CORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 479-vi

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

Work and Pensions Committee

The Role of Jobcentre Plus in the Reformed Welfare System

Wednesday 20 November 2013

Esther McVey MP and Neil Couling

Evidence heard in Public Questions 468 - 575

USE OF THE TRANSCRIPT

1. This is a corrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.

2. The transcript is an approved formal record of these proceedings. It will be printed in due course.

Oral Evidence

Taken before the Work and Pensions Committee

on Wednesday 20 November 2013

Members present:

Dame Anne Begg (Chair)

Debbie Abrahams

Graham Evans

Sheila Gilmore

Glenda Jackson

Kwasi Kwarteng

Nigel Mills

Anne Marie Morris

Teresa Pearce

________________

Examination of Witnesses

Witnesses: Esther McVey MP, Minister of State for Employment, and Neil Couling, Work Services Director, gave evidence.

Q468 Chair: Can I thank the Minister for coming along this morning? It is the last oral session of our inquiry into Jobcentre Plus’s role in the reformed welfare system. Can I welcome the Minister to her relatively new position? It is a few weeks now, but at least this did not happen in the first week that she was in post. That would be a bit more daunting. I know that you know the subject area well from your previous ministerial position. Can I ask you to introduce yourself and your colleague, just for the record, please?

Ester McVey: Thank you, Chair, and thank you for your warm welcome. With me today is Neil Couling and he is the Work Services Director. He heads up Jobcentre Plus.

Chair: There seem to be strange moustaches appearing all over the place this month. I am assuming that that is part of that.

Neil Couling: This is not a new fashion move for me.

Chair: I could say that to some here. It is genuine; they have been trying to raise some money.

Ester McVey: It is sweeping the nation.

Q469 Chair: If I can begin, one of the things we have found as we have been doing this inquiry is that there is not one single proper classification or ability for Jobcentre Pluses to actually assess people as they come through the door, as to who needs the most help and who needs the least help. Each Jobcentre seems to take a different approach to the initial assessment process; therefore, there is no clear idea, in many cases, as to which claimant has the biggest barriers or not. I am just wondering whether that is something that is in your thinking, Minister: there should be an introduction and some kind of initial assessment process that will be applied consistently across all Jobcentre Pluses.

Ester McVey: I will try to paint the entire picture because, of course, we all want to understand the claimant as best as we possibly can, so we do have a diagnostic interview as soon as somebody comes in. This understanding, this segmentation of the claimant, is the Holy Grail in a way. We have been doing pilots for the last two years looking at the Australian model. Equally, at the same time, we have looked at our own success in the UK. We know, after 13 weeks, 58% of claimants would have flown off. We know that, by 26 weeks, 76% would have gone off and found a job. It really is understanding those who need the best support.

Sometimes, and by some of the pilots that we have done and looking at the Australian model, by doing this diagnostic at the very beginning, it proved later on that two out of three of that was actually incorrect. What we are looking at is, yes, doing the interviews, supporting people as best we can, following them through and then knowing what is the best support that can be given, making sure the right person is following the right support at the right time, and getting it as accurate as possible. We do continue to look at this segmentation. Neil, do you want to add anything in?

Neil Couling: I just want to come back on the specific Australian tool. It is, as you said, Minister, the Holy Grail. It is very difficult to judge, in effect, who will be longterm unemployed after a year. When we trialled that back in 2010, we got two out of three cases wrong. Two out of the three cases we thought would be longterm unemployed actually got jobs before they became longterm unemployed.

Q470 Chair: That was not using the Australian tool. I do not think those are the figures. In Australia, they do say that it is generally accurate and does give a good prognosis of the individual who has the highest barriers. Part of the problem is that the initial interview includes a lot about conditionality and what the person must do, rather than analysing, looking at or even discussing the barriers that person might have to getting back into work. As a result, there is no coherent approach across Jobcentre Plus. It really is dependent on the individual personal adviser asking the right questions, but many will not be asking those questions because, in a 45minute interview, they are too busy telling them what their obligations are on the claimant.

Neil Couling: We did take the Australian tool and adapt it for UK environments. For example, we took out the obvious questions you would take out like "Are you an aboriginal or a Torres Strait islander?" Clearly, there may be one or two in the country, but not very many. We did in essence test their tool, and it just did not work. We are still seeking to see whether we can use segmentation in a slightly different way in a UK context but, in general, it is very difficult at the start of their claim to assess somebody and whether they are going to be longterm unemployed. Getting a job is a mix of motivation and opportunity, as well as people’s confidence.

Q471 Chair: You have done quite a lot of work on this. You have actually spent a lot of time trying to work out a UK version. Is all that work wasted? Are you saying that none of it works?

Neil Couling: We are going to launch a new trial of a different kind of approach to segmentation in February. My own view is that this is extraordinarily difficult to do. It is the labour market equivalent of cold fusion, in my view. It would be wonderful if we could do it, but I am not sure it is actually practical. When you think we see 400,000 people make claims each month, we are talking at such a volume here that the costs and the tool have to be extraordinarily sophisticated to allocate resources at that point, if it is not to be wasteful.

Q472 Chair: You must be wasting a huge amount of resources by not identifying, at quite an early stage, the people who are going to need the most help. I understand you want to identify the dead weights, and the Minister gives the figures for the numbers who will get back into work, but you have to know the characteristics of that group of people in order to know that they perhaps do not need a lot of help at the beginning. However, you also need to know the characteristics of the group who do need a lot. They have been unemployed a year before they get any kind of help.

Neil Couling: I do not think you can say we are wasting a lot of resources. That is the hard thing here. With our offflow rates being so strong, the fact is that 76% of people who claim have gone off benefits by six months. The cost of an upfront intervention on those 76% of people would be enormous compared with the benefit of identifying it.

Q473 Chair: That is not the question I am asking. We are not looking for an upfront intervention just by having a diagnostic tool as a first interview. The 45minute interview should be a diagnostic interview, not "Here are your responsibilities. If you do not turn up every fortnight and sign on, we will take your benefit away from you."

Neil Couling: If in that original diagnostic we identify somebody who, for example, may well be a repeat-somebody who is cycling through the system-they will get more intervention. What I was saying was more responding to the question of whether you can develop a philosophical construct that produces the right answer in every case. I do not think that is possible. Do we, in the diagnostic interviews, take the time to say, "This person has got specific needs or specific barriers"? Yes, we would if we identified them, but our system works on the basis that, in the initial phases of unemployment, where we can help people effectively sort themselves out, it encourages them to do that, because that is the most costeffective way of dealing with what are some very large volumes.

Q474 Chair: You still do not know who these people are. That is the problem.

Neil Couling: We do not know who absolutely everybody is, but in Jobcentres for example they will red, green and amber people, on the grounds of their assessments of likelihood. If you use the red, amber and green approach to decide all of your interventions, that would be wrong as well, and that is what our work has done. It is very difficult to judge, if somebody is in front of you for the first time, exactly what their barriers are. Sometimes it will take a while for people to open up; it could be their second, third, fourth and fifth interviews, which is why in some offices we have been trialling intensive activity where we pull people in every day. Each day we take a different aspect of their claim or the process with them.

Q475 Chair: You are only doing that once they have been unemployed for at least three years.

Neil Couling: No, that is not true. We have been trialling intensive activity, for example in Hammersmith for the Universal Credit Pathfinder, from day one for individuals there.

Ester McVey: It is also fair to say that nobody in any part of the world has got this initial diagnosis right. We tried the Australian model and it is no better than what we are doing, but we do continue to look for this. If we developed it here in the UK, we would be cutting edge at getting this segmentation right.

Q476 Sheila Gilmore: A couple of things here: this is a big issue in the employability world. Policy Exchange produced a report recently that said quite a lot about this, as have a lot of other people. Why have you not reported on your outcomes and discussed it with other people? We seem to be having a dialogue here of the Department saying, "It does not work," and other people saying, "This is what you should be doing." We are hearing both sides. Would it not be helpful to have published these results?

I was very struck when the Secretary of State was introducing what was going to happen to people who had been right through the whole Work Programme and were coming out the other side. He said, "We are discovering that people have literacy problems." It seemed to me to be very late to be discovering that people have literacy problems after they had been through various systems for three years. This business about people getting back into work quickly is not new. That is not new; you could go back. Even if you do not have a perfect assessment system, should we not at least be trying to pick out some of these people for intensive help early on? There are three or four questions there.

Ester McVey: When you have your first interview, yes, of course you will do the jobseeker’s contract or the Claimant Commitment, but there is an interview there as well. As you are drawing out your CV, what you can do, what your capabilities are, what your limitations are, what sort of job you would like to do, where we can put you, how we can get you on Universal Jobmatch, all of these things are coming out along that journey. Like with anything, sometimes it is about time with somebody; it is about trust of somebody, really understanding what people’s issues are. They might not immediately want to come out with all that information, but all of this probing is continually done, and that is obviously what we want to do: find out what extra support we can put into place for those people.

Q477 Chair: A lot of the evidence we have taken from organisations that work with people who are quite disadvantaged and are trying very seriously to get back into the labour market, such as Centrepoint, the homeless charity, or indeed a number of the homeless charities, is it is not even identified that the person is homeless at initial interview. That is a pretty big barrier to work. If at the initial interview that very basic assessment has not been made-that someone has literacy problems-at a very early stage, either the person’s interventions are not going to work because they have not taken account of the initial barriers or there are no interventions at all. That is happening with a number of people who are on ESA, who are turning up to their first interview and being sent away because they are too ill to work. There needs to be some kind of consistent assessment tool at a very early stage to at least try to identify the ones who are furthest from the labour market. You are not going to get it right for some of the ones who are going to get back in, but there is a whole tranche of people who are being missed.

Neil Couling: It is to misunderstand what we do to say that there is not a process involved to do that. What I am saying is that the idea that there could be a tool to do this is, as the Minister said, a bit of a Holy Grail here. I went to Germany this time last year, because it was reported to us that the Germans had invented something like this. When you went and investigated what they were doing, they are actually applying the same techniques that we do in the United Kingdom to German jobseekers.

There is no foolproof tool. I know you will have people like Policy Exchange and others in front of you saying, "The Department should do this." The Department is trying to do this. It is very difficult to do. Be under no misunderstanding: if you present with these kinds of problems in front of an adviser, then an adviser will try to get to that problem where the person will admit. Very often on literacy, they will not admit they have a literacy problem or a numeracy problem, because they have masked it for a long time. It is a bit of an art; this is not a science. Any system or process that we put in place to do this will miss some people. They will go through the system because we do not have perfect knowledge of the people coming to us. It is a process of investigation, exploration and also, for that individual, them accepting that they might have a problem here. They may not accept that they have a literacy or a numeracy problem, for example.

Q478 Nigel Mills: You said that in the trials of the tool, two-thirds of people you identified found work in the sixmonth period. What would have been your threshold for the tool being acceptable? Would it have been one in two finding work or a third of people? Where is the breakeven for this?

Neil Couling: About 8% of the people who flow in to Jobcentres leave at one year to go into the Work Programme. We have about 8%. Back in 2010, we took the top 8% of the scores off the Australian tool, the JCSI tool, and we then tracked what happened to that 8%. Did they get into work or did they emerge, after a year, still unemployed? What happened was two-thirds of those people got work in that period. We were trying to identify the 8%; in fact, the tool identified 2%. In effect, had you put how we intervene at a year into those people early, you would have wasted two-thirds of the money to do that, because they would have found work through the normal Jobcentre Plus offer.

That is what we did and that is where we concluded that that was just too expensive a thing to do, because obviously we are still spending on the two-thirds we missed, as well as the interventions on the people that just were not costeffective and were not worth doing.

Q479 Nigel Mills: Presumably the idea of the early intervention is that you get people into work who otherwise you spend a lot of money on later. Presumably, by spending the money earlier, they are still more motivated and they are still close to the job market, so I guess there is more chance of success. How much more refined does the tool need to be to break even? Is it a million miles off being breakeven in terms of cost versus advantages, or does it just need to be 20% better or something?

Neil Couling: That tool, in effect, would increase by two-thirds the cost of the Work Programme if you implemented it nationally. That is a sense of getting so many cases wrong, if you pulled that early intervention on those individuals wrongly forward. These are people who got jobs with the help of Jobcentre Plus at a rate that the tool did not expect them to do. The breakeven point is actually a very high threshold here. We are trying to identify that 8%.

Ester McVey: Looking at it another way, if you then put that money into those people who did not need it-look at the opposite side-then you have deprived the people who do need that money for more support, because you used it in supporting the wrong people. You have to view it from the other side as well: we need to make sure we put the most money with the people who need the most support.

Q480 Nigel Mills: We were aiming, were we not, rather than spending lots of money in benefits for future years, to look at spending it now in intervention and have that long saving. I am just trying to see; presumably you spend a bit of money on people you should not have done, but you may end up, by having the tool, spending less on the people who you did need to identify. Perhaps some of this extra saving you make covers some of the initial cost. Are you saying that those two are nowhere near being in balance?

Neil Couling: If I was before the Treasury trying to make a case for investment into that, what the Treasury would say, not unreasonably, is that for those people, the gain you get on them, if it was, say, a onemonth gain, would not be enough to pay for the cost of the interventions for the people you missed.

Nigel Mills: It is a long, long way apart.

Neil Couling: It is a long way apart, yes.

Q481 Debbie Abrahams: Would you accept the principle that to get it right first time, the assessment and the diagnostic process, if not the diagnostic tool, is still very important?

Neil Couling: Yes, the initial diagnostic is extraordinarily important.

Ester McVey: Hang on a second. I would just delve into what the question said there, because regarding this notion of getting it right first time, as I said at the very beginning, nowhere in the world has got it right first time. We are exploring the best ways to do that segmentation here in the UK, and if it were possible and you could do it, that would be brilliant. As that is not the case, what we have to do is go through a process, which is what we do.

Q482 Debbie Abrahams: Thank you, Minister. What I think you are saying then is nowhere in the world, apart from Australia apparently has a process-

Ester McVey: No, that is not true either, because we have just tried it.

Q483 Debbie Abrahams: It has not worked here. It is not transferable to here but it works in Australia. The principle of having a tool that works in diagnosing the needs of somebody-

Ester McVey: Hang on. We asked for the actual-

Q484 Debbie Abrahams: It does not work here currently, but are you exploring a tool to ensure that we get it right for us, and not just in terms of getting people off register, but making sure that they are going into sustainable employment?

Ester McVey: There are two things there. We asked for the findings on this research that Australia is doing it so well. Actually, there is not that, as you keep giving, definitive information that this is the outcome from Australia, hence we took it on board and tried it. You are giving as fact something that is not a fact.

Q485 Debbie Abrahams: Just a minute, Minister. That does not make any sense.

Neil Couling: Australia did not have a recession. Australia rode on the back of the commodities boom, in terms of exporting to China and so forth. If you look at the performance of the Australian labour market when we had similar rates of GDP growth, in the first part of the 2000s, the UK labour market outperformed the Australian one with them using this tool. Clearly, what Centrelink uses in Australia is a matter for them. I cannot comment on whether that is right or wrong for them; that is their choice. When we tried to put it here, it just did not work.

Q486 Debbie Abrahams: It is not transferable. That often happens when you use different tools that are developed in different settings. Would you accept, first of all, the principle that I think you are accepting and the fact that a diagnostic assessment that does not include whether somebody is homeless is a flawed process?

Neil Couling: I am not accepting that a diagnostic interview would not uncover the fact that somebody is homeless or not. They may not represent as homeless, so they may say, "I’m living at this person’s house," and we may think that that is an arrangement that they have entered into. As I am saying, you do not get 100% disclosure at the first engagement anyway, between claimants and us.

Q487 Anne Marie Morris: Minister, clearly what we want to do is achieve sustainable outcomes for these individuals. Currently, the performance measures are very much focussed on offbenefit. You measure at different weeks as to how many individuals have actually come off benefit. How can you guard against, if you like, the creaming and parking? How can you ensure that Jobcentres are not therefore focussed more on those easy to get off benefit, rather than focusing on who we can really get into work, because that is not measured?

Ester McVey: It certainly is not set up as creaming and parking. As I said, somebody will come to you; they will need support; you will do the interview; you will find out what they need; you will support them as best as you can.

Q488 Anne Marie Morris: We are getting into talking about the measures now. We have heard all of that.

Ester McVey: The process is roughly as such. You want a different form of measurement is what you are saying.

Q489 Anne Marie Morris: I am asking you whether or not the form of measurement we have works, because my concern, and I think the concern of many of the witnesses that we have seen, is that it is focussed on measuring those who go off benefit, as opposed to measuring whether, in the future, they take on employment and how long that is sustained.

Ester McVey: That is your question then. Sorry, your question was not measuring the way we deal with offflow but measuring going into a job. That was the question.

To be fair, we have looked at both, looking at what are the pluses and what are the minuses. It is probably a simpler measure looking at offflow. We can do it with certainty and we know what is happening there, and then, when you look at the sheer volumes going through, you have to say, "Actually, is that reasonable to be chasing up those employers? Is that the best use of time? Can we do that?" Across the two, it is not deemed that that is the best way forward.

However, what I can say is, when you have a tenth of the numbers that are going through on the Work Programme, they are measured that way. Have they got an attachment? Have they got a job? How long have they been in there? Really, it is best uses of resources and how we engage employers most proactively. Is it to follow up if somebody is there? Is it going forward or really are we engaging with employers to ask if they have the opportunities for people? Measurements are being done either way and offflow has been deemed, in this instance, for the numbers we are dealing in-400,000 people a month-the best way to do that measurement.

Q490 Anne Marie Morris: What is the justification for deeming it to be the best, if we exclude, for the moment, those who go on to the Work Programme? Forget for a minute what you do, because you have explained that there is a different system once they get on to the Work Programme, but not everybody gets on to the Work Programme. In terms of the justification for the money we spend on Jobcentre Plus, looking at the measures we use, you are saying that, at the moment, it is deemed to be more costeffective to measure offbenefit rather than sustainable employment.

Ester McVey: It is also the relationship with employers as well; if it is 400,000 people a month and you are checking them, calling up employers and following it, it is the work intensity for the individual as well as your engagement with employers. It has been deemed on many levels that is not our best way of engaging necessarily with employers. We want them to give people jobs, not to be monitoring what they are doing and where people are going. There are lots of reasons.

Neil Couling: We used to do this. We used to have thousands of people in the Department who would do followup, we used to call it, with employers with lists of claimants we had submitted to vacancies. "Did you take these people?" What it did was completely sour our relationships with most employers, because they were fed up taking the calls and they were fed up checking their admin records for this.

What we could do in the future and what we are exploring at the moment is using the realtime information feed that HMRC now has, which is supporting Universal Credit, to move us to a situation where you could measure jobs. Right now, running a bigvolume business as I am, offflow is the best measure we have of the kind of activity of Jobcentres. We know it is not perfect, but I need employers. My relationship with employers is extraordinarily important, and I would not want to compromise that by going back to a system where we basically bothered employers every day.

Q491 Anne Marie Morris: I understand that, but you mentioned RTI and the changes to the PAYE system; you are absolutely on the button there. Are you actively looking now, because RTI is not that far away, at the systems and processes that you would put in place and the new performance indicators that you would use, so that we get that information? I think you are validly saying that is more useful information, provided it is costeffective, than just offbenefit.

Neil Couling: It is. I recognise that, when we are in Universal Credit, the nature of what you ask Jobcentre Plus to do changes as well. It does not just become about getting people into a job. It becomes about sustaining people in that job and it becomes about progressing them through. RTI is the way in which you can judge some of that. We do have a tactical choice to make about when you cut over to that. I do not want to cut over two or three times. I want to change the system of targets inside the organisation once because, every time you change the system of targets, it is quite a huge change inside the organisation on this as well.

Q492 Anne Marie Morris: What is your timeline on this? RTI has got a timeline, so we now have some certainty as to exactly what is happening when. What is the timeline that you are looking at to deal with using these measures in an effective way? We all agree they are better measures long term.

Neil Couling: The judgment we have to make is at what point Universal Credit reaches such a size that it makes sense to cut over to that kind of modelling and that approach. You will know ministers are considering what the next phase of Universal Credit looks like, and I think you have an evidence session with the Secretary of State and the Permanent Secretary coming later on in December. I cannot move in advance of some of that work.

In theory, yes, you can do all this. It will require some seriously clever people looking at how you manipulate the data to make this work, because what you want is active management information to drive behaviour in offices. I do not want to lose that. That is currently what I have with offflow. I know essentially in order to meet targets who I have to off flow in any cohort or any Jobcentre. If you go into a Jobcentre, they can tell you the names of the people they are trying to place into work that week in order to hit some of these targets. Offflow is a very active, very successful system at the moment. I want to be certain that, when we cut over, I am getting at least as good from the realtime information feed. That has not been developed yet. In theory, yes, but in practice there is a fair amount of ground to cover before you can cut the organisation over to that.

Q493 Anne Marie Morris: We have looked at the two measures. One is offbenefit and the other one is sustainable work outcomes. One of the things that I find curious at the moment is that, in terms of understanding why people are off benefit, only about 40% of the individuals off benefit seem to be people for whom you have information as to why. It seems to me, if we are going to move across from offbenefit to measuring sustainable outcomes, trying to understand the reasons why people are coming off benefit is relevant. Is there a reason why the question is not automatically asked?

Ester McVey: We do know that. We know that nearly 70% of people who come on the offflow will go into work. We know 60% will go into fulltime employment; 26% will go into parttime employment; and 13% will go into selfemployment. We do have these figures of what people are doing and where the offflow is.

Q494 Anne Marie Morris: Then why does the National Audit Office say that in 40% of cases claimants leaving benefit are not asked why they ended their claim?

Neil Couling: We did for a while some leaver surveys of those leaving benefits, and that was the National Audit Office questioning that, because different samples do show different outcomes here. They were as frustrated as others, as all of us are, that you cannot easily focus on people into jobs. The thing about offflow I would just mention is there is some good offflow as well. Some people who are actually working will get caught by the regime and just excuse themselves from benefits. Not all nonintojobs offflow is a bad thing to have either.

Q495 Anne Marie Morris: What is the process now for getting the information as to why they leave? Is there an automatic question asked? You talked about that as a pilot, and yet the Minister talks about clear statistics about who goes where. That assumes there is a clear process for when you are off benefit.

Chair: Can I just update the statistics that you quoted from, Minister? My understanding is that the destination surveys are only done about every six years. The last one was 2011; the one before that was 2004.

Ester McVey: The one I have here I am assuming is the very latest, so it would be 2011.

Neil Couling: That is the destination survey from 2011.

Chair: 2011 is still quite a bit out of date. There are no current figures for the destinations.

Ester McVey: Except we do know we have got a million more people in jobs. What we do know is that the stats at the moment are far better than they were in 2011.

Q496 Chair: Anne Marie’s question was why Jobcentre Plus does not ask the question of why someone has come off benefit. That was her question, and you do not systematically ask everybody who stops claiming benefit why. It is an obvious question.

Neil Couling: One reason why is we have 14,000 people leaving JSA every day. I could ask everybody why they left JSA every day, but it is just managing that kind of information-that is 75,000 a week.

Q497 Chair: There could be an increase of people who are coming off JSA because they do not get any money and, with the various conditionalities now, they think it is just not worth signing on, because their contributory JSA has run out and they do not get any other money. You will not know that.

Neil Couling: That is why we use the destination survey rather than asking everybody, for example.

Q498 Chair: But it is six years apart, when government policy has so rapidly changed in the most recent years.

Neil Couling: It is not six years since we ran the survey but, yes, there was a sixyear gap between the 2004 survey and 2011. There was a rather big recession in the middle of that period as well going on. To be frank, we were focussed on dealing with the recession.

Q499 Chair: That makes it even more important. It seems incredible that you do not ask the people who have come off benefit why, because you cannot make the assumption they have come off benefit and gone into work. You certainly cannot make the assumption they have gone off benefit and gone into sustained work.

Ester McVey: What we do have and what we do monitor in other ways are things like the labour force statistics, so I can say that 50,000 young people found a job in the last quarter. We do know what is happening and we do have figures from other statistics, which we can move in and add into those.

Glenda Jackson: The stats are unreliable for the whole Department. The National Audit Office has already laid that on the line.

Ester McVey: I do not agree with that.

Q500 Glenda Jackson: I would not expect you to. You spoke about targets and, in the past, we have been told there are no targets in Jobcentre Plus, but how do you decide, when someone has come off benefit permanently-they are not appearing at Jobcentre Plus and not meeting the requirements-some kind of penalty should be imposed on them, like taking their benefits away? How do you know? Somebody decides, "I’m not bothering with trying to claim benefits anymore. I don’t like the process; I’ll look after myself," and they do not come in anymore. There will be a point when the people in Jobcentre Plus say, "Right, this individual has not turned up, so we are going to stop their benefit." How do you know? When does that come into play and for how many people?

Neil Couling: Two points: we have never said there are no targets in Jobcentre Plus.

Glenda Jackson: Excuse me.

Neil Couling: What we have said is there are no targets for sanctions. The second thing is: what do we do when somebody fails to sign on, which is what you are talking about? If they cease to sign on every two weeks, we hold the claim open for five days, because there may have been some difficulty getting to the Jobcentre or something else may have happened. If we do not hear anything from them, we close the claim.

Chair: We have a couple of questions on sanctions coming up, so can I leave that?

Q501 Sheila Gilmore: Can I just follow up on the research issue? There was a piece of work done about people who had been found fit for work through the ESA process. That was published in 2011 and, rather alarmingly, it found that 43% of those people, after a year, were not in work or on any other benefit. In other words, they may have gone from ESA assessment to JSA to running out of JSA to not getting a job, but 43% is an awful lot of people. Have you carried on any further? Has that research just stopped at that point? Has there been any further followthrough?

Neil Couling: I do not know about that particular research.

Q502 Sheila Gilmore: It was your research; it was published on your website.

Neil Couling: I do not know about every piece of research on the website, so I am sorry. We will happily get back to you.

Q503 Sheila Gilmore: It is quite important, because it may be that things are much better now, but that is a lot of people who, after a year, initially went on to another benefit, which would have been JSA but, after a year, 43% of that cohort were neither on one of those outofwork benefits nor in a job.

Neil Couling: The things that we do know are that the employment rate for disabled people is rising. We do know that the general employment rate in the UK economy is rising but, for those actual individuals, have we tracked them? I do not know the answer to that following up from that survey. In general, the economy in labour-market terms is doing extraordinarily well. There are over a million more jobs in the last three years, and the number of people on inactive benefits is down by nearly half a million over that period. There is a strengthening going on. On your specific question, I do not know about that piece of research, but I will happily get back to you on that.

Q504 Anne Marie Morris: Can we now move on to longterm training? Clearly training is key to some of these individuals and getting them back into work. Currently, you have a different provision, but it is a fairly fixed provision. I think it is two weeks if it is under six months, and they can have eight weeks if it is beyond that. Many have said that, if you really want the training to be effective, one needs a more flexible approach. Have you considered looking at a more flexible approach and giving Jobcentre Plus the ability to really identify, for each individual, wherever they are in the system-whether it is under six months or over six months-what is appropriate for them? That might mean you waste less money and you get better outcomes.

Ester McVey: We do. We have a flexible support package and that is entirely what we do. We take twoweek traineeships. You get your training, yes, which everybody can do, but if somebody specifically needs it and they believe it is with a view to getting a job and it is key, then that money would be used from the flexible fund to support those people.

Q505 Anne Marie Morris: Minister, my concern is that the flexible fund is an optional pot. It is great to have it but it is relatively small, so the reality is that most Jobcentres are stuck with the main pot, which is fixed at two weeks under six months and up to eight weeks after. Clearly, one of the options might be to extend that flexible pot and, if you like, rebalance what money is in each pot, but do you accept that, for training to be effective, it needs to fit the individual and, therefore, it is worth reviewing the system? All the evidence we have heard so far is that the system, as it currently works, does not give even the Government best value for money, never mind outcomes for the individual. Are you willing to look at that, and do you accept that, if training works, then the Government should be doing everything it can to make sure it is delivered in the best way, at the right time?

Ester McVey: We do that. You have to separate out what is training to get into a job while you are claiming benefits, what actually is an apprenticeship and the training that goes with that, which is obviously different because that is a work contract with learning at the same time, and then if somebody wants to go into full-time education. If they wish to do fulltime education, that would mean they would not be available to do their commitment to be getting Jobseeker’s Allowance. Each one of those steps is something that the Government looks at and the individual looks at and chooses as well. We do what we do best, giving those trainees traineeships and, should they need to be a little longer and we believe they go into work, yes, they get that. Should somebody wish to instead do fulltime education, that is a different path as well, and we have to work with all those variables and best suit it to the individual and the taxpayer.

Q506 Anne Marie Morris: Clearly, it is right that there should be, as you have described, a variety of interventions at different stages. You are absolutely right: there are some things that are more appropriate at different stages. I am only looking at this very small piece, which is while people are with Jobcentre Plus, when they are under six months and when they are over six months-just at that piece. Clearly, you are absolutely right, and it is to the Government’s credit that there are these alternatives, but have you looked and are you willing to look at increasing the flexibility there? All the evidence that we have had so far is that the flexibility is not sufficient to get the best outcomes.

Neil Couling: In principle, am I interested in looking at flexibility? One of the things I have done since I arrived is put more flexibility into the system, but I understand that it is back to the answer to question one here. Our inability to effectively judge who you should back with the longer training interventions at particular points means that there is a danger, if you took all of the rules away, that you would spend a lot of money ineffectively there, and resources are finite. The twoweek and fourweek rule-there are other things that some districts do as well-are designed to help with those kinds of allocative choices here, which are not easy to make.

In general, I would hope that, if somebody saw somebody with a lot of needs and thought, "We can fix that problem for that individual by an intervention early on," people would feel empowered and freed up to do that, which is where, as the Minister said, the Flexible Support Fund is really important, because that does give some flexibility for local managers to say, "On this person, I’m going to do that, because I think that will produce a job outcome from that."

Q507 Graham Evans: Just a quick question from me, Chairman. It is a topical question. It is Alcohol Awareness Week this week. What assessment do you do for those claimants, perhaps those hardertoplace claimants, for alcohol help or substance issues? How do you assess those people to help them away from the addiction and the problems that causes getting them into employment?

Ester McVey: That is a very key issue. Alcohol does bring about so many different problems in the immediacy and in the long term. Again, the person who is coming into claim might not necessarily believe they have the problem, so again it is about trust. It is about this twoway relationship and people maybe admitting where they need help and support as well. In that instance, there will be different avenues and different support to push them along. Equally, this would affect their conditionality. This would affect the extra support that would be given there, and also leeway and good cause measures to them.

Q508 Chair: Can I just pick you up on your last answer to Anne Marie in terms of flexibility? When you are talking about flexible support with regard to training, you are not talking about being flexible with the set timescales that Anne Marie set out, are you?

Neil Couling: In principle, I have no objections to looking at that, but understand that the fixed periods are there because of this allocative choice problem we have. What I was saying, as the Minister said, is that the Flexible Support Fund effectively allows people around that difficulty. If you have someone who is in the first six months and you think they need more than two weeks’ training, you could use the Flexible Support Fund to buy an intervention, for example, for that individual.

Chair: It would still be two weeks.

Neil Couling: As I said, back to the question one answer, because you cannot necessarily spot who is going to off flow before six months, as well as who is going to off flow at 12 months, with absolute certainty, you run the risk of spending money on individuals who actually do not need it.

Q509 Chair: What the colleges in their evidence suggested is that you have a lot of retreads. They have had people in earlier who could only do a fixed time of training, and then they get them back once they are on the Work Programme, mandated, to do exactly the stuff that they should have done in the first place, but they were not able to because of the time constraints.

Neil Couling: Luckily, they have perfect vision in hindsight, because that person has gone to them through the Work Programme. They are not seeing a bunch of people who would never have got to the Work Programme. I am sorry to sound a bit circular in my answers here, but this is at the core of the dilemma. It is really important the Committee understands this. The schools and colleges will tell you these things, because they are just seeing who ends up with them and saying, "Oh, if we had only done this beforehand, I would not have had to do this now." Of course, they are not seeing the 92 people we did not send them because they actually got into work.

Q510 Sheila Gilmore: The NAO found that claimants’ fortnightly jobsearch interviews were typically between four and seven minutes. Is that sufficient time?

Neil Couling: The purpose of the fortnightly jobsearch interview is to check whether somebody has been effectively fulfilling the requirements of their jobseeker’s agreement and, steadily as we roll it out, their Claimant Commitment. Somebody signs a declaration. There is a bit of bureaucratic process there, but that is essentially what that is for. We found that bringing people into a Jobcentre to do that has an effect on people actually fulfilling the requirements of their commitment. If you spot a problem or somebody has been a while without a longer intervention, what will happen is a person will either be referred to an adviser or they will be booked an advisory interview after that. The mistake the NAO made was just seeing the fortnightly jobsearch reviews in isolation from the other activity that goes on at a Jobcentre. It is part of the process; it is not the process.

Q511 Sheila Gilmore: What statistics do you publish or could you publish to assist the NAO on how many people get further advisory interviews?

Neil Couling: That is where those who wish us to get rid of offflow do not really understand the value of offflow in the system. Given there are targets at 13, 26, 39 and 52 weeks, we use those triggers to decide, when people are coming into us, whether they need a longer intervention. We have that data and can provide that.

Q512 Sheila Gilmore: Do you have figures for how often people, if they are staying the full six months, would have something more than the meetup to say, "How many jobs have you applied for?"

Neil Couling: All of the incentives on the advisers is to make those longer interventions, because they have this target for offflow of 73% of people at 26 weeks. The system is set up to achieve that. My slight dig at the NAO was that, when they looked at this and made that comment in their report-in fact, I gave evidence to them-they used it in isolation. You have to see the totality of the system and what is going on, the whole Jobcentre Plus offer, which is why on the 28th or so we are publishing an evaluation on the whole of the process inside Jobcentres and not just taking isolated bits and saying, "You only spend four minutes there, Neil," or "You are only doing this here," or "You’re not doing that." You have to see the totality of what we are doing and the results we are getting from that, because we are getting results on offflow that are well in excess of the kinds of targets we have been set.

Sheila Gilmore: That will show how long people actually spend with advisers.

Neil Couling: Yes.

Q513 Sheila Gilmore: Will it also say how many employment advisers you have in Jobcentres?

Neil Couling: Employment advisers? I will just check. This may just be bureaucracy, but my employment advisers are the people who work with employers.

Sheila Gilmore: Sorry, I meant the ones who work with jobseekers.

Neil Couling: There are 1,500 people who work with employers and we have about 24,000 advisers and assistant advisers. In fact, we did produce some data for the NAO report you were looking at.

Q514 Sheila Gilmore: Has that number gone up or down in the last two years?

Neil Couling: The number is going down but, then again, unemployment is going down.

Q515 Sheila Gilmore: The new Claimant Commitment is going to ask people to spend a full 35 hours per week jobseeking. How is that going to be judged? Presumably people are not going to be in the Jobcentre any more often. How are you going to judge whether somebody has spent 35 hours a week?

Ester McVey: There will be a combination. Yes, they will be looking at how many jobs you have applied for, how many interviews you have had, how many people you have gone to see. I guess there is an element of discretion in there. What we are trying to do is just make sure that people are doing as much as they possibly can do to get a job. That is what we are saying: view it as you are in a job to get a job. When you are claiming your Jobseeker’s Allowance, have that in your mindset. That is what we are wanting to do; we are wanting to support you to enable you to get a job and progress in life. It should be a very positive relationship.

Q516 Sheila Gilmore: You are looking then to people supplying some evidence that they have done that. Is it going to be, "You have not done enough. You have not done 10; you have not done 20"?

Ester McVey: There is that. There is, "Have you done enough? Does that look like a reasonable amount?" That is when you will discuss it and say what you have done. Equally, should you have said, "Well, I went out, I met a person and had an interview," that could be an hour on the bus to get there, an hour to meet with people and an hour to come home. You could justify that time and that would be reasonable.

Sheila Gilmore: Are people expected to keep a diary?

Neil Couling: Yes. As part of the Claimant Commitment, there is this document called My Workbook, where they are expected to keep details of what they have been up to and what they have been doing. We are trying not to set minimum expectations, because we found, when we trialled this, that if you encourage the claimants themselves to set out what they are going to do, they will actually do more and feel more comfortable and more ownership of what they are being asked to do, rather than the adviser saying, "You must apply for six jobs," or "You must do this or that." It is much more of a discussion and it is using some behavioural science to try to encourage people to take ownership and have much more of a dialogue with us about just what is going on and what is getting in the way-so how some of this is going.

Q517 Sheila Gilmore: What I am having some difficulty with is working out how all of this is going to happen within the workforce that you have. A minister said that they were trialling having two 90minute interviews within the first month of unemployment, which sounds very good. I do not know if that is happening everywhere, if it is just happening in some places or in how many places that is happening, plus we have this discussion with people over whether they have spent their 35 hours. Is all this actually going to happen in practice?

Ester McVey: When you look at the journey that Jobcentre Plus has been on, particularly from 2007, and you see that between 2007 and 2010 the workload doubled during the recession, they dealt with that; they worked with that. They redeployed, to use that word, as best they could, and we are now finding we are moving away from those large volumes that fundamentally doubled in a short space of time to "How do we have more indepth support with people as the number going to Jobcentre Pluses eases slightly?" That will not be an easy thing to move people around and remobilise people around, but that is fundamentally what Neil and his team have been doing in the last couple of years.

Neil Couling: As of 4 November, we had Claimant Commitment rolled out in 74 Jobcentres. We will have half of them done by the end of the year and the rest done by April. We are on track to do that. It is a big change; it is a big cultural change. It is a change in the relationship between the claimants and the advisers. In fact, we are renaming the advisers "coaches" to try to get across that this is a change of relationship that is going on here. It is a big change but, as the Minister said, the falling volumes are presenting us with an opportunity to redeploy some resource in there. My resources are not falling as fast as the volumes are falling, because we recognise we have to invest here to help people. Coming out of the last two recessions, folk got left behind and we do not want that to happen this time.

Q518 Sheila Gilmore: Some of the announcements and statements do sound good. Two 90minute interviews within the first month of unemployment does sound as if it is going to give people that sort of intensive help. Is that going to be done everywhere? Is there going to be a report on its effectiveness? You tell us about a lot of things you have tried, but I still have not heard from you if any of these things are reported on in a public way, so that we can hear about them.

Neil Couling: The Claimant Commitment will be rolled out by the end of April. We will be evaluating how that is going, because it is a key part of the Universal Credit reforms. Obviously, Universal Credit is rolling out at the same time and rolling out to different claimant groups. The Claimant Commitment is just about the flow of people on to Jobseeker’s Allowance and on to Universal Credit itself, and people who are returning from the Work Programme, so it will not be covering everybody on JSA.

We will be evaluating that, because we will not have got everything right. We trialled this in Essex. We also trialled it in a couple of other places across the country. What we are implementing is a hybrid of that Essex trial and the approach we trialled in Pathfinder sites in that part of Manchester. All I have asked people is, "Let me just roll that out and see what that does before we start playing with it, and start using the evaluation from it and experience." I am sure we will be improving it. That is what we did with the JSA regime from 1996. It has been through a number of changes and modifications. At its core, it is still the same as what we had in 1996, but we have modified it in the light of experience. I am sure, if the Committee is interested, we can come and tell you about how Claimant Commitment is going.

Q519 Sheila Gilmore: Are the two 90minute interviews part and parcel of that or is that a separate initiative?

Neil Couling: You are referring to some announcements that were made in and around the Spending Review. It is a measure of flow and people coming on to benefit. Obviously, that gets wrapped into the new Claimant Commitment regime. Yes, it is part of that process, but that is not currently rolling out right now as part of Claimant Commitment. It will come later when the funding for that is deployed within Jobcentre Plus.

Sheila Gilmore: It is not happening anywhere yet.

Neil Couling: The extra 90-minute interviews are not. That is part of the Spending Review package, I think.

Q520 Teresa Pearce: Regarding the Essex trial you just mentioned, you said before that, when people come off benefit, you do not track them because it is too big a job. Are you tracking people in that trial when they come off benefit?

Neil Couling: Not as part of the work for Claimant Commitment, no, and that trial has ended. It ended five or six months ago.

Q521 Teresa Pearce: You do not know, but there is a presumption that there is a reduced number of people on benefit because of the trial. There is a presumption that it is because they have gone into work. You do not know that they have gone into work, but you are rolling it out.

Neil Couling: What we are tracking and what we are using is our offflow data.

Teresa Pearce: They are off benefit but not necessarily into work. They could be dead.

Ester McVey: This is a different trial. This is a trial for Claimant Commitment to check that the Claimant Commitment is working and that people are engaging it and doing it. We were not analysing that in the data you were requesting there; we were doing it for buy-in and how the Claimant Commitment was working.

Q522 Teresa Pearce: How will you tell if the Claimant Commitment is working if you are not tracking the people who actually come off benefit and go into work?

Neil Couling: Offflow.

Q523 Teresa Pearce: That is exactly the question I just asked. You are looking at the trial and you are thinking there are people coming off benefit, so therefore it is a success, but unless you track why they come off benefit, it is a possibility it is a success, but you cannot prove that, yet you are rolling it out on a presumption.

Neil Couling: Offflow, as a measure, measures some things that you might think are a good outcome, like getting a job; some things that you might think are not a good outcome-

Teresa Pearce: Like going to gaol.

Neil Couling: Yes, like going to gaol. It also measures some people who were working and who, because of the regime we have applied, have decided they have not, which in my book is good offflow as well.

Teresa Pearce: That is one of the reasons for more intervention, so that people who were working and claiming no longer can do that. I understand that.

Neil Couling: As I said, we are now rolling this out nationally so, for the same reasons I gave-the volume numbers of people leaving benefits-it is not easy without bothering an awful lot of employers to chase up the employment outcomes of individuals.

Q524 Teresa Pearce: You could bother the person who has come off claiming. There is no problem about bothering them all the way through the claim.

Neil Couling: Yes, I could run another destination survey.

Teresa Pearce: Would it not be good for your Department to be able to show that you actually had a successful outcome, rather than just people stopping claiming, unless that is the desired outcome-just to stop claiming rather than get people into work? It is a suggestion.

Chair: That is just repeating the questions we asked earlier. Claimant Commitment might put people off from claiming, especially if their contributory JSA has run out and they get no money. There is nothing in it for them, apart from obviously a job, but there is no guarantee. Is it something different, Glenda?

Q525 Glenda Jackson: It was actually still on Claimant Commitment and whether there is any assistance. The Minister gave what I thought was a quite realistic journey time for going to an interview, particularly for people who live in rural areas-an hour there on the bus, an hour for the interview and an hour back. My question was going to be: is there going to be any kind of financial support for those people who have to pursue work physically by taking buses or trains, moving outside their own immediate area?

Ester McVey: Yes. If somebody needed support, that would be where they could get assistance from the flexible fund, if the think there could be a job outcome and they are really trying hard and doing an interview. Yes, they could apply for money from the flexible fund.

Q526 Glenda Jackson: Does that mean that Jobcentre Plus makes the choice amongst those claimants who have already signed up for Claimant Commitment or is it universal for all people who agree to the Claimant Commitment? The flexible fund as we know it in other areas does not work.

Ester McVey: If it was deemed that you needed money to do this-maybe it is exceptional for the circumstances or you could not do it within your budget-then it would be looked upon favourably, I am right in saying, so they would get support.

Neil Couling: I have seen some claims for travel turned down, but that tends to be where we have some doubts that there is actually a job involved in that travel. In general, you will see travel claims met, particularly when they are within the traveltowork area.

Q527 Glenda Jackson: The Claimant Commitment then, if they were granted that money, would mean they would be expected to produce the bus ticket and the details of the interview they had been to. Is the working week five days or six days? You are not going to get a lot of interviews in a normal working day.

Ester McVey: It is whenever a company realistically gives you that job interview. I do not know what job somebody is going for but, if it is the leisure industry, it might have been maybe a weekend interview. If it was in an office, it could be a daytime interview. Most of the interviews I have ever done have been during Monday to Friday.

Q528 Glenda Jackson: This is what I am saying to you. The requirement on the Claimant Commitment is 35 hours a week. What is that working week for the claimant? Is it Monday to Friday, or is it Monday, Tuesday, Wednesday, Thursday, Friday, Saturday, Sunday?

Neil Couling: We are not going to say to them, "Oh, I see you were looking for work on Saturday; that doesn’t count," if that is your concern.

Q529 Glenda Jackson: No, that was not my question. I will try again. The point I am trying to make to you is, if it is a fiveday week that the hours are going to be spread through, then the capacity for getting enough interviews during that fiveday week is fairly rare. Presumably it could be a six or a sevenday week.

Ester McVey: You are looking at the time. It is up to an individual to-

Glenda Jackson: You have set the time at 35 hours.

Ester McVey: It would be up to the individual to choose that time whenever it fitted within their life, the job they were going for and what they are wanting to do. Again, there is flexibility within that.

Chair: I think we are getting away from the subject, so we will move on. Nigel, on to Universal Jobmatch.

Q530 Nigel Mills: Can I take you to Universal Jobmatch? Perhaps you could just set out your assessment of how that is going and what plans you have to take it forward.

Ester McVey: Universal Jobmatch has been a major step forward in a way to help people look for a job online and to connect more employers with the whole Jobcentre Plus and engaging with individuals. I know at the moment we have about half a million companies that are engaging with Universal Jobmatch, 12,000 new ones per week, and at any given one time over 60,000. This is not a solution in its entirety-not every business is on there-but it is an extra tool and extra support for people looking for work. People who I have spoken to have said they found it very helpful. It is the fact that it is constantly looking for people. It is a match that can go on 24/7 even if you are not, and come up with potential offers of work. It is an extra tool to help people.

Neil Couling: There are two things I would just add. I found it quite a mindblowing statistic when Monster told us we are getting 41 million searches a week on Universal Jobmatch. The other thing I would mention is that, in Jobcentres now, we are getting very few comments from jobseekers saying, "There are no jobs around here." What Universal Jobmatch is doing is dropping vacancies into their account. The potential of this system is quite large. Clearly, the Committee heard a bit of a sales pitch from Monster. You would not expect them to do anything other when they were with you. However, in terms of whether this gives the potential in the future to do some quite interesting things and take this tool on, I am absolutely convinced that it does.

Q531 Nigel Mills: You will be aware that there has been some concern that some of the jobs on UJ are a bit dubious-all those duplicates, and things are pretty poorly categorised. Do you have plans to try to smooth out those issues in the system?

Neil Couling: There is a dilemma here about what you want to do with this as a tool. We could rigorously police it down to the point at which it shrunk in size, but the clue is in the name; we wanted it to be universal. When you do that, you buy the fact that there are some duplicates. If you are a jobseeker, you do not just look on Universal Jobmatch. They use Indeed and many of the other job boards as well. Those job boards have the same kinds of duplicates, so it is an issue that we have decided to live with because, if we try to devise a whole series of rules and knockouts there, we will probably decrease the extent to which people use it, and we want people to use Universal Jobmatch. We are living with some of that.

Are there some rough edges around the system I would like to change? Yes, there are. We have plans with Monster to do something about the fact that the registration process is quite cumbersome for individuals. If you forget your password, you have to reregister, and we think we have a technical solution around that that will help jobseekers.

Q532 Nigel Mills: Are there any plans to train employers so they can better use the system when they put their jobs in in the first place, so that they are categorised correctly?

Neil Couling: It was designed as selfserve and reasonably easy to do, but the feedback from our employer advisers is that they have had to help some employers use it and effectively coach them. We have done some of that. We do have a helpdesk that is there to help employers when they want to post vacancies there. I am quite keen that people do not get put off by their first time on this. As the Minister said, there are about 12,000 employers joining every month and we have nearly half a million already on, so it is going quite well. Where we need to support people, we will try. The idea though is that it is selfserve.

Q533 Nigel Mills: How useful is the data that UJ can provide-labour-market data, for example? How useful is that to the Department? I presume you have plans to try to make that more useful?

Neil Couling: That is what we are talking to Monster about at the moment because, where they have used similar systems in Ohio in the States, Ohio seems to be getting much richer data-draw from their system than we are currently getting. We would like to make some of that information available, because it will give us some really good data on what is happening in local labour markets. Often questions that Members of Parliament will ask us at the moment we cannot answer, and we do want to be able to draw some of that information out of it. That is the next area of focus with it.

Q534 Nigel Mills: How come that was not built in from the start if it has been done elsewhere?

Neil Couling: There is a question of putting the system in. The thing with getting 41 million searches is it is a much bigger system than Monster thought they would be taking on. We thought it would be this size, and we have really driven it through; in terms of the number of jobseekers now not using Universal Jobmatch, it is very small. I think it has been coping with that and coping with the implementation, and then us realising what we can use it for as well. Quite a lot of advisers are now using Universal Jobmatch to send jobs out and ping alerts to people, and do some things like that. There is a question of a learning for us from both sides. A lot of the data requires a bit of mining, so you have to set your miners at work to pull it out.

Q535 Nigel Mills: Can you envisage Jobcentre staff being able to use UJ information to help claimants? Presumably, the CV analyser and matcher could feed out a report that says, "This CV matches very few jobs within a 10mile radius." Is that a functionality you are going be looking at, to use that as a diagnostic and information gap, rather than just counting how many jobs they are applying for?

Neil Couling: Some of the other countries have been using this. I will not attempt the pronunciation, but the Flemish agency-VDAB is probably the safest thing I could call them-is using it to understand their skills position in the Flemish part of Belgium. They are sending that information back to their education providers about where they have gaps, so people coming through with skills gaps, and then what their education system, and in particular adult education system, needs to produce. We have just scratched the top 10% of this now as we develop this, so I am in discussions, because we are effectively all using a similar sort of thing now across the advanced labour markets in Europe, using the same sorts of systems. How are they exploiting theirs and how could we exploit ours in the UK?

Q536 Nigel Mills: That sounds very interesting, but the question I was looking at was, for an employer, the system will tell you who the top so many applicants who match your requirements are. Presumably, there is a reverse analysis that could say, for each jobseeker, "Actually you were not in the top 100 for any of the jobs you applied for." Is that a report that could be made available to the jobseeker or to the JCP adviser to try to say, "Actually, this guy is just applying for completely the wrong jobs or his CV is completely inappropriate"?

Neil Couling: I would hope the adviser was aware of what they were applying for and watching some of that but, in theory, yes; you could use that to say, "You have had no responses from employers from so many applications you have made with this CV. What is wrong with that CV or are you aiming at some jobs that you just do not have the skills match for?"

Q537 Kwasi Kwarteng: I want to ask a question about the Youth Contract trying to get young people back to work. As far as we understand it, there are 160,000 wage incentives available over three years to employers, and just 2,000 of these payments have been made in the first 14 months of the scheme. As far as the employers are concerned, the Recruitment & Employment Federation said there was a "complete lack of awareness" of wage incentives amongst employers. What is the Department doing to raise awareness of this scheme?

Ester McVey: The Youth Contract has got various component parts to it. You are right there is the wage incentive. There is also the incentive now for apprenticeships. There is also work experience and the sectorbased academies. When it started brand new, you thought, "How many would go into each?" It was interesting that work experience is the one that has fundamentally doubled, up to 113,000, and done very well, but you are quite right that the wage incentive had a slow start. What you saw was 1,000 a month originally coming forward and 21,000 by the first year of people using the incentive payments. However, through extra work, through telling employers more about this, we are now seeing 4,000plus people a month coming forward for the wage incentive. Yes, it was a slow start. Coming forward, it is 21,000, but I have some numbers a little bit later than the numbers you were talking about, but they are processed amounts already. Of course, you do not get the processed amount until you have been in work for a certain amount of time.

Q538 Kwasi Kwarteng: With regard to my specific question, is there anything specific that you are doing to try to raise awareness of the incentives?

Ester McVey: Yes. We are pushing it out through Jobcentre Plus. Equally, as employers understand that it is working, it is being taken on board. We have done surveys, and now employers are saying, "We would be 86% more likely to use it again because we see that it has worked." Yes, we are doing that.

Q539 Kwasi Kwarteng: Essentially, what you are saying is that it was a slow rollout, but you feel that you are doing the right thing, in terms of getting awareness.

Neil Couling: At the start, it was just being done through Work Programme providers and then, in January, Jobcentre Plus was asked to get involved and asked to do 3,000 a month, pushing these out. About four months ago, we hit 3,000 a month; we are now up to 4,000 a month. The fact that we had as much engagement with young people and employers as the Work Programme was having-we had our big battalions on it-is what is making the difference on it now.

Q540 Teresa Pearce: Mr Couling, you might not be able to answer this off the top of your head. If you cannot, I would be grateful if you could provide it to the Committee. It is about the procurement for Jobmatch. Regarding the original Department procurement, a freedom of information request showed Monster was neither first nor second on the original procurement. There was a problem with the procurement, it was rerun and then they won. I would like to know whether or not they were in the running in the first procurement and whether they changed their bid in any way. The reason I ask that is because you have mentioned that there are things that need refining, and I would want to know whether or not you are going to have to pay them more for those refinements or if it was in the original bid. I understand you might not have that information to hand.

Neil Couling: I have not got the full information to hand. I do know that the specification for what became Universal Jobmatch changed and it was a very long procurement. It went over a number of years. It was originally designed to replace the Job Points that you will you have seen whenever you have been in Jobcentres. It changed in that process, but let me get you some detail on that.

Q541 Teresa Pearce: It is just to know because, as we have seen with other providers of different types of IT, quite often they will, in procurement, promise it will do certain things, and then, when it does not, the Department has to pay more for what they originally thought they were going to get.

Neil Couling: In essence, what I bought from Universal Jobmatch was a managed service. For example, regarding the questions from Mr Mills about data and so forth, that should be part of that managed service. If I want to change the functionality of the system, then I will be in some kind of contractual negotiation with them about whether that was within the contract or not.

Teresa Pearce: Just some clarity about that would be good.

Neil Couling: Let me get you a note on that.

Q542 Nigel Mills: Can we switch to the Universal Credit rollout and particularly the Local Support Services Framework? I think we got the broad outline framework some nine months ago, but there are still a lot of questions out there about exactly how the support for vulnerable claimants to deal with the transition to Universal Credit is going to happen. Is there any update you can give us on how this is going to work and when we might see some further action?

Ester McVey: We have done the first set of Pathfinders, which was in the AshtonunderLyne area, so we know we are monitoring that. We are now set on a second set within the Hammersmith, London, area and we are rolling that out. A slightly different set of people are going to be using the Universal Credit and, as each bit of information comes in, what we have always said is we will do it slowly to make sure that we have gathered all of the information we need to and ensure that it is working properly.

Q543 Nigel Mills: In terms of how everyone is working together to support those vulnerable claimants who perhaps will not be used to managing monthly budgets or having all the money directed straight to them, how is the work progressing on that framework, engaging the local authorities and the charities, etc., to provide that help to people?

Neil Couling: What we have for the Pathfinder Jobcentres is effectively protoLSSF arrangements there going on. For example, in Ashton, the local council has subcontracted the Citizens Advice Bureau to provide those kinds of services for them, and we are funding some of that. We are obviously in discussion with the LGA for England, COSLA for Scotland and I forget the equivalent body in Wales about what the arrangements should be as Universal Credit rolls out across the country, and learning from the Pathfinder experience just what it is we need to do.

The thing about the Pathfinder experience, as I do not need to tell this Committee, is that it is a narrower range of claimants than the full thing, so it would be a bit risky to determine your actual LSSF-I can hardly say it; it is probably this moustache-needs from that experience. We are trying to learn. We are still in discussions with the local authorities. I was with a number of local authority chief executives a couple of weeks ago. They were saying how well they thought these discussions were now going: us specifying clearly what it is we need from them, and then them working out how they provide those services. Some like Ashton will subcontract and some will try to use their own services to provide, I suspect.

Q544 Nigel Mills: Your discussions will have all this in place in time for funding rounds and planning a year ahead. It will not just be, "Can you start this in six weeks’ time and here is a bit of money? Get on with it."

Neil Couling: With the Pathfinders, it is patched into live running. We launched in Hammersmith. We talked to Hammersmith Council about what we needed for many months before then, and have been with Rugby and Inverness, which go live next week, in fact next Monday. We have had discussions with the local authorities there. We are doing it quite pragmatically while we are constructing an overall plan for rollout.

Q545 Nigel Mills: The framework document suggested that perhaps some or all of the payments for this help and support were on an outcome basis. It is not immediately clear how you can link an outcome to the fact I have given some budgeting support or I have given some IT training to use the system support. How can you link outcome payments to that discrete support?

Neil Couling: This is quite a tricky thing to do, because what we are trying to do, through the policy in total, is build us much selfsufficiency as possible into the system. We do not want people using the extra support services unless they actually need the extra support services. We are trying to ensure that the payment regime does not incentivise parties to seek out more volume because more cash follows from it. That is what those words are about in terms of the discussions we are having. We are trying to construct a mechanism that does not incentivise the expansion of help, but focuses it on those who actually need it. It is not easy.

Nigel Mills: The outcome is helping someone who needed help.

Neil Couling: Rather than getting everybody on to weekly payments in a particular locality.

Nigel Mills: It is not a case of saying, "This person got a job; therefore, you now get paid for the budgeting help you gave them three months ago." It is not that.

Neil Couling: No, I do not think it is that arrangement.

Q546 Chair: We had local authorities in front of us. They were actually quite vague about what specifically was going to happen under the Local Support Services Framework. I have to say that you sound equally vague. I know that the rollout of Universal Credit has been slowed down, and you are absolutely right it is a very narrow group, but it seems as though it is still not clear which organisations, whether it is local authorities, you, or advisers, are going to do which function in each area. Is that a fair criticism?

Neil Couling: I do not think it is a fair criticism, but it is a fact that we have not defined the service to a level of complete clarity yet, partly because we have had a series of pilots running that we are attempting to learn from. If you think about the direct payment pilots on housing benefit, they are coming to fruition. I was at one about 12 months ago up in Edinburgh, and it is about the learning from that. We are trying to dock our aspiration, which is to use, in the first phase of this, local authorities to contract with and provide these services, with the actual services we think we need.

One of the things coming out of the direct-payment pilots was that people were coping with direct payments much better than the housing associations thought people would. One of the things housing associations said to me was that they had no idea people had bank accounts. These were their own tenants, and they could see opportunities for themselves knowing that people had bank accounts. Give us some credit here.

Chair: The rate of arrears is still much higher than it was. Maybe it was not as high as they anticipated, but it is still pretty high. We are talking about vulnerable claimants. In the Edinburgh pilot, they had to take the vulnerable claimants out of the pilot.

Neil Couling: Given money is tight, you can forgive us, I would hope, if we do not want to pay for things that we do not actually need. That is where the debate is, and it is a good and healthy tension, because local authorities are realising now just how important Universal Credit will be for their own locale, so they actually want a footprint on UC as well. You can run a criticism that we should have this all defined and so forth, but I think there is an advantage in not having it so, because we want to make sure that the limited amount of money we have is going in the right way here.

Q547 Chair: The Secretary of State keeps insisting that the ultimate timescales for UC are still in place. There may have been a slow rollout this year but, from next year, things should speed up. It still does not sound as though you are ready to make these kinds of decisions, if you are still analysing the various pilots.

Neil Couling: There are some serious discussions going on with the LGA and other local authority representatives about what should be in here and how the funding arrangements would work: will it be jointly commissioned, or will it be singly commissioned by Jobcentre Plus district managers? That is what the negotiations are around.

Q548 Chair: Local authorities are going to have to set their budgets in March, so they are going to really need to know what it is they are being expected to deliver. I know, both in Scotland and in England, their budgets are frozen. Council tax is frozen. They really do need to know what is going to be expected of them.

Neil Couling: There is some good news, though. The work we have done around the benefit cap has put Jobcentres and local authorities much closer together. There is an awful lot of learning out of that. I do not think this is a bad story. It is just both of us trying to make sure that we do not waste council-tax payers’ money or central government money where it is not needed.

Chair: Graham has got some questions on resource implications for Jobcentre Plus.

Q549 Graham Evans: Next April, there will be changes to those post-Work Programme people who have unfortunately been unsuccessful getting themselves into work. They will be required to sign on weekly; there will be community work placements and the addressing of barriers to employment-numeracy, literacy, etc. What are the resource implications for Jobcentre Plus to successfully implement this policy?

Ester McVey: In the Spending Round 2013, an extra £345 million was put in place to help with the budget there. Moving forward, as more people flow off benefit, some of that money can remain within the system. Therefore, it will become costneutral going forward, but extra money has been put there, and the final funding will come through in the Autumn Statement for that. It is working with and getting the numbers right on who is going to go forward for the extra mandatory support. I was looking at, when you have daily signons, what that really means for a third of those people coming off. It actually means 35 extra signons per day, per Jobcentre. How do we absorb that? How do we cost that? How can we deal with that? We are confident we can.

Q550 Graham Evans: How will Jobcentre Plus decide which is the best option for that hardtoplace group of people?

Ester McVey: That will be a combination of things. It will be to determine from the information coming off the Work Programme whether this person, although they might have done two years, with a little bit more support would be really quite close to the labour market now. Would they benefit from a little bit of community work or would they be helped with a little bit more intensive support? Really, it will be getting that information after the two years’ support they have been on: how close or how far away they are still from the marketplace. Some of them will possibly be quite close.

Q551 Graham Evans: In terms of those who successfully get into work, you are still formulating plans for inwork conditionality. Will this involve people who are in work on universal benefit going into the Jobcentre on a weekly basis?

Ester McVey: What we are looking at there-because most people would say this-is that a job is one thing but, actually, what we want to do now is have progression within the workplace. Where do we go from there? We are helping people with that and have 11 pilots working on that. How do we help people do the next step? How do we help them get more money, a higher hourly rate and work forward on promotion? That is what that is for.

Q552 Graham Evans: They will be required to go into Jobcentre Plus.

Ester McVey: They will be supported with that, yes.

Neil Couling: We are currently running about 10 pilots across the country, trialling different things with people who we have got into work and then, effectively, we are testing how we sustain somebody in work. We are looking at using followup interviews. We are not actually calling very many of them into Jobcentres. Some of them are asking to come in. It is something that we actually did under the New Deal for Lone Parents many years ago; many of the personal advisers there would follow up with the lone parents and keep them in work. We are trying to rediscover a bit of that and pilot a bit in advance of Universal Credit rolling out in big numbers, so it is working with people who are on tax credits now, for example, and things like that. I would not envisage a large number of people coming into Jobcentres, but I would not rule it out either, if that is what is needed.

Graham Evans: There will be some additional workload with people coming in.

Ester McVey: What I have noticed in the Work Programme is that, when you are making sure people have a job, keep it and go forward, some of that is like a soft place to speak to somebody. It could be a phone call. It might be speaking after hours: "How was today? How could you go forward? How are you going to deal with your boss?" It could be a light touch like that rather than intensive.

Q553 Graham Evans: With the reform in welfare and Jobcentre Plus’s role in this, the PCS Union says that there is simply not the capacity within Jobcentre Plus to be able to cope with all these changes going on-the policy initiatives, the pilot schemes, etc.-once that is rolled out. What is your view on the PCS Union’s view?

Ester McVey: I said it a little bit earlier on. Actually, the workload doubled between 2007 and 2010, with the increase of people coming through the Jobcentre because of the recession. What we are seeing now is, as that inflow of people goes down, we can redeploy people. Neil is confident there with what he is doing moving around over 4,000 people, 5,000 people, to take up the jobs that they would have been doing before to focus on the extra support for people who are longterm unemployed, so shifting the focus.

Neil Couling: At this point in the cycle, I would normally be closing Jobcentres and shifting people out, but the £345 million allows me to keep the Jobcentres open. There is a little bit of money there to actually expand the size where we need to-where we know we are going to have some footfall pressures-and then effectively retain 4,000 staff who we would otherwise have to exit from the organisation.

Q554 Graham Evans: When you say "expand", what do you mean?

Neil Couling: Essentially, in some Jobcentres now, we have got some screened areas for the Social Fund. We do not do the Social Fund anymore, so I am looking at the possibility of effectively removing some of the screens and so forth that are there for the Social Fund to create more frontofhouse capacity to receive the increase in footfall we think we will get, because daily sign-on will increase the footfall in some Jobcentres. Some will be able to cope; some will not be. Some of them are quite tightly fitted now.

Q555 Graham Evans: Can I ask a question on the scrutiny and performance of Jobcentre Plus? There are concerns about the introduction of the welfare reform in Jobcentre Plus. Is it possible to have an annual report of the performance of the whole of the Jobcentre Plus? Are there about 400 in the UK?

Neil Couling: 719.

Q556 Graham Evans: 790, okay. Is it possible to have a look at the best performance: where we have got the pilot schemes, those Jobcentre Pluses that appear to be performing well, taking on the challenges and the changes that are going on, and comparing and contrasting those with underperforming Jobcentre Pluses? Is it possible to have an annual report with best practice, to promote and highlight outstanding performance in one area so that you can improve performance in other areas?

Ester McVey: You will be pleased to know that we do know the ones that are performing well in different areas. It is not as simple as just one area; there will be multiple measures by which people are performing, how they are helping. It will be different geographically. It is key that we know who is working and supporting people the best, and who maybe is not performing as well, and what the training is that needs to go into there and how you, as I said, share best practice. Equally, the people working within the industry come forward and will say, "We have got this good idea. You could use it here," and that is shared across as well, but I do think that is really important. It is a lot of people and a lot of centres, and we need to make sure that we are doing the best for the people who come through the door.

Q557 Graham Evans: Just to come back to Neil, you mentioned the estate and possibly expanding the front of house. The whole point of the Government policy is to get people into work. Jobcentre Plus, in my area, are at the heart of the business community, where jobs are and where opportunities are going to be. Is it possible to have an audit of the estate, the 790 properties, to see if there is a possibility of opening up the Jobcentre Plus to job fairs, breakfast meetings and that sort of thing to make sure Jobcentre Plus is at the heart of the business community, and therefore any job opportunities, skills and so on and so forth could be utilised within Jobcentre Plus itself?

Neil Couling: For the purposes of the Hansard writers, I said 719, but my moustache may have made it 790. I do apologise. Would it be possible to have an audit? In theory, it would be possible to have an audit. Whether it would tell you anything more than your own eyes going around a Jobcentre would tell you is a different question. I am in the 16th year of a 20year contract with the people who provide our estate. We do not own any of our estate; we privatised it back in 1998. I do not own the buildings that I am in. I am tied into a long-term contract, so I make use of the space in the estate as best I can. Some Jobcentres have lots of space and can deal with employers; in others, it is really difficult to do.

Q558 Chair: Building on the questions that Graham has asked about capacity, you mentioned the fact that, with more people back in work, there is less footfall, but there are potentially a million extra within work conditionality. Of course, a lot of the people who will not be needed in your organisation will be in benefits processing, but they actually will be needed in helping as job advisers and things. Have you got any programme of retraining of your existing staff so that they can move around the Department more easily, or are you envisaging laying people off and bringing new people on?

Neil Couling: I will give you a very good example of that. When the Social Fund moved over to local authorities in April, there were 3,000 people within our organisation who were without work. We managed to redeploy them, some into Jobcentres and others into different bits, like benefit-processing opportunities. Clearly, we run pensions. We have got child maintenance; at the moment, our child maintenance function is actually growing as it takes on people to deal with the new scheme that we are implementing there. We have a long track record of redeploying people, and quite a proud track record of having only a handful of compulsory redundancies through lots of very big changes. We are now down to under 80,000 people; at the peak of the recession we were at about 110,000, I think, and we have done that without the need for vast numbers of compulsory redundancies.

Ester McVey: You constantly see training. What was it? 2,000 twoday training just to do the Claimant Commitment, and then you look at how many five days a year are needed for people, and you look at whether it is 60 hours of foundation training, 160 hours of entrylevel training, or 64 hours of established training. This notion of constant training, and, equally, what you would like to do in your progression-"Would I like to be a DEA? Could I have more support here?"-constantly goes on.

Q559 Sheila Gilmore: Can I take you back to the question of the post­Work Programme people? This programme is not kicking in until April, but there have been people coming back from the Work Programme since last June. What is happening to them at the moment, and could you not have foreseen that there would be people coming back and get this set up earlier?

Ester McVey: They are getting support now, but what we have said is, "Okay, how will we deal with everybody in a more consistent way going forward? What are we going to do? What could we put in place?" and, equally, "What have we now got the money to do going further forward, with this extra pot of money, and equally, how have we analysed what has been going on at the Work Programme?" Those people are getting their support now.

Neil Couling: The good news is that we had 165,000 people back from the Work Programme so far. Of those, 7% have moved on to a different benefit, probably Employment Support Allowance, but about 16% have either got jobs or-on the measure that Ms Pearce was saying-have off-flowed, so we are having really rather a big success with Work Programme returners. Of that 165,000, 23% are no longer with us on Jobseeker’s Allowance. We did have a plan for people coming back from the Work Programme. It is called the Mandatory Intervention Regime; we put it into all of the Jobcentres, and Jobcentres are really doing very well on this at the moment. There are some really quite tough discussions going on there, because some of the people coming back were the people we moved over to the Work Programme back in 2011, who had been with us for a number of years. There are people with some very long durations on benefit who we are actually finding work for, which is fantastic.

Q560 Chair: What were you doing wrong all those years before?

Neil Couling: That is the question I have asked my team. One of the things we have said to the claimants coming back to us is that this is not the Jobcentre Plus they left in 2011. This is a different regime; we are doing different things now, and they are more effective. This is not the Work Programme failing. It is the fact that, probably, our work with them prior to 2011 was not very successful. One of you raised the point that people have had literacy problems for a long, long time-"Why was that not picked up?" and so forth. This is not us crowing about this. I am very pleased with how things are going, but you can ask the questions like, "How did you get here?" However, the point is we are here, and we are doing well now, and that is what we have come to focus on.

Q561 Sheila Gilmore: Is that going to be published in some form?

Neil Couling: I think we could publish that. I do not think I have shared any secret information with you. That is just me tracking what is going on, and the numbers coming to us.

Q562 Kwasi Kwarteng: I was just wondering, if I may, about ESA and the pilot schemes that are being run on that. We understand that there are three separate pilots that have begun this month related to the ESA claimants, and I was just wondering what sort of support these pilots will provide. What are you, in a sense, trying to achieve with these new pilots?

Ester McVey: These are the hardesttohelp people. Yes, we are dealing with them; we are learning about them a little bit more, seeing all the complexities of the issues, and for some of them the question is: "Would it be better if there was more health support in there as well?" It is not just about getting the job here; that could be somewhere along the line, somewhere along the journey, for these people. It might actually be more health help in there, and then what we are doing is running trials, whether done by us in the Jobcentre Plus or by some of the work providers. Basically, it is just to see what the combination of support is, and how much health is in there, before the job outcome.

Neil Couling: There are three things. We are trialling time with healthcare professionals in one location; we are trialling extra personal adviser support in a Jobcentre; and we are trialling extra activity and extra resources going into the Work Programme, to see what the best outcomes of those three are.

Q563 Chair: Are you segmenting the group even further, or is it just that you are giving more money to the providers who finally get people into work?

Neil Couling: Effectively, we are drawing a ring around the Work Programme provider and saying, "Now we know what kind of outcomes we get from a normal Work Programme provider, do we get extra outcomes for the investment that we are putting in there?" It is similar for the Jobcentre, and the work we are doing with sending them, effectively, to the NHS.

Q564 Chair: In the pilots, are you seeing a greater move towards using subcontractors? One of our criticisms of the original Work Programme design was that the specialist subcontractors seemed to be getting squeezed out, and they were the ones who previously had the track record. Are they coming back into frame in the pilots?

Ester McVey: All of that has definitely to be explored: "Are we using all of the various groups at our disposal?" Equally, it is understanding the multiple complexities in these people’s lives, and just how we support them on their way pre-work.

Chair: As I said, we are going to come back to conditionality and sanctions.

Q565 Debbie Abrahams: Minister, since the new sanction regime was introduced at the end of last year, how many people have been sanctioned on this new regime between October 2012 and June 2013, on JSA and then on ESA?

Ester McVey: I can say that there has been an increase in the use of sanctions. I think it is 11% across the board, so there has been an increase, but what we are seeing is that we are supporting people. You have got to have a sanction in place there, just to make sure that people are doing what they are meant to be doing, and that is us helping them get a job. Looking even more closely, are sanctions important? Do they work as an outcome? I was interested to find that that Germany had looked at what we have done, and is now using sanctions. It has had a doubling of effect of people going into work, so it is something that is needed, but what we have got to do is make sure that we are doing it in a commensurate way, so people are getting the right sanction.

Q566 Debbie Abrahams: In terms of the number of people who have been sanctioned, you said that there has been an increase of approximately 11%. Do you know the actual figure of people that have sanctioned?

Ester McVey: I do; I have got it written down here. It is a total of 223,000 who have received the lower sanction, 167,000 individuals had the intermediate sanction, and 48,000 received the highestlevel sanction. In fact, highestlevel sanctions have actually gone down significantly and, in the ESA group, 173,000 sanction decisions have been made.

Debbie Abrahams: I think you will find that that is a figure for a month. I was asking for the October to May figure. I think you will find, from your own report that was published a couple of weeks ago, that 1.35 million people have been sanctioned in that period.

Ester McVey: Yes, and 0.58 million were adverse decisions.

Debbie Abrahams: Absolutely. So, even on the lowest sanction, people are still off-flow, off-benefit, off-register, and off the national figures for a month.

Ester McVey: No, that is not right. So long as you continue signing on, you are not taken off the claimant count. All you have got is a sanction, so you are not taken off the claimant count, but what you have got to do is carry on signing on. That is how it works.

Q567 Debbie Abrahams: I asked you a question on Monday at Work and Pensions Questions about the inappropriateness of sanctions and, Mr Couling, we have corresponded on a number of occasions around this. Certainly, within my own constituency, I have instances of totally inappropriate sanctioning. I know I am not alone, and since my question to you on Monday, I have had correspondence from advisers who have said, quite clearly, that there is a culture of not targets but what they are calling "expectations" around sanctions. I know that we have corresponded, as I say, Mr Couling, and you have said that if there is any untoward sanctioning, you wanted to hear about that. Given that this is not just my own personal experience-we had evidence to the Committee a few months ago that was saying there is an expectation culture around sanctioning-is it not time that we had an independent review? We have had the internal investigation of sanctioning. We have this mismatch of what is happening around sanctioning. Do we not need to get to the bottom of this? These are people who have no money to live. They are really, really struggling. It is a bit different from the previous regime when it was a week, but this is for a whole month. How are people meant to live?

Ester McVey: I want to come in a little bit there, because I was keen on understanding the sanctions: was it proportionate? Is it right? Is it having the right effect? Are people adhering to the rules? Does this help us? All we want it to do is help us to get people to engage, to move into a job. Every time I go out to a Jobcentre, I will deal with the people who would be saying, "This could be a sanction," before it is handed over to the decision maker, and I say, "What is that process?" I need to know, if there is good cause or if there was a reason that somebody could not be there, what the process is that somebody goes on, so that it would not be quite as drastic as someone not doing something and being sanctioned straight away when they did have a reason for not being there.

I am categorically assured by the people who are working front­of­house that people know what is expected of them. Should they have had a good cause that sounded reasonable, or maybe the Jobcentre Plus employee got the form wrong-they did not realise somebody was going for a job interview-they would not be sanctioned, and then they would be able to put that forward. Now, should they be sanctioned but it is not their fault, it would go to a decision maker; they would look at the information and, again, there would be a process after that, a reconsideration and an appeal. For me, I felt it is important that we understand how it is administered. It is not the first thing that anybody does. It really is understanding somebody’s life and getting that right, so I think it is key that we understand when a sanction is handed out and how that process is done, and if it is working.

Q568 Debbie Abrahams: That is helpful, Minister. You are saying that advisers do not need training, because, again, in other evidence we are hearing different points of view around that. Getting back to my point, should there not be an independent review around sanctioning? You are being told one thing, we are being told another, and we have our own personal experience as constituency MPs with constituents coming to us with, I think, absolutely appalling instances. Can I ask: should we have an independent review?

Ester McVey: Yes, and Matthew Oakley is coming in and looking at the whole process and checking how that is working, so we have got that independent review starting and ongoing. You are quite right: it has to be measured throughout to make sure what we are doing works for those individuals, so I totally agree with you there, because I believe sanctions are an important part of the process, but only if we have got it right and it is commensurate with what has or has not been done. I totally agree with you.

Q569 Debbie Abrahams: Mr Couling, the Minister has just mentioned that there is an independent review already going on. Is that the case?

Neil Couling: Yes. In the passage of the Jobseeker’s Allowance Act, earlier this year, there was an agreement made as part of the passage of that bit of legislation that there would be an independent review.

Debbie Abrahams: When is that due to be published?

Neil Couling: I know Matthew is currently gathering evidence. I think he will report in the New Year, but he has just written out a call for evidence.

Chair: But that is just about the communications, is it not? It is not the whole process.

Ester McVey: It is process and communications.

Debbie Abrahams: Is it about how sanctions are communicated, or investigating to see whether there is inappropriate sanctioning.

Ester McVey: There will be different things. There is process on there, as well as communications. I think, as a secondary piece of information, we need to know how the sanctions in the duration are working as well, and that could be a secondary piece of work. That is what I would like to see.

Q570 Debbie Abrahams: That would be very helpful indeed. Two things, then: could we have terms of reference for the review that is going on currently, and the date of publication? The Minister has just committed to do a followup to that review, with a more in-depth analysis.

Ester McVey: I have not only committed; I have already started the work on that. For me, it is important to get that right, and then I will give you the timings on that when it goes into place.

Q571 Debbie Abrahams: Thank you. Can I have one final question-I beg your pardon-around food banks and referrals to food banks? Again, we are having a lot of information from the CAB, the Trussell Trust, and other food banks on the relationship between those who are claiming food banks and those who have been sanctioned. It would be useful to see how that marries with the figures that DWP will be collecting as well. Minister, I think you have already said that it is appropriate for claimants to be referred to food banks, so could we have some data on that, please?

Ester McVey: I think that what we have always said is that the food bank journey is very interesting. I think it started off, as you would know, in 2002 with the Trussell Trust. They went up tenfold under the previous Labour government.

Sheila Gilmore: They went up from 4,000 to 40,000.

Ester McVey: That is tenfold by anybody’s maths.

Sheila Gilmore: It is tenfold, but 10 times a small number is still a very small number, whereas the number now has gone up tenfold in three years.

Ester McVey: Hang on a second. Let me finish the journey, and what was happening there. At the time, as well, the previous administration said they would not do any signposting to food banks. We changed that, and said yes, we would, and we have done and supported people.

I like to think that it is important that we look in the context of what has gone on in the last few years. You have seen the worst recession in living memory for most people-yes, it is. What you have seen is businesses doing as much as they can do to keep people employed, with the way they have redeployed their services and what they have done. You are actually seeing levels of unemployment much lower than the recessions of the 1980s and 1990s. At the same time, you have seen government put a lot in place, such as what we are doing with the Work Programme and what we are doing to try to help people into work. There are a million more people in work, and at the same time-because there is a squeeze, without doubt-we have to look at what the community has done together to support people and help people in their own way. I will be with my local churches and look what we can do, and how we can do it. I think you have got to look at in the round.

Q572 Debbie Abrahams: Are you saying it is a good thing that we are having more food banks?

Ester McVey: I am saying what has happened has happened. The recession we have had was happened.

Debbie Abrahams: Minister, you are now in Government. Our job as a Select Committee is to scrutinise Government policy. Our job is to do that; it is not to make this a political forum for the Government.

Ester McVey: But sometimes, I believe, it is important things are put into context.

Debbie Abrahams: Can you answer my question, please, in terms of what data are you going to be collating around food banks and referrals from the JCP to food banks?

Ester McVey: At the moment, I believe the Department is doing a lot of information gathering into why people present themselves at food banks and what is going on there. It is only correct that people use all of the government support, whether that is benefits or hardship payments, which we are doing. Yes, we will be gathering that information. Equally, you had stats on Germany, looking at understanding the context at the moment. In the UK, 60,000 people are using food banks, but did you know in Germany, 1.5 million people are using food banks?

Debbie Abrahams: You are a minister of this Government, so if you will forgive me, could you possibly answer that question?

Ester McVey: No, hang on a second. If you can ask about what Australia is doing, or about what other parts of the world are doing, I am saying "Let us put it in context so you can see the whole picture of what we are doing"; how we are supporting people, and how we have got people into work, and how a million more people with a job is a million more people with a wage who can help themselves, their family and their local community. That is what we are doing.

Debbie Abrahams: I have finished my questions. Thanks, Chair.

Q573 Chair: We have had lots of MPs-and, I have to say Conservative MPs as well-who have been forwarding to us letters from a campaign run by Church Action on Poverty, asking that the Select Committee look at the growing use of food banks. From what you have just said, you suggest that you think it is just part and parcel of being part of the recession, and somehow the food banks will go away, or do you think that their greater use is actually here to stay?

Ester McVey: That is why I said that we will be gathering that information and doing that. I just do think that we have to ensure that we look at it in its whole entirety. Yes, we will get that extra information, but just so long as everybody knows that we are all doing our best-Government, business, and the local community.

Q574 Chair: I am going to bring Graham in just a minute. Can I just be a bit clearer about the Matthew Oakley review of sanctions? I have just had a look at the terms of reference, and it is all about clarity of communications. There is nothing in his remit to look at the appropriateness of the sanctions. I think that was the wider question that was being put to you: should there not be an independent review that would cover all of that: not just whether people have been told that they are being sanctioned, but whether the sanction and the sanction regime were actually appropriate?

Ester McVey: I said it was communications and process, and I personally had said that I wanted to make sure that it was proportionate. That would be a secondary one, so they are separate, yes.

Q575 Graham Evans: My honourable friend and fellow member of the Committee has just left, and I was just following up her point. Inappropriate sanctioning is indefensible. As a constituency MP, if that happened to me, I would be on the phone to the Jobcentre Plus and to the management to say, "There is a mistake being made. Can we look into why it is being made, and stop it happening again?" I allude to the point I made earlier about best practice, and about the leadership and management of Jobcentre Plus when it comes to sanctioning to make sure the rules and appropriate behaviour are observed by Jobcentre Plus. Do you agree with that?

Ester McVey: Oh, absolutely. That is what they are there for. The ultimate end point of sanctions is that you would not be using them. People would be following the path that is there. We would be helping somebody into a job, and it would all flow very smoothly. That is where you ultimately want it to be.

Q576 Graham Evans: My other experience is that my prime provider for the Work Programme said that sanctioning is one of the best things that happened in terms of helping them to help people get into work. Have you got the figures for how much sanctioning went on under the previous Government? There is nothing new about sanctioning; sanctioning has always been there. Have you got the figures for pre2010, for example?

Neil Couling: I can help. There were 12.22 million sanctions on JSA between April 2000 and June 2013, so I have not got it broken down for the last Government, but you are quite right; sanctioning has actually been in the system since 1911, when Unemployment Benefit was created by Lloyd George.

Q577 Chair: Can I just ask about the accuracy of the sanctioning decision? The majority of sanction referrals made by JCP advisers do not result in adverse decisions in which claimants have their benefits stopped. For example, of the 164,200 total JSA sanction decisions made in June 2013, only 68,710 actually resulted in the claimant’s benefit being stopped. In the remainder of the cases, the referral was cancelled by the decision maker. The adviser is saying they are going to be sanctioned; it goes to the decisionmaker, and the decision maker says, "No, they should not, because the evidence is too weak." That would suggest that perhaps the front­line adviser has been a bit gungho in saying that somebody is going to be sanctioned, when in fact the decisionmaker then looks at the case and says, "Actually, there is not enough evidence here." Is that part of the culture of not targets but making sure that people are-

Neil Couling: Part of an answer to Ms Abrahams’ questions would be in that very system: the adviser does not make the sanction decision. What they do is refer a doubt to an independent decisionmaker. The figures vary each month, but in roughly seven out of 10 cases, the decisionmaker upholds that referral and commits to a sanction on that individual claimant. There are some checks and balances in the system.

I think, when this was being put round, this expectations point-which we might come to in a second-was based on the misunderstanding that somehow advisers were making the decisions here, and they are not. It is done independently of that, with somebody looking at the evidence and maybe asking the claimant for their side of the story.

The second thing is that some of the sanctions are automatically referred to decisionmakers, so there is no jobseeker input. For example, if you are thought to have left work voluntarily, that goes to a decision maker for them to research the situation with the claimant. That person would be under sanction, as it were, but actually has not been sanctioned.

This expectation point, I think, is really important. I have put an expectation into Jobcentre Plus that people will be sanctioned. Why have I done that? Because that is the law. Public servants are meant to follow the law, and my worry-funnily enough, this has not come out in the Committee-is the variation I have got across sites between the level of sanctioning that is, or is not, going on. I know that I have been to Jobcentres recently where they have freely admitted that they were not doing that. They have been decently honest about that, and said that they now are and they are actually getting some really good outcomes from it as well, in terms of getting people into work.

Q578 Chair: But if you found an adviser who had put on to a decision maker 100 sanctions, and 99 of them were inappropriate, would you take action against that?

Neil Couling: Yes, absolutely. That is the whole point about the performance regime we work here, which is why we do have data on what is going on with individuals and track what individuals are up to. It is not to create some sort of oppressive regime on them, but to find out whether we have got rogue decisions going on here, or rogue referrals. That is in nobody’s interest, and it is in nobody’s interest for the sanctions regime to fall into disrepute, which is why we have been very open about what is going on in our offices. When Members of Parliament have come to me and said "I have got a problem," I have said, "Evidence this." I have encouraged the kind of people Ms Abrahams was talking about to come to me and talk to me about this.

What it often is, I am afraid, is that there is a small number of advisers in my organisation who do not believe in sanctions and who do not want to use them. Now, I respect that opinion, but their opinion has to stop at the door of the office. They cannot bring that opinion into work and use it in that environment, and I make no apologies for challenging that sort of behaviour. Our job as public servants is to administer the law that Parliament passes.

Q579 Graham Evans: The PCS union representative here said that they were ideologically opposed to sanctions. Does that cause you problems when you are trying to execute them?

Neil Couling: I have had a number of robust conversations with the PCS about this matter, and I make it very plain that their members in our offices do not have any choices about which bits of the law they implement and which they do not. They do accept that, and they have said that they will politically campaign-which they do-but in the offices themselves, they understand that that is a dangerous thing to do for their members. It could put them in breach of their employment contracts, and everything, and I do not want that to happen, either. Yes, we have some good discussions.

Chair: Nigel has got what we are calling the "blue sky" question.

Nigel Mills: We like to save the easy question for last, Minister.

Chair: He says it is an easy question; do not believe him.

Q580 Nigel Mills: The purpose of the inquiry is to look at the future role of Jobcentre Plus. What is your vision for how Jobcentre Plus will develop going forward? There has been some suggestion that all the out-of-work support should be outsourced and we should beef up the Work Programme, and leave the Jobcentre as a benefit processor and not a source of out-to-work support, splitting the two roles. How do you see this area progressing?

Ester McVey: I think it should be, like its name suggests, helping jobseekers and helping people to find a job. That is key. What I have seen, by looking around the various Jobcentres, is that we need to make sure that things move with the times. We are seeing an extra 6,000 computers go into Jobcentres, because everybody now is on the Internet, so you do not want to be left behind. That is a tool to use when looking for work. I believe it is important that people still have a face-to-face form of contact. I think most human beings relate better to people, especially, maybe, when they are in a time of need, than just a computer screen-although I believe it is important that you are on a computer screen, especially when you hear it is 41 million hits or job searches that are going on there.

What I have been most impressed about is the ability of the Jobcentre and the people within there to shapeshift. It is a bit like an A&E ward. They have a call; they have a redundancy; they have something happening with Remploy, and they can put a package in place immediately. There are 24,000 people deployed there to support people. You have seen how it has moved from lots of people coming through the door in 2007 to 2010 to, now, us looking to put a lot more support into people who have been unemployed for a long period of time. It is a matter of allowing that ability to shift towards what is needed on the ground at the time, and we do not necessarily know what is going to happen out there in the jobs market in the current job situation. For me, it is having it on the street, embedded in communities, and allowing it to do what is needed at the time.

Q581 Nigel Mills: Do you think it works, then, to have the same person, same organisation, partly being the person who sanctions you and deals with your actual benefit and, at the same time, trying to support and encourage you into finding work? Is it not hard for someone to be both your jailer and your support person?

Ester McVey: What does a teacher do in a school? A teacher would tell you off, or give you lines and detentions, or whatever it is, but at the same time they have your best interest at heart. They are teaching you, they are educating you, but at the same time they will also have the ability to sanction you.

Neil Couling: If you go back and look at the history, Lloyd George and Churchill debated this very point when it was being set up, and whether it was sensible to put this together or to try to split it out. They concluded that it was not, and during the whole history of employment services, the extent of this has waxed and waned a bit, but it has always been at the core of it. The Minister mentioned the German experience: putting it together in Germany, they found it worked so much better. It is really telling, and I think we have a real national asset here. People do a great job in Jobcentres day in, day out. These volumes are very difficult to deal with, and other countries look to us for inspiration about what to do. They are always asking me, "What are you up to? Where are you going next?" and I think sometimes that gets lost in the cut and thrust of things. Jobcentres up and down the land do a good job for the country, I think.

Q582 Nigel Mills: Yet, when somebody has been unemployed for a year and we start trying to intervene with them, we then move them out to an outsourced provider and a payment-by-results process. It is kind of like you do great work until it gets a bit tough, and then we get somebody else to do it. How do you mesh that strategy with what you have just set out?

Ester McVey: When you look at this giant machine-and I will call it a giant machine-with 400,00 claims per month, 98,000 adviser interviews per day, 14,000 people each day moving off JSA and 150,000 phone calls a day, you see the enormity of the organisation. However, what you should do within that is a refinement of the process each time. What they say is that one in 10, roughly, will end up on the Work Programme, so there is an element of segmentation; they would say, "How do we get extra support there," as you say, "with the payment by results, with the attachment fees, with the employability and seeing what they are doing?" I do not think that that alters what Jobcentre does at all. I call that a refinement of its process as we understand people better, and as we help them into work more. I think that is a positive extension of what it does.

Q583 Nigel Mills: If we gave you a blank cheque from the Chancellor in the Autumn Statement, there is nothing dramatic you would buy? You are not saying, "If only we could do X, Y, or Z, we could really make a massive improvement"; you are quite happy with the structure you have got?

Ester McVey: I will tell you what I have definitely learned in the last two years. We are all looking for this segmentation tool, this understanding of people: what the effects are on people’s lives, whether it is a disability that is causing problems, or whether it is attitude; whether they need extra support or emotional support, and what is maybe going wrong in their life and in their communities. If we could do all that right now, we would be doing it. If there was anywhere in the world that was doing it right now, we would take it off them in an instant. What we are doing is being at the cutting edge to help people as we can in 2013 to get a job, using the best information, the best people and the best tools we can.

Q584 Nigel Mills: Mr Couling, anything you could do with a blank cheque? Legally would be preferable.

Neil Couling: We could clearly do more, but the question would be whether that would be a worthwhile investment. I am very conscious that, as a Government as a whole at the moment, money is tight, and the additionality you would get from an extra pound of spend I would question. We know activation works. We do face a new challenge now: as the volumes are falling off among the hardertohelp groups, are we getting those interventions right? That is what my next 24 months is going to be about, because we are determined that this time, coming out of this economic downturn, people do not get left behind in the way in which they were in the previous two exits from big recessions. That will probably involve better joint working with local authorities. It will involve better joint working with training providers, and so forth, but I do not feel that money is the problem right now.

Chair: Thank you very much for coming along this morning. Thank you for your time. We have gone a wee bit over our allocated time-which explains why Members have left, because the House is now sitting-but we really appreciate the evidence you have given this morning. We will now construct our report, and we hope to publish some time in the New Year. Thank you again.

Prepared 11th December 2013