Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Baroness Gibson of Market Rasen) (Lab)
My Lords, if there is a Division in the House, this Committee will adjourn for 10 minutes.
Medical Act 1983 (Amendment) (Knowledge of English) Order 2014
(10 years, 9 months ago)
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The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, this Government recognise that overseas doctors make a valuable contribution to the NHS, and we are keen to ensure that highly skilled professionals do not face unnecessary barriers. However, it is vital that all doctors practising in the UK have the necessary English language skills in order properly to care for and communicate with patients.
Due to the legislation that governs the regulation of doctors, the General Medical Council is not able to apply language controls to applicants from the EU as a pre-condition to registration as a medical practitioner. This is of great concern to the Government and to the General Medical Council, as it raises a clear risk to patient safety.
The same restrictions in law do not apply to international applicants from outside the EU. Therefore, the General Medical Council is able to require all international applicants to provide evidence of their English language capability—for example, by taking an English language test—before being registered and given a licence to practise in the UK.
We have worked with the General Medical Council to identify a system of language controls which provides greater patient safety while being compliant with European law. We believe that the proposed legislative changes contained in the draft order will achieve this outcome. The draft order gives the General Medical Council appropriate powers to ensure that only those doctors who have the necessary knowledge of English to do their jobs safely and competently are able to practise medicine in the UK.
The draft order makes changes to the Medical Act 1983 to do two things: first, to give the General Medical Council the power to refuse a licence to practise in circumstances where a medical practitioner from within the EU is unable to demonstrate the necessary knowledge of English; and, secondly, to create a new fitness-to-practise category of impairment relating to language competence. This will strengthen the General Medical Council’s ability to take fitness-to-practise action where concerns are identified.
The licensing amendments will enable the General Medical Council to require evidence of English language capability as part of the licensing process where language concerns have been identified during the registration process. This is compliant with EU law, which sets out under the mutual recognition of professional qualifications directive that a professional’s qualifications must be recognised by the host member state before any language checks can take place.
The order makes amendments to Section 29G of the Medical Act 1983 which will require the General Medical Council to publish guidance setting out the evidence, information or documents which a medical practitioner must provide to demonstrate that they have the necessary knowledge of English. Any person who is refused a licence to practise on the grounds that they have failed to demonstrate they have the necessary knowledge of English will have a right to appeal.
The process for determining whether a person has the necessary knowledge of English will be set out in the General Medical Council (Licence to Practise and Revalidation) Regulations, which will be amended by the GMC in due course to enable the policy to be implemented.
With regard to the fitness-to-practise amendments, a new category of impairment relating to English language capability will be created. This will allow the General Medical Council to request that a doctor undertake an assessment of their knowledge of English during a fitness-to-practise investigation where concerns have been raised, which it is currently unable to do. These changes will strengthen the General Medical Council’s ability to take fitness-to-practise action where concerns about language competence are identified in relation to doctors already practising in the UK.
The proposed amendments to the Medical Act 1983 are designed to complement and further strengthen the existing language controls imposed through the responsible officer regulations, performer list regulations and checks undertaken by employers at a local level. These amendments will enable the General Medical Council to carry out proportionate language checks where there is cause for concern, and ensure that all doctors practising in the UK have the necessary knowledge of English to do their jobs well and reduce the risk to patient safety. I commend this order to the Committee, and beg to move.
Lord Walton of Detchant (CB)
My Lords, I cannot say how welcome this order is. Forty-three years ago I was elected dean of the medical school of the University of Newcastle. By virtue of that election, I was immediately appointed to the General Medical Council. I became a member of its education committee and three years later I became the chairman of that committee. By virtue of being chairman of the education committee of the GMC, I was then appointed, under the new arrangements for the European Union, to the Advisory Committee on Medical Training, which met twice a year in Brussels and was required to make recommendations on basic medical education, specialist medical education and the mutual recognition of qualifications.
That was an interesting experience. Under the treaty of Rome, the first directive derived from that treaty said—I am not quoting exactly but the meaning is clear—that in the movement of doctors across the European Union there should be mutual recognition of qualifications and registration should be granted, but that it should be up to the host country to see to it that the incoming doctor had such ability to communicate with patients to make him or her safe to practise. That seemed to give us at the GMC full authority to embark upon establishing a language test.
At that time, for historical reasons, some doctors from outside the European Union—from Commonwealth countries such as Australia, New Zealand, the West Indies and many others—had enabled the General Medical Council to inspect their examinations and qualifications so they were automatically granted full registration under the Medical Act. But doctors from many other countries who had not had that ability to have inspections were required to apply for temporary registration if they wished to come to the UK, and they had to take a test set by the Professional and Linguistic Assessments Board, which established tests of not only clinical and academic competence but language capability. That was the so-called PLAB test.
It is important to make the point that the rights of doctors graduating in any other member country of the European Union applied only to those who had graduated in those countries but who were also nationals of EU member states. For instance, if a doctor from a country outside the European Union graduated from, say, Heidelberg, they were not entitled under that treaty to come to the UK and had to go through the same procedure as a doctor from India, Pakistan or other parts of the world.
Indeed, there was one such doctor, an Iranian, who qualified in medicine in Heidelberg. He applied for registration with the General Medical Council and was turned down. He took the GMC to a judicial review. Of course, he lost because he did not qualify. The result of this was that I was interviewed by Special Branch because he had made serious threats against my person, including threats of violence. However, we will leave that alone for a moment.
The point I wish to make is that it is so important that we have this language test. We at the GMC, having read what the directive said, tried to impose a language test on incoming doctors from the European Union, but we were threatened with being taken to the European Court because we were told very clearly by our lawyers and by the lawyers from Europe that this was contrary to the treaty of Rome. We tried again 10 years later when I became president of the General Medical Council, again with a total lack of success. All we were able to do then was to persuade the employing authorities in the UK, through the Department of Health, that they could impose a language test as a condition of employment. Regrettably, that agreement with the Department of Health was never properly or widely fulfilled across the UK, so a language test as a condition of employment for European doctors was not widely employed. Our attempts at that time were lost.
The great thing about this order is, first, that it makes it clear that the GMC can properly design and employ a test of the language ability of an incoming doctor from the EC as a condition of registration. Secondly, the responsible officer can make certain that any doctor coming up for revalidation speaks English adequately. Finally, when any doctor who is already a specialist from the EC or is working either in general practice or in a specialist grade and is brought before the GMC on the question of fitness to practise, the fitness-to-practise procedures can take note of the doctor’s ability to speak English. These are extremely welcome developments. Perhaps I am wrong about the condition of registration but the GMC, I think, is hoping that that is the effect of this order. Perhaps the Minister can clarify it for us. The whole process set out in this paper is extremely welcome and long awaited.
Lord Turnberg (Lab)
My Lords, it is always a challenge to follow the erudition of my noble friend Lord Walton, who certainly has no difficulty with the English language. I am sorry to add to the noble Earl’s load of potential medical speakers this afternoon but it is a pleasure to welcome this initiative which at long last gives the GMC the powers to ensure that doctors coming to work in the UK can speak and understand English. It has been long awaited and although it has always been part of the assessment of non-EU doctors it will now be a requirement for EU doctors too. After all that, it might sound a little churlish to say that there remain some things to be done about long-running issues that are not addressed in this statutory instrument. I hope the noble Earl will forgive me for mentioning them here.
I go back a little while, not quite as long as my noble friend Lord Walton, to when I was chairman of the Specialist Training Authority and the EU directives were being produced in the 1990s. Since those directives governing the free flow of workers across the EU came in, doctors trained in other member states can come to practise in the UK quite freely. However, we recognised from the very beginning that we know relatively little about the training of specialists in other EU countries. We have no knowledge of the curriculum they go through or the skills and knowledge of, for example, cardiologists, neurosurgeons and paediatricians from a selection of EU counties such as France, Italy, Spain and Germany. They may be perfectly fine, of course, and they probably are, but apart from knowing that they have spent a certain minimum number of years in training, we are not allowed in the UK to assess any of their knowledge or skills before they are put on the register of specialists. That is not the case for specialists coming from, say, America, Australia, New Zealand or any other non-EU country; they have to have their training and skills properly assessed and they may be required to take more.
Questions about the safety of our patients as far as EU doctors are concerned have been raised in this House in the past, but I have little confidence that we will be able to change the arrangements now when we would, it seems, have to convince the other EU member countries of this problem. Will the noble Earl seek advice from the GMC on how it intends to check on the safe practice of specialists from other EU countries? It is possible that its system of responsible officers may help. However, the GMC can act only after a doctor is already on the specialist register. There is a question of whether there is sufficient capacity in the responsible officer network. It would helpful if this issue could be aired a little further. I hope that the noble Earl will be able to find out from the GMC how far it can go on this.
Baroness Finlay of Llandaff (CB)
My Lords, I rise, somewhat cautiously, as the third medical speaker in a row. I welcome the order.
It is worth noting that in 2013, the GMC had 13 fitness- to-practise cases that involved concerns about the language skills of doctors. In its 2011 review, the England Revalidation Support Team found 66 cases where the responsible officer has dealt with linguistic concerns. Part 3 of the order is therefore particularly important because it relates to fitness to practise. I hope that we will have an assurance today that in a fitness-to-practise procedure the doctors will not themselves be paying for the English language competence test. I have a bit of a concern, if they are paying for it themselves, that there may be a seeking out of a centre that is different from another centre, so it has to be fully conducted by the GMC, although it seems completely reasonable that the payment for the test prior to licence to practise is borne by the person applying for a licence to practise.
I understand from the GMC that it will be using the International English Language Testing System—IELTS—which costs from £130 to £145 depending on where you sit it, and that that will remain valid for about two years, on the recommendation of the Commonwealth. There is evidence that language skills, if they are not used, begin to decay after about two years.
It is also important to recognise that in this order we are talking about “ordinary” English language; we are not talking about testing medical English. It has been suggested that the dictionary for medical English is about the same size as the dictionary for another European language. It is a huge language. However, many of the words are very similar across the different European languages—although, of course, they are very different in some other languages.
We are talking about the ability of a doctor to take their medical knowledge and translate it into what you could call everyday English so that they can communicate it to patients. One point that I hope will be part of a fitness-to-practise procedure, however, is a recognition that communication involves far more than language. In terms of communication skills and communicating, although about 20% of communication is verbal, much of it is non-verbal. When you look at complaints against doctors in relation to the way they have communicated, although they sometimes have very good English language skills, other aspects of their non-verbal communication might reveal an attitude that is below the standard that one would expect from somebody on the GMC register.
I have to say, from my experience of teaching postgraduate students, that at Cardiff University they are required to sit the IELTS. It is a good test of English language skills. Since it was introduced as a statutory requirement by the university, we have found that it has become easier to teach and to mark the work done by those whose first language is not English. When teaching communication skills, it is easier to separate out the non-verbal problems from the verbal problems.
My view is that this is an important regulation. The ability to look back at those currently practising in the UK about whom there are concerns is crucially important and the GMC needs to be empowered to do so. I would just sound a note of caution following on from the remarks of the noble Lord, Lord Turnberg; of course we do not know what is set out in the curricula of different places. Medical students can graduate from some universities with almost no patient contact at all. If they are moving into training jobs, there is a concern that the baseline level of their medical training may be very different. This order may be the first step towards looking at the competences that we expect of a doctor coming from anywhere in the world in relation to practising in the UK.
Lord Kakkar (CB)
My Lords, I declare my interest as a member of the General Medical Council and I would like to take this opportunity to congratulate the noble Earl and Her Majesty’s Government on dealing with this important issue in what I think we can all agree is a very sensitive way. There is no question but that our health services are vitally dependent on a steady flow of doctors coming from all parts of the world, including the European Union. Not only can they learn from our healthcare system, they can also serve in it. But it is absolutely right that a professional regulator must enjoy the confidence of the public, and it is the responsibility of the General Medical Council first and foremost to ensure that patients are protected and that clinical practice in our country is safe.
For that confidence to exist, the public have to be sure in their own minds that the elements of what they would consider to be essential clinical practice—the ability to practise in a responsible and safe way—are met and tested by the General Medical Council whenever it feels the necessity to do so. The ability to communicate effectively, and therefore to use our language in a way that the public and patients appreciate and would expect, is an essential part of the responsibility of the regulator of the medical profession. As we have heard during this short debate, it is anomalous that the GMC is able to ask that question of potential registrants and licensees from outside the European Economic Area, but has not been able to do so of those who come from within the European Union. It is quite right that the Government have focused on this issue and decided to act in this fashion.
The fact that this order makes provision not only for the question at the time of licensing of a professional, when concerns about language skills might have been raised during the provisional registration process, but also that the new category of considering the ability to use language and to communicate becomes part of the broader question in fitness-to-practise considerations, is vitally important. It means that not only at the time of coming on to the register and being licensed to practise in this country, but throughout the practice itself, the public and patients can now feel confident that the General Medical Council will be in a position to act if it needs to do so. The importance of that cannot be overestimated.
We have heard about the additional question of competence skills, which is a matter that your Lordships have considered in the course of a number of debates in the Chamber over the past few years. The issue remains to be addressed, but I think that most would agree that ultimately, wherever a doctor comes from in the world, whether they have trained and qualified in our own country, elsewhere in the European Union or elsewhere in the world, they should be expected to demonstrate their skills to the same standard and to deploy those skills throughout their professional career in a way that enjoys the confidence of the people of our country.
Viscount Bridgeman (Con)
My Lords, I rise with some diffidence as the first layman to address your Lordships in this debate. I, too, thank the Minister for his statement and pay tribute to his department for the leadership that it has shown in securing from the Commission the remedying of what was a glaring and potentially dangerous anomaly in the 2005 directive. The Commission has produced a very satisfactory outcome.
I believe the United Kingdom is among the first member states, if not the first, to incorporate the changes introduced by the revised directive into legislation. I note that the order is headed:
“Health Care and Associated Professions”.
I hope the new language-testing arrangements will be incorporated as early as possible into other branches of healthcare—I have nursing in mind in particular. I think it is the experience of many that nurses from the EEA are almost invariably pleasant, caring and considerate. They of course play a huge role in this country, but I know that many patients have had difficulty in communicating and in making themselves understood.
There are many reasons why this is a matter of some urgency, but I will suggest just one. I think I am right in saying that the practice of putting great emphasis on patients’ notes goes back a long way in the UK; possibly more emphasis than some other member states, even those with advanced healthcare arrangements. It is therefore all the more important that nurses from the EEA are proficient not only in spoken but in written English, a point which the noble Baroness, Lady Finlay, made in connection with doctors. As one facetious journalist put it,
“the difference between a microgram and a milligram is a coffin”.
I hope the Minister can give your Lordships the assurance that progress is being made in extending the provisions of the revised directive right across the healthcare profession, not least with nurses. I hope that this will include the fitness-to-practise hurdle, which is so important in reinforcing the ongoing responsibility of the relevant regulators for their members.
Baroness Brinton (LD)
My Lords, I am also a layman so the noble Viscount, Lord Bridgeman, need not feel completely alone. However, I preface my remarks by saying that my grandfather was the dean of St Mary’s Hospital Medical School. I remember him trying to explain to me why a bedside manner was not just about translating medical language but was all about speaking and listening. The one point I would add to the many that have been made by noble Lords this afternoon is the one about communication. A technical knowledge of English on its own is not enough—it needs to be one that picks up not just the body language but the nuance, including of regional language. If a Yorkshireman says he is “probably alright”, you know that you would want to question him further, whereas somebody coming from overseas might take that at face value.
I leave the rest of the medical comments to the medical professionals, who have spoken amply in that respect, and want to speak very briefly on freedom of movement in the EU. My party certainly believes that it is vital but—in true liberal tradition—it is fine up to the point at which it harms other people. It has been quite clear, certainly with one very celebrated case but also with others that may not have hit the public eye, that the capacity to cause harm is now at a level where action needs to be taken. These changes are well overdue and I am very pleased that they will set a new framework for the General Medical Council and restore confidence in foreign doctors from the EEA, wherever they are from and whatever level of language they have.
I end on the point that proportionate language competence must not only be checked but be checked more frequently than the BMA perhaps would like, because language and communication skills can get rusty.
Lord Hunt of Kings Heath (Lab)
My Lords, I, too, welcome the order. It comes, of course, from a report which followed the death of David Gray in 2008 after he received medical treatment from Doctor Ubani, a German national working his first shift as an out-of-hours doctor. Doctor Ubani gave David Gray an overdose of diamorphine which was 10 times the recommended maximum dose. A Select Committee investigation followed, looking at the use of overseas doctors in providing out-of-hours services, which was published on 8 April 2010. This recommended that the Government make the necessary changes to legislation that would allow the GMC to language-test those applying for registration. The order follows that and we welcome it. I commend the GMC and the noble Earl’s officials for their work in this area.
A number of points have been raised. I was interested in the BMA briefing on this matter which encapsulates some of the issues to which noble Lords have referred. It particularly concerns the area of fitness to practise. I agree with the noble Lord, Lord Kakkar, that the fact that the order covers the fitness to practise of doctors who are practising rather than those who are wishing to practise is a significant advance.
The BMA is right to ask for safeguards to ensure that testing for language competency is not abused. As it points out, a doctor’s language competence may not be a cause for concern but may be used as a conduit to prevent a doctor working where an employer may have more general concerns. One can recognise the circumstances in which this could be used. I would be interested to know what safeguards the GMC proposes in this area. Clearly, careful differentiation is required between situations when language is the main cause of concern and when there are other underlying problems such as professional or personal issues.
The BMA also states that an assumption has been made in these proposals that if someone is found not to hold a sufficient standard of English following a fitness-to-practise investigation, the situation is remedial and language competence could then be improved sufficiently over time to allow the doctor to continue to work in the UK. The BMA points out that while this may indeed be the case, it is concerned that the quality of English tuition may be very variable and that some responsibility might need to be taken by the GMC to signpost doctors to expert language training.
My next point was raised by both the noble Baroness, Lady Finlay, and the noble Baroness, Lady Brinton—namely that language competence is not the sole area which determines the likelihood of a doctor not trained in the UK experiencing difficulties. Effective communication is far broader and, indeed, has been highlighted by the GMC’s programme for doctors new to the UK, which looks at professional and ethical standards along with the importance of effective communication. I agree that it is essential that those new to the UK understand and apply the ethical and professional standards expected of them. That reinforces the point made by my noble friend Lord Turnberg that in the case of specialists from other countries, we sometimes do not know what we are getting.
I refer the noble Earl to a further briefing from the General Medical Council which stated that, by January 2016, the Government will have the opportunity to implement into UK law the new language requirements in directive 2013/55/EU on the recognition of professional qualifications. These clarify that competent authorities throughout Europe, such as the GMC, should have explicit powers to assess the language competence of all health professionals after their qualifications have been recognised but before they are allowed to practise.
The GMC considers that at that point we should be able to produce a more comprehensive scheme for language controls before doctors are given a licence to practise in the UK. Will the noble Earl confirm the GMC’s interpretation and can he say anything more about the timelines for this country implementing directive 2013/55/EU in the UK? Will he also confirm that, in so doing, we will be able to meet the point raised by the noble Viscount, Lord Bridgeman, in relation to other health professions? The point he raised about nurses is very well taken, particularly in view of the fact that they are very mobile in terms of where they work. It would be good if the noble Earl could confirm that as well.
Earl Howe
My Lords, I am very grateful for the welcome that this order has received from all noble Lords who have spoken. Perhaps I may begin by making clear one critically important point relating to the order prompted by a comment made by the noble Lord, Lord Walton. It is important to understand that the English language test is not a condition of registration. If a language test is required of a doctor, it would be a condition for that doctor receiving a licence to practise. Registration is granted on a full basis and language is assessed after registration.
The noble Lord, Lord Turnberg, questioned the quality of the training of specialists who come from other EU countries and asked what was being done to assure the safety of those doctors. If the specialism of a doctor is listed as a specialism under the directive then he or she will be required to comply with the minimum training standards set out in the directive. However, I will seek the advice of the GMC on this matter and will write to the noble Lord accordingly. A similar point was made by the noble Lord, Lord Kakkar, around the competency of EU doctors. I am sure he will know that it is not possible for the GMC to assess the competency of an EU doctor on registration. However, the council could assess an EU doctor’s competency in fitness-to-practise proceedings if questions are raised about the competence of that practitioner.
The noble Baroness, Lady Finlay, asked who would bear the cost of the fitness-to-practise case where there were language concerns. I can confirm that a doctor will not be required to pay for his or her own assessment in fitness-to-practise cases. The GMC has confirmed that it will bear this cost. She made the point, rightly emphasised by a number of noble Lords, including my noble friend Lady Brinton, that good communication skills are about more than just language competence. The issue is one that falls squarely to the GMC and we look to the council to ensure that it is addressed in guidance. If communication skills result in deficient professional performance, that matter could certainly be considered as part of a fitness-to-practise issue.
The noble Baroness spoke with her customary experience about the International English Language Test. On 25 February, the GMC announced a change in the score it requires in the English language test. As she pointed out, this is a test that many international medical graduates currently use to demonstrate their knowledge of English when they apply to join the register. Currently, IMG applicants must achieve a minimum score of seven out of nine in each of the four elements, and an overall score of seven. From the middle of June 2014, doctors will have to achieve a higher overall score of 7.5. They will continue to have to achieve scores of at least seven in each of the four domains. The new requirements for IELTS will be the same for all those applying to join the register. This move follows research commissioned by the GMC which suggested that the level should be enhanced. Moreover, IELTS will be one of the pieces of evidence that European doctors can use to demonstrate that they have the necessary knowledge of English.
My noble friend Lord Bridgeman asked about the extent to which the principle behind this order will be extended to other medical professionals, including nurses. The Government believe that in order to maximise patient safety, nurses coming to work in the NHS should not be able to work unless they have the necessary knowledge of English to perform their job well. Departmental officials are having ongoing detailed discussions with the NMC to seek to establish a system that will enable them to carry out proportionate language checks which are in line with EU law. I cannot give him further detail at this point but I can assure him that this matter is very definitely under scrutiny.
It must also be remembered that registration with the Nursing and Midwifery Council does not guarantee employment in the UK. Individual organisations are responsible for ensuring that the people they employ have the necessary skills for the post for which they are applying. EU legislation does not prevent the employer from assuring themselves that the nurse being recruited is competent, safe to practise, has up to date and contemporary knowledge, and has the necessary language and communication skills.
The noble Lord, Lord Hunt, raised the concern that the test for language competence should not be abused, and asked what safeguards the GMC was proposing in this area. As I mentioned, the GMC will be issuing guidance to provide absolute transparency of what evidence and documents are needed to demonstrate the necessary language competence. That should provide not only the necessary clarity for all applicants but also minimum scope for the kind of abuse that he referred to. It is for the GMC as the independent regulator of medical practitioners in the UK to decide the necessary knowledge of English to practise safely in the UK. As regards the guidance, in its recent consultation it suggested that where there is a cause for concern, similar evidence may be required to what is currently required for IMG doctors—for example, the required score in the academic version of IELTS or that the doctor has a primary medical qualification taught and examined in English. But, of course, in making that determination, the GMC will need to be mindful of EU law and ensure that such requirements are necessary and proportionate in view of the job to be performed.
The noble Lord, Lord Hunt, also asked whether the language requirements will be in any sense new. Systematic language checking is not permitted under the new directive. Any testing, as I mentioned, must be proportionate, and we anticipate that the new directive is likely to come into force in January 2016.
As regards the noble Lord’s other question, about the quality of language tuition where a doctor has been found to be deficient—and he asked whether the GMC will be signposting such doctors to good language schools—I have no doubt that this is an issue that the GMC will consider. However, it is ultimately an issue for it.
I hope that I have succeeded in answering most if not all of noble Lords’ questions. If I have not I will of course write. I conclude by thanking noble Lords for their very constructive and helpful comments.
Contracting Out (Local Authorities Social Services Functions) (England) Order 2014
(10 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, I remind the Committee that in 2011 an order was passed by noble Lords under the Deregulation and Contracting Out Act 1994 to allow local authorities taking part in two pilot schemes to contract to outside organisations certain adult social service functions.
The House agreed to amend the original order in November 2012 to allow local authorities to continue this contracting-out activity in respect of the pilot programmes beyond the period provided by the original order. The pilots were: adult social work practices pilots and right to control pilots. The order before noble Lords today seeks to set out the policy intentions for general delegation of functions in relation to adult social care, and will in effect mark the end of the social work practice pilot programme.
I am presenting this order today, not to extend the social work practice programme itself but instead to roll out the general policy intentions for delegation of statutory functions in adult care and support. There are three main reasons why this order is required: first, to ensure that organisations set up under the SWP programme can continue to operate legally and carry out statutory functions on behalf of the local authority; secondly, to give any other local authority the power to delegate specified functions to a third party; and thirdly, to support our policy intention for delegation, bearing in mind the general power of delegation within the Care Bill.
I shall now set out more detail on each of the three points. The social work practice pilots were announced in 2010 and saw the creation of seven social worker-led organisations, which discharge the functions of the local authority in providing adult social care services. Five of these organisations continue to exist today. On a day-to-day basis, the pilots were independent of the local authority but worked closely with it and in partnership with other providers. The local authority paid for the services provided but maintained its strategic and corporate responsibilities though its contract with the social work practices.
We were looking at the pilot sites to test the potential benefits of the social work practices and delegation of statutory functions, and whether these innovative approaches improve outcomes and experiences for the people who use them. The intention of the programme was to bring people who need health and care support closer to those who provide the services they need by reducing bureaucracy, encouraging innovation and increasing the personalisation of services. The pilots were an opportunity to test different models to see what works well, and they were fully evaluated by King’s College, London.
My officials have now seen the draft final evaluation report. On the whole, the evaluation was positive, finding some evidence that the SWP model could work well. Because each pilot was set up and operated differently, it was difficult to make generalised findings, but the evaluation found evidence of better continuity of care and co-ordination; a more personalised “offer” to people in need of care and support; opportunities for reducing bureaucracy, often through greater autonomy; and increased job satisfaction and empowerment for staff working in the pilots. Ultimately, the evaluation found that the success of the SWP was largely dependent on the quality of the contract and the relationship with the host local authority. It found nothing to negate our policy intention to make such powers available to all local authorities.
This order is crucial to allow the organisations set up under the SWP programme to continue to operate legally, subject to contractual arrangements with the host local authority. Not creating the order would mean that the functions would have to come back to local authority control, undermining the hard work and progress made under the pilot programme and potentially impacting on people receiving services through this route.
As the evaluation was largely positive, this new order seeks to extend the powers of delegation to all local authorities. We know from working closely with the Cabinet Office mutual support programme—a £10 million fund to support the creation and growth of public service mutuals—that several local authorities are already keenly watching the SWP programme, as they are also interested in gaining these powers. Others have contacted us about early adoption of such powers to support them in preparing for implementation of the Care Bill. The order will allow them and others to put in place necessary mechanisms to develop innovative service models, such as mutuals, to serve local populations in advance of the Care Bill. The findings from the SWP evaluation will be beneficial to all local authorities, and we shall publish them in full in due course.
This proposed extension to all local authorities is also consistent with the future policy of delegation of certain statutory adult social care functions. Clause 78 of the Care Bill provides for a general power of delegation of adult social care and has been developed through engagement with local government colleagues and wider social care stakeholders. Indeed, it has been part of the Bill from the very first iteration that we published. Furthermore, this clause has also been agreed by noble Lords and in the other place. The order therefore also bridges the policy gap until the Care Bill comes into force. Subject to Parliament, we plan for this to be on 1 April 2015. When enacted, Clause 78 will provide for a general power of delegation and the order will serve only for any transitional arrangements.
We know from working with the SWP pilots and through the evaluation that setting up a contracting-out process takes time. The order allows interested local authorities to begin this process now to assist them in preparing for implementation of the Care Bill, as well as providing security for the existing SWP sites. We are also currently working on statutory guidance to accompany the Care Bill, and the findings from the evaluation will be valuable in informing the guidance on delegation. We are working closely with adult social care stakeholders on the development of this guidance and will publish it for consultation in May of this year. This will also be useful for any local authorities seeking to consider use of this power in advance of the Care Bill being enacted.
In considering the need for the order, we have listened to the advice of representatives from the SWP sites, to ADASS and to colleagues from the Cabinet Office mutuals programme. In conclusion, we see the order as one that fully supports the aims set out in the Care Bill and the general adult social care reform programme. It will allow the continuation of existing innovative ways of working and the creation of new ones in order to benefit individuals and communities as a whole. I commend the order to the Committee.
Baroness Brinton (LD)
My Lords, it is encouraging that the results from the social work practices pilots are very positive. Phrases like “innovative”, “flexible” and “less bureaucratic” are very important to begin to change the culture in the way people work. It is also as important that the real personalisation of services is balanced by the job satisfaction of staff.
The Explanatory Notes that accompany the order are almost entirely positive. I picked up a slight nuance in the Minister’s comments. I wonder if there were any identifiable less positive or concerning features about which it might also be worth advising local authorities in how they are going to be commissioning work in the future. Apart from that, it is inevitably unfortunate that there is a short notice period that this is intended to cover, before the Care Bill comes in. At least there will not be a gap now, which is to be praised.
Lord Hunt of Kings Heath (Lab)
My Lords, I should have declared on the previous order—and do on this order—my chairmanship of the Heart of England NHS Foundation Trust and that I am president of GS1 and a consultant and trainer with Cumberlege Connections. I am happy to support this order. I think it is the third time the noble Earl has been before the Committee to present such an order and, as I understand it, it is an interim measure until the Care Bill is enacted; the noble Earl has said that that is expected to be on 1 April 2015.
To pick up the point raised by the noble Baroness, Lady Brinton, I suppose it would have been helpful if we could have seen the draft of the final evaluation report at this point—it is now not going to be published until April. The noble Earl referred to some of the main findings of the draft final evaluation report from King’s College. He said that it was mainly positive although there were clearly some issues, which are identified in paragraph 7.6. Perhaps he might like to say a little more about that.
Perhaps I could also ask the noble Earl about right to control. This was considered in the previous order, and in this order a reference is made to the fact that decisions on the future of the right to control pilot scheme have yet to be made and hence no provisions are included in the new order in this regard. When we debated this on 20 November 2012, the noble Earl referred to the interim evaluation of the right to control programme, published in February 2012, which showed that disabled people were benefiting but there simply was not enough evidence to make a decision on a wider rollout. He went on to say:
“Clearly, an extension of the kind that we seek will give us more evidence. The early signs are positive but that does not provide the basis for a robust decision on permanent arrangements”.—[Official Report, 20/11/2012; col. GC 150.]
Has the department now given this further consideration? Can the noble Earl say why no decisions on the future of right to control have yet been made and when he thinks such decisions will be made?
Earl Howe
My Lords, I am grateful to both noble Lords for their comments and questions. They both asked whether in the draft report from King’s we found any negative advice about the results from the pilots. I think the answer is no but it is worth repeating what I alluded to in my initial remarks—that King’s commented that the success of the pilots critically depended on the quality of the contract and the relationship with the local authority. The pilots that worked best were those where those two things had been got right. However, there was nothing to negate our general policy intention to roll out the right of delegation more widely. When the evaluation is published—I, too, have not had the opportunity to have sight of it yet—I am confident that it will be helpful to local authorities looking to delegate functions and I am sure we can be grateful to the team who put the report together for a very thorough piece of work.
The noble Lord, Lord Hunt, asked me about the right to control pilots. As he will have noticed, the order before us does not cover the right to control them. The pilot finished in December 2013. It was considered that there was no need to continue the pilot, which is currently being evaluated. Unfortunately, I cannot tell him when an announcement will be made on that issue but as soon as I am made aware of the date I will be happy to inform him of it. However, we were clear that the order before the Committee today need confine itself only to the matters to which I have already referred.
Legislative and Regulatory Reform (Regulatory Functions) (Amendment) Order 2014
Viscount Younger of Leckie
That the Grand Committee do consider the Legislative and Regulatory Reform (Regulatory Functions) (Amendment) Order 2014.
Relevant document: 20th Report from the Joint Committee on Statutory Instruments
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie) (Con)
My Lords, I beg to move that the Committee considers the two complementary instruments that the Government have laid. I will discuss each instrument in turn.
First, the Regulators’ Code is an update of the Regulators’ Compliance Code, which was first published in December 2007, and I acknowledge the work that the previous Administration did on this. This is a statutory code of practice which sets out principles that should be applied by regulators when they are determining their policies and when they are setting standards and giving guidance.
Viscount Younger of Leckie
My Lords, the code provides a flexible framework that individual regulators can apply in a proportionate manner. It supports and enables regulators to design their service and enforcement policies to best suit the needs of their service users, while allowing resources to be focused on the non-compliant. The Regulators’ Code encourages greater transparency in the way regulation will be delivered, encouraging trust, open dialogue and accountability between regulators and those that they regulate.
The code applies to a wide range of people exercising non-economic regulatory functions, including more than 60 national regulators, from the large regulators, such as the Health and Safety Executive and the Environment Agency, to much smaller regulators, such as the Sports Ground Safety Authority and the assay offices, which happen to be part of my intellectual property portfolio.
The code also applies to a number of regulatory functions exercised by Ministers and those exercised by all 433 United Kingdom local authorities. Such diversity, not only in size and resource but in purpose, has been considered in developing the code, which is flexible in its nature. It does not add burdensome requirements, and regulators can apply the principles in a proportionate manner to suit local demands. Regulators are obliged to have regard to the code, but this duty is subject to any other requirement affecting the exercise of regulatory functions. This means that the duty to comply with the code is a secondary objective. It does not undermine the regulator’s primary protection duties.
This revised code has been produced in response to a post-implementation review carried out in 2012 and an eight-week consultation on a revised code in 2013. Both the review and the consultation found that regulators had generally accepted the code and its principles-based approach. National regulators had by and large adopted the principles into their enforcement policies. The Health and Safety Executive, for example, has a clear explanation on its website detailing how it meets the provisions of the code, including the use of risk assessment to guide its regulatory activity. The Forestry Commission is also a good example of a regulator which has adopted the code principles. Its enforcement policy details how enforcement activity is carried out in accordance with the code and principles of good regulation.
However, we found that there was nevertheless room for improvement. First, we found that many local authorities had not consistently adopted the principles. For example, enforcement policies could not be located on 15% of the local authority websites reviewed. Where local authorities had published enforcement policies they were not fully compliant with the principles of the code. Secondly, there was a lack of transparency about how regulation would be delivered, and we received feedback that some of the code’s provisions were overly prescriptive and burdensome. Thirdly, business representatives felt that the code had failed to promote open and early dialogue with regulators because visibility of the code among businesses was low. Many businesses had little or no knowledge of the code’s existence.
The updated Regulators’ Code builds on the experience of and lessons learnt from the existing Regulators’ Compliance Code. It adopts five principles which were in the previous code. The first principle is that regulators should carry out their activities in a way that supports those they regulate to comply and to grow. The second principle is that regulators should provide simple and straightforward ways to engage with those they regulate and to hear their views. Thirdly, regulators should use risk assessment methodologies to support their regulatory activities. Fourthly, regulators should share information about compliance and risk, and fifthly, regulators should ensure that clear information, guidance and advice are available to help those they regulate to comply. In response to the feedback we received, the new code also includes a sixth and final principle that regulators must ensure that their approach to their regulatory activities is transparent. The code encourages regulators to do this by publishing service standards which set out what business and the public can expect from their regulators. The other significant difference is that the provisions in the revised code have been simplified so that the code is now clearer in setting out expectations and, as a consequence, it is also much shorter.
The revised code was published in draft in July 2013 and the Better Regulation Delivery Office has organised a series of UK-wide awareness-raising events and training sessions since then. This has ensured that regulators have had time to review their existing policies and procedures and they have been assisted to meet the provisions of the code. In addition, the Better Regulation Delivery Office is continuing to work with regulators and bodies such as the Local Government Association to develop tools, including enforcement policy and service standards templates, to help regulators to comply with the code provisions. We have also worked extensively with the business community and trade associations to ensure that they are aware of the new code. As a result, we are confident that regulators will comply with the new code and that businesses will know what they can expect of their regulators when the code comes into force as soon as early April. In the unlikely event that a regulator does not comply with the provisions in the code and it is not able to provide any justification for departing from the principles, the Better Regulation Delivery Office will work closely with the individual regulator to remedy the non-compliance.
Businesses and their representatives will also be able to hold regulators to account by challenging any non-compliance with the code principles. In the first instance this could be through dialogue with regulators, and if that was insufficient, they could of course seek permission to judicially review any non-compliance. We believe that this will provide a sufficient incentive to encourage regulators to adopt the principles in the code.
I would like to stress that the introduction of this code will not add additional burdens or introduce more bureaucracy for regulators or businesses. As I have stated, the Regulators’ Code shortens and simplifies the provisions contained in the existing Regulators’ Compliance Code to make it easier for regulators to comply. It does not override any existing statutory requirements but sits alongside them. It will enable regulators to direct limited resources to the areas of greatest need, thereby reducing the bureaucracy and burdens on low-risk, compliant businesses.
I turn to the second instrument. The purpose of the regulatory functions order is to update the regulatory functions which are within the scope of the Regulators’ Code. These functions are subject to the statutory principles of good regulation set out in Section 21 of the Legislative and Regulatory Reform Act 2006.
The better regulation principles provide that regulatory activities should be carried out in a way which is transparent, accountable, proportionate and consistent. In addition, regulatory activities should be targeted only at cases where action is needed. The Government believe the better regulation principles and the Regulators’ Code should be applied by the broadest possible range of national regulators, Ministers and local authorities exercising non-economic regulatory functions.
To this end, we have consulted Monitor, the Groceries Code Adjudicator, the Regulator of Community Interest Companies and the claims management unit of the Ministry of Justice, which have agreed that their functions should be in scope of these statutory provisions. The 2014 order therefore adds these bodies to the list of those already in scope.
It is my firm belief that the revised Regulators’ Code and order extending coverage are important parts of the Government’s overall package of better regulation measures. They are an important step in developing modern, open and transparent approaches to regulatory delivery. I therefore commend this order and the Regulators’ Code to the Committee.
Lord Curry of Kirkharle (CB)
My Lords, I support this change. I need to declare an interest. I chair the Better Regulation Executive and work very closely with the Better Regulation Delivery Office. I am tempted to say that I regularly meet the regulators, both individually and collectively. I have created a forum, the better regulatory outcomes group, where we meet regulators on a three or four-monthly basis. It was at such a meeting that we floated the concept of revising the code in the first instance. The regulators were very supportive of this, in that many of them are already adopting the principle of the code, as the Minister has said—but it was inconsistent. They recognise that, today, with better regulation being a high priority for government and the encouragement of economic growth being of paramount importance for the economy, for regulators to be seen to be supporting growth and encouraging companies to grow is of higher priority than it was when the original codes were introduced. I therefore commend this change to the Committee and firmly support it.
Baroness Hayter of Kentish Town (Lab)
My Lords, I thank the Minister for introducing the draft order and the code, and particularly for the extension in scope to the other regulators. It is perhaps worth the Committee remembering, as it is perhaps not evident from the code or from what has been said, that the main purpose of regulation is to promote and protect the interests of consumers, particularly in sectors where market forces alone would not deliver the best outcome or where consumers cannot effectively alter service delivery. That is what regulators are all about: in a way, they are standing in the shoes of users or consumers to make sure that they get a fair deal.
Just 52 years ago this month, on 15 March 1962—which is why we will have World Consumer Rights Day this weekend—in a special message to Congress on protecting consumer interests, President Kennedy wrote that all of us deserve to be protected against fraudulent or misleading advertisements, of the right to be protected against unsafe or worthless products, and of the right to choose from a variety of products at competitive prices. He went on to outline the steps taken in America to increase the inspection of foods and improve safety on the highways, and to cut back on deceptive trade practices and high utility bills—it all sounds familiar, does it not?—while recommending,
“a law to require consumers to know how much they are being charged in interest”,
plus,
“laws to tighten safeguards against monopolies and mergers which injure the consumer interest”.
Some of those measures are not caught by what we are looking at today, but it is interesting that he described them as being,
“immensely important to the well-being of every American family”.
That is what we should concentrate on today because similar things are of interest to every British family. Therefore, it is worth looking at whether the code measures up to what is demanded of it.
As has been suggested, there is much in the code to be applauded. It calls for clarity of language, clear expectations, reduction of unnecessary bureaucracy and petty rules, and less duplication of information requests, which is clearly very important. These things are vital for the effective working of any regulator. However, I wonder whether the Government have looked at the code as it applies to themselves, given the incredible red tape they introduced under the transparency Act that was imposed on trade unions and charities where no mischief had been identified. It would be interesting to know whether the Better Regulation Task Force could look at the Government to see whether they had measured up to their expectations of the code.
Perhaps the concern of any consumer representative is that this code seems to be all about working with the regulated community. We should remember that on the whole we are talking about industries which, for whatever reason, cannot be trusted to treat the customer fairly without a regulator, or to be responsive to the needs of users. However, there is nothing in anything we have heard or read about the regulator listening to or consulting those whose interests the regulators are meant to promote. This is very different from the position of the two other main regulators for financial services and legal services respectively, where consumer panels are required by statute to ensure that the end user’s view is fed into the regulators’ work. There are also, quite rightly, practitioner panels because obviously we want regulation, as far as possible, to work with the grain, to be practical, and to encourage the provider to do the right thing without the regulator having to come knocking on their door.
However, consumers also have a role to play. Without an input from consumers and their representatives, we would not have achieved redress for tenants and landlords who use letting agents, or for complaints against CMCs. What was not being done by the regulator of CMCs is now covered, fortunately, by this code. We know that the regulation of letting agents and CMCs was inadequate. The regulators had not addressed consumer needs adequately, as evidenced by the amount of complaints and consumer detriment which built up. Therefore, I worry about whether we are listening only to providers and not to the people affected by them.
It is the case that regulators need real teeth to be effective. It was, of course, your Lordships’ House which managed to convince the Government to give the Groceries Code Adjudicator proper teeth from day one. That success improved the legislation, so having real teeth matters in order to protect consumers. It is our contention that regulators and those who oversee them should feel the need to hear from and represent the consumer interest. Under the Legal Services Act 2007, the regulator’s objectives include,
“protecting and promoting the public interest”,
and “the interests of consumers” as well as “promoting competition”. The Act requires the Lord Chancellor, when appointing the LSB board members, to have regard to the desirability of appointing people with experience or knowledge of consumer affairs, the handling of complaints, and the differing needs of consumers.
Viscount Younger of Leckie
My Lords, I thank the noble Lord, Lord Curry, and the noble Baroness, Lady Hayter, for their comments and, if I read it correctly, their broad support for this order. It is particularly nice to have good support from the noble Lord, Lord Curry, in the light of his current role.
At the beginning of her speech, the noble Baroness, Lady Hayter, quoted some interesting comments from President Kennedy back in 1962, which I thought was really rather nice. It shows that this is something that goes back decades, and not just in this country. Consumer interests and consumer-facing issues are matters that cross boundaries and continents and remain, as we know particularly in this country, quite a live issue. Following that, the noble Baroness raised the issue of proper protection for the consumer. The Regulators’ Code promotes proportionate, consistent and targeted regulatory activity in relation to consumer regulation and other protections. We believe it takes appropriate action when non-compliance is identified. The noble Baroness also raised the issue of letting agents. She is well aware that there have been debates recently—indeed there is one this very day—in the other place on the Consumer Rights Bill. I know she is definitely well up on that particular issue and indeed takes a lead in debating it.
The noble Baroness asked a substantive question about the consultation, and I will spend a little time explaining the length and depth of the consultation. As I said earlier, the public consultation lasted eight weeks. It opened on 8 March 2013 and closed on 3 May 2013, with 95 responses received from a variety of organisations. There were 14 responses from national regulators, 37 from local authorities, 20 from business and trade associations, and 17 from professional bodies. To give a general overview, business respondents were generally supportive of the draft revised code and the provisions contained within it. They highlighted the shorter, clearer nature of the revised code, which would make it easier to know what they can expect from regulators. The substantive responses included the following: businesses welcomed the focus on the need for regulators to provide advice and guidance. They suggested that publication of service standards would lead to increased transparency and accountability, but felt there was a need for greater clarity around the notion of growth. This was also raised by the noble Lord, Lord Curry. They were also concerned that the revised draft code did not have sufficient strength and that regulators would not fully comply with the provisions.
Local authorities were generally supportive of the principles but expressed concerns that the detailed provisions were too prescriptive and would therefore impose additional burdens. The authorities stressed the fact that the revised code put too much emphasis on requirements for regulators and not enough on recognising the responsibilities of businesses. They were also concerned about the potential use of the code as a mechanism for challenge and the cost considerations of additional appeals procedures.
National regulators held rather more mixed views. Some felt that the provisions were too burdensome and were concerned about possible legal challenges, while others were positive about the opportunity to engage with the business community. National regulators commented on the need for any measurement and process to be proportionate to regulatory activity. Finally, they argued that culture change was important—I add my own strong support for that—to embed the code’s principles, and that training and leadership can assist with this. I could go on but I hope that gives a substantive and full overview of the response. I will be more than happy to write to the noble Baroness should she wish for more substantive detail.
Baroness Hayter of Kentish Town
Will the Minister confirm that no views were sought or received from consumer representatives?
Viscount Younger of Leckie
There are no consumer representatives mentioned in my brief. However, in addition to the ones I have mentioned, 20 business and trade associations responded to the consultation and there were meetings with the National Consumer Federation. I am more than happy to write to the noble Baroness to clarify the relationships and contacts we have had on this with consumer representatives.
Lord Curry of Kirkharle
I am not sure whether it is on the list, but Citizens Advice is in the forum I established with regulators. It was represented and certainly took part in the initial discussions regarding the revised code.
Viscount Younger of Leckie
I thank the noble Lord, Lord Curry, for that intervention and hope the noble Baroness, Lady Hayter, will find it helpful. The noble Baroness also raised the issue of legal services. The Legal Services Board is subject to the regulatory principles in the Legal Services Act. The Regulators’ Code sits alongside those principles and does not override them.
I remind noble Lords that the purpose of these two complementary instruments is, first, to revise and update the current Regulators’ Compliance Code with the draft Regulators’ Code. The second instrument updates the regulatory functions that are currently within the scope of the Regulators’ Code and the principles of good regulation. The Regulators’ Code encourages transparency and accountability in the relationship between regulators and those they regulate. It enables regulators to direct resources to the areas of greatest need, reducing bureaucracy and ending the culture of tick-box regulation. I commend both the Legislative and Regulatory Reform (Regulatory Functions) (Amendment) Order 2014 and the Regulators’ Code to the Committee.
Regulators’ Code
Viscount Younger of Leckie
That the Grand Committee do consider the Regulators’ Code.
Relevant document: 20th Report from the Joint Committee on Statutory Instruments
Income Support (Work-Related Activity) and Miscellaneous Amendments Regulations 2014
(10 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Bates
That the Grand Committee do consider the Income Support (Work-Related Activity) and Miscellaneous Amendments Regulations 2014.
Relevant documents: 20th Report from the Joint Committee on Statutory Instruments, 29th Report from the Secondary Legislation Scrutiny Committee
Lord Bates (Con)
My Lords, these regulations were debated in the other place on 3 March 2014 and I am satisfied that they are fully compatible with our obligations under the European Convention on Human Rights.
The Government have made clear their commitment to improving sustainable employment opportunities and reducing worklessness, while supporting those who are unable to work or who are looking for work. Helping more people into work is essential to the recovery of the economy and to ensuring that people can achieve their aspirations and those of their families. Given this, we remain committed to giving people the support they need at the time it is needed.
The Government have already taken steps to provide additional support for lone parents but believe that more could and should be done to help them prepare for work. This is the reason for these regulations, which essentially provide for two separate changes. First, these regulations would bring income support into line with employment and support allowance by making the work-focused interview regime more flexible and responsive to individual needs. Secondly, they would make changes to income support, employment and support allowance, and universal credit in order to offer more support for lone parents with children aged three or older by requiring them to undertake appropriate activities that will help them prepare for work.
Since 2008, the age threshold for the youngest child has changed so that from May 2012 lone parents with a youngest child aged five or over have no longer been entitled to claim income support solely on the basis of being a lone parent. Such lone parents should either be in work or looking for work. We know that many lone parents are already taking steps in preparation for a return to work but we also know that many more lone parents would benefit from additional support to overcome barriers to future employment.
It is worth reflecting on the current position for attending mandatory work-focused interviews, which varies according to the benefit an individual is awarded. Lone parents with a child aged one to five who are entitled to income support are usually required to attend mandatory work-focused interviews every six months. In the year before entitlement ends, interviews take place on a quarterly basis. Lone parents on employment and support allowance with a child aged one to five attend flexible work-focused interviews, with the frequency determined by their work coaches. Under universal credit, lone parents and responsible carers with a child aged one to five also attend flexible interviews, the frequency of which is determined by their advisers.
From April, these regulations will bring in mandatory work-focused interviews for lone parents on income support, in line with the approach already taken for employment and support allowance and universal credit. The frequency of interviews will be determined by the adviser based on the needs of the individual. It means that a tailored package of support can be offered to lone parents at the time they need it rather than at predetermined times set by an inflexible appointments system. The Government believe that this approach will better serve lone parents to prepare for work. As the House has already agreed to this principle in universal credit and employment and support allowance, I trust that noble Lords will not see any reason to oppose this measure.
Secondly, these regulations change the work-related activity requirements for income support, employment and support allowance and universal credit. It might be helpful if I remind noble Lords of the current position. In the existing system, there is no requirement to undertake work-related activity within income support for any claimant. The current position in employment and support allowance is that lone parents in the work-related activity group can be required to undertake work-related activity when their youngest child is five. Currently, there are no requirements in universal credit for lone parents with a child aged one to four to undertake activities to prepare for work.
The mandatory work-related activity changes will affect lone parents and responsible carers with a youngest child age three or four who are entitled to income support solely on the basis of being a lone parent, those in receipt of employment and support allowance—in both the work-related activity group and new-style employment and support allowance—and those in receipt of universal credit.
The regulations remove the cliff-edge effect of going from not having any work requirements to having full work requirements that is currently faced by many lone parents when their youngest child reaches the age of five. The Government recognise that for many lone parents the main barrier to work or preparing for work has been the lack of affordable childcare. However, the Government have taken steps to improve this position. All children in England aged three and four are now entitled to free childcare for 15 hours a week. We expect lone parents and responsible carers to take advantage of this provision where they can so that they can start preparing for work. Childcare is a devolved matter and Scotland and Wales have their own equivalent offer.
Baroness Sherlock (Lab)
My Lords, I thank the Minister for that explanation. Labour supports the aim of these regulations. Indeed, the leader of the Opposition said in a speech last June that in a workless household, both partners or a single parent should use some of the time while their children are at nursery to make some preparations that would help them get back to work. He also stressed that there would be no requirement to go back to work until the youngest child is five years old. So we support the aim of these regulations.
When this order was debated in another place, my right honourable friend Mr Stephen Timms asked a series of questions of the Employment Minister, Esther McVey. She was able to answer only two of them and perhaps not in the depth that my right honourable friend had hoped for. I shall therefore put some of the same questions to the Minister in the hope that the intervening week will have enabled his officials to brief him to answer them perhaps more fully than was possible on that previous occasion.
First and most seriously, why is there no easement in the regulations for lone parents who have suffered domestic violence? I acknowledge that the Government have taken domestic violence seriously. In this very Room not so long ago, we debated the new cross-government definition of domestic violence and I was pleased to give the Government support for aiming to do precisely that. In the Universal Credit Regulations 2013, there was a clear easement for domestic violence which stated that, for 13 weeks, there would be no work-related requirements. In jobseeker’s allowance, the claimant is exempt for four weeks, which can be rounded up to 13 weeks. But in these regulations, there is nothing.
On 3 March in the Delegated Legislation Committee in another place, Stephen Timms asked Esther McVey this question:
“Can she confirm that it is her intention that there will be guidance that makes it clear that there will be the 13-week easement for people who suffer domestic violence, in line with other regulations?”.
The Minister replied:
“I will indeed; it is right that, as such support is given in other areas, it should be given in this area”.—[Official Report, Commons, First Delegated Legislation Committee, 3/3/14; col. 14.]
Can the Minister confirm that it is indeed the Government’s intention that there will be guidance that makes it clear that there will be the 13-week easement for people suffering domestic violence? If so, can he explain why that is not in these regulations, as it is in the corresponding regulations on income support and jobseeker’s allowance? Finally on this first point, can he explain what a lone parent would have to do if a decision-maker should require her to undertake some work-related activity despite suffering domestic violence? After all, Gingerbread reports many cases of lone parents being pushed to do things which they are not required to do by regulations or by guidance, perhaps because of a misunderstanding among generalist advisers in jobcentres. What should a lone parent do in these circumstances?
The second question that I want to ask is on the issue of parents of children aged five who have not started school and are not legally required to receive full-time education. Parents have to explain why it would be unreasonable for them to find other arrangements for the care of the child until he or she is in full-time education. Why is that easement not in these regulations?
Thirdly, under the regulations and as the Minister explained, single parents cannot restrict their availability for work-related activities during their child’s normal school hours—which is to be expected—or when their child is under the temporary supervision of another adult. Gingerbread is concerned that the latter issue causes a potential problem, because it means that a single parent could be sanctioned for being unable to undertake work activities because informal childcare arrangements had broken down. The Minister may say that childcare is covered in the “good cause” provisions, but that is not acceptable because of the process that would have to be gone through to try to sort that out. In JSA, informal childcare is not taken into account when compliance is being determined, presumably for precisely this reason, so why is it here?
What would happen to a single parent asked to attend an interview or other work-related activity whose three or four year-old was not in nursery and who did not have access to reliable free childcare? How should she pay for childcare? In another place, when Stephen Timms asked about this, Esther McVey referred to the childcare subsidy available for the first year when a parent first starts work. She also referred to Childcare Assist, which helps with childcare costs in the week before a single parent starts work. What about someone who is not working and not required to work? How should she pay for her childcare in these circumstances? Gingerbread suggests that Jobcentre Plus should pay for the childcare. What does the Minister think of that?
Finally, there is the question of travel time. The JSA and universal credit regulations place a limit of 90 minutes’ travel time to and from an interview. Can the Minister confirm that that limit will apply also to single parents undertaking work-related activity? If so, will that be made clear in the guidance to decision-makers? I look forward to the Minister’s reply.
Lord Bates
I am grateful to the noble Baroness for her response and for generously saying that support for this initiative in preparing people for the world of work is shared across parties. When we are dealing with some of the most vulnerable people in the country, it is important that, as far as possible, such agreement exists.
The noble Baroness referred to domestic violence. Again, I preface my remarks by welcoming the fact that she acknowledged that the Government had taken this very seriously and it was of great concern. We do not believe it is necessary to put an easement for domestic violence into these regulations. The draft regulations are flexible enough for advisers to apply the policy when appropriate. The income support guidance will reflect the position in jobseeker’s allowance and universal credit by stating that when a person satisfies the policy requirements, they are eligible to receive the easement, which includes deferring interviews and not setting mandatory work-related requirements. Providing the domestic violence easement in guidance mirrors the current approach taken for claimants who are victims of domestic violence and abuse who are entitled to old-style employment and support allowance.
We believe that these regulations are broadly enough worded for that to be taken into account as a good reason why certain requirements may not be met. We do not think it is necessary to put it in the regulations, as has been requested. But in response to Stephen Timms in the other place, my colleague Esther McVey, who is the Minister responsible for this area, has said that she will issue guidance in this area to the workplace advisers. I hope that will go some way towards reassuring the noble Baroness on this point.
The noble Baroness asked what would happen if the coach made a claimant do something despite them being subject to restrictions. The requirement to undertake activity when subject to domestic violence would be a matter of good cause to be considered, and would also be subject to appeal if that was something that was disputed.
Baroness Sherlock
I just want to be sure that I have understood this correctly. Three questions occur. First, why would the Government use as their comparator the position in old-style ESA rather than JSA or universal credit—the creature of their own invention, which they have just introduced? What is the difference between somebody on universal credit and somebody on income support? Secondly, will the Minister clarify that the guidance he has just referred to will be for a 13-week easement? That was the question asked by my right honourable friend Stephen Timms. Thirdly, if a lone parent who had suffered domestic violence was then inappropriately asked to engage in work-related activity, she could appeal, but would her benefits be sanctioned in the mean time, and how long does the average appeal take? What would happen to her while she was trying to sort that out?
Lord Bates
While I am getting some guidance myself, I will move on to some of the other points that the noble Baroness raised. She asked: if childcare is not available, is this an excuse not to undertake a work-related activity? We have no power to mandate claimants to place their children in childcare in order that they can undertake work-related activity. Claimants may also restrict their availability for work-related activity to times when they do not have childcare responsibilities. However, claimants cannot use the unavailability of childcare as a reason for not undertaking work-related activity. Even with the ability to restrict their availability, the requirement to undertake work-related activity remains. Claimants must accommodate this requirement or face the possibility of sanction. Claimants would therefore need to be reasonable about what they could do, which may involve taking up the offer of free childcare. If a claimant fails to comply with work-focused interview or work-related activity requirements, the regulations prescribe that the availability of childcare must be taken into account in determining whether that is a good cause, although it is not determinative of good cause in itself.
The noble Baroness asked about comparisons with jobseeker’s allowance and universal credit and the limit of 90 minutes’ travel time to and from the place of interview. A 90-minute travel time to work in each direction applies to those claimants who are expected to look for, and be available for, work. It does not apply to lone parents affected by this change, not does it apply to claimants on employment and support allowance. Any work-related activity which a claimant is required to undertake must be reasonable, taking the claimant’s personal circumstances into account, including the time that it would take for the claimant to get there. When determining what is reasonable, matters such as the availability and practicality of using public transport, the location of work-related activity and childcare responsibilities must be considered. Guidance will be updated to ensure that advisers are aware of this and take account of claimants’ individual circumstances.
Another question was about what support the group could get from the flexible support fund. The flexible support fund can be used in a number of ways, including paying for travel and replacement adult or child care to enable lone parents to undertake training, attend interviews or start work.
On why we use comparator old-style ESA, not JSA or universal credit, the JSA easement is for jobseekers. The ESA easement is in guidance. We will consider the need to place this in regulations.
Baroness Sherlock
I thank the Minister. I urge him strongly to take the question of domestic violence back to his colleagues and to think again. I take the Minister’s line as possibly a hint that Ministers may indeed be doing that; I hope very much that I have not overinterpreted it. I look forward to hearing some more information about that. I do not think that the distinction between someone being a jobseeker or not seems to be a good reason why someone who has suffered domestic violence should be treated any differently. If one is coming out of that circumstance, the ability to look for a job, whether mandated to do so, or just to prepare for it, would both seem to be of comparable difficulty and ought to be treated similarly. I look forward to hearing some good news on that before long.
I want to clarify a couple of the Minister’s other points as I may have misheard them. When this matter was discussed in another place, the question of childcare—particularly the position of someone whose child was not in nursery having to use informal childcare—my understanding was that the Government’s position was that the additional childcare offer for two and three year-olds is an offer, not a requirement. I understood the Minister to say that, effectively, a lone parent would not be able to use the fact that he or she might not have access to any suitable childcare as a reason not to engage. Therefore, if they could not find anything else, they would have to take that offer up, whether they wanted to or not, or have their benefits sanctioned. Can the Minister clarify that?
On travel time, I am quite surprised to find that there is no limit. Can the Minister at least reassure the Committee that the guidance will say that one should not be expected to travel for three hours each way to do a brief interview or course? In a sense, the point of having a timeframe is that it is a time limit. If that time limit applies for a job, why would it not apply to a course or some other thing that the department might require the lone parent to do? Can the Minister reassure the Committee that there will be some limit, or some guidance, at least, given to decision-makers as to what a reasonable limit would be?
Lord Bates
On that point, we can safely say that that limit is consistent across JSA and ESA, and therefore the 90 minutes would continue to be the restriction. The whole point of this is to encourage an engagement to prepare people for their place of work, and therefore there is a degree of flexibility on both sides. On whether the 13-week easement in the case of domestic violence would still apply, the answer is yes.
On whether that guidance is still being formulated, of course, we introduce regulations and I would like to think that where we have had drawn to our attention certain lacunae in the regulations, particularly where they affect vulnerable people, we have shown a willingness to pause and look carefully at that. I am sure that when the guidance is issued, that will provide an opportunity for that to happen.
Baroness Sherlock
I thank the Minister for his graciousness in allowing me to intervene. There was one more issue, which was that of parents of children aged 5 who have not started school and are not legally required to receive full-time education, and why that easement was not in the regulations. I suspect the answer may be patterned on some of his previous answers.
Lord Bates
I wonder whether the noble Baroness will bear with me and allow me to write to her on that specific point. I will also seek to follow up on some of the other points which have been raised. I understand the point and want to give an accurate response as opposed to a rushed or hasty one. I am very grateful to the noble Baroness for the interest she has shown in this change.
I hope that I have set out for the Committee the matters behind the regulations and have responded to the issues raised by noble Lords. Therefore, I commend these regulations to the Committee.
Occupational and Personal Pension Schemes (Automatic Enrolment) (Amendment) Regulations 2014
(10 years, 9 months ago)
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Lord Bates
That the Grand Committee do consider the Occupational and Personal Pension Schemes (Automatic Enrolment) (Amendment) Regulations 2014.
Relevant document: 21st Report from the Joint Committee on Statutory Instruments
Lord Bates (Con)
My Lords, I am pleased to introduce this draft instrument, which was laid before the House on 3 February 2014. I am satisfied that it is compatible with the European Convention on Human Rights. The instrument makes amendments to two of the 2010 automatic enrolment regulations. These are technical amendments but the consequences of the changes are not insignificant. Broadly, they seek to ensure two things: first, that employers using good-quality career average pension schemes are able to do so without any unnecessary impediments; and secondly, that all employers using hybrid pension schemes under automatic enrolment are treated alike in terms of phasing in minimum contributions.
First, I will set out the reasons for the more substantial changes to the regulations, which relate to the revaluation of benefits in career average pension schemes. To be used as a qualifying scheme for automatic enrolment, in addition to satisfying the quality requirements for defined benefits schemes, a career average pension scheme is required to revalue accrued benefits by at least a minimum level while the member is in employment. This is so that the value of the benefits is given a degree of protection against the effect of inflation. Final salary schemes do not need this revaluation in service because historically salaries have tended to at least keep pace with, if not outstrip, inflation.
The minimum level required by the regulations is an annual increase by reference to the general level of price inflation—either the retail prices index or consumer prices index—up to a ceiling of 2.5%. There are problems with this requirement, which, without the amendments we are proposing today, would prevent good-quality career average schemes from being used as qualifying schemes. Schemes that revalue accrued benefits by reference to the change in average earnings rather than prices cannot guarantee that they will meet the minimum level required going forward, so would currently be excluded from qualifying by regulations.
The amendments would allow a longer-term view to be taken. Schemes in the scenario I have described—those that revalue by the change in average earnings or potentially by reference to another measure—will not be excluded from being qualifying schemes so long as the scheme’s funding and statement of funding principles assume that revaluation will be at or above the minimum in the long term. This provides consistency within regulations with schemes that revalue by reference to a discretionary power where funding assumptions can already be considered. It also allows schemes maximum flexibility over the method of revaluation they use, so long as it can be assumed from the scheme’s funding that the minimum level will be provided.
New public service career average schemes could have been excluded from qualifying under the current regulations; for example, if they revalue by average earnings. The new schemes are, of course, of sufficient quality to be used for automatic enrolment, and revaluation in service for all the schemes concerned will be by at least the change in prices or earnings uncapped. New public service schemes that revalue by reference to the planned annual Treasury order are explicitly provided for. If they revalue at the rate specified in the order, they will not be prevented from being a qualifying scheme. Explicit reference was needed in this way because such schemes are not able to consider funding assumptions in the same way as funded private sector schemes, which are required to have a statement of funding principles or an equivalent.
The technical issue regarding hybrid schemes was brought to our attention last year by stakeholders. We are grateful to members of the Society of Pension Consultants for raising it. Employers using hybrid schemes that provide money purchase benefits are intended to be able to phase in contributions during the transitional periods under automatic enrolment. The policy aim here is to allow employers to stagger their costs in the initial years of the workplace pension reforms. However, currently, where the money purchase element of hybrid schemes is certified against one of the sets of alternative requirements, schemes have not been able to do this. Schemes that certify against one of the sets of alternative requirements do so because, for example, the definition of pensionable pay in the scheme is not the same as qualifying earnings. The policy intention is that they be treated just the same as those schemes that explicitly meet the quality requirement. The amendment would ensure that hybrid schemes are able to phase in contributions regardless of how they demonstrate that they meet the money purchase quality requirement. This means that all hybrid schemes will be put on the same basis going forward. I commend this instrument to the Committee. I beg to move.
Baroness Sherlock (Lab)
My Lords, I thank the Minister for that explanation and I do not propose to detain the Committee long on this order.
For many years Governments of all complexions have looked at ways to encourage the UK workforce to save for their retirement. There have been several changes to pension legislation but none as big as the Pensions Act 2008 and the pension reforms that will affect every employer in the UK. Since October 2012 new regulations require every employer in the UK to enrol automatically their eligible workers—which will be almost everyone—into a workplace pension scheme.
I want to say how much I appreciate that this Government have given such strong support to auto-enrolment, which was begun by the previous Government but taken forward by the present one. We also welcome the Government’s policy intent in these regulations to allow schemes providing career average salary benefits to be used as qualifying schemes for the purposes of automatic enrolment. This is a positive step and has the support of the Opposition. The Opposition will continue to support the Government to ensure that auto-enrolment is a success and the move to ensure that both average salary benefits schemes and hybrid schemes are a part of auto-enrolment is also positive.
Lord Bates
I am grateful to the noble Baroness, Lady Sherlock, for that support. Auto-enrolment is very much a success story. The credit for the figures that are coming in transcends parties and Governments. It is also very encouraging for people providing for their retirement. With that support, I commend the regulations to the Committee.
Financial Assistance Scheme (Qualifying Pension Scheme Amendments) Regulations 2014
(10 years, 9 months ago)
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Lord Bates
That the Grand Committee do consider the Financial Assistance Scheme (Qualifying Pension Scheme Amendments) Regulations 2014.
Relevant document: 22nd Report from the Joint Committee on Statutory Instruments
Lord Bates (Con)
My Lords, I am satisfied that these regulations are compatible with the European Convention on Human Rights. The Financial Assistance Scheme provides financial assistance to members of certain occupational pension schemes who have lost a significant part of their pensions as a consequence of their scheme winding up or being underfunded. Generally, the FAS is limited to schemes that began to wind up before 6 April 2005. This is because the Pension Protection Fund deals mainly with schemes with insolvent employers from that date. However, schemes have been discovered which, for various reasons, fall between the two schemes: they do not qualify for the PPF, but they cannot get access to the FAS. There has been a long-standing principle that schemes should enter the PPF only if they have been subject to all the protection provisions such as funding and employer debt, and have been subject to the PPF levy. Nevertheless, successive Governments have accepted that it is not reasonable to leave members with neither assistance from the FAS nor compensation from the PPF simply because the qualifying events did not happen in a specific order. These regulations deal with one of these situations.
In order for a scheme to qualify for entry to the PPF there must be a qualifying insolvency event on or after 6 April 2005 relating to what is known as the “statutory employer”. To be such an employer, you must employ at least one active member of the scheme. In 2009, a scheme applied to be considered for the PPF. However, it was discovered that while the employer attached to that scheme did become insolvent in 2009, it was not the statutory employer. On further investigation it was found that the actual statutory employer became insolvent in 2002, before the PPF was established. Unfortunately, as this scheme did not begin to wind up until 2009, it is also unable to look to the FAS for help. Rather than leave the members uncovered, the Government have decided to extend the coverage of the FAS to encompass this scheme and any other scheme in these circumstances. That is what these regulations do.
Specifically, the regulations extend the FAS qualifying conditions to cover schemes which began to wind up between 23 December 2008 and before these regulations come into force, where the employer ceased to be a statutory employer before 10 June 2011, and where the employer became insolvent before 6 April 2005. These dates may appear to be very specific and perhaps I should explain why they have been chosen. The first condition of winding up between 23 December 2008 and before these regulations come into force reflects the fact that schemes which commence wind up before 23 December 2008 due to an insolvency event prior to 6 April 2005 are already catered for in the FAS regulations. The second condition is that the employer must have ceased to be a statutory employer before 10 June 2011. This date is the date that we announced our intention to make the extension. It was important to limit the potential scope of the extension in this case to prevent any incentives for employers to break links with schemes that they were supporting. The third condition of the insolvency event occurring before 6 April 2005 prevents overlap with the PPF qualifying conditions.
I hope that I have explained that these regulations are designed to ensure that members receive assistance from the FAS and I commend them to the Committee. I beg to move.
Lord McKenzie of Luton (Lab)
My Lords, perhaps I may put two brief questions to the Minister. There is no impact assessment attached to these regulations, but my recollection is that the FAS is funded from the public purse and not, as is the case for the Pension Protection Fund, from the levy. It may be that it is just de minimis in the scheme of things because we are dealing with only one identified scheme at the moment. However, I would be interested to know what the costs of this in terms of additional FAS spending might be. Perhaps the Minister might take this chance to update us on what the annual ongoing costs of the FAS currently are. Can the Minister also clarify for me, in relation to the particular scheme that has been identified, whether it had been paying the protection levy? If not, why was it outside of that?
Baroness Sherlock (Lab)
My Lords, I thank the Minister for his explanation and my noble friend Lord McKenzie for his, as always, insightful questions. I am very pleased to see the Government’s ongoing support of the Pension Protection Fund set up by the previous Labour Government. The PPF has made a substantial difference to people’s lives. As regards schemes including Woolworths, MG Rover and Turner and Newall, the members would all have had much lower pensions had it not been for the PPF and the Financial Assistance Scheme. I also welcome the Government’s continued support for that scheme.
I would like to ask a couple of specific questions. First, I recognise that the Minister is trying to close a specific loophole and obviously the changes relate to a particular case. I must confess that the Opposition are therefore unsighted on some aspects of this. Following on from the question of my noble friend Lord McKenzie, can he explain a bit more about the Government’s thinking in deciding to plump for the FAS as opposed to the PPF, rather than leaving the members of a scheme ineligible for either, because that would seem to be the key question?
Secondly, obviously, the Government have not brought forward an impact assessment for these regulations. The Explanatory Note was helpful in explaining the long gap between the consultation process and these being brought forward, but will the Minister confirm that there is a timescale for further consolidation of the regulations on which the Government consulted in 2011, and that an impact assessment will be brought forward to accompany those changes?
Lord Bates
I am grateful for those questions. In terms of context, we are talking about a specific scheme with a number of members—the George and Harding pension scheme. To answer the point made by the noble Lord, Lord McKenzie, the scheme had not been contributing to, or paying, the PPF levy and therefore was not able to claim under that procedure. Therefore, we are changing the relevant dates so that we do not break the contributory principle of the PPF but ensure that financial assistance is made available. The noble Lord, Lord McKenzie, is as astute as ever and I am sure that the noble Baroness, Lady Sherlock, as a former adviser in Her Majesty’s Treasury, will also be aware that Her Majesty’s Treasury did seek to have some idea of what the impact would be on the Exchequer. The estimated full cost of the FAS contribution is £600,000, which comes out of the Exchequer over time because, obviously, that will be the way that people will be compensated as and when the funds will need to be drawn down. That is also the reason for the specific dates because we are trying to cope with a specific scheme rather than giving an open-ended commitment. Having demonstrated this, I hope that we can point to the fact that, should similar gaps in certain schemes arise in the future, we will look very carefully at them without giving any cast iron guarantee.
Lord McKenzie of Luton
Can the Minister clarify whether the £600,000 is the net present value?
Lord Bates
That is the net present value of the cost of the scheme. Annual ongoing cost differs depending on the schemes taken in. I do not know how helpful that is but we try to be as fulsome as we can. Has the relevant firm been paying the protection levy? I have covered that point but that does not mean that it gets entry into the scheme. It was thought that the employer supporting the scheme was a statutory employer. I think that is the point we are dealing with here—the definition of a statutory employer. It was realised that it was not only after investigation. When will we consolidate the FAS regulations? As noble Lords know, there is a great deal happening in the pensions area, to be continued on Centre Court tomorrow, I think. This requires the department to prioritise its resources. The consolidation of the FAS regulations remains on the department’s work plan but I cannot give a definite date as to when the draft consolidation regulations will be laid before Parliament. I am grateful for the probing questions I have been asked. The noble Baroness, Lady Sherlock, looks as though she wants to come back in.
Baroness Sherlock
I thank the Minister for those answers but just want to push a little bit more on consolidation. Is there a difference in principle with how long one might wait after consulting before consolidating legislation? I am glad things are on the departmental work plan, but I gather it is rather a busy work plan at the moment and would be grateful for any hints. The other question I asked is whether, whenever that happened, an impact assessment would be brought forward at that point.
Lord Bates
I think I will probably need to write to the noble Baroness on those two points, again to ensure that we get absolutely the right answer. They are good questions and we want to make sure we get a correct response. I am grateful to the noble Baroness and the noble Lord, Lord McKenzie, for raising their concerns. I commend these regulations to the Committee.