Welfare Reform Bill

Public Bill Committee, 12 February 2009.

Jimmy Hood (Labour, Lanark and Hamilton East)

Good morning. It is a pleasure to have everybody here. I do not know whether this is a first for the House but it is certainly unusual to have three Ministers giving evidence and a Minister on the Committee available to ask questions. Because we need to finish at 10.25 am, we need to get on with the business. I will ask the Minister whether he needs to introduce his two colleagues.

Mark Harper (Conservative, Forest of Dean)

I would like to start with the right to control area of the Bill. This question is probably best directed at Mr. Shaw and then perhaps Ms Helson.

Clause 29(2) starts well by being drawn widely across a range of areas affecting somebody’s whole life. Unfortunately, it gets rather narrower in subsection (5) where it excludes social care services and a number of other things. I have read the reasons for that—that those areas are already controlled under other legislation—but it seems to me that we run the danger, with a number of Government Departments moving in this direction, of ending up with individuals having a number of individual budgets and a number of different funding streams and not being able to draw all those things together. Why not be braver and encompass a range of funding streams across Government Departments to give individuals a genuine right to control, so that they do not have to fit their lives round departmental boundaries but Departments try to fit their service delivery around individual lives?

Mark Harper (Conservative, Forest of Dean)

May I hear from Ms Helson and then come back to the Minister?

Mark Harper (Conservative, Forest of Dean)

I am still not entirely convinced, and we will have more debate on this when we get to the detailed consideration of the Bill. First, the legislative framework for adult social care is in place, but it is not very advanced in the sense of the number of people in the country who have an individual budget. One of the witnesses on Tuesday was Paul Davies, the director of adult social care at Oldham. His authority has a fifth of the national total of people on adult social care who have an individual budget. The number of people with an individual budget in adult social care is very disappointing. Picking up the point that you both made about pilots or trailblazers, he said in his evidence that he understood why people wanted a pilot but, having rolled this out to everybody in his authority, he was convinced that there was sufficient evidence about what works and how to proceed, and he said unequivocally that he would like the Government to press forward with this. That is broadly my view.

Have you considered the alternative to a piloting system, which is putting the legislation in place and being very clear with authorities about the direction that you want to go? Obviously some local authorities, and possibly even some parts of the DWP and its delivery organisations such as Jobcentre Plus, would move faster. You could then use those leading organisations to learn the lessons—to see what worked—and then roll out to those that were slower. That would set a clearer direction and would be more likely to lead to this concept taking hold than running pilots for three years, during which a lot of authorities will be tempted to sit back and wait and not engage with the process because they are not sure that it is inevitable.

Mark Harper (Conservative, Forest of Dean)

I have a final two-part question on this clause. First, I am saying the opposite about constraining. When I read through the Bill I was encouraged that clause 29(2) was all-encompassing, covering a range of areas. It is later narrowed by excluding some other funding areas. If you left those bits out, you would enable individuals to start from looking at how their life works, pulling in the funding streams from across Government. You would be able to give yourselves the powers to do that.

My second concern about the piloting is the opportunity cost of not doing this fast enough. You will know from your visits that when you talk to people who have managed to get an individual budget for social care, they say that their lives have been transformed and enhanced and that a huge difference has been made. There may be snags along the way that need to be sorted out, but I would like to be able to bring help faster to all those people who will not get the opportunity to get control of their lives in the next three years or more. In the legislation, you have powers to run a further set of pilots after that; it seems that we are in danger of not making this happen fast enough for all those people for whom it would be a life-enhancing experience.

Mark Harper (Conservative, Forest of Dean)

Does Ms Helson have anything to add to the Minister’s comments?

James Plaskitt (Labour, Warwick and Leamington)

Could the Minister explain the thinking behind the proposal in the clauses dealing with the social fund to bring in external providers to assist with the process?

James Plaskitt (Labour, Warwick and Leamington)

Who are the external providers you have in mind?

James Plaskitt (Labour, Warwick and Leamington)

What about those parts of the country where there are no credit unions?

James Plaskitt (Labour, Warwick and Leamington)

The problem is that there is already a postcode lottery with the budgeting loan part of the social fund, as you know, and this sounds like a double postcode lottery, because there might be a better service in some parts of the country and a bog-standard service in other parts. Is that fair?

James Plaskitt (Labour, Warwick and Leamington)

That will be very welcome. Will the reform do anything to expand provision within the budgeting loan system, such as to bring in any additional resources?

James Plaskitt (Labour, Warwick and Leamington)

Finally, at the moment low-income families borrow six times as much money from loan sharks as they get from the budgeting loan fund. Can we do anything to redress that imbalance?

James Clappison (Conservative, Hertsmere)

I have questions on another matter, but may I ask you about what you said on social funds? Is it part of your plans under clauses 13 to 15, or of any other plans, to charge interest on any of the loans that are made from social funds, either by you or by external providers?

James Clappison (Conservative, Hertsmere)

You have changed your mind since the consultation paper, which clearly envisaged interest being charged on loans.

James Clappison (Conservative, Hertsmere)

There was a bit more than a clue about what you wanted to do. You said that interest would be charged in return for services, but that it would be at affordable rates. Then you set out how somebody with a loan would end up paying more because they would have to pay interest on top of the capital. Will there not be any interest paid?

James Clappison (Conservative, Hertsmere)

We will have more debates on that, I am sure.

John Howell (Conservative, Henley)

I have a couple of questions that relate to delivery of what the Bill seeks to achieve. You will have heard that on Tuesday afternoon Professor Gregg threw down a challenge to DWP officials and Ministers about the culture change that would need to take place if you are going to be able to deliver the kind of black box arrangement that he envisaged in his report. How would you reassure those sceptics who are concerned that it will be very difficult for the DWP not to allow a legitimate concern and a wish to be involved in the contract to spill over into the operation of the contract?

John Howell (Conservative, Henley)

I think that is exactly what he said, and I am reassured that you followed it.

John Howell (Conservative, Henley)

Do you think that is being sufficiently done in the contracts that are being drawn up at present?

John Howell (Conservative, Henley)

My next question relates to the impact on resources, particularly of Jobcentre Plus but also more generally. The last time we were in this kind of position, just before Christmas, I understood you to say that you did not believe that the number of long-term unemployed would grow in parallel and at the same rate as the general pool of unemployment. Is that still your belief, and why?

John Howell (Conservative, Henley)

I am sorry; was that a yes or a no to my question?

Paul Rowen (Liberal Democrat, Rochdale)

I would like to ask a few questions about clause 9 and schedule 3 regarding drugs. Was there any evaluation of existing voluntary schemes before the decision was made to move to compulsion with regard to drug users?

Paul Rowen (Liberal Democrat, Rochdale)

If you are already doing that work and it is already successful, why do you need this step?

Paul Rowen (Liberal Democrat, Rochdale)

Some 140,000 people, which is not an insignificant number, are already getting treatment and are on benefits. If that figure increases to 240,000, what additional resources will be made available?

Paul Rowen (Liberal Democrat, Rochdale)

But we heard on Tuesday that the net result of that would be, without additional resources, that other people, who perhaps needed drug treatment, would be bumped off those programmes to make room available.

Paul Rowen (Liberal Democrat, Rochdale)

So, do you have a delivery plan that will show how you are going to cope without the additional staff necessary for the training you are going to deliver over the next few years?

Paul Rowen (Liberal Democrat, Rochdale)

Sharon White, in terms of the staff at Jobcentre Plus, have you done an audit of the skills that they already have and the additional training they will need to deal with that? What are your plans?

Paul Rowen (Liberal Democrat, Rochdale)

Nevertheless, the Bill’s provisions give Jobcentre Plus staff the ability to require.

Paul Rowen (Liberal Democrat, Rochdale)

How will that requirement be enforced? Are you saying that a medical officer will make the recommendation?

Paul Rowen (Liberal Democrat, Rochdale)

The NHS constitution gives a patient the right not to accept treatment or to even disclose information. Do you think that the legislation under discussion conflicts with the constitution and people’s rights under it?

Peter Lilley (Conservative, Hitchin and Harpenden)

On the social fund, may I ask about the extent to which external providers will have discretion as to whom they will grant personal loans, as well as the amount of those loans? Furthermore, what is the extent to which the providers will be operating from a ring-fenced pool of money?

Peter Lilley (Conservative, Hitchin and Harpenden)

I will start again.

Peter Lilley (Conservative, Hitchin and Harpenden)

May I ask, in respect of the social fund, the extent to which outside providers will have discretion as to whom they make loans, as well as the amount of those loans, and whether the total amount that each provider will be able to allocate will be a ring-fenced annual amount?

The reason I ask is that there is a familiar ring to all this; I remember officials proposing to me that I should establish a people’s bank with an automatic right to personal loans. I resisted that, partly because I did not think that we should be in the business of facilitating the indebtedness of people who were not well off—I was ahead of my time. More importantly, it seemed to be motivated by the fact that it is a rules-based Department, as I am sure Ministers have observed in their own Departments. Officials hate discretion and do not like to be given those powers, so they wanted to get rid of it. I wanted to retain it because I thought that at the end of a rules-based system, you needed some discretion in case something went wrong with all the rules, because however wonderful the rules are, you cannot cover all complexities. Are we retaining that discretion, and if so, are we privatising it? That is a rather bold step—even for me.

Peter Lilley (Conservative, Hitchin and Harpenden)

I would not expect you to have the figures here, but it would be helpful if the Committee knew the current default rate or repayment rate—one is the obverse of the other—for social fund loans.

Peter Lilley (Conservative, Hitchin and Harpenden)

And then you have the problem that there is a maximum number of deductions that can be made. What happens if, for some reason, those were used up and a crisis emerged? Does this go to the crisis fund, and will it in the future?

Peter Lilley (Conservative, Hitchin and Harpenden)

What about the ring-fenced budget? Will each external provider be told, “This the amount of money that you have to allocate,” or, “This is the maximum you can allocate during the year,” and the devil take the hindmost?

John Mason (Scottish National Party, Glasgow East)

Professor Gregg talked about different sanctions—monetary and non-monetary—and seemed to be leaning towards non-monetary sanctions, especially for vulnerable people, because, if they are already on a fairly minimal income, monetary sanctions could push them over the edge. How do you see the balance between the two in the Bill?

John Mason (Scottish National Party, Glasgow East)

If we eventually reach financial sanctions, what will happen in practical terms to a family on a fairly minimal income—especially if there are children—whose benefits are reduced? What do that family do?

John Mason (Scottish National Party, Glasgow East)

At this level, that is quite reassuring, but many people’s fear is that once it gets down to an individual level, there might be a clash with child poverty. How will this work in practice?

Meg Munn (Labour, Sheffield, Heeley)

I want to follow up a little on that. The Minister helpfully confirmed that the way in which Professor Gregg described the sanctions regime operating on Tuesday is how he envisages it will work. I want to mention the particular issue of people with a learning disability because obviously this process provides an opportunity for many such people who have never worked to do so. However, clearly, when we start talking about sanctions, people become concerned about what that might mean. When considering personal advisers’ understanding of whether somebody has a learning difficulty, the situation is perhaps analogous to that of drug users. Someone who has a relatively mild learning difficulty might not have a great deal of support from services and they might just not understand what is being asked of them. How are you going to ensure that personal advisers have the training and support to find that out, and that they make sure that people are getting chances, rather than being sanctioned when they are not clear about what is happening?

Meg Munn (Labour, Sheffield, Heeley)

Where might advocacy fit into that? I am not decrying the skills of personal advisers who have had training, but there is a difference between a personal adviser and an advocate whose role is to help the person with a learning disability to put across their views and concerns. What will happen in parts of the country where advocacy services are thin, or people have just not had access to them?

Meg Munn (Labour, Sheffield, Heeley)

I want to ask a question about joint birth registration. I think that all children have a fundamental right to know who their birth parents are, provided that someone actually knows who they are. Are the measures in the Bill robust enough to deliver that?

Meg Munn (Labour, Sheffield, Heeley)

I am as concerned as the next person about the safety of children, but it is really important to divorce the issue of the name of the father and who he is from the issue of protecting children from a father with whom they should not have contact. Dealing with the issues for a child who has not had contact with their father, when that father is somebody who should not have contact with children, is entirely separate from the right to have that person named on the birth certificate. I am a little worried that some of the dialogue and discussion on this seems to focus on saying, “You can’t possibly have the name of the father on the certificate because that will pose a risk to the child.” That should not be the case. Adopted children can, at a certain stage, see their original birth certificate and find out who their birth parents were, even though, for whatever reason, they no longer live with them. Can you respond to that and put my concerns to bed, as it were?

Mark Harper (Conservative, Forest of Dean)

I want to go back to the drugs treatment provisions. I think that Mr. McNulty was present for most of the questioning of DrugScope in our session on Tuesday, so he should now be clear, even if he was not before, that we are certainly very supportive of the direction of travel of this aspect of the Bill, as we always have been. However, I have specific questions on the detail.

First, what exactly do the Government mean by treatment? Is the objective of the treatment to get someone off their drug habit, or is it to manage that habit? From looking at the treatments already provided, it seems that around half of people on drug treatment programmes receive a replacement drug. That solves the criminal justice part of the problem, but does not get them off an addictive substance. From the point of view of work, we want to aim at fixing the addiction problem.

My second question is about capacity. Will the Minister give us an idea of the modelling that the Department has done? How many people does it think will be picked up with the carrot-and-stick approach, and does the required capacity exist? Will he give us more detail about this in the devolved parts of the country? I know from a visit to Wales that there is a problem there because the Welsh Assembly Government and the Welsh health service do not give the same priority to drug treatment services as happens in England. There is a problem with getting drug treatment in parts of Wales. We are running the programmes with a DWP remit that covers the UK, and that remit needs to be sensitive to the availability of treatment in all parts of the UK. Clearly, it would help if the Welsh Assembly Government and the Scottish Government were absolutely aligned with what was happening England, but if that is not the case, the DWP needs to take into account what is deliverable in those parts of the UK.

Mark Harper (Conservative, Forest of Dean)

What work has the Department done to model how many people it foresees being covered? The question from Mr. Rowen was about the fact that we clearly were not going to leap from current treatment capacity to addressing everybody who has a drug problem. What kind of modelling have you done on expectations, and how do you see this rolling forward?

Mark Harper (Conservative, Forest of Dean)

Would be fair to say that the piloting is going to be partly a process of data gathering to assess the success of the measures in the Bill at effectively helping problem drug users on out-of-work benefits to turn their lives around?

Mark Harper (Conservative, Forest of Dean)

My final question is more general. Given that this Bill is, in many ways, a framework Bill that gives Ministers the power to draw up regulations, can you say whether or not the Committee will be seeing draft regulations for any or all of the areas across the Bill prior to our deliberations after the recess?

Mark Harper (Conservative, Forest of Dean)

We await them with interest.

James Clappison (Conservative, Hertsmere)

I want to ask a few questions about transition and the provisions of clause 8. First, can I ask you very briefly about something that you said to my colleague, Mr. Howell? I think that the phrase that you used was that you were exploring the parameters of contracting out for the flexible new deal and the contracts that companies are bidding for at the moment. Contracting lies at the background of much of what is in the Bill and we wait to see how it turns out.

Things have turned out to be worse than originally foreseen, have they not? There are going to be many more long-term unemployed than were originally envisaged. You announced a short pause in the programme of bidding for contractors who want to take on the task of finding work for those long-term unemployed. How long do you think that short pause will be?

James Clappison (Conservative, Hertsmere)

You said—

James Clappison (Conservative, Hertsmere)

Yes, 1 October.

James Clappison (Conservative, Hertsmere)

You are even keener than we are.

James Clappison (Conservative, Hertsmere)

There is a bidding process at the moment for the contract to go into operation at the beginning of October.

James Clappison (Conservative, Hertsmere)

That is fair enough. We may be at the tail end of the bidding process, but the discovery that something is going to be 300 per cent. higher, which is what you said in the letter—300,000 is the figure that you have given—represents quite a development. Are you confident that you will meet the deadline of 1 October? You said that you were wedded to it, but do you expect to meet it?

James Clappison (Conservative, Hertsmere)

In that case we will wait and see, but we want to know what is going to happen and when.

Clause 8, in which you take the power to direct claimants to undertake specific work-related activity, will apply to employment and support allowance claimants as they are moved from incapacity benefit over time. In light of that, what will happen to the very large, existing stock of incapacity claimants—not the new people coming on to it, but the stock that runs to some 2.6 million, 1.5 million of whom have been on incapacity benefit for more than five years? We do not yet know the details but, when you take those powers, what is going to happen to somebody who is part of that stock of long-term incapacity benefit claimants?

James Clappison (Conservative, Hertsmere)

What specifically do you envisage happening to somebody among the existing stock of incapacity benefit claimants who is aged over 50, of whom I imagine there are a number?

James Clappison (Conservative, Hertsmere)

I understand that. Everybody is agreed about the support group—there is no conditionality on that because of the nature of people’s conditions.

James Clappison (Conservative, Hertsmere)

I think your estimate is that the majority of people will actually be in the other group, to which conditionality should apply. That is the non-support group and there will be many people involved, including many existing claimants over 50.

The White Paper says:

“most existing claimants over the age of 50 will be offered a single Work Focused Interview, with the opportunity to take up further support on a voluntary basis.”

Is that what it all amounts to under the provisions that you were telling us about under clause 8 and the extra help and support? Is that the sum total?

James Clappison (Conservative, Hertsmere)

As things stand, under existing legislation—before the Bill comes into effect—somebody who is over 50 years of age and on either employment support allowance or incapacity benefit can take the support that they want on a voluntary basis.

James Clappison (Conservative, Hertsmere)

For those people, the direction that will come about as a result of the Bill will be a single work-focused interview.

James Clappison (Conservative, Hertsmere)

I accept that point, but this has been the problem all along. We have had this stock of claimants throughout the whole history of welfare reform over the last 10 years. There is a bit of tinkering around the edges and things happening for new people, but the stock goes on growing, but people are on the benefit for longer and longer, and in large numbers.

James Clappison (Conservative, Hertsmere)

I do not want to take all the time remaining, Mr. Hood, but my point is about what extra provisions the Bill will give us. We already have pathways to work.