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The other thing that is different about people with mental conditions is that it is not only about a good cause and regulations but about acting in good faith—and the vast majority of them are. The key to this is not getting regulations put in writing. I actually disagree with the notion of an exemption, because this particular client group deserves special attention, rather than being exempted. But they will not get that under the current regulations, because the personal adviser caseload is far too big to be able to apply the special resources and attention that these clients need. If that is true in the pilots, it will be true in spades when the roll-out comes and we have a £360 million budget wrapped around our necks to deliver the policy with. I do not know how realistic it will be in practice for the caseloading to be right and for personal advisers actually to have time to make these calls and house visits—an important aspect in my experience, mentioned at least twice. House visits are an essential part of the support that this client group needs. Personal advisers do not have the time to do that if their caseload is overstretching them.

There is some argument about what the caseloading should be. Some of the figures I have heard are slightly worrying for an ordinary casework situation, never mind areas with predominant mental illness figures. It is essential to get the caseloading right, and for discretion to be made available to personal advisers to determine whether people are acting in good faith, never mind with good cause. If somebody is acting in good faith, the new system should respond positively to him or her, never mind the regulations. Who is the best person to decide that? The personal adviser, with time and the ability to say, “I think you are trying to do everything you can to get involved in this, and are playing by the rules as best you can”. They should fall over backwards to support the customer in whatever way necessary to get them into work. Whether it is one, 10 or 40 hours a week does not matter; it must be tailor-made and time must be spent. There is no substitute for getting the resources available in the time that personal advisers have to get this right. If we do not do that, we will suffer.

Bear in mind that, in the fullness of time, a lot of this will be put out to businesses that will contract to provide support services for groups of 500 clients. The Wise Group is a not-for-profit enterprise, so we are not driven by making money, dealing with shareholders or any of that; it is easy to over-emphasise all that and make it sound pejorative. But if you are contracting to supply services for a cohort of people like that, the last people you want to try to help are those who are mentally challenged, because it takes so much time do it properly. The experience under the old scheme, where people are often left behind—even in companies which try their best to do good practice—is that in any group of 500 clients, you will always get 400 who are nearest to the labour market, for whom you get outputs, for which you get contractual rewards. However, the last few dozen in every group get left behind and

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neglected. Make no mistake, people are currently neglected under contracts, because contractors do not have the time to move them in the direction in which they must move for their own benefit. If that happens now, it will potentially be worse in the future: worse for people with a mental condition.

After the debate, I hope that the Minister will go and reflect carefully on the conditions. We can talk about the regulations until we are blue in the face, but until we get manageable caseloading for personal advisers and a sensible amount of discretion for them to deal with whatever condition they encounter in a customer or client with a mental illness, we risk failure in the important reform we are trying to introduce.

Lord McKenzie of Luton: I agree with a lot of what the noble Lord said about the importance of engaging with these customers, making it specific, addressing people’s particular needs and having the flexibility in the system to do so. That is what is there. With respect, I take issue with some of the wild assertions about caseload overload and the system not working and so on. We must certainly not be complacent. A strong message has come from this engagement, and we must obviously take that seriously.

On funding, I stress—and it has been stressed before, certainly at Second Reading—that the roll-out of Pathways is fully funded. I do not agree that personal advisers do not have sufficient time. The testimony of customers shows that the assertion is not correct. On using external providers, the contracts will specifically state the opposite—people cannot be ignored and all customers, with all conditions, have to be provided with support. That will be a key part of the contractual arrangements and part of the monitoring of the contracts that we put in place.

5.45 pm

Baroness Meacher: I thank the many noble Lords who have spoken so eloquently, particularly those who speak from personal experience and are able to make so clear the problems of implementing these proposals. I thank the Minister for his remarks, although he knows that I am not convinced by what is, for me, a presentation of the theory when the difficulties are of the reality, the complexity and, as my noble friend has just whispered to me, the chaos that the systems will have to deal with in the community.

We will be returning to a number of these issues in Committee and, I have no doubt, on Report as well. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 36 and 37 not moved.]

Lord Oakeshott of Seagrove Bay moved Amendment No. 38:

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The noble Lord said: That there should be a genuinely independent and regular report on how these major changes are working is an important and basic principle to establish. The high level of incapacity benefit appeals being upheld shows that the assessment process is failing a significant number of claimants. We believe that our amendment is a useful way of ensuring that information on the effectiveness and accuracy of the assessment is collected and made available for public scrutiny.

There was considerable and revealing debate on this topic in the Commons. This particular amendment was not called in the Commons, but similar amendments on this approach were debated. There was considerable cross-party support for the principle we are proposing. The Labour MP Roger Berry was very clear on that. Indeed, I was impressed with the remarks of the Conservative Member, Jeremy Hunt, who said:

The Minister in another place, Mr Murphy, was steadily pushed backwards as he responded. Because of the fact that the amendment we are discussing was not called in Committee in the other place, the Minister hid behind a rather technical series of excuses, saying that the Office for Disability Issues would not be the appropriate body to make such a report, given that it is part of the Department for Work and Pensions and this would cut across its operational responsibilities. We accept that, but those arguments do not apply to the Commission for Equality and Human Rights.

The Minister also talked about the ongoing evaluation of independent experts from the working groups who would be able, from 2008-10, to remain in place to offer assessment, challenge and observations about the operation of the revised PCA. If I may say so, that is a classic controlled review, as we so frequently used to enjoy seeing ordered by Sir Humphrey in “Yes Minister”. It is not in any way a proper independent assessment, as we are asking for in this case. I beg to move.

Lord Skelmersdale: This is another huge group of amendments, many of which pertain to the Government. I shall speak first to our amendment in this group, Amendment No. 92, which seeks to ensure that all regulations made under this part will be subject to affirmative resolution. I suspect the Minister will describe this as overkill, but we shall see.

Although the Government have been extremely helpful in trying to provide us with as many draft regulations as possible, there are still, as the Minister knows, relevant regulations that have not yet been finalised and we have not been able to see. That is natural, and I readily understand that. There is no criticism. Clearly at Second Reading I asked for more than I was going to get, but I knew that at the time.

This clause currently makes provision for only the first regulations made under Clause 12 to be debated in both Houses—in other words, affirmative

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resolution. I am glad to see that the Government are responding to many of the recommendations in the report of the Delegated Powers and Regulatory Reform Committee on this matter, but I still feel that there would be value in scrutinising much more carefully many of the regulations that are not mentioned. The final details of the assessments have caused many concerns that will only be addressed through well targeted regulations.

We believe that new and altered regulations currently within the IB regime, and there will be a whole chunk of them, which will be necessary under these clauses in particular, would certainly benefit from much fuller and more regular scrutiny. As rollout continues, I am sure the Government will find it necessary to make quite significant amendments as time goes by. I also agree with the noble Lord, Lord Oakeshott, that seeing only the first draft of regulations relating to Clause 12 would not be enough. Legislation should allow enough flexibility for the Government to adapt to changing circumstances and improve on previous regulation. The Bill, however, gives an enormous amount of power with very few safeguards. I do not believe that the Government will ever need to change the regulations under the Bill in such a rush that affirmative action would be a problem. The noble Lord, Lord Oakeshott, has also requested that there should periodically be a report to Parliament. I cannot see any good reason why the Government should not accede to that.

I return to my own amendment. I understand that, as currently drafted, it would require enormous numbers of regulations currently in use for IB to be re-submitted through Parliament. I accept that that would not be necessary, or even helpful. Therefore, perhaps my expression “overkill” is the right one. But—and it is a big but—I feel that the Bill as it stands, or even as it will stand after the government amendments have been accepted, does not give us adequate protection. After the Bill is amended, which it doubtless will be in a few moments, regulations under Clause 2(2)(c), 2(3)(c), 2(4)(c) or 2(5)(c) and under Clause 15(2), which relate to decisions under regulations under Clause 10, 11 or 12, will also be debated, as I understand it, for the first time in your Lordships’ House and another place. Thereafter, they will sink down to the normal negative resolution procedure. At least, I understand that that is the purport of the government amendments.

As a matter of detail, Amendment No. 95, the Minister’s own amendment, deals with regulations under Clause 15(2) that relate to decisions under regulations under Clauses 10, 11 and 12. When he speaks to that amendment, I hope that he will be able to explain very clearly, because, to me at least, it is the most extraordinary piece of drafting.

Proceedings in another place and the initial stages of Committee here have shown that the debate on these matters can be consensual and productive—and, in most cases, it has been—and can go a long way towards reassuring both the general public and interested organisations, not least ourselves, of the Government’s intentions. I therefore look forward to hearing the Minister’s response, and hope that he will

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be able to offer reassurance on the further role of Parliament in the establishment of this new benefit system. I would like to think that there is at least one other government amendment in the pipeline on Clause 40.

Baroness Thomas of Winchester: I support my noble friend in calling for an annual report on the operation of the assessment for limited capability for work. It is essential to have an independent person to look at the way in which the PCA is working and to publish the annual report to Parliament. One worry is that 50 per cent of appeals against incapacity benefit decisions were successful.

On the issue of long-term and independent monitoring, the Minister for Employment and Welfare Reform said:

It is especially important to ensure that there are no anomalies or disparities in either the regional or the sectoral treatment of people subjected to assessment.

I gave notice to the Minister last week that this was probably the right place—not that there is a perfect place, but this is as good a place as any—to speak about the conducting of the PCA. The PCA matches a claimant’s conditions to a series of descriptors, each of which has a score attached depending on the severity of the condition described. A score of 15 gives eligibility. However, some of the lower-scoring descriptors are being scrapped in the revised test, which is giving rise to a great deal of concern in the specialist groups. The descriptors in the draft regulations seem quite inadequate for the range of disabilities that people have. I acknowledge that the department has just published an evaluation report called, rather dramatically, Transformation of the Personal Capacity Assessment, in which it is clear that it is trying to get it right. However, on page 15, for example, there is a table of the physical descriptors with “Notes” to one side. From these, I see that the first descriptor, under the heading,


I had made a note that this might depend on the weather conditions, or a crowded pavement, but I see from the “Notes” that we are talking about an indoor environment, which is completely different. Why is it not made clear in the regulations what environment is being asked about? I gather from what was said in another place that there will be further consultation on the PCA, and I urge the Government to listen to the specialist groups who have such a valuable bank of knowledge to draw on.

I raised the LIMA computer programme, with its pre-coded answers, at Second Reading and made the point that added comments by a claimant should be capable of being taken into account. Will the Minister give us an assurance that the LIMA computer programme

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is capable of doing that? As we are not allowed to see for ourselves how LIMA works, because of commercial confidentiality, some independent assessment of how it is working is essential. Finding out how these computer programmes work is a highly unsatisfactory pursuit if Parliament can never examine them properly because of commercial considerations.

It is likely that many people who would previously be granted incapacity benefit will now fail the revised PCA despite better results for those with mental health conditions. For there to be confidence in the whole system, it is essential that independent assessors are able to evaluate it properly.

6 pm

Lord McKenzie of Luton: I shall speak to Government Amendments Nos. 93, 95, 113, 96, 97, 98, 99, 100, 101, 102, 109 and 110 and comment on opposition Amendments Nos. 92 and 38.

I start by agreeing with the noble Lord, Lord Skelmersdale that the amendment to make everything affirmative would, indeed, be overkill. I am advised that something in excess of 400 regulations could flow from this Bill and that would mean that we would be spending a very long time together. That would be a joy, but would eat into some of the other things that we had to do.

Lord Oakeshott of Seagrove Bay: That is a staggering figure—400 regulations. Does that not suggest that not enough work has been done on the Bill and that there should be rather more in the Bill and rather less in the regulations?

Lord McKenzie of Luton: Not at all. Many of those regulations are technical and flow, as the noble Lord, Lord Skelmersdale, said, from changing the current IB system.

The Delegated Powers and Regulatory Reform Committee made recommendations in relation to Part 1 of the Welfare Reform Bill. We have accepted those and have tabled amendments to Clauses 25 and 67, and Schedules 3 and 6. The amendments will make regulations made under the following powers subject to the affirmative procedure: Clause 2(2)(c) and (3)(c), as well as Clause 4(4)(c) and (5)(c) regarding additional conditions of entitlement to the support and work-related activity components; Clause 15(2), to which I shall return, where the regulations relate to the contracting out of decision-making functions in relation to failure to comply with conditionality requirements; Section 65(4A) of the Child Support, Pensions and Social Security Act 2000—this subsection will be inserted into the 2000 Act as a result of a consequential amendment in Schedule 3 to the Bill; and Sections 7(4B) and 9(4B) of the Social Security Fraud Act 2001—these subsections will be inserted into the 2001 Act as a result of a consequential amendment in Schedule 3 to the Bill.

We have also followed the committee’s recommendation on Schedule 6, which would allow us to add, amend or remove cases from the list of

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those in which a person is not to be regarded as a relevant employer of a person disabled by a disease to which this Act applies. In addition, the committee commented in relation to the annual review of amounts of employment and support allowance. We have considered the issue further and have tabled an amendment to Schedule 3 to the Bill to amend Section 150(1) of the Social Security Administration Act, placing an obligation on the Secretary of State to review the relevant employment and support allowance amounts in each tax year to determine if they have retained their value.

I am most grateful to the committee for their recommendations and comments and I shall, therefore, move those amendments.

On non-Government Amendment No. 92, I believe that the amendments that we have tabled will satisfy the concerns raised by the noble Lord. Amendment No. 92 would make all regulations under Part 1 subject to the affirmative procedure. That would go much further than the Delegated Powers and Regulatory Reform Committee’s recommendations and would result in a significant and inappropriate burden on time in both Houses and make the new benefit hard to manage in relation to meeting customer’s needs.

We need to build a social security system that takes account of changing needs and circumstances and it is crucial that our regulations can be updated quickly. Many of the changes to regulations involved in this process will be technical, so it would not be appropriate to subject them to the full affirmative procedure. The committee’s recommendations strike a sensible balance and requiring all Part 1 regulations to be made under the affirmative procedure is unnecessary.

On Amendment No. 38, quite rightly, the review of the PCA has attracted considerable interest and it is essential for us to evaluate how it is working. Your Lordships will have seen the recently published evaluation report of phase 1—a limited exercise carried out last October. A more comprehensive phase 2 evaluation is due to begin in March. The Minister for Employment and Welfare Reform has given an undertaking that he will continue to monitor the effectiveness of the revised PCA for the first two years following implementation. After then, a decision will be taken on the best way to provide further evaluation. Like the phase 1 evaluation, phase 2 will be carried out by independent healthcare and other professionals from the technical working groups and will continue to involve the independent external experts in the ongoing programme of evaluation.

Asking the Commission for Equality and Human Rights to provide an annual report on the operation of the PCA assessment would distort this natural accountability, placing at least some of the responsibility for policy operation stewardship elsewhere rather than on those responsible for the specific policy and its operation.

The assessment of limited capability for work involves evaluating the effects of medical conditions on individual people. This inevitably requires the exercise of clinical judgment, because it involves assessment of symptoms, such as pain, which cannot

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be measured exactly. This amendment would require the Commission for Equality and Human Rights to carry out evaluation of a process involving medical judgment, for which it is not equipped.

To impose an entirely new and unrelated burden on the Commission for Equality and Human Rights, such as that proposed, would be inappropriate and conflict with the high degree of independence envisaged for it. Adequate and appropriate provision is already in place to achieve the aims that the noble Lord seeks. Policy development and implementation are monitored for their impact on disabled people and we can provide access to published information. Of course, there are also the usual parliamentary safeguards of Select Committees and parliamentary questions.

A number of specific points were raised. I shall deal first with the point raised by the noble Lord, Lord Skelmersdale, about Amendment No. 95, which would make regulations under Clause 15(2) relating to the contracting out of decision-making functions in relation to the failure to comply with conditionality requirements that make those subject to the affirmative procedure; that is, if we contract out decision making under Clauses 10, 11 or 12, we can do so only after affirmative regulations have been made. I hope that helps the noble Lord.

The noble Baroness, Lady Thomas, asked whether removing the three point-scoring descriptors in the PCA was just a way of ensuring that fewer people are entitled to benefit. The answer to that is no. The technical groups involved in the review were unanimous that those descriptors do not add up to an overall level of disability at which it is unreasonable to require people to work, but rather they reflect the sort of condition that any person might expect to experience without having any resulting functional limitation.

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