regulations will provide for an appeal mechanism.’.
‘(9) Regulations will provide for an appeal mechanism.’.
‘(8) Regulations will provide for an appeal mechanism.’.
‘(12) Regulations will provide for an appeal mechanism.’.
‘(9) Regulations will provide for an appeal mechanism.’.
The amendments would repeat for the transitional benefit the changes that we have debated previously for universal credit, so that the duration of the withdrawal of benefit should be limited to one year rather than three years; so that lower-level sanctions should be limited to 13 weeks in duration, rather than 26; and so that sanctions in transitional benefits should not be imposed on someone with a disability without a disability employment adviser being consulted. Again, I am glad to have heard what the Minister said about the continuing role of those advisers in Jobcentre Plus.
The amendments would make explicit the requirement for an appeal mechanism and aim to ensure that hardship payments are grants rather than loans. I have put all those arguments to the Committee previously and I do not intend to repeat them, because the same arguments apply to transitional benefits as to universal credit. They are important points, and I hope that the Minister will take them to heart. Nevertheless, they are here for completeness, rather than for the purpose of initiating a new debate.
Chris Grayling: I am grateful to the right hon. Gentleman for making his comments in the way that he did. A number of the amendments refer to the appeals mechanisms, so perhaps the most appropriate way for me to respond is to say that I think that those mechanisms are necessary. I appreciate that there are divisions of
The right hon. Gentleman’s desire to have a clear appeals mechanism for these measures is entirely appropriate. He does not agree with the measures, but he is absolutely right that there should be an appeals mechanism. I want to reassure him that the appeals mechanisms provided by the Social Security Act 1998 apply equally to all the changes in the Bill. Nothing will change. JSA and ESA are already within the scope of that Act and will continue to be so when they are only contributory benefits. Effectively, all the changes in the Bill that relate to the provision of social security support are subject to those original appeal provisions.
I have written to members of the Committee to set out precisely what those appeal provisions are and how they apply. So I reassure the right hon. Gentleman that claimants will continue to have clear appeal rights against decisions to reduce an award in accordance with the sanctions and that they will have the rights that they have always had to challenge our decision if they disagree with it. That is appropriate and necessary. It is particularly appropriate because Jobcentre Plus does its job pretty well, but no organisation will ever get everything 100% right. Therefore, it is absolutely appropriate that people should have a fall-back position and a proper independent assessment of that decision. That will continue to be the case. It is written firmly into law. The amendments are therefore not necessary, but I absolutely take on board why the right hon. Gentleman tabled them.
Stephen Timms: I am grateful to the Minister for his helpful response to the amendment. I certainly take the view that the Social Security Act 1998 was a particularly exemplary piece of legislation, and I am reassured by what he said about its continuing efficacy. On that basis, I beg to ask leave to withdraw the amendment.
Nothing within these regulations shall supersede the provision set out in the Jobseeker’s Allowance (Lone Parents) (Availability for Work) Regulations 2010 or the Social Security (Lone Parents and Miscellaneous Amendments”) Regulations 2008, Clause 11.’.
We can dispose of the amendment quickly, because we have heard useful assurances from the Minister on the specific flexibilities that were introduced by the previous Government about the requirement that lone parents should be available for work-related activity
Chris Grayling: I will respond equally briefly. First, there are technical reasons why we need to redraft the legislation and why, in reality, it would be impossible to accept the amendment. It would prevent the redrafting of regulations to fit in with the creation of universal credit and the new system, and it would leave us stuck with the previous system. There is a need to redraft the regulations simply to fit in with the world of universal credit for technical and legal purposes.
We have been clear throughout about our intention to protect the interests of lone parents. We have moved the threshold from seven to five, but we have been clear about the protections that will be provided for lone parents with children under the age of five. We have been clear about the limits of what we expect in terms of work search for a parent with a child at primary school. We have been clear about our recognition of the importance of child care. With this Administration, from the Prime Minister downwards, the intention is to adopt a family-friendly approach.
I will reassure the hon. Lady and say that the safeguards that she is hoping and wishing for are very much there. We intend to migrate the past rules to the new rules in the confines of what we have described in other parts of the debate, but there are simple and practical technical reasons why her amendment would not work. It would prevent some of the protections that we want to import into the universal credit world from being imported, and I am sure that that is not her intention. I therefore hope that my comments have reassured her, and I hope that she will feel able to withdraw the amendment.
Kate Green: I am grateful to the Minister for the reassurance that he has offered. Naturally, we look forward to seeing the detailed regulations in due course, and we will obviously want to check at that time that we are comfortable that the protections that he has assured us will remain in place are reflected in the new regulatory environment. I welcome having his helpful assurances on the record this afternoon, and I beg to ask leave to withdraw the amendment.
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