---

Jobcentre Plus

I welcome the opportunity to debate this important report. I compliment the Select Committee on the quality, depth and detail of the report, which was exemplified in the initial remarks of the Chairman of the Select Committee, the hon. Member for Bradford, North (Mr. Rooney). I compliment him on the way in which he opened the debate. The Government’s response does not match the quality of the report. Several issues have been raised in the debate and I will mention a few more, but my fundamental response to the report is that the Government took an overly Panglossian view of the mistakes that occurred in 2005. The introduction to the Government’s response stated:"““The Government accepts that not everything has gone perfectly in Jobcentre Plus over the last year””." Not everything going perfectly is something of an understatement compared with some of the more robust, and I would say appropriate, language used by the Select Committee. The nature of the Government’s response gives me cause for concern, not least for some of the reasons mentioned by the hon. Member for Leyton and Wanstead (Harry Cohen). There are a number of other major changes coming down the track in the Department for Work and Pensions; additional efficiency savings are being sought by the Treasury, and a major programme of welfare reform and additional IT changes are proposed. I hope that in his response the Minister for Employment and Welfare Reform will acknowledge that it is incumbent on the Government to take full responsibility for the mistakes that occurred and to ensure that they fully learn the lessons from those mistakes when introducing future changes in the Department. In its report, the Select Committee described the circumstances of the efficiency savings and the consequences of introducing the customer management system and so forth as ““a catastrophic failure””. I contrast that with not everything having gone perfectly. The Select Committee’s phrase is appropriate. The Government state that lessons have been learned for future plans following problems that occurred in the contact centre. First, as the Chairman of the Select Committee made clear, there have been improvements in performance since the period of time that was the focus of the report. However, it is too early for claims to be made that the situation has been fixed. The briefing provided by the National Association of Citizens Advice Bureaux probably reflects the constituency experience of all hon. Members present: there are continuing problems with delays—for example in benefit processing times—in ensuring that those people who cannot use a phone system, particularly because of their disability, can engage in another form of processing. There are examples in my constituency of people wishing to go to Jobcentre Plus to make claims and being turned away and told that they must use the phone. There are still too many examples of such unacceptable conduct for the Government to be able to say that everything has been put right. Secondly, if and when the catastrophic service performance is resolved, there is little in the Government’s response to reassure us that the problems that caused the crisis have been addressed. There is still a state of denial within the Department about the problems that occurred in 2005. It is disappointing that the Government are not taking the matter as seriously as they should, especially the points made in recommendations 21 and 22 of the report. We need more clarity about what lessons have been learned; in particular, do they accept the Select Committee’s view that too much was done too quickly? Was it good judgment to introduce a new IT system—the customer management system—at the same time as staff cuts and redeployment? Was it efficient to introduce an IT system that could soon be replaced again when the IT component of the benefit processing replacement/working age transformation and change programme—I hope I have got the title right; I cannot use the acronym—is brought forward? Can we have any confidence in the Department and Jobcentre Plus to roll out pathways to work, and the new employment and support allowance, no doubt with a new computer system to manage that benefit, without a further breakdown in the quality of service provision of the sort that the Committee rightly outlined in its report? The Committee Chairman rightly referred to the impact of the closure of local service outlets. I have experienced it in my constituency, where the Jobcentre Plus in Nairn, 15 miles east of Inverness, was closed. All the services in my constituency are provided through Inverness, so that someone who lived in Dalwhinnie, for example, would have to make a 115-mile round trip to the Jobcentre Plus. My constituents have raised a number of issues, but I shall not dwell on them as I have been in correspondence with the Minister and his predecessor about them. However, there are ongoing issues about one important point. Within the Department, there is a travel-to-interview scheme to ensure that when people’s costs rise above a certain amount when they travel to job interviews or interviews at the new Jobcentre Plus to which they are supposed to go, which in my constituency is Inverness, they can have their costs reimbursed. A range of different interpretations of the scheme have been given to claimants in Nairn. Clarity is important when a local outlet is closed, so that claimants know their entitlements, where they are expected to go and how they can access those services. I am concerned that it has not been properly dealt with in Nairn. Several hon. Members have made points about staffing and training, and recommendation 3 in the report deals with that. It is clear from the report that in the Committee’s view, staff are redeployed in some cases without adequate training for their new roles. The Government’s response was soft. They said:"““It is fully accepted that staff should receive the training necessary to execute their duties effectively””." ““Should”” is not will. There are no guarantees, and the reply does not set out the headlines of the redeployment strategy up to 2008, as the Committee specifically requested. Will the Minister do so in his response? The Government make it clear that Jobcentre Plus staff will get an average of six days training per year. That is an average. It means undoubtedly that some staff with high training needs may get little or even no training in a particular year. Back office staff are being redeployed in customer-facing roles, for example as personal advisers. The Welfare Reform Bill and the associated roll out of pathways to work will require an increase in personal advisers employed in Jobcentre Plus. However, personal advisers for sick and disabled people will need to be well trained and skilled for what is a specialist role, as other Members have said. Will the Minister set out clearly the minimum provision of training for those who are redeployed in that role? Future staff reduction is the subject of recommendation 7, and we are told that Jobcentre Plus staff numbers have already been reduced by 10,000, that there will be a further reduction of 4,000 and that the reductions will take place only once detailed work force plans have been completed. I am sure that there were detailed work force plans for the reduction of the other 10,000 jobs, but it is clear from the report that not enough attention was paid to the impact on services as the reductions were made. Will there be greater flexibility in the pace of future reductions to ensure that the service to claimants is maintained during the transformation? It is clear from the report and our constituency experiences that services to claimants were not maintained during the initial transformation. In recommendation 47, the Committee concludes that the procurement process for voluntary and private sector delivery of services is ““deeply flawed””. The Government admit that last year, they"““fell short of what providers had a right to expect.””" The taskforce and provision forum are welcome, provided the Government genuinely listen and respond to the points that they make. Although the Government state that most contracts are for two or three years, many are still for one year only. In any case, two or three years may be too short a period. I recently spoke at an event sponsored by the organisation Tomorrow’s People, which it was running as part of its getting London working programme. It had secured funding for six years through the London Development Agency and the single regeneration budget. During that time, it achieved, pound for pound, double the job outcomes of any other SRB-funded programme nationally. What assessment have the Government made of the system introduced in Australia, where since 1998 the Jobcentre Plus roles of providing services at the same time as regulating services and paying benefits have been entirely separated? The publicly funded job brokerage service was replaced by Job Network, a national network of private, voluntary and public organisations, leaving the Australian Government’s equivalent of Jobcentre Plus as purchaser and regulator of services, and manager of benefit claims, rather than the direct provider. One cannot necessarily read across, but that is why I am interested to hear from the Minister whether the Government have studied that system either in response to the Committee’s report or as part of wider welfare reform. Under Australia’s new structure, the cost per employment outcome has roughly halved and job outcomes have significantly improved. They are efficiency savings way beyond those that the Government achieve with Jobcentre Plus. As the hon. Member for Leyton and Wanstead said, yesterday we heard that unemployment continues to rise. I shall not comment on what he said about the political consequences of it, but 1.65 million people were classed as unemployed in the three months to May, an increase of 90,000 on the previous quarter. The chief executive of Jobcentre Plus has made it clear that rising work load could put the efficiency savings programme at risk. She said that"““the more people we have claiming, the more there is to do...I need to look first and foremost to see if I can move resources... If that becomes unmanageable for me I have to have a conversation that says, ‘Do we maintain this regime? Do we change it? How do we do it?’, but that would be for ministers to decide.””" What is the Department doing in the context of the report to monitor the impact of the growing work load from rising unemployment? The chief executive made it clear to the Committee that certain decisions would need to be taken because of the rising work load. Has the Minister made any of those decisions yet? The Committee also raised some important points about fraud and error in the benefit system. It was particularly concerned that the changes were having a detrimental effect on accuracy levels. Error costs the Department more than fraud, and last year the Select Committee on Public Accounts said that"““losses due to errors…remain too high.””" It estimated the annual cost of staff and customer error to be £1.5 billion, and its report warned that the plans to cut 30,000 DWP staff, of which 14,000 have been cut already,"““may affect morale and lead to increased turnover of staff whose skills are most needed to combat fraud and error.””" The Department’s permanent secretary, Sir Richard Mottram, told the Public Accounts Committee last year:"““If you want an honest discussion, that is the reality: official error has gone up because of organisational churn.””" It is unacceptable that an efficiency savings programme should lead to the growth we now see in official error. That ““organisational churn”” should not be considered inevitable when staff reductions and efficiency savings are made. What is the Department doing to get on top of rising error in the benefits system? In the Government’s response to the Work and Pensions Committee, they mentioned a three-phase plan for improving income support accuracy. We require a clearer explanation of the plans, how they are delivered and how the variation between the delivery centres in the Government response will be addressed. We need more detail. Will the process-driven improvement mentioned in their response make any difference if error is down to low staff morale, insufficient training and poor IT procurement and transition? If those are the causes of the error, what are the Government doing to address those more fundamental points? An interesting point is made in the Government’s response to recommendation 19, which called for output measures to be adjusted to reflect qualitative factors. The Government’s response stated:"““Analysis has shown that although the point scores were designed mainly to incentivise staff rather than as measures of social and economic value, they broadly reflect the net fiscal benefit to the Exchequer of moving a customer off welfare and into employment.””" The net benefit to the Exchequer is interesting information. Will the use of such measures be developed further? Will the information provided on net benefits to the Exchequer be made publicly available? Does it suggest the economic net benefit, too? Such information will, I believe, be important to monitoring the progress of welfare reform in the future, so again there is a lesson that can be drawn from that experience to shed a positive light on future proposals. I hope that the Minister will be able to assure the Chamber that such analysis has been further developed and will be made publicly available. Since the period of time reflected in the Committee’s report and since its publication, the Chancellor has made it clear that a further 5 per cent. efficiency savings will be sought from the Department for Work and Pensions. There will be yet further pressure on staffing and budgets. It is important that the Minister reflects on what lessons the Department draws from the episodes outlined in the report and how it will handle those future additional reductions. That is particularly important when we look forward to welfare reform, when the Government are planning to spend an initial £360 million on rolling out the pathways to work scheme. Most organisations, and I share their view, believe that to be an inadequate level of funding for rolling the programme out comprehensively across the country. Additional efficiency savings are being sought, unemployment is rising, which is increasing costs, and the Department has been told that the money to be released into the pathways to work programme has to come from other savings in existing budgets, so it is clear that within the Department for Work and Pensions there is a great deal of financial pressure and pressure to make more efficiency savings. I am concerned that even the inadequate amount of money that has been made available to allow the pathways to work programme to be rolled out will be eroded and undermined yet further by the additional changes that will have to be made in response to the targets that have now been set by the Treasury. There is a lot more for the Government to do to show that they are responding effectively to the concerns outlined in the Committee’s excellent report, and I look forward to the Minister’s response.