Appendix: Government response
Introduction
Both the written and oral evidence provided by the Department for Work and Pensions (DWP) to the Work and Pensions Select Committee (the Committee) set out how DWP has significantly improved the speed at which it processes benefits and, as a result, reduced delays. The performance being seen today across every single benefit is the best since records began; however we are ambitious to go even further and have re-structured some of DWP to improve information sharing capability. This means that we now deal with claimants in a ‘once and done’ way and continue to take prompt and timely action to minimise delays.
|
The latest available data on the Department’s speed of processing for its four main primary benefits is detailed below. |
Level |
Performance Achievement |
|
|
2009/10 |
2014/15 |
||
|
Jobseeker’s Allowance(JSA) |
90% in 10 days |
67.6% |
88.6% |
|
Employment and Support Allowance (ESA) |
85% in 16 days |
72.9% |
93.6% |
|
Income Support(IS) |
90% in 13 days |
85.6% |
96.0% |
|
Personal Independence Payment (PIP) |
N/A |
N/A |
11 weeks clearance time (for new claims normal rules as at April2015)* |
DWP has made substantial progress in respect of the speed of processing new claims to benefit while maintaining the accuracy of payments. Fraud and error in the benefit system has dropped to the lowest level since records began, falling by £350 million last year.
Benefit fraud and error fell to 1.8 per cent of overall welfare spending in 2014/15, compared to 2.1 per cent in 2010/11.
The evidence also set out how the Department seeks to avoid delays in benefit payments and the mitigations in place on those occasions when delays do occur.
As a result the performance information is clear; the vast majority of benefits are paid on time and claimants are seeing their benefits processed quicker than before.
There have also been commensurate reductions in the volume of outstanding benefit applications in need of processing, as well as reduced need to pay advanced payments of benefit, appeals and special payments. This has led to a marked downward trend in the number of telephone calls we receive as claimants are finding it increasingly unnecessary to ask about the progress of their claim. There have also been significant reductions in the length of time claimants need to wait for an appointment to see a health care professional for an assessment as part of a claim for Employment and Support Allowance and for Personal Independence Payment. This has been notably delivered against a backdrop of reducing headcount.
It is disappointing that the Committee failed to recognise this progress in their report. We accept that some claimants are subject to a delay, but would want it recognised that this is not the experience of the majority of our claimants, and that – over the last five years – we have reduced delays to their lowest ever level. The most common causes of delay in processing claims once received are the need to gather additional evidence or information from the claimant as well as the complexity of some of our case types. As well as paying on time, it is important we process people’s benefit claims accurately. DWP often has to make further enquiries of claimants to ask for evidence or information such as proof of identity and bank/earnings details. Complex cases include, for example, conducting a test to ensure the claimant can be classed as habitually resident in the UK or undertaking a work capability or other health assessment.
DWP makes every attempt to progress quickly if additional information is required from claimants and in dealing with complex cases. In addition, our welfare reform programme Universal Credit (UC) is now live in all jobcentres, and is revolutionising the benefits system. It simplifies the system by combining six benefits into one, adjusts automatically as people’s circumstances change, and ensures people are always better off in work. Recent research has shown that people on UC are significantly more likely to move into work than people on JSA. Over three-quarters of UC claimants say they can manage with monthly payments and we provide budgeting support for anyone who may have difficulties. Benefit advances are available for UC claimants who need help before their first payment.
We do welcome the committee’s report and have responded to the recommendations below.
Government Response
1. Error in Housing Benefit
Fraud and error in housing benefit have increased in the past five years, despite DWP’s use of real-time information on claimant incomes.
We recommend the Government set out in detail how it will exploit other sources of data to gain a better picture of claimant circumstances, including living arrangements, and what reductions in fraud and error it expects these to achieve.
We expect the DWP’s 2015–16 annual report and accounts to show progress in this area.
The latest national statistics show that Housing Benefit overpayments reduced from 6.0 per cent in 2013–14 to 5.3 per cent in 2014–15. Underpayments also fell from 1.5 per cent to 1.4 per cent.
There are three principal data mechanisms in place already to identify and correct payments:
- The Automated Transfer to Local Authority Systems (ATLAS) sends a daily feed to local authorities to update them on any changes that have taken place in associated DWP benefits or Her Majesty’s Revenue and Customs (HMRC) Tax Credits. The system has helped local authorities address both over and underpayments.
- The Housing Benefit Matching Service is in place and is designed to match different data sets against one another to identify inconsistencies. It uses the information provided in the local authorities’ data extract to match against DWP, HMRC and other data sources, in order to identify Housing Benefit cases that are most likely to contain fraud and/or error, for example income from other benefits, undeclared capital and household composition.
- The Real-Time Information (RTI) Bulk Data Match began in October 2014 for Housing Benefit. This is a retrospective bulk data-matching exercise against DWP benefits to identify cases where there are under-declared/undeclared earnings and/or Non-State pension. It is estimated that this type of fraud/error currently accounts for overpayments costing £650 million every year.
Moreover, we intend to go further and will be delivering a new service that will provide wider use of RTI data during benefit processing. This will enhance the Department and local authorities’ ability to prevent errors from entering the benefit system. Where the Bulk Data Match detects errors after the fact, this new service moves towards stopping errors before they begin. This new service will be tested during 2016, with a view to providing the service more widely across the Department and local authorities during 2016–17.
In December 2015, the Department set-out in the Annual Report and Accounts Supplementary Written Evidence to the Committee how the Department is using data to identify high-risk claimants.
The Department is also working on a cross-government initiative with HMRC and Cabinet Office which includes reconsidering the definition of living together, improved data sharing and claimant education. It is too early to anticipate potential savings however we expect to hold a more confident position by Autumn Statement 2016.
A new overarching fraud, error and debt strategy is being developed, covering both legacy benefits and welfare reform. This will include a new cross-welfare fraud and error target which reflects fraud and error losses across DWP benefits and tax credits net of DWP recoveries and provides more clarity on losses actually incurred by the taxpayer.
2. More focus on underpayments
The DWP has a target for reducing benefit overpayments but not for reducing benefit underpayments. This indicates their relative priorities as the Department seeks to reduce costs. Underpayments, however, can have an enormous effect on individuals and can be a false economy as they transfer the burden to other services. Real time earnings information in Universal Credit is expected to improve the accuracy of benefit payments and should result in a reduction in underpayments over the next few years. We welcome the Department’s invitation to hold them to that expected ‘dividend’ from Universal Credit.
Underpayments totalled £1.5 billion, or 0.9% of benefit expenditure, in 2014–15.
We recommend the DWP introduce a target to reduce underpayments to less than 0.5% of expenditure by the end of this Parliament.
The Cabinet Office’s Fraud, Error and Debt Steering Group should monitor the Department’s progress towards achieving the target.
The Department publishes comprehensive data on underpayments as part of our bi-annual national fraud and error in the benefit system statistics. 2014/15 final estimates showed that underpayments had remained stable at 0.9% of expenditure, which equates to £1.5bn in monetary value.
The Department previously rejected a recommendation from the Public Accounts Committee to set a target for underpayments.
This is because the Department’s fraud and error measures are designed to ensure payments are correct and as such impact both over and underpayments alike. Therefore we do not believe a target for underpayments is necessary. The Department understands the importance of paying the right money to each of its customers and will continue to tackle the causes of underpayments, as part of the wider approach to ensure claimants are paid the amount to which they are entitled.
Universal Credit will make it easier for customers to understand their entitlement and obligations. Errors are less likely to arise from claimants not understanding how different types of benefit interact. Similarly, errors that arise from claimants only telling one part of Government about changes of circumstance will be minimised.
Claimant error is the biggest cause of underpayments (approximately two thirds, equating to £1bn). We are currently working up a number of measures that will help strengthen claimant responsibility. This will include clear signposting on how claimants can report changes along with a commitment that we will promptly update any claim where someone has been in touch. We will continue to review the letters we send customers as part of this work.
Claimants have a responsibility to report their circumstances correctly. Where underpayments are identified, as a result of official error the Department will pay arrears in full at the earliest opportunity. Underpayments resulting from the claimant’s failure to notify the Department of a change of circumstance will be paid dependant on the circumstances. The Department makes information on benefit entitlement available in many locations, including doctors’ surgeries, welfare rights premises and Jobcentre Plus offices. This helps ensure that people are aware of their entitlement to benefits and how to claim. Additionally, the Department makes information on the gov.uk web site and general benefits advice is available from the Jobcentre Plus information line - 0800 055 6688.
3. Opportunities for Universal Credit
The DWP is already exploring options for online resources in the digital service and Universal Credit is still in the ‘test and learn’ stage. Now is therefore an opportune time for the Department to develop other online tools, such as a landlord portal for the housing element.
We recommend the Department trial a landlord portal in an area where the digital service is operating.
DWP does not currently accept this recommendation because the current focus of UC resource is focussed on building a robust IT platform for the full UC service. DWP continues to iterate this platform and may incorporate a landlord portal in future releases if user feedback demonstrates sufficient demand.
DWP is building and testing the full UC service in response to user needs and is continually looking at the most appropriate and efficient ways to deliver. We will continue to consult and engage with landlords and other partners throughout development and rollout. There are a number of products on www.gov.uk to support landlords and escalation routeways are in place to assist them with any issues.
DWP is piloting an exercise to understand and assess how social landlords can identify vulnerable tenants and arrange direct payment of housing costs to landlords, where appropriate. This builds on our commitment to working with landlords to help those claimants who need support to manage their rent payment. The pilot is a product of joint working between DWP and the Social Rented Sector to develop an approach that ensures those tenants who need support receive it.
Following assessment of the Trusted Partner pilot, we will explore opportunities for future partnership working with this key group of stakeholders.
4. Alternative Payment Arrangements
Alternative Payment Arrangements (APAs) are an important backstop to protect claimants who will struggle to manage a single monthly benefit payment.
We recommend the DWP review its guidance, and application of that guidance, to ensure that (a) there is no requirement for a claimant to have built up rent arrears before an APA can be put in place; and (b) no APA can be cancelled without ensuring the claimant is aware of the change.
Alternative Payment Arrangements (APAs) are put in place for a variety of reasons. A claimant does not necessarily need to have built up rent arrears for them to be entitled to an APA.
APAs can be used at any point during the UC claim, either at the outset or during a claim; they are subject to review and are time-limited. They are delivered in conjunction with Personal Budgeting Support (PBS) to help claimants successfully make the transition to monthly budgeting.
The APA process is under constant review as the Department tests and learns from live running, and expands to take on other client groups in the future.
UC work coaches engage in an on-going conversation with claimants to build trust so that they are more comfortable talking about financial capability. During these conversations, work coaches will make claimants aware of any changes to their APA arrangements.
DWP does not cancel an APA without making the claimant aware. All APAs are reviewed with the claimant and they will be alerted to any changes to the APA. The claimant (and landlord where it is a managed payment to landlord APA) will be notified when an APA stops. An APA could be stopped before the review date is reached if the claimant feels able to manage without it and the Work Coach agrees.
Some changes in circumstance will trigger an APA review for example, a change of address, a change in earnings, or an increase in the amount of capital a claimant has. DWP agrees these changes as part of a consultation between the work coach and the claimant.
5. Personal Budgeting Support
The introduction of Personal Budgeting Support (PBS) money advice is a good step towards helping claimants manage their monthly Universal Credit payment. We are concerned, however, that in these early days it is not being delivered as effectively as it should be and uptake is low.
We recommend the DWP review the processes for assessing and delivering PBS to ensure claimants are receiving the support they need to manage a single monthly payment. We further recommend that DWP conduct a study of the best way to encourage claimants to use the financial products available in order to manage their budget.
It is too early fully to assess the impact of the five to six week wait claimants have for their first Universal Credit payment. We are concerned the DWP has not properly considered households who have no savings of a final paycheque to fall back on. We will continue to monitor the effects of this built-in delay and return to it when we examine Universal Credit in more depth.
Personal Budgeting Support forms part of Universal Credit’s Universal Support scheme.
Universal Support has rolled out alongside Universal Credit, focusing on financial and digital barriers to help claimants manage the transition to UC.
An expanded version of Universal Support, which is being considered and developed at the moment, is intended to support those who have multiple and complex barriers to work through a system of more joined up services at a local level to help claimants into sustained employment. It could, for example, ensure claimants who need support are identified more quickly and more effectively, given personal introductions to relevant services, provided with tailored plans that support their needs and monitored to ensure they are making progress to work.
Underpinning this will be the strong local service networks of Jobcentres, local authorities, skills and voluntary sector providers, working together to join-up services.
PBS will prepare claimants for the financial changes Universal Credit brings. The PBS process includes a conversation with all claimants at their initial work search interview to gauge their potential support needs – this could include money advice with a mix of online, telephone and face to face support. The Department continues to work with local authorities and other partners to understand the on-going impact of the monthly payment of Universal Credit.
We are reviewing the current customer communications that work coaches use to encourage claimants to access financial products which help them manage their budget. We are also developing some alternative methods of promoting what is on offer for claimants that draw on behavioural insight in this area.
Depending on what these findings demonstrate, the Department may trial different approaches before reaching final conclusions.
As stated, it is too early to assess the impact of the monthly payment of UC; however the Department is evaluating this alongside other on-going research with UC claimants at the start of their claim.
6. Employment and Support Allowance
The lack of available data on ESA and WCA clearance times is unacceptable. The DWP cannot properly monitor Maximus’ performance, make clear policy decisions or effectively support claimants without it.
(a)We recommend, where applicable, the Department publish quarterly official statistics on ESA clearance times, including data on time from claim to completion of WCA; time from WCA to decision; and time from decision to payment of benefit, showing not only averages but a breakdown of the ranges of clearance times.
(b)We further recommend that in addition to the current average claim processing time target, the Department set a target time within which ALL claims should be processed.
(a)The Department monitors performance and makes evidence-based policy decisions using internal management information. Turning management information into Official Statistics at the level of accuracy and quality demanded by the UK Statistics Authority takes a significant amount of time and resource. The development of official statistics for WCA clearance times would need to be prioritised against our current work programme, and the increasing number of requests from Parliament and other users for new and expanded statistics.
(b)In relation to clearance time, the Department currently monitors the percentage of ESA claims cleared within 10 days (this measures the front end part of the customer journey from the point they make their new claim to the point they receive a decision on their entitlement to pay assessment rate ESA). In addition, the business uses internal management information on the age of cases outstanding to manage clearance time performance and ensure that claims are progressed as quickly as possible.
The Department would not set performance expectations for a timescale within which all claims should be processed owing to the nature of some ESA claims. This is because some types of cases are expected to take longer, specifically those cases recent welfare reform changes were introduced for. These changes require some claimants to have a Work Capability Assessment before their claim is processed if they have previously had a claim for ESA and been found not to have limited capability for work.
7. Interaction between ESA and JSA
We welcome both the Secretary of State’s intention to review the nature of the Work Capability Assessment and his commitment to engage with us in this work. However, people with significant health conditions who have been found “fit for work” and who are currently struggling to meet JSA conditionality cannot wait for a more nuanced assessment to be designed and implemented. They require immediate action to prevent them falling in the gap between JSA and ESA. We agree with our predecessor Committee that it is inappropriate for those challenging ESA decisions to claim JSA as some claimants are refused JSA due to being “unfit for work”.
We recommend that assessment rate ESA be paid to claimants throughout reassessment of their claim, not only once an appeal is lodged.
Following five independent reviews, the Department has made a considerable number of changes to improve the accuracy of WCA and remains committed to continuing to do so. This helps to ensure that benefit goes to those who need it most.
There is evidence showing that work is generally good for physical and mental wellbeing. It also shows that, where their health condition permits, sick and disabled people should be encouraged and supported to remain in or to re-enter work as soon as possible.1
The introduction of Universal Credit reduces the possibility of claimants falling between ESA and JSA as claimants will no longer be required to make a new claim for benefit when there is a change in their circumstances. As the Secretary of State explained to the Work and Pensions Select Committee on the 11th May, the Government intends to publish a Green Paper later this year that will set out reforms to improve support for people with health conditions and disabilities, including exploring the roles of employers, to reduce the disability employment gap and promote integration across health and employment. This will form part of a new conversation the Government wants to start with disabled people, and with their representatives, employers, and health, care and welfare professionals. The Government will listen to all of the ideas and views generated.
In November 2014, the Government made clear its position on the issue of ESA to JSA transitions in its response to the previous Committee’s Report on Employment and Support Allowance and Work Capability Assessment2.
The Department’s view is that where an individual is found fit for work it is only right that they are encouraged, with appropriate support, to seek employment. Many people with a health condition or disability are in work and there is a large body of evidence showing that work is good for physical and mental wellbeing and that being out of work can lead to poor health and other negative outcomes.
The Department has issued guidance and training to its staff to help ensure the employment support that claimants are given is flexible enough to accommodate an individual’s needs in relation to any disability or health condition. The Department has also made a number of other changes to help smooth the transition for claimants moving from ESA to JSA and to help ensure that disruptions to the payment of benefit are kept to a minimum.
For example, the Department introduced stronger messaging, such as an outbound call to the claimant made by the decision maker, to inform claimants of the need to claim benefits immediately after being found fit for work and to remind them that failure to claim other benefits immediately may result in a loss of/or gaps in their benefit payments.
Universal Credit claimants are required to accept a Claimant Commitment as a condition of entitlement. The Claimant Commitment helps the claimant to focus on the activities they have agreed to take, which includes the hours they are available for work and considers their physical and/or mental health conditions. These measures are designed to ensure that claimants receive the help and support they need to move closer to or into work from JSA and provides individualised coaching and support for claimants with health issues or more complex needs.
In response to the feedback the Department has received from the previous Committee and others, a number of changes have been made to help improve the experience of those claimants engaged in the mandatory reconsideration process. For example, ESA decision notices are now available to Jobcentre Plus work coaches to help them prepare, enabling them to have an informed discussion with ex-ESA claimants during the JSA claim interview.
The Department has no plans to change its current position when claimants have been found fit for work but it recognises the need to ensure that operational processes are clear in this situation. We will continue to carefully monitor how this is working and consider process improvements, where appropriate, as part of the Department’s continuous improvement work. Our aim is for the transition from ESA to JSA to operate as effectively as possible.
8. Refugees
We question why the “move-on” period for new refugees is only 28 days, when it is clear from research conducted by charities and the Government that it is in many cases insufficient.
We recommend the DWP conduct an immediate investigation into the “move-on” period and work with the Home Office to amend the length of time if necessary.
The Government accepts that previous studies highlighted some difficulties experienced by those granted asylum and their transition from asylum support to mainstream benefits. As a result, the Department has already undertaken to seek to resolve these issues through improvements to existing processes.
The Government’s own research into this issue, carried out in July 2013, revealed that there were two major causes for delays. The first factor was a lack of claimant awareness and understanding leading to, for example, refugees making late claims, providing incorrect documentation and failing to attend interviews. The second was that at times there was a lack of awareness of processes on the part of DWP staff.
In order to address these issues the Department has worked very closely with Home Office officials as well as external stakeholder groups to revise information issued to refugees when status is granted, which clarifies how refugees can access DWP services and benefits. This revised information leaflet has been issued to all those granted status from 6 July 2015 onwards and is also available to view on GOV.UK.
In addition to this, the Department has also recently updated guidance for staff handling claims from refugees and a number of improvements have been made to instructions for frontline staff.
It has always been the Department’s intention to evaluate the impact of these improvements. The Department plans to carry out this study later this year. Next steps will be decided upon when the findings of this evaluation are available.
We welcome the recent guidance for refugees issued by the DWP. We also recognise the advantage of local transition guides, which can be used as self-help handbooks for new refugees and their advisors. Such guides can be a low-cost means of assisting refugees with unfamiliar concepts and surroundings.
We recommend the Department review the Belfast City Council transition guide and consider supplementing existing national guidance and/or issuing similar guides to other local authorities. These can then be supplemented by local authorities with information tailored to their area.
As previously mentioned, the Department has already revised information issued to refugees detailing how to access our services and benefits. This was referred to by a British Red Cross spokesperson during the Committee’s benefit delivery oral evidence session on 4 November 2015 as “Very good guidance… It is available online and sets out the expectation of what should be done and copies are given to all newly granted refugees”.
Local Jobcentre Plus offices supplement this national guidance with information on local services and support available.
In addition to this, local authorities also produce relevant local information in the format that works best for them. The Belfast City Council transition guide is an example of this type of local authority produced information.
9. Short-term benefit advances
Trends in short-term benefit advance applications and awards are unclear.
We recommend the Government set out its plans for the publication of regular statistics in response to this Report.
The development of official statistics for Short Term Benefit Advances (STBAs) would need to be prioritised against our current work programme, and the increasing number of requests from Parliament and other users for new and expanded statistics.
We recommend that the Department include information about Short-Term Benefit Advances as part of the mandatory text in Jobcentre scripts. Jobcentre staff should ask every claimant whether they have an urgent financial need rather than wait or the claimant volunteer that information.
The Department does not accept this recommendation for the following reasons:
- The financial needs test for STBAs is based on avoiding serious risk or damage to the health or safety of the claimant or any member of their family. It therefore follows that if someone is in that position, they would mention it to a member of staff when being told they will not receive their benefit immediately.
- People clearly are aware of STBAs, evidenced by the fact that for the year to September 2015, there were 228,039 requests received (around 7 per cent of the total number of claims to IS, JSA or ESA for the same period).
10. Mandatory Reconsiderations
The statistics available expose flaws in the sanctioning process. DWP must address the quality of original decisions in order to maintain a downward trend in the number that are overturned at Mandatory Reconsideration stage.
We welcome the news that Mandatory Reconsideration clearance times for some benefits are coming down. We also welcome the proposed and long overdue introduction of a Mandatory reconsideration clearance time target. A remaining concern is the monitoring of long decision making times for individuals in excess of those targets and averages. These people are not just outliers on a clearance time chart.
We recommend the DWP publish Mandatory Reconsideration clearance time statistics by April 2016. These should include the proportion of Mandatory Reconsiderations which were cleared in 1 to 7; 8 to 14; 15 to 30; and more than 30 days. We further recommend the DWP introduce a seven day clearance time target for all Mandatory Reconsiderations.
The Department monitors performance and makes evidence-based policy decisions using internal management information. Currently only 2.2 per cent of original JSA decisions are overturned at Mandatory Reconsideration. Turning management information into Official Statistics at the level of accuracy and quality demanded by the UK Statistics Authority takes a significant amount of time and resource.
Official statistics about Mandatory Reconsideration clearance times are currently under development. When the data is of robust quality and has undergone the necessary assurances the Department will pre-announce these improvements in accordance with the release protocols detailed in the Official Statistics Codes of Practice.
When the Department published Mandatory Reconsiderations for JSA and ESA sanction decisions from Wed 18 Feb 2015 and PIP Official Statistics from 17 June 2015, within the regular Official Statistics releases, these did include both the number of Mandatory Reconsiderations made and the outcome of the Mandatory Reconsideration.
The PIP statistics can be found here:
https://www.gov.uk/government/collections/personal-independence-payment-statistics
The Sanction statistics can be found here:
https://www.gov.uk/government/collections/jobseekers-allowance-sanctions
In relation to performance expectations, the Department has plans to monitor Mandatory Reconsideration clearance times within its 2016–17 performance framework and is in the process of agreeing an appropriate performance measure and performance expectation for 2016–17.
© Parliamentary copyright 2015
11 July 2016