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Was the timing of those two things consequential on one another? Was the Section 82 consent asked for because the benefits processing repayment programme was abandoned? If that is the case, I wonder whether the 22-month programme that was set in place by the Section 82 consent, which has been three months in gestation since the authority was given, is realistic. We have been here before with other IT platform programmes. It is a politically driven programme, and it is far too challenging. If it does not work, does A-day still happen on 1 April 2008, or does it move to November 2008? When it happens, what does “up and running” mean? Does it mean that the platform will be available to every front-line adviser on the day when the scheme is rolled out? Now that Jobcentre Plus has had that extra time since it got the consent for the spend under Section 82, can the Minister say whether the spend is up to programme or is it slipping further behind?
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The department estimates that it has foregone “only” £70 million of the BPRP. Is there anything that can be salvaged from the remaining £70 million? I would dearly like to know whether efforts are being made in that regard. The department said that it was going to put a plan into effect to ensure that the most was made of the salvaged elements to deal with the legacy systems. Will the Minister undertake to share with us in Committee the details involving the underpinning IT provisions and operational platform for this new, important allowance? My experience suggests that, if he does not, the whole house of cards could tumble down because of operational difficulties because the computers do not work. If that happens this time, it will be a tragedy, and there will be no excuse, because Ministers could not say that they were not warned.
6.58 pm
Baroness Greengross: My Lords, I shall concentrate on two areas covered by this important Bill. The first, as the noble Baroness, Lady Hollis, mentioned, is the area of permitted work rules for disabled people. Secondly, I want to touch on the situation for older workers.
The objective of the Bill is a welcome one: to help large numbers of disabled people in moving towards work. With that objective in mind, I wish to raise an issue around the impact that proposals in the Bill will have on the ability of people claiming incapacity for work benefits to undertake permitted work. Currently, people claiming incapacity benefit or severe disablement allowance are able to undertake a limited number of hours of paid work each week to help them gain work experience and remain in touch with the labour market. They are also able to volunteer for an unrestricted number of hours. Those rules form an important means for disabled people on benefits to try out work without any threat to their benefit entitlements, which for many people is a source of great anxiety, having often been through long and complicated processes to secure those benefits.
The permitted work rules changed on 10 April last year. A new category of permitted work was created for people who were exempt from the personal capability assessment, which establishes entitlement for incapacity benefit. People in this group are able to work for less than 16 hours a week, on average, and earn up to £81 each week without having an impact on their benefit entitlements. However, as part of this Bill, a review of the personal capability assessment has been conducted, and it is proposed that the exemption from the assessment for certain groups of disabled people is to be ended. While that has been welcomed in the sense that it means that these groups of disabled people will no longer be automatically regarded as unable to work and therefore included in the additional help that will be offered under the Bill, it is unclear what will happen to claimants who are undertaking permitted work under these provisions when employment and support allowance is introduced in late 2008.
I should be grateful if the Minister could clarify the Government’s intentions regarding how the introduction of employment and support allowance will impact on people who are at that time undertaking permitted work on the grounds of being exempt from the personal
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We must acknowledge that an older workforce will mean more people with acquired disabilities. The Government need to ensure that they strike the right balance between prescriptiveness and entitlement. Incapacity benefit is a contributory benefit, so recipients have a stake in the system and are not asking for hand-outs. Often, they will have worked for a substantial amount of their life. Any health conditions affecting their ability to work may even be workplace-derived. I am pleased that the Government acknowledge that early intervention is essential to stop the rot and prevent long-term dependency. Forty per cent of unemployed people over 50 have both health and skill limitations. However, I fear that, if the work-related activities are too restrictive, the reforms will fail. We need maximum flexibility to capitalise on individual circumstances, education, training and life commitments such as family and care. We should remember too that older workers may need or wish part-time work, and the reforms must accommodate that.
It is regrettable that funds have been withdrawn for education and training in later life. One-third of those in their early 40s do not have five GCSEs or equivalent, so the problem is more systemic than just an incapacity benefit bill for the over-50s. Those in the pipeline, as it were, are already building up the same problems. That needs attention.
The Minister acknowledged in June last year that there was a lot of resistance from employers to employing older people, as we have heard. The Government must take the lead and campaign to enable employers to understand the benefits of employing older people: the experience and loyalty that they bring to a company and the saving on recruitment costs, as older workers tend to stay in their jobs for much longer than younger ones.
Finally, the reductions in incapacity benefit if occupational pensions reach above £85 are worrying. Incapacity benefit is then reduced at 50p per pound. The Government said in 1999 that that would be reviewed annually to ensure that pension value was not eroded, but the figure is still £85, and there is no public evidence of it being reviewed. Will the Minister give a commitment that the figure will be uprated to take account of inflation?
I look forward to hearing what the Minister has to say on these important issues.
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7.05 pm
Lord Best: My Lords, I want to add one or two further points to those already made by your Lordships on Part 2 on housing benefit. This is a subject of such complexity and, dare I say it, for those not directly affected, of such tedium, that it has defied reform and improvement for many years. I congratulate the Government on working up a revised housing benefit scheme with a new simpler system for calculating benefit—the local housing allowance scheme.
Over the past five years I have chaired a housing benefit reform group with representation from landlord and tenant bodies and from government departments, which has followed the progress of the new measures. In this instance the pathfinder schemes in pilot local authority areas have been the subject of impressive evaluation for the Government, not least at the University of York. This has involved a thorough appraisal of the concept and has shown that it is sensible to roll out the arrangements from the initial 18 areas to all local authority areas.
The scheme involves greater clarity and simplicity and will make the administration of housing benefit, which, frankly, has been a nightmare for the 408 local authorities handling housing benefit as well as for both landlords and tenants, infinitely better. However, perhaps unsurprisingly, the new arrangements are not perfect. The worst aspect of the current housing benefit regime is that many tenants have to pay out more in rent than they receive in benefit. This means that the tenant must cover the balance from their other income. But income support and other benefits do not have any leeway to pay the rent. Other benefits are calculated on the assumption that housing costs are fully covered.
The new regime has led to smaller shortfalls in many cases, which is of considerable importance, but shortfalls remain in many other cases. The Catholic Housing Aid Society in Kirklees carried out a survey of 37 landlords with 2,756 properties and found that the people who had a benefit shortfall went without meals on a regular basis: 50 per cent missed three main meals a week; 50 per cent were behind with other bills, and 15 per cent faced court action for debt; 50 per cent were behind with their rent, unsurprisingly, and 20 per cent faced eviction as a result. Why the shortfall, the gap, between the rent and the housing benefit intended to cover it? It occurs because the rent officer sets a rent level which is lower than the landlord charges the tenant. The new system involves rent officers setting the rates for the flat-rate local housing allowances. The problems of fixing maximum levels, which in many cases leave tenants trying to make up the balance, need to be minimised.
A problem can arise if the geographical area covered by the so-called broad rental market areas includes such an unbalanced portfolio of properties of different prices that the median rent is too low in relation to the actual availability of properties for rent. The boundaries for these broad rental market areas need an input from the local authority and its own housing experts. At the moment the rent officer service is quite separate and independent of the local authority. It also seems important for there to be a system of appeal against rent officers’
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More technically, there is an intention to move from the use of the mean rent in the calculation to the median rent. I am advised by Professor Steve Wilcox, acting for Citizens Advice, that this innocuous-sounding change could mean a lower level of maximum housing benefit for all concerned. Will the Minister look at this technical issue and see whether his officials can do some sums in advance of implementing it, just in case this advice is correct and we are unwittingly coming up with a formula that will mean more of these dreaded shortfalls?
A specific aspect of rent-setting which has caused particular controversy is the single room rent for under-25 year-olds. This caps housing benefit at a level deemed to cover the rent of a room in a shared home, not a self-contained flat for these tenants. The Minister referred to this in his opening remarks. The requirement is now to be called the “shared room rate”. The Minister pointed out that a large number—I think that the figure is 40 per cent—of younger people who pay their own rent live in shared accommodation. Is it fair, goes the argument, to seek a self-contained flat if you are on housing benefit when those who are not on benefit often must share their house or flat? This misunderstands the realities facing many young people who need accommodation in the real market place. Life is quite different for vulnerable, ex-homeless young people—people coming out of prison; people moving from a hostel or supported accommodation into their first home—from what it is for young, upwardly mobile young people, down from university, or students who share, and enjoy sharing, perhaps with help from their parents.
There are many areas in which there are practically no shared apartments on the market for that young person to go out and find. Houses in multiple occupation are closing in a number of places—there are fewer of them than there were. The huge phenomenon of buy-to-let, with lots of new landlords coming into the market place, is entirely in self-contained accommodation: one-bedroom and two-bedroom flats.
The Department for Work and Pensions has discovered that the average shortfall for young people in these circumstances is £35 per week. This is a very large sum of money to find if you really do not have any other source of income to sustain you. You have your income support to cover your food, your fuel and your clothing; there is nothing left to contribute to your rent. So, very soon, these young people, who are not able to move into shared accommodation, will find themselves, as they have in the past, in serious difficulty. The YMCA, Crisis, Centrepoint and Shelter have all sent us evidence on the problems which the old single-room rent, which is to be perpetuated in the new system, has caused for young people in these circumstances. I hope that the Minister will be able to offer some reassurance that this real defect in the old, and now in the new, housing benefit scheme will be remedied.
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7.13 pm
Lord Morris of Handsworth: My Lords, I am grateful to my noble friend Lord Morris of Manchester for his contribution not only to this debate but to the debate in 1969 on the Chronically Sick and Disabled Persons Act, to which he referred. He was much too modest to repeat his profound contribution to that debate. Movingly, he said,
- “if years cannot be added to the lives of the chronically sick, at least life can be added to their years”.—[Official Report, Commons, 5/12/69; col. 1863.]
I quote my noble friend because it is sometimes said that the values of a society can be judged by the standard of its welfare system. While there are limits to that statement, it is true that the welfare system can define a society. Welfare defines our common humanity. It defines our collective compassion and our sense of social justice, and, for some of us, it defines our moral compass. How we treat our retired citizens, our pensioners, our children and those with disabilities can say much about what kind of society we are.
To date, the Government’s strategy has been one of empowerment, directed, rightly, at getting people from welfare to work. This must be welcomed. Yet, only half of Britain’s disabled people of working age are employed. Those who have been on incapacity benefit for more than two years are more likely to die or retire than ever to get back into work. So we certainly need reform of the system.
Sadly, the history of previous reforms has been underpinned by a culture of sanction and even fear. But let us be very clear: no one will argue against reform of the incapacity benefit regime. No one will argue against the crackdown on benefit fraud. The better co-ordination of the housing benefit regime is just one of many worthy objectives that the Bill seeks to address.
However, it is essential that the Bill sets the right tone of incentive and support. The measures in the Bill must therefore tackle employers’ prejudice against those with disability; it must enable and empower those who can work to do just that; it must ensure that those who are deemed unfit to work receive the support and decent benefits that they deserve; and it must crack down on fraud in the benefits system. However, for these reforms to be successful, it is vital that the many fault lines caused by the complexity of the benefits system are addressed.
We all recognise the scale of the task which faces the Department for Work and Pensions. It pays out more than £100 billion in benefits every year. It processes more than 60 million cheques per month. It handles more than 200,000 appeals per year against benefit decisions. Thirty million people in the United Kingdom receive income from at least one pension or benefit department. That is a huge task.
It is therefore self-evident that it is not possible to satisfy every claim from every individual, but do we really need the multiplicity of benefits that is highlighted in the report on complexity of benefits by the National Audit Office in November 2005? I am confident that this Bill will add to the complexity.
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Sadly, due to the complexity of the system, the people who need the benefits most understand it least. When staff at the sharp end of the system have to ring up the citizens advice bureau or the Family Welfare Association for advice on and interpretation of the regulations, we are all in trouble.
Delivery is a crucial part of the benefits system. Yet the 2005-06 Social Security Advisory Committee’s report drew attention to the difficulties that many claimants will face following the termination of the Post Office card account system in 2010. In addition, the current round of Post Office closures will cause real hardship to claimants, particularly senior citizens who are not mobile and those who live in rural areas.
Finally, on the culture of the Bill, it is short on principles on the face of it—there are just three or four key ones—and limited in details. It is essentially an enabling Bill in many instances, as the Explanatory Notes say. The key objectives will in reality be delivered by a framework of rules and secondary regulations. I have no doubt that this House will pay as much attention to the secondary regulations as to the Bill, because reform of the benefits system is a matter of fundamental importance, requiring rigorous legislative scrutiny for the details and primary provision. In conclusion, the Bill should be about welfare, not work fear.
7.22 pm
Baroness Murphy: My Lords, I shall address my comments to the Bill’s mental health aspects. They have already been well addressed by other noble Lords, so I can cut down considerably on what I was going to say; many of the facts and figures have been ably addressed by the noble Lord, Lord Low, and others.
Paid work gives people with mental health problems tangible evidence of their own value, improves self-esteem and can give them a sense of mastery over their lives. I welcome the Bill, in building on the Pathways to Work pilots, while pointing out that early evidence suggests that people with a mental illness have been less successfully helped back into work than those with physical health problems.
The Bill raises some practical issues. As the noble Lord, Lord Morris of Handsworth, has just said, one of the Bill’s problems is that the devil will be in the detail of the regulations. I may therefore be raising issues to be addressed in regulations; if so, I hope that the Minister will bear with me for the moment.
The accuracy and appropriateness of the revised personal capability assessment (PCA) is clearly crucial. The revised version is a big improvement for people with mental health and learning disabilities. However, we know that, when implemented across many hundreds of thousands of people, the sensitivity and skill with which these assessments are carried out might in practice be less than perfect. We must ensure that staff are better trained to understand fluctuations in mental state, difficulties in social interaction and the importance of taking time. As mentioned by the noble Baroness, Lady Hollis, staff often want support and have a good approach to it, but not the knowledge or skill to apply it properly. The personal capability assessments can therefore be applied incorrectly.
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Given the pivotal role played by the PCA and the concerns about the review process, I add my voice to those who believe that there should be long-term government monitoring of the new PCA. When conducting the PCA, medical assessors from Atos Origin are guided through the issues to be covered by the computerised questionnaire known as LiMA (logic integrated medical assessment), which the noble Baroness, Lady Thomas, described so accurately in her vignette. As they go through an assessment, the doctor records claimants’ responses by selecting pre-coded options suggested by the LiMA system. In the main, the final assessment report is made up of a series of selected pre-coded responses.
I am perhaps referring to a period before Atos Origin took over this contract, but given the lamentable knowledge and skills about mental health issues frequently demonstrated by medical assessors, we might be better off trusting a computer program. However, for accuracy it unfortunately still requires high-quality input and sensitivity from the doctor. On average, the process takes 45 minutes and is completed in a one-off snap-shot assessment. What must be addressed is the quality of decisions currently being made. It is interesting that, in spite of the promised objectivity of these “mouse-driven medicals” as they are called, appeal after appeal—over 70 per cent—still says “No” to computer-generated reports and “Yes” to the claimant. Something is not right here. How we implement this may be important.
Requests for access to LiMA have been turned down, I understand, because it is exempt from disclosure under freedom of information legislation, as that might threaten the commercial interests of Atos Origin. It seems extraordinary that such an important tool should not be available for parliamentary or public scrutiny. Can that be correct? I was surprised to be informed of this by organisations. Can the Minister confirm why we cannot scrutinise it and judge whether it is an appropriate tool? At present, the great majority of appeals against decisions are successful, indicating that gate-keeping is poor. There should be regular customer surveys about the PCA process to ensure that it is fair, credible and can be continuously improved.
Under the current system, many people find themselves subject to a PCA once they begin to take steps to work, such as volunteering or educational activity. For people on the support component of ESA in particular, fear of an untimely PCA could become a barrier to participation in such activities, leaving them in the benefits trap. The regulations will provide an opportunity to stipulate when and in what circumstances a PCA can occur. That would give people on ESA greater trust in the system and more security to take the necessary steps towards employment. I recognise that, in Pathways to Work areas, many personal advisers ensure that customers taking steps to work are not penalised by an unexpected PCA. The regulations should ensure that this becomes standard practice in all areas.
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