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I expect that by the time the welfare-to-work provisions in Clause 1 come into operation, the current very deep recession will have run its course and the economy will be starting to revive. In that scenario, jobcentres will find it relatively easy, as they have in the past, to
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Amendment 20 is also in this group. Given that paragraphs (c), (d) and (e) of new Section 17B(1) relate, as I said just now, to money, I am surprised that the Public Bill Office allowed me to table this amendment. However, given that it has, I am going to speak to it. My question is simple. We can all readily understand why fees should be payable for the purposes of paragraphs (a) and (b)—the reasons for which I have just discussed—but we on this side of the Grand Committee believe that the provision for facilities in paragraph (a) should not include physical entities such as buildings, offices and so on. Therefore, why should grants or loans, to say nothing of the wonderful word “otherwise”, which also appears, be appropriate in this context? After all, the grants or loans are open-ended. They could, for example, cover not only offices but the setting up of a totally new entity. I assume that this would cover either contractors or their third-sector sub-contractors.
It has been a long-held policy of my party that the core funding of charities is a no-no and that this should be sought by other means, such as private fundraising, private legacies and so on. The proper use of taxpayers’ money is to commission the third sector to use their good offices, which by definition already exist, to do something that the Government of the day cannot do either as well or as cheaply themselves. An example in the health service, which I was involved in for many years in the past, would be the Stroke Association, of which I was chairman, being paid—that is, the Stroke Association, not me—by primary care trusts to provide speech therapy services for aphasic sufferers. In the context of this Bill, that might mean drop-in or day-care facilities for drug users, for example. Both are fee-based services. What, then, are grants, loans or otherwise to be used for? Why, in essence, do we find them in new Section 17B(1)(a)?
I was going to leave it at that until my attention was drawn to an article in the Financial Times of about a fortnight ago which said that there was already a preferred list of bidders for these various contracts. However, on investigation in another place, I discovered that this had never been announced through government sources. Therefore, I should very much like to know what is going on. I can show the Minister the article if he wishes. It also raises other questions, such as what is almost the contradiction of
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Lord McKenzie of Luton: These amendments would remove some clarity concerning the scope of the powers that the Secretary of State has to support providers of the “work for your benefit” programme or those who supply related facilities. It would be useful perhaps to clarify the purpose of these powers. First, there may be instances where the Secretary of State wishes to provide facilities to contractors or sub-contractors to ensure that the programme works as well as it can. For example, there may be circumstances where a sub-contractor wants to run a workshop in Jobcentre Plus premises to explain “work for your benefit” to prospective participants, or there may be times when host organisations wish to interview prospective participants and the most sensible place to do that would be in government buildings.
The department will certainly wish to give support by way of guidance and advice to suppliers. It is our intention that this programme will be delivered by private and voluntary sector contractors. We will procure this programme through an open competition. As we are encouraging, through the contracting process, creative delivery and innovation, it would be naïve of us to think that we can predict today how the Secretary of State may be asked to support a truly innovative process. It would be sad indeed if we had to stifle that innovation because there was doubt about whether we had the powers to provide such support. That is the reason why the clause is drafted in such a way. Accepting the noble Lord’s amendment would remove legal clarity, and could, I think, result in timidity in helping providers adopt new ways of helping jobseekers.
In terms of how we will pay providers, we expect that funding will be at least partly outcome-based, in line with the department’s commissioning strategy. This means that the payments could consist of a service fee and at least one type of outcome payment. However, there may be times when the Secretary of State wishes to provide alternative forms of financial support to providers delivering “work for your benefit”. This is not something we are planning, but it is not possible to foresee all the circumstances in which we may wish to provide alternative financial support for providers. During the lifetime of a contract, circumstances may change, as we have seen during the current economic downturn. It would be unfortunate for customers if we could not adopt practical solutions because there was doubt about how we were able to remunerate providers. I can assure noble Lords that these sections of the clause are in no way sinister and exist solely to ensure that we provide the best support we can to jobseekers in a range of circumstances, not all of which we can predict.
I should also point out that this section will simply replicate the legislative approach we took with the employment zones in the Welfare Reform and Pensions Act 1999. The intent is entirely benign.
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The noble Lord made reference to an article in the Financial Times about a list of preferred bidders and I am advised that that preferred list is on the DWP website. There is nothing secret about it. The noble Lord made reference to the shape of the contractual arrangements for Flexible New Deal. I should stress that it does not necessarily follow that Flexible New Deal providers will be the providers who provide “work for your benefit”—they may not. I do not have before me all the details of how the Flexible New Deal contracts are structured, but they certainly have an outcome focus.
The “work for your benefit” budget is £20 million, as we discussed the other day. We are working with providers to design a funding model, so there should be some outcome funding attached to that.
The noble Lord also made reference to the Flexible New Deal and customer churn. Linking rules exist so that if a customer gets only short-term work—less than 26 weeks—they go back to the Flexible New Deal contractor. I think that that covers the points that the noble Lord was seeking information on, but I am happy to try again if not.
4.45 pm
Lord Skelmersdale: Once again, the Minister has been extremely helpful. I readily understand why it may be appropriate to use a government building—for example, what I used to call a social security office and is now called a jobcentre—for a provider to hold courses in, or perhaps to interview the potential or actual participant. That is straightforward. I am not sure, though, why grants and so on are required. I shall have to read what the Minister said very carefully, not least what he said about the provision replicating the provision in the Welfare Reform and Pensions Act. The fact that it does so does not necessarily mean that the provision is required here, but I shall look into that.
Lord McKenzie of Luton: I was just saying that that formulation of wording to cover these sorts of circumstances has already been used in a different situation. I am not saying that the provisions in the 1999 Act could be used to do what we want to here; it is simply that there is a parallel way of expressing these provisions.
Lord Skelmersdale: I am grateful for that elucidation. Furthermore, the Minister said that the exact details of what I have described as the “loading” of the contracts are still being worked out, presumably with members on the preferred list of bidders—or is it purely an internal exercise?
Lord McKenzie of Luton: The noble Lord is probably confusing the “work for your benefit” arrangements with the Flexible New Deal, which is where the preferred-bidder list exists and operates. The structure of the contract is still under consideration.
Lord Skelmersdale: I am not confusing them at all. We are dealing with Clause 1, which has nothing to do with the Flexible New Deal. I was trying to discover—the
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Lord McKenzie of Luton: I will be happy to write to try to satisfy the noble Lord.
Lord Skelmersdale: That would make life much easier for all of us. I beg leave to withdraw the amendment.
Amendments 20 and 21 not moved.
22: Clause 1, page 3, line 47, at end insert—
“17C Procedure for regulations under sections 17A and 17B
(1) Before the Secretary of State makes any regulations under section 17A or 17B, he must consult such persons as appear to him to be likely to be affected by his proposals.
(2) Where those proposals affect any local authorities in Wales, the Secretary of State must also consult the Welsh Ministers.
(3) If, following consultation under the preceding provisions of this section, the Secretary of State proposes to make regulations under section 17A or 17B he must lay before each House of Parliament a document which—
(a) explains his proposals,
(b) sets them out in the form of draft regulations,
(c) gives details of consultation under subsection (1), and
(d) where consultation has taken place under subsection (2), sets out the views of the Welsh Ministers.
(4) Where a document relating to proposals is laid before Parliament under subsection (3), no draft of any regulations under section 17A or 17B to give effect to the proposals (with or without modifications) is to be laid before Parliament in accordance with subsection (8) until after the expiry of the period of sixty days beginning with the day on which the document was laid.
(5) In calculating the period mentioned in subsection (4) no account is to be taken of any time during which—
(a) Parliament is dissolved or prorogued, or
(b) either House is adjourned for more than four days.
(6) In preparing draft regulations the Secretary of State must consider—
(a) any representations made during the period mentioned in subsection (4),
(b) any resolution of either House of Parliament, and
(c) any recommendations of a committee of either House of Parliament charged with reporting on the draft regulations.
(7) Draft regulations laid before Parliament in accordance with subsection (8) must be accompanied by a statement of the Secretary of State giving details of—
(a) any representations considered in accordance with subsection (6), and
(b) any changes made to the proposals contained in the document laid before Parliament under subsection (3).
(8) Regulations under section 17A or 17B are not to be made unless a draft of the regulations has been laid before and approved by a resolution of each House of Parliament.””
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Baroness Thomas of Winchester: I shall speak also to Amendments 23 and 26. These amendments would apply the super-affirmative procedure to regulations introduced for Clauses 1 and 2. This colourful-sounding procedure is not used very often but it is well precedented in other Acts. At the moment the most obvious example is the Legislative and Regulatory Reform Act 2006, which allows the Government to propose legislative reform orders to amend or repeal a provision in primary legislation considered to impose a burden on business or others, as long as it could be reduced or removed without removing unnecessary protection.
When the draft order is laid before Parliament, the Minister must recommend one of three possible parliamentary procedures for dealing with it, one of which is the super-affirmative procedure, which requires the Minister to have regard to representations, House of Commons and House of Lords resolutions and committee recommendations of either House of Parliament that are made within 60 days of laying, in order to decide whether to proceed with the order and, if so, whether to do so as presented or in an amended form. If the order is to be proceeded with, both Houses debate it in the usual way. In other words, the super-affirmative procedure is really just the affirmative procedure with a few bells and whistles added.
Why am I proposing this very specific procedure for regulations made under these two clauses? After all, the Delegated Powers and Regulatory Reform Committee did not recommend this procedure, but that should not be a bar to anyone else putting forward an opinion. My reasoning is simple. Taking Clause 1 first, “work for your benefit” is a completely new concept which is very controversial. Whether the Minister likes it or not, it is already being compared unfavourably with the American system of workfare, which, as the Peers’ information pack note says, is a,
We do not yet know how “work for your benefit” will work because we have not seen the all-important regulations, although the Minister is being helpful in giving us some clues along the way. Surely the Government cannot complain if all we are asking is for Parliament and those in the field to be able to comment on a genuinely draft order setting out how this part of the Bill will work. After all, the then Minister in the other place, Mr Tony McNulty, admitted that regulations under this part of the Bill are important and represent a significant shift in policy. The only way to change the regulations is still for the Government alone to do so. Parliament and others can suggest changes but it would be solely the Government’s decision. However, if the Government did not listen to representations, they would risk a Motion to reject the regulations which might be passed in either House of Parliament, although that is pretty unlikely.
More transparency and better scrutiny is now being advocated more than ever before in all the dark recesses of government. This call for more transparency has been made since the Bill was debated in the other place. This procedure would make sure that Parliament knew what it was giving its consent to. The Minister may say that the DWP consults stakeholders anyway, but the consultation on many issues appears to be
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I believe that it is high time that this super-affirmative procedure for regulations was used more often in order for Parliament to be at the heart of law-making, rather than just a peripheral player. I beg to move.
Lord Kirkwood of Kirkhope: I support the proposal for bells and whistles so eloquently proposed by my constitutionally expert noble friend. She knows more about procedure in this place than anyone else I know. I want to make a very simple point. There is a lot of scepticism—I guess that that is the best word—outside this place about exactly how the whole Bill is going to work. The Minister has been doing well so far in providing some reassurance by giving us careful statements from the Dispatch Box on behalf of the Government, which is all very useful. However, it would go a long way to increase people’s confidence if they knew that there were no hidden agendas and that this was not workfare by the back door and so on. That is all floating around in the pressure groups and communities that seek to serve the Members of this Committee and generally do so very well. If the Government said, “Yes, we will adopt the 60-day period. We will look carefully at the research work, the resolutions, Select Committee reports and other things”, that would cost the Government next to nothing but it would send a very strong signal to people who are watching the proceedings of this Grand Committee rather closely that the Government have nothing to hide.
Lord Northbourne: I am profoundly unhappy with the Bill and I should like to throw it out. It gives a blank cheque for 387 regulations to be issued by the Minister, in many cases only through the negative procedure. The super-affirmative procedure in itself does not give us much control over the situation, but it would give us some. We are receiving reassurances from the Minister for which I am sure we are all most grateful, but if I give him a cheque for £1 million and then someone steals it from him in a year’s time, there is no telling in what way that money might be disposed of. In the same way, can the Minister give an assurance that any subsequent Government will abide by all the reassurances he has given us about how the regulations will be implemented?
Lord Skelmersdale: The Liberal Democrat party clearly has a fixation on super-affirmative regulations. They have been mentioned on several occasions, which is no surprise to me, although oddly only once in connection with the Bill. I am surprised that they have not been mentioned in relation to Clause 2.
Lord Kirkwood of Kirkhope: Do not provoke us.
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Lord Skelmersdale: We might finish Clause 2 within the next hour, but chance would be a fine thing. The noble Baroness, Lady Thomas, described the procedure rather dismissively as only an affirmative process with a few bells and whistles attached. The noble Lord, Lord Kirkwood, agreed with that and indeed repeated it.
While I congratulate the Liberal Democrats on this long and complicated amendment, I have to say that I have difficulty with all sorts of things in it, and it would surprise me very much if the Minister did not agree with me to a great extent. The difficulties start as early as proposed new subsection (1) which begins by saying:
“Before the Secretary of State makes any regulations”—
which subsection (8) says are to be made by affirmative resolution—various things have to happen which I shall come to in a moment. The Minister told us on Tuesday last that the original regulations may need to be changed relatively quickly as experience of the pathfinders develops. I take his point that certainly after the original regulation, it is appropriate to use negative regulations for doing that. I note, however, that he did not go as far as to suggest that the first regulations to be made under new Clauses 17A and 17B should be affirmative. However, that is not the proposal in this amendment, which refers to “any regulations”, and thus means each and every time orders are laid. I really cannot support that proposal.
My second concern is something that I am surprised was not picked up by the noble Lord, Lord Kirkwood. While something must happen before the new sections are introduced in Wales, the rest of the country is ignored. This Bill covers England, Wales and Scotland, but nowhere do we find out what is proposed, in this super-affirmative way of doing things, for Scotland. Next, the amendment calls for draft regulations to be issued after a report has been laid before Parliament giving details of the consultations held under subsection (1) and explaining the proposals. Parliament then has six sitting weeks to report and comment on it. Only then can the Secretary of State lay the final order. I really must ask the noble Baroness how long all this is expected to last; that is, up to the time when Jobcentre Plus staff can actually start to use the provisions in new Sections 17A and 17B, which to my mind are wholly beneficial.
The whole proposal seems to be a delaying tactic, which should not be necessary each time an order is made. Pilots, pathfinders or whatever, are investigations as to exactly what will work when a scheme is rolled out across the country. Of course they may need to be changed as they progress, especially as they are now to be extended to three years—and three years may subsequently become another three years or even another three years after that—according to the Bill. That is before they are introduced across the country as a whole. Incidentally, we have had an answer to the question asked by the noble Lord, Lord Northbourne, about the difference between a pathfinder and a pilot. I would be grateful if the Minister could elucidate that for us. Pilots are defined in Schedule 1, but nowhere can I find reference to a pathfinder.
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Lastly, I find this amendment to be rather previous. The objective of all of us in the Grand Committee is to find out exactly what are the concrete proposals hidden in this framework Bill. Although the Minister does not like it, we are trying to pin him down. As our debates on Tuesday and earlier this afternoon show, we are having some success, but only when we have finished will we know whether the long drawn-out procedure envisaged by the amendment will be necessary or appropriate. My guess is that it will not.
5 pm
Lord McKenzie of Luton: This has been an interesting debate. I find myself broadly having common cause with the noble Lord, Lord Skelmersdale, on this matter and must resist the amendments proposed from the Liberal Democrat Benches—forever hereafter the party of bells and whistles. I start with the question that the noble Lord, Lord Skelmersdale, asked again about the difference between pathfinders and pilots. Pilots are meant to be pure tests to decide whether we want to do something; pathfinders are for when we want to do something and evaluate how best we can roll it out. That is the key distinction.
Perhaps I can also deal up front with the point made by the noble Lord, Lord Northbourne: can I give him an assurance that a subsequent Government will not use the Bill in a completely different way from that intended? I am sure that he will forgive me if I do not contemplate the prospect of an alternative Government, but if I had to imagine it, my answer would be that whatever Government are in place will do whatever that Government want to do. They may need primary rather than secondary legislation to do it, but they will have their way if that is what they intend.
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