Monitoring the Performance of the Department for Work and Pensions in 2012-13 - Work and Pensions Committee Contents

List of conclusions and recommendations

In this List, conclusions are set out in plain type and recommendations, to which the Government is required to respond, are set out in italic type.

Benefits up-rating

1.  Studies have shown that people on low incomes spend a higher proportion of income on rent, heating and food, which are often subject to higher inflation rates than general expenditure. The average annual rate of inflation that the poorest people face may therefore be significantly higher than that incurred by wealthier people. This may mean that people on benefits are likely to be hard hit by a 1% limit on benefit up-rating. We recommend that the Government monitor the impact of this reform on benefit claimants, particularly as many of them may also be affected by other reforms, including those to housing benefit, the introduction of the benefit cap, and changes in entitlement to disability benefits. (Paragraph 13)

Personal Independence Payment (PIP) implementation

2.  We agree with the Minister that 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. People should not be forced to wait six months or more to find out whether they are entitled to financial support towards the additional costs of living with disabilities and health conditions. Urgent action is required. We recommend that DWP closely examine its own systems and that it work with the contracted providers to resolve the current dire situation. Penalty clauses (service credits) contained in the contracts with providers should be invoked where necessary. We also recommend that DWP 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. (Paragraph 48)

3.  We agree with the National Audit Office that DWP needs to address the stress and uncertainty being faced by PIP claimants suffering delays. We support its recommendation that DWP set out a plan for informing claimants about the delays they are likely to face. We also recommend that DWP takes immediate steps to ensure that claimants are given accurate and timely information when they raise queries about progress with their claim with either DWP itself or with the contracted providers. (Paragraph 49)

4.  It is particularly important that claims from terminally ill people are expedited and that as much of the stress as possible is removed from the process they have to go through to claim PIP. We recommend that DWP set a target of seven days for processing PIP claims from terminally ill people and that it devotes all the necessary resources to ensuring that this target is met. (Paragraph 50)

5.  We recommend that DWP also take steps to establish a mechanism for expediting claims from people who may not have a terminal diagnosis, but who have rapidly deteriorating conditions, resulting in a similar need for immediate financial support. (Paragraph 51)

6.  The fact that claimants are taking longer to return written PIP claims forms and to provide supporting evidence suggests that the claim form, and the guidance for claimants on accompanying information, need improvement. It may also be the case that the four weeks allowed to return the form and supporting evidence is insufficient. These factors may be contributing to the higher than expected level of face-to-face assessments deemed by the providers to be required. We recommend that DWP consult stakeholders on the adequacy of the PIP claim form and the accompanying information provided to claimants and make amendments to both if these are found to be necessary. The time allowed to submit the completed form and supporting evidence should also be reassessed and extended if necessary. (Paragraph 52)

Local welfare assistance

7.  It is often the most vulnerable people who rely on being able to access hardship payments, previously available from the discretionary Social Fund, in emergency situations. Local authorities are using widely different eligibility criteria and application processes for these schemes. This change has also taken place at the same time as significant reforms to other benefits, particularly support for housing costs. (Paragraph 62)

8.  It was the Secretary of State's impression that local authorities may not use their full allocations for local welfare assistance schemes in this financial year, although he acknowledged that it was still too early to tell. However, if this does prove to be the case, it is likely that, at least in part, this is because this is a new responsibility and authorities may understandably have been reluctant to allocate too great a proportion early in the year when they were not in a position to accurately predict demand. This may also have led some local authorities initially to impose very exacting criteria for accessing these funds. (Paragraph 63)

9.  We believe that it is essential that the Government ensures that sufficient funding is available to local authorities to cover the costs of providing the localised welfare support schemes which have replaced elements of the discretionary Social Fund. We recommend that this is done in one of two ways: either DWP should continue to transfer funding to local authorities beyond April 2015, until it has a clear picture of the level of demand; or the local government settlement administered by the Department for Communities and Local Government should be increased by the full amount that would have been allocated for these elements of the discretionary Social Fund, and this sum should be ringfenced for local welfare schemes. (Paragraph 64)

Pension charges

10.  We previously recommended that member-borne consultancy charges—charges imposed by pension consultants for providing advice to employers, which are then deducted from scheme members' pension pots—should be banned outright. Following our report, the Government announced its intention to ban consultancy charges in automatic enrolment qualifying schemes. This ban came into effect from 14 September 2013. We very much welcome this step. (Paragraph 68)

11.  We welcome the Government's decision to bring forward regulations to ensure greater transparency in transaction costs in workplace pension schemes. The range of charges and costs which scheme members incur can make an enormous difference to the size of the individual's pension pot when they reach retirement. (Paragraph 74)

12.  There has also been some progress in tackling the wider issue of high pensions charges in the form of the Government's consultation on a possible charge cap. Although we understand the reasons for the Government's announcement that no steps to implement this important change will be taken for at least another year, it is disappointing that there will not be earlier progress. We reiterate our view that, at a time when millions of people are already being automatically enrolled into workplace pension schemes, it is vital that they are protected from excessive charges imposed by some pension companies and that the charges which are levied are transparent and comprehensible. (Paragraph 75)


13.  The Financial Conduct Authority's intention to carry out a market study of retirement income products, following on from its thematic review of annuities, is welcome. However, 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, many of whom face the risk of substantial financial loss in purchasing an annuity from their pension provider. We recommend that the Government and the FCA 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. We reiterate the recommendation from our 2013 report: that, if improvements in the annuity market do not occur soon, the Government might, as a last resort, have to consider taking steps to separate the function of providing pension schemes from that of providing annuities. (Paragraph 79)

Defined Ambition and Collective Defined Contribution pension schemes

14.  The Government launched a consultation on its plans for Defined Ambition workplace pensions in autumn 2013. We expected to be invited to carry out pre-legislative scrutiny on the resulting proposals for broadening the range of pensions available to employers, but these final proposals have not yet been published. We are concerned that the momentum for bringing forward these proposals may have stalled. It is important, as auto-enrolment widens out to the whole of the working population, and with the continuing closure of private sector Defined Benefit schemes, that employers and employees are offered new ways to share risk and to maximise retirement income. There is additional urgency in that the new arrangements ideally need to be in place by the time contracting-out of DB schemes ends in 2016. We look forward to seeing the Government's legislative proposals for these changes very shortly. (Paragraph 87)

Child maintenance reforms

15.  The impact on parents of charging for using the new statutory child maintenance scheme needs to be carefully monitored, particularly given that a full evaluation will not take place until 30 months after charging begins. The behavioural impacts, including to what extent charging deters parents from having any maintenance agreement in place at all, are particularly important. We recommend that DWP publish interim updates on the impact of charging on use of the statutory system and on the level of family-based arrangements, in advance of the full evaluation. (Paragraph 104)

16.  We welcome the Government's use of a pathfinder to introduce the 2012 scheme as a means of ensuring that the new Child Maintenance Service was functioning effectively before it was opened to all applicants. However, replicating and maintaining the service levels achieved in the pathfinder in the national implementation is clearly a challenge. We recommend that DWP monitor this carefully and publish regular updates on standards of service provided to parents. (Paragraph 106)

17.  The Government's motivation in introducing the new child maintenance scheme is to encourage parents to come to voluntary arrangements. However, many parents will need effective support to enable them to come to arrangements which are workable and acceptable to both parents, and parents will need to know at an early stage where they can go to find this support. We welcome the funding of around £10 million provided for voluntary and third sector organisations as part of the Innovation Fund to test and evaluate interventions that can help parents work together in the best interests of their children. We recommend that, in response to this report, DWP sets out how these projects will be evaluated and what the process will be for extending, funding and publicising the schemes identified as the most effective. (Paragraph 109)

18.  DWP's strategy for dealing with child maintenance arrears—both historic arrears and those in the new 2012 scheme—needs to be shown to be practicable. It is not yet clear whether the steps introduced to prevent new arrears arising are feasible; nor what the prioritisation of historic arrears for collection means in reality for those parents with care who are owed money. DWP needs to ensure that the decisions it takes regarding the collection of arrears are transparent and communicated clearly and promptly to all parents affected by the new arrangements. (Paragraph 114)

Use of DWP statistics

19.  DWP releases a great deal of statistical information about benefits. We have commented before that it needs to exercise care in the language used in accompanying press releases and ministerial comments in the media. 2013 saw heightened and quite widespread concern—including from the UK Statistics Authority and organisations representing disabled people—about the DWP commentary accompanying releases of benefits statistics. (Paragraph 141)

20.  The Government is doing a great deal to promote a positive image of disabled people, including in the principles behind its Disability Strategy and the Disability Confident campaign to help disabled people into employment. However, this positive action risks being undermined if the language used in DWP press releases and ministerial media comments accompanying releases of benefit statistics adopts a tone which feeds into negative preconceptions and prejudices about people on benefits, including disabled people. (Paragraph 142)

21.  We agree with our colleagues on the Public Administration Select Committee (PASC) that Government statistics should be presented in a way that is fair, accurate and "unspun" and that this is especially the case when they are being used to justify a particular policy or a particular allocation of resources. We reiterate our view that DWP should avoid feeding into negative public views about people who receive benefits, and that statistics should be used objectively to shed light on policy implementation, not to prop up established views and preconceptions. We recommend that, in response to this Report, DWP sets out the specific steps it has taken in response to the comments from PASC, the UK Statistics Authority, and this Committee, to ensure that statistics are released in a way which is accurate, and fair to benefit claimants. (Paragraph 143)

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