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Social Security (Flexible New Deal) Regulations 2009

My Lords, it is my pleasure to move the Motion on the Order Paper, namely to move that this House takes note of the Social Security (Flexible New Deal) Regulations 2009. In so doing, I draw attention to my entry in the Register of Members’ Interests. I am a non-remunerated, non-executive director of the Wise Group in Glasgow. It might be worth reminding myself that this is a Motion to take note, not a Prayer. That is deliberate, because the House should be able to comment and seek further and better particulars from Ministers on statutory instruments that are important, without taking the full-blown normal method of objecting to them that has served the House from time immemorial of moving a Prayer to reject them. That would be the wrong thing to do. But having regard to the valuable work of the Social Security Advisory Committee and the Merits Committee, in raising a number of legitimate points, gives the House the opportunity, through a Motion of this kind, to ask for clarification, which is the purpose of this Motion in my name. I hope that the House will be able to take advantage of it and to get the Government’s policy intention clearer. In particular, two issues which run through the report from the Merits Committee and the Social Security Advisory Committee’s work exercise me. The stated policy intention was generated before the economic circumstances took quite a steep downturn. The provenance of this policy was in late 2006 and early 2007. The commissioning strategy was published in February 2008. These were times when the economic auguries were in a much better position and we were more confident that the state could provide policy and public expenditure in a way that perhaps is now more suspect. The policy in the budget in particular underpinning this policy deserves scrutiny, just so that we can reassure ourselves that we understand what the Government are trying to do and are confident that the money is available now to do it. As noble Lords will know, contracts for phase 1 of the Flexible New Deal have been delayed. The announcement has been delayed for the very good reason that the department has realised that the targets set out in phase 1 policies were unachievable in the circumstances, as opposed to when they were originally put in place. I hope that the Minister will say that we will get the results of the successful bidders shortly, which is what I expect. If we do not get the results of the providers who will provide an essential service starting in October 2009, there will be a question mark about whether the providers acting in good faith can deliver the policy in the time available to them. In addition, not only would phase 1 be delayed, causing providers some difficulties, but the operation of and submission of the bids for phase 2 will fall hard on the heels of the announcements of the successful contractors for phase 1. A lot of activity is going on against a background of economic change for the worse. That all puts pressure on everyone, in spite of the fact that everyone recognises that, ultimately, we are all trying to do the same thing and help more people into work. Undoubtedly, it is true that the caseload for the next three to five years is set to expand. It is bound to expand because of the increased worklessness that is already in the system. It is inevitable and impossible to predict, but everyone can be confident that unemployment levels, however they are measured, will go up over the next 12 months, which was unexpected when the policy was put to bed originally. In addition, noble Lords will also know that the on-flow of lone parents to the JSA will increase. Later this week, we will discuss that at Second Reading of the Welfare Reform Bill. Perhaps I may remind colleagues of what they probably know intellectually: in 2010, employment and support allowance claimants will be encouraged—if that is the right word, as some of them will not be given much choice—to apply and may find themselves on jobseeker’s allowance as well. There is a whole anticipated increase in the on-flow to jobseeker’s allowance. All that puts pressure on Jobcentre Plus, which, under the Flexible New Deal, has to administer the first 12-month period in three phases of the clients referred to them. In the few moments available to me this evening, I should like to say that I concur with the sentiments of the Social Security Advisory Committee, as no doubt do other noble Lords, on some of the salient points made in its valuable report. However, based on my experience with the Wise Group in Glasgow, I should like to make some suggestions which are significant but in parallel to the recommendations of the SSAC. My strong advice to the Government is that if there is a capacity problem and more people are coming on to JSA, it would be sensible to start with working with the willing. Of course, we have to provide services for all customers, but if there are challenging capacity pinch-points, my experience indicates that you get further faster if people volunteer to come down and engage with the department in trying to find work for themselves. They are already motivated and have that activation factor which is essential to make progress. With a big increase in the caseload, it makes a lot of sense to concentrate on working with the willing. There is an opportunity cost to working with the recalcitrant part of the customer client group and great opportunity costs in working with people who are reluctant to engage with the department or with providers. Therefore, it is best to start by thinking about helping those who try to help themselves first. Once those customers have been dealt with, it would be sensible to move on and to deal as a priority with the other sections of the customer base. Well-being, as defined by Carol Black in the valuable work she has done and continues to do with mental health and intermittent illness, is a very important part of this programme. It would be really sad if it was to get lost in the crush of the incoming on-flow of new customers. If I had control over the Government’s programme, for people who genuinely suffer medical conditions with an intermittent dimension, I would guarantee that, for a period of time, six months or a year, they would not be prejudiced in their benefit claim if they fell out of work. It is the one thing that gets them out of the door and motivates them to take the big step of moving into the first stage employment opportunity that I hope they will be offered. But at the moment a lot of them are very reluctant and will continue to be reluctant to go into work because of the lack of a guarantee that their benefit position would not be prejudiced by taking the chance. Local discretion is very important in providing the skills, the healthcare and the childcare to give people the active support that they need if this programme is to work. We need to remind ourselves that this is a centrally driven programme in terms of its policy. Its implementation will be successful only if it is delivered skilfully and sensitively at the local level. Open access to personal advisers at stage 3 should be added. I know that there are constraints on resources and that there is a three-hour access to stage 3 for customers. I do not think that that is enough. If more open access to personal advisers could be made available at stage 3, my experience from working in Glasgow suggests that that could pay dividends if it was possible. Continuing support for early-stage employment is essential. I guess that that is more appropriate for stage 4 than for stage 3. The new providers offering these skilled services—the not-for-profit, social enterprise and private sector providers—must be required to make sure that they do not abandon people once they cross the threshold of work for the first time. A lot of first-time workforce job entry customers find it very difficult to survive the first six weeks to the 13-week stage of their employment. I turn to my wish list. We keep forgetting about the employers. I understand that the Government have done some valuable work with the Access to Work scheme, and I welcome the fact that the spend has been doubled, but it does not begin to take us to the point where jobseekers can be confident that they can go to an employer with a package that includes the valuable assistance which the Access to Work scheme can provide. In its absence, job opportunities cannot be secured. I want to make a couple of brief points before I conclude. Although it is not a departmental responsibility, I am concerned about the findings set out in a report produced last year by the CBI entitled Towards a NEET solution. It looks at young people in the 15 to 19 year-old age group who are not in employment, education or training and considers ways of tackling the problem. However, in giving the United Kingdom a very poor rating, at number 23 out of 28 OECD countries, it has some really important things to say. I shall quote one sentence: ""Even if the Government’s target of reducing the percentage of young people not in employment, education or training from 10 per cent to 8 per cent by 2010 is met, the UK will still lag behind major OECD competitors, and that means significant costs for taxpayers"." This is true, and I urge the Minister and his department to think carefully about how to work with colleagues in education, skills and other parts of the Whitehall hierarchy to address the issue. These young people could be unemployed for a lot longer than some of the others in the customer base and therefore will cost more to put right in the long run. We must evaluate or set up a continuous assessment of how the Flexible New Deal is going. The target of a proper evaluation in 2012-13 is all very well and important for a proper longitudinal study, but that will be far too late to look at what is happening as the programme evolves. At the beginning it is impossible to judge what the circumstances will be, so evaluation is important. Also, we all have to think about stage 5. I am frightened about Workfare. I understand that the proposal is still open to consultation and no doubt we shall talk about it with the department later in the year. I look forward to engaging in the debate because, as I say, I am worried about some of these proposals. I conclude simply by saying that, for ease of reference, paragraph 5.9.1 on page 51 of the Flexible New Deal White Paper sets out estimates that I think were generated in different times. The savings are estimated at around £400 million in JSA payments over the next 10 years. They also mention savings on departmental expenditure of approximately £32 million per annum, and the money to be used to assist the hardest-to-help customers on to stage 3. I wonder if that estimate is anything like appropriate now. I turn to the implementation costs which are listed at £30 million to around October 2010. Again, is that figure still apposite and appropriate? The paragraph finally goes on to talk about having access to European Social Fund money during the programme period of 2007-13. My point is simply this: all these estimates were good at the time, and I am sure that they were properly researched, but I do not believe that they are valid any more. I hope to be put right about this during the course of the debate but, if not, I want to make a final plea to the Minister. Will he ask for some updated figures and arithmetic, particularly after the phase 1 contracts under the Flexible New Deal are known? Perhaps he would write to colleagues who take part in the debate—here I should say that I am grateful to note that the Conservative Front Bench is to take part—to see whether a sensible update could be made on some of the figures that lie behind the provenance of this policy. It is too important to get wrong. On that basis, I commend the Motion to the House.