This report provides an assessment of DWP's performance in delivering a number of policy reforms during 2012 and 2013, based on its Annual Report & Accounts 2012-13, published in December 2013, and on a number of oral evidence sessions with Ministers.
Welfare spending reductions: benefits up-rating
- The Government decided to limit benefits up-rating to 1% for three years from April 2013 rather than linking it to a measure of inflation. Its rationale for this is that it is fairer given that wages have risen by only around 1% in recent years.
- The Government needs to monitor the impact of this reform on benefit claimants. Studies have shown that average annual rates of inflation that the poorest people face are typically much higher than those experienced by wealthier people. This means that people on benefits are likely to be hard hit by a 1% limit on benefit up-rating, particularly as many of them may also be affected by other welfare reforms, including the benefit cap and changes in entitlement to disability and housing benefits.
Implementation of Personal Independence Payments (PIP)
- New claims for PIP began, and DLA ceased to be available for new working-age claimants, from April 2013. Migration of existing DLA claimants to PIP followed in October 2013, although at a slower rate than originally envisaged.
- People making claims for PIP since April 2013 have faced long delaysin some cases as much as six months or morebefore they are given a decision on their eligibility. Some of the affected claimants are people with terminal illnesses.
- The current level of service offered to PIP claimants and the length of time claimants are waiting for decisions on their PIP applications is not acceptable. Urgent action is required. Penalty clauses contained in the contracts with assessment providers (Atos Healthcare and Capita Business Services) should be invoked if necessary.
- DWP should clear the existing backlog of claims, and reduce the average time taken to process new claims to the expected 74 days, before it extends the natural reassessment of existing DLA claims to other parts of the country.
- DWP needs to address the stress and uncertainty being faced by PIP claimants suffering delays. It should set out a plan for informing claimants about the delays they are likely to face, as recommended by the National Audit Office.
- It is particularly important that claims from terminally ill people are expedited. DWP should set a target of seven days for processing PIP claims from terminally ill people and devote all the necessary resources to ensuring that this target is met.
Local welfare assistance
- In April 2013, the Government passed responsibility for providing emergency hardship support previously available from the discretionary Social Fund (Crisis Loans and Community Care Grants) to the devolved administrations, and to local authorities in England, which have established their own local welfare support schemes.
- DWP funded the new schemes in 2013-14 and 2014-15 but this will end in April 2015. After this, local authorities will have to finance their welfare support schemes from their overall grant settlement. It is not yet clear whether additional funding will be provided within the grant to take account of this additional responsibility.
- The Government should provide sufficient funding to local authorities to run their local welfare support schemes effectively after April 2015, either by continuing DWP funding beyond this date, until it has a clear picture of the level of demand; or by increasing the local government settlement by the full amount that would have been allocated for these elements of the discretionary Social Fund.
- The steps taken by the Government to ban member-borne consultancy charges in workplace pension schemes used for automatic enrolment are welcome. However, more action is needed to deal with excessive charges, and the lack of transparency in pensions costs and charges, including the imposition of a charge cap.
- The Government and the regulators have had clear evidence for some time that the open market in annuities is not yet working in the best interests of the majority of pension scheme members. They should take urgent action to make the open market option a realistic one for all those who purchase annuities, not just the minority who are currently able to negotiate it successfully.
Child maintenance reforms
- The Government's new child maintenance scheme (the "2012 scheme") was opened to all new applicants in November 2013. During 2014, once the new scheme is seen to be "working well", DWP will begin a process of ending liabilities on all existing Child Support Agency (CSA) cases over a three-year period.
- Parents will be charged for using the new statutory scheme. The impact of charging needs to be carefully monitored, and interim updates regularly published, given that a full evaluation will not take place until 30 months after charging begins. Assessing the extent to which charging deters parents from having any maintenance agreement in place at all, is particularly important.
- DWP needs to provide more clarity and detail on the schemes it is funding to support parents to come to voluntary arrangements which are workable, and acceptable to both parents, and how these will be evaluated, extended and publicised.
- There is also a lack of clarity about DWP's strategy for dealing with child maintenance arrearsboth historic arrears and those in the new 2012 schemewhich needs to be addressed. DWP needs to ensure that the decisions it takes regarding the collection of arrears are transparent and communicated clearly to all parents affected by the new arrangements.
Use of DWP statistics
- DWP releases a great deal of statistical information about benefits. 2013 saw heightened and quite widespread concernin the UK Statistics Authority, and organisations representing disabled people, as well as this Committeeabout the DWP commentary accompanying releases of benefits statistics.
- The UK Statistics Authority investigated some of these cases and highlighted changes it wished to see both in DWP practice, and more widely across Government, in the way benefit statistics are released to the media.
- The Government is doing a great deal to promote a positive image of disabled people but this risks being undermined if the language used in DWP press releases and ministerial media comments about benefit statistics adopts a tone which feeds into negative views about people on benefits, including disabled people.
- Government statistics should be used objectively to shed light on policy implementation, not to prop up established views and preconceptions. DWP should set out the specific steps it is taking to ensure that statistics are released in a way which is accurate, and fair to benefit claimants.