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Benefits Simplification

Such trips are beyond the purview of the Scottish Affairs Committee, on which I serve, but it seems to have been a very useful visit. In their response to the report, the Government describe the Post Office card account as having been modelled on the Californian system. It would be interesting to hear from the Minister what stage has been reached in the process of awarding a new contract for the Post Office card account, which has been going on for some time. The degree of complexity in the system clearly has the potential to cause worrying and damaging consequences, which are highlighted in the report. The first involves benefit take-up. I believe that there is considerable evidence that it is partly owing to that complexity, the confusion that arises from it and a sense of the system being highly intrusive that many older people who are entitled to pension credit do not claim their entitlement. Last week the National Society for the Prevention of Cruelty to Children warned that, as well as worries about information sharing and the security of data, a sense of being at the margins—particularly among the most vulnerable claimants—might affect decisions on whether to claim benefits. The hon. Member for Bradford, North dealt effectively with issues of fraud and error. There is clearly a relationship between complexity and fraud, and the detection of fraud, but it is important to bear in mind that what is described as fraud often starts as a straightforward misunderstanding caused by the complexity of the system, which can build up over time. It is interesting to note that although the fraud figures have been falling, which is welcome, the figures for official error have not; in fact, they have been going up. One wonders to what degree that is a consequence of either the complexity of the system or the fact that there are significant ongoing staff reductions and changes within the administration of benefits which then cause official errors to increase. If we have a system where fraud has been cracked down on but official errors are increasing, there is an element of taking with one hand and giving away with the other. The Government must ensure that there are proper systems in place, particularly as in the end it is claimants who suffer from official errors, especially when they result in benefits not being paid or benefit payments being delayed. I have certainly noticed an increase in that type of case in my constituency; they might involve the time taken to pay benefits, paperwork getting lost, or the centralisation of benefit claims in large call centres causing problems in terms not only of getting through, but of information being recorded accurately and being processed in a timely way. All those problems are, at least in part, consequences of the complexity of the system, which need to be ironed out. The report also highlights the critically important area of work incentives. Particularly in relation to high marginal deduction rates, work incentives can suffer as a result of a highly complex benefit system, especially one that is so hard to understand. It is now almost always the case that someone would be better off in work—we might talk about that further—but many people do not understand that they would be better off in work because the system is so fiendishly complicated. Reference has also been made to the impact that this entire process has on staff—on staff morale and staff understanding of the system. That is an important point, and the Minister must address it. The report addresses in particular the question of the better-off calculation. It is almost impossible for any ordinary mortal to calculate for themselves, starting from whatever their circumstances happen to be, whether they would be better off in work. The Government have recently proposed that everyone who goes into work will be at least £25 better off—a better-off guarantee, so to speak. However, I was worried to note that that guarantee does not, as I understand it, take into account the impact on passported benefits, such as free school meals and prescription charges. Although the Government might well be able to make that guarantee in terms of the basics of benefits and tax credits, account must also be taken of the wider impact that that extra income will have in other areas of people's lives. Travel costs must also be taken into account. I noticed that the Government statement referred to the concept of reasonable travel costs, but there might be quite a difference between what are considered reasonable travel costs by a constituent of mine in the highlands and by someone using the bus system in a big city—or by people in other rural parts of the country. A great deal more needs to be done in understanding what truly is a reasonable travel cost. That must be done, if that better-off issue is to be properly addressed. My next point is that a complex benefits system leaves many claimants confused and having difficulty in understanding how the amount of money they receive is calculated—how those calculations are arrived at, and why they might or might not be entitled to different benefits at different times. That is made worse by the often lengthy form-filling processes people have to go through. Recently, a constituent came to my office asking for help in filling in the housing benefit application form, which was a lengthy document with an even lengthier set of explanatory notes. I think I was just about able to help, but it is an extremely complex and difficult process. Such processes can often lead to frustration, as information that is recorded on a form might be entered—perhaps inaccurately—into a computer system, and there is the ““computer says no”” phenomenon, in which people get a letter saying, ““Your benefit application has been refused”” and they then need to go through a lengthy process to put things right. The Select Committee report also addressed the important question of costs, particularly in terms of telephone systems. It rightly identified the use of 0845 and 0870 numbers for helplines and in call centres. They are proliferating in the benefits system now that face-to-face contact appears to be a thing of the past in the Department for Work and Pensions. Those costs are enormous. Although the assumption is often made that people have a landline, so the rates are relatively cheap, the social fund's evidence is that up to half of the calls it receives are made from a mobile phone. Depending on the network operator, when someone calls an 0845 number, or even an 0800 one, from a mobile phone it can cost up to 40p a minute. They might end up being on the phone for anything from 10 to 50 minutes, depending on the helpline that they are calling and the reason for doing so. That soon adds up to a substantial sum that people are being asked to pay simply to get what most would say is their entitlement under the welfare system, which is supposed to be available to all.