Westminster Hall

Thursday 3rd April 2014 Westminster Hall

Thursday 3 April 2014

[Mr Andrew Turner in the Chair]

Backbench Business

Thursday 3rd April 2014 Westminster Hall

Incapacity Benefit Migration

Thursday 3rd April 2014 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Swayne.)

13:30

[Sheila Gilmore (Edinburgh East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Turner. I thank the Backbench Business Committee for giving me the opportunity to have this important debate. I hope that during the course of it, we can tease out some of the issues that remain.

The context is that the last Labour Government, as we know, replaced incapacity benefit, severe disablement allowance and income support on grounds of disability with employment and support allowance in 2008. Since then, the benefit has attracted a great deal of criticism. Under the Conservative Government between 1979 and 1997, the total number of people claiming the predecessor benefits that I mentioned more than doubled from 1.2 million to 2.6 million. That rate of increase slowed after 1997; total numbers peaked at 2.7 million and dropped to 2.5 million again by 2008.

I regularly hear Ministers say that the last Government did not care about that and that they tolerated people being on incapacity benefit, although clearly that had been happening for a considerable time. The rise under the Thatcher and Major Governments was due in part to a lack of any proper strategy to get people into work who had lost their jobs after the decline of heavy industry. There was a clear pattern: the number of claimants rose during that period in areas that had been major heavy industry areas, where jobs had been lost and people often had health problems resulting from their employment. Miners are an obvious example, but people in other heavy industries also suffered considerable health problems. During that period, people were almost encouraged to claim incapacity benefit rather than unemployment benefit, and we arrived at the situation that we had.

The position has not been static, however. It is interesting to look at the situation between 1999 and 2008. At some point over that period, 5.7 million people had their incapacity benefit closed, and 5.6 million new claims were made. The often made assertion that nothing changed, nobody moved and people were left to rot is not borne out by the statistics. There was perhaps more movement than people normally credit.

That said, the Labour Government—particularly at a time when unemployment had fallen considerably—wanted to consider who might be able to work even though they might have been unable to do their previous job. That is why we introduced employment and support allowance, which acknowledged that some people who are ill or disabled can work, given the right support when preparing to re-enter employment and after obtaining a job. It also acknowledged that although some people with particular conditions might not be able to work, others with the same condition might be able to, and that it is often better for people’s mental and physical health—I would certainly not want to dispute this—if they are working rather than staying at home.

The issue for many people is being able to get a job, being able to get support if they do get one and whether their employment conditions enable them to stay in that job. In my city, we had a BlindCraft firm, which was not part of Remploy but which, as its name suggests, had long provided for people with severe sight difficulties. It was closed on the basis that it needed a subsidy, which was a cost to the council that ran it, but it was a place where a lot of people got self-esteem, income and the feeling that they were part of their community because they could work.

The work capability assessment—the testing process that determines eligibility for the benefit—was designed to consider people’s functional capability rather than simply their condition. It was meant to identify what people could do, rather than what they could not. It was introduced in October 2008, but it soon became clear that ESA was not working as it should.

My interest in the matter was kindled when I was a parliamentary candidate between 2009 and 2010. I started from the perspective that we had to change things. I felt that the move away from incapacity benefit was not a bad idea in principle, but meeting people during that period convinced me that we had a problem. I met people who were still recovering from cancer but who had been found fit for work, as well as a young woman whose employment with the local council had been terminated because she was unfit to continue but who, within weeks, had been told she was completely fit for work.

All of that told me that far too many claimants were being incorrectly assessed as fit for work. Regardless of which Government had introduced the scheme, I was absolutely determined to come to Parliament to fight for changes to the system. At the time—this is a marker of whether the system is successful—one in 10 decisions were overturned on appeal. That is not one in 10 of all appeals, because 40% of all appeals were successful, but one in 10 decisions. That remains broadly the case today. In addition to the emotional costs faced by claimants and their families, the annual cost of appeals is about £66 million.

Those concerns were widely shared by advice agencies, charities and MPs, and were far more profound than any raised about incapacity benefit. In 2011, the Select Committee on Work and Pensions reported on the subject and concluded that the WCA was flawed. There are many examples of the impact on individuals and the distress and upset caused, and I do not intend to reprise them here, but we should never forget that this is about people.

The incoming coalition Government were largely unmoved by the concerns about the benefit that were already being widely expressed. They renewed Atos Healthcare’s contract for the face-to-face part of the WCA, reduced the time limit for receiving contributory ESA from two years to one year for people in one of the recipient groups and started the migration of people from incapacity benefit to the new benefit. The process of reassessment started with pilots in Aberdeen and Burnley in November 2010, was rolled out nationally in April 2011 and was due to be completed this month.

The Government have always given the impression that those policies would lead to a significant reduction in the total number of claimants. Upon commencement of the incapacity benefit migration pilots, the Secretary of State for Work and Pensions told the Evening Standard that

“there are around 2 million people receiving incapacity benefit, parked out of sight of any support system and at a cost to the taxpayer over the past decade of almost £135 billion. We estimate we will find around 23% of people fit for work immediately”.

On Second Reading of the Welfare Reform Bill in March 2011, he said:

“We are picking up an incapacity benefit system in which they left people parked, never seen by anybody for years and years.”—[Official Report, 9 March 2011; Vol. 524, c. 932.]

By November 2012, he had ramped up the rhetoric to such an extent that on one occasion, he claimed that he would get all the 2.5 million people who had previously been parked on incapacity benefit into work.

Has the migration, then, lived up to expectations? We now know that between the start of the migration and March 2013, when there were at least 12 months of the process to go, 234,600 people out of 1.015 million incapacity benefit claimants who were reassessed were declared fit for work. However, the number of claimants on ESA and its various predecessors—obviously some people have still not gone through the migration process and are still in receipt of one of the previous benefits—fell by only 150,000 over the period, from 2.597 million to 2.362 million.

Clearly, the work capability assessment is designed to be tougher for new claimants than the equivalent assessment for incapacity benefit, and that has caused much of the furore. I am not in a position to say whether the number of people found fit for work under the WCA as new claimants differs much from the number under incapacity benefit, because the Department has not published the equivalent figures for incapacity benefit up to 2008. I assume—because it was the intention—that fewer new applicants have been successful. In view of that, it would be expected that the flow on to employment and support allowance, after the initial assessment period, would be lower than it had been for incapacity benefit.

It has also been decided to reduce the time limit on contributory ESA to one year for people in what is called the work-related activity group. Some time ago I asked for figures about that, and the then Minister told me in a letter that in 2012-13 alone, 82,000 people had lost their contributory ESA and did not qualify for the income-related version of that benefit. In other words, they were off benefit altogether. From the perspective of those individuals, they were losing £91 a week. Yes, they would often be in a household with someone else who was working—they probably had a working partner. However, that partner might have been working only part time. For a household that has already lost a salary through someone becoming unwell, losing a further £91 a week is extremely serious. If the number of those people is taken from the 150,000 by which total numbers have gone down, it seems that the changes have eliminated only 68,000 from claiming.

The reduction in the total number of claimants would be expected to be significantly more than the number found fit for work during the migration, but in fact it is less even given the other changes, such as people coming off contributory employment and support allowance, and despite the fact that we are constantly told that the test is tougher, more people are being found fit for work and fewer people are getting benefit. Where have the people gone? What has happened in the system?

One possible explanation is that more people are becoming ill or disabled and so the number of successful new claims is rising. That seems unlikely; there seems to be no particular reason to suppose there has been such a change in patterns of illness and disability. I suspect—I would be interested to hear the Minister’s view—that some of those who have been declared fit for work, either as new claimants or as previous incapacity benefit claimants, are not recovering. They are not really fit for work, and their health may well deteriorate after they go through the process, so sooner or later they reapply for ESA and are awarded the benefit the second time round. I presume that the Department has some capacity to check whether that is happening. If it is, then despite everything that is going on and the cost of the system, including the human cost, the outcome seems relatively small.

We do not know what happens to people, because the Department does not track that properly and, as far as I can tell, no research has been commissioned on the subject since 2010. The one piece of published Department for Work and Pensions research came out in 2011. The previous Government commissioned it to examine the impact of the changes that had been made, which was an appropriate thing to do. A large sample of ESA applicants who had been found fit for work was followed up. Nine months on from the fit-to-work decision, 29% were in employment, 22% were on jobseeker’s allowance and 43% were neither in work nor in receipt of an out-of-work benefit. A qualitative survey followed some of the people up to find out what their circumstances were. Its conclusion was that a number of people who were not receiving JSA or another benefit

“were reliant on a range of sources of income, for example, savings, cashing in insurance policies, or borrowing or being supported by friends or family. In some cases people were under considerable financial pressure and these income sources did not seem sustainable in the long-term.”

If that pattern has continued—of course, if research had been done we might know whether it had—a large number of people may have dropped out of both work and benefit. Further follow-up research would be useful. Perhaps, however, some people ended up reclaiming employment and support allowance, because their health did not improve or deteriorated while, of course, their financial position got worse. That might help to explain why the overall numbers in receipt of employment and support allowance and its predecessor benefits have not gone down as much as one might expect. I also contend that the poor quality of support for people trying to find, retrain for and hold down a job leaves people who might be able to work with little option but to reapply for employment and support allowance.

When employment and support allowance was introduced there were two categories of beneficiary: those considered, at least for the foreseeable future and perhaps for ever, to be unable to return to work—the support group—and the work-related activity group. The purpose of the two groups was to make it possible to provide assistance and support for those who could return to work in the future. There are serious concerns about whether all the people in the work-related activity group should really be there. For example, there still appear to be people in that group who have degenerative conditions that will never improve.

Even if all the right decisions were being made, however, very little assistance or support is being given in practice. Substantial numbers of people have been in the work-related activity group for two, three or four years. That does not make it seem that they are anywhere close to being ready for work, and it raises the question why people so far from being capable of working were put in that group. I have a constituent who has been in the WRAG and has been reassessed yearly for four years. She has never had more than one work-focused interview in a year. She goes to the interview and is told “That’s fine, come back in a year’s time.” If she is thought capable of work at some future time, which is what the test is supposed to have established, one would think that some further help and assistance might be given. Otherwise, the experience that she has had so far will go on year after year, which seems to be little different, in many ways, from what happened before. Perhaps the WRAG is now the new parking place, if we want to use such language.

In practical terms, of course, those things matter to people. There are individuals who receive a lower rate of benefit because they are not in the support group, even if they are in the work-related activity group for years on end. Some people lose their benefits after a year because they live with a partner or have a small pension. Specialist disability advisers in jobcentres, who help people in those situations, are not available to the extent that they are needed; the Select Committee on Work and Pensions flagged that up in several of its reports.

There are not the opportunities to acquire new skills and build the confidence and experience to make the journey from not being able to work to being able to find employment. Some of that group—those with a prognosis that they will be fit for work within 12 months—end up in the Work programme, where they join those who have been found fit for work. So two groups may end up in the Work programme: those still in receipt of ESA, but with a prognosis of being fit within 12 months, and those who have ceased to receive ESA, but previously did so.

In 2010, the Secretary of State said:

“People who are found fit for work will move directly on to our new Work programme…They will receive an integrated package of support…It will provide personalised help based on individual needs…Using the best of the private and voluntary sectors, that will help get people into work as quickly as possible.”—[Official Report, 11 October 2010; Vol. 516, c. 35.]

Ministers did not set minimum performance levels for former incapacity benefit claimants in the Work programme, but other types of claimants can be used as a basis for comparison.

By year three of the Work programme, where we are now, the Government expected 30% of new JSA claimants over 25 and 15% of new ESA claimants to be in work. Between the launch of the programme in June 2011 and December 2013, only 2,500—about 10%—of the 24,000 ex-IB claimants declared fit for work and on the Work programme had found a job; and only 760—1.7%—of the 44,000 ex-IB claimants still in receipt of ESA, but referred to the Work programme, were in work. Of those who were found fully fit for work and went into the Work programme, only 10% had found a job; of those who remained on ESA in the work-related activity group, only 1.7% had found a job.

The Secretary of State said that people would receive an integrated package of support to provide personalised help based on individual need, but the trouble is that that has simply not materialised. Ministers make much of how cheap the Work programme is, but its very cheapness means that the money available to spend per person is low, so the specialised help that former IB and ESA claimants need is not present. The financial structure of the Work programme is not operating so as to give that help.

In theory, providers will get larger payments—up to £13,500 per individual in some cases—for the groups seen as being furthest from the labour market, but even if only one in 20 of that group is sustained into permanent work and earns the provider such a sum, the money spent has to stretch over all 20 in the programme. What is on offer is simply not adequate, and that explains why so few people are being found employment through the Work programme.

Many people are suffering real distress and upset, which will have an effect on their health. For all the efforts made and the cost of assessments and appeals borne by the taxpayer, the Government’s attempts to reduce the numbers on incapacity benefit have fallen well short. If a policy is not working and not achieving its intended ends, it must be time to look at the whole system again.

When will the migration be completed? The planned completion date for the migration, which was meant to be the start of this month, appears to have been missed. The total number of incapacity benefit claimants due to be assessed was about 2.2 million in 2011, but two thirds of the way through the process, in March 2013, fewer than half that number had been assessed. In 2011, the Work and Pensions Committee warned that the DWP target of 11,000 assessments per month as part of the migration process was over-ambitious. Those concerns appear to have been justified.

One of the reasons why we are in this situation is that even sensible suggestions about the process, certainly in the four years I have been in Parliament, have simply been ignored or swept aside. The insistence that existing claimants be reassessed frequently, sometimes as often as every three or six months, not only causes considerable stress and anxiety to the claimants, but creates unnecessary expense. It means that new and existing ESA claimants and those on incapacity benefit who have been migrated all have to wait long periods for the assessments and, if necessary, for the appeals. In recent months, many of my colleagues have been reporting longer waiting periods than ever for all those categories of people.

In my Adjournment debate on 5 December 2012, the Minister of State, Department for Work and Pensions, the right hon. Member for Wirral West (Esther McVey),said:

“To ensure that people receive benefit correctly, it is important that they are called for reassessment from time to time, to ensure that they still meet the entitlement conditions. People’s health conditions can change and we need to ensure that they remain in the correct group…This active approach to the benefit is crucial and is having an impact.”—[Official Report, 5 December 2012; Vol. 554, c. 318WH.]

Earlier this year, however, the Benefits and Work website published a leaked DWP internal memo saying that staff had been told to stop calling existing claimants for periodic reassessments from 20 January, because the system was not coping. Indeed, the Minister present today said in a recent Question Time that he had

“turned off the tap on reassessments”—[Official Report, 31 March 2014; Vol. 578, c. 592.]

Given that we were previously told that the reassessments were important and had to happen—with that level of frequency—regardless of the impact on individuals, we seem to have put people through unnecessary stress and strain.

We now learn that Atos, which delivers the WCA for the Government, is set to withdraw from its contract before the expiry date in August 2015. It is easy to focus on Atos as the problem, because it has had a lot of criticism, but that energy would be better directed at the Government.

Ministers decided that Atos was capable of undertaking new claims, periodic reassessments and the migration to ESA. This year, in addition, it has also had to undertake—perhaps this is the final straw—half of new claims for the personal independence payment. On top of that, Atos was required to make savings on its ESA contract between 2011 and 2015. As far back as 2011, the Select Committee pointed out that that was problematic and that taking on such a high level of assessments while making savings would be extremely difficult. The Committee rightly queried whether it would be possible. The Minister, in his recent statement on the Atos contract, said:

“My Department is committed to learning the lessons from these past failures and ensuring they are reflected in the design and management of future contracts”.—[Official Report, 27 March 2014; Vol. 578, c. 57WS.]

I genuinely hope that that is the case, but I fear that the only substantive change proposed for the long term is the move to multiple assessment providers.

In March 2011, Professor Paul Gregg, who was involved in planning the original introduction of ESA, stated in written evidence to the Select Committee that he felt that things should move more slowly and that recommendations for change should be tested before moving ahead with migration. An important recommendation was that the Department should track what was happening. He characterised what was happening at that stage as

“an interactive process of changes being followed by a chorus of complaints, revision, a wait to see if complaints diminish, and further revision when they don’t. The current national roll out will not be the end regime but just the latest iteration in my view. This is no way to introduce such a fundamental reform affecting so many vulnerable people.”

That indeed is what we have seen: complaints, some changes, more complaints and more changes, but no fundamental look at whether the system is delivering what the Government want.

The fourth independent report, from Dr Litchfield, made recommendations about simplifying the WCA process, improving how people are treated as they go through the process, decision making and knowledge about mental health among decision makers and health care professionals. We have been here before, however, as we have with all the independent reports. As Professor Gregg said, it appears that we are simply tinkering and making changes without fundamentally improving the position.

One change proposed in the Litchfield report—I hope it will be implemented speedily by the Government—is that people in the support group with long-term degenerative conditions, and other conditions from which they are not likely to recover, should not have to be reassessed more frequently than every four years. In practice, we appear to have dropped reassessments, but only temporarily.

Oxford citizens advice bureau submitted evidence for the Select Committee’s new report. It said it had seen little change and that 90% of appeals from ex-IB claimants or new claimants are successful, which suggests there is still something fundamentally wrong with the system. Other citizens advice bureaux can give similar reports. The Government must make fundamental changes to the process before tendering for new contracts.

Reforming the audit process, encouraging the submission of proper evidence at the outset so the right decisions are made first time and requiring all assessments to be recorded are all important changes. However, we must look at the overall process and ask whether we are getting the results we intended or we are putting people through a stressful and upsetting process that makes many people’s health worse, and without getting the results we need. If the results do not improve the savings will not materialise either.

I have talked a lot about statistics and the process, but I want to conclude with the story of my constituent, Brian Green. Mr Green has suffered from depression for a considerable time. He has been on employment support allowance for nearly the whole of the past three or four years—he started on it in 2010. When he was initially assessed, he was placed in a work-related activity group. He was called back for a reassessment after six months and was declared fit for work. He had to wait for an appeal hearing and was put back in the work-related activity group. That pattern has been repeated several times over the past three years. In 2011, he was put on the Work programme with A4e for two years. These are his words:

“A4e wasn’t helpful at all in helping me find employment. Throughout the two years all I did was regularly search for jobs using their PCs. Also I was put in a group to be shown how to set up my CV, which given I have ample experience of being employed and had already had help from Careers Scotland, seemed a waste of time. After all the jobs I applied for, very few sent acknowledgements, and I was never even called to interview.”

Mr Green’s case neatly demonstrates the problems with the work capability assessment. It needs to be reformed and we desperately need to improve employment support for people with disabilities. Mr Green was on the Work programme for two years and employment support allowance for nearly four years. He is no nearer to being ready for work or getting a job than he was at the outset. That, from his point of view, is a tragedy; it is not that he does not want to work. He needs proper help and support, not a scheme that does not acknowledge where he is in his life and the mental health issues with which he needs help. He was not getting that help through his Work programme provider.

Overall, we must ask whether the system is efficient, working and—after all we have gone through—worth while. We must also ask whether it is working for individuals. On both counts, I say it is not. I hope the Government will take the opportunity to look at the whole system and make serious changes.

14:04

[Chris Bryant (Rhondda) (Lab)]

It is a delight to serve under your chairmanship, Mr Turner, and to follow my hon. Friend the Member for Edinburgh East (Sheila Gilmore). The Minister and I agree that since she arrived in the House she has made a dramatic contribution on the issue of work and pensions, the way in which the Department functions and how the Labour party develops its policy on the issue.

I will start on a point of consensus. Everybody in the Chamber believes that the best route out of poverty for the vast majority of people is work. That is not as easy for some people as it is for others. Some people start life with phenomenal advantages, whether it is an uncle who can ring up somebody and secure a job for them, an easy route into an apprenticeship or an internship, or the financial freedom to leave university with no debt. We all agree that the social security system must be there for everybody in their time of need. We may think we will never have a moment of need in our life, but it may come suddenly. For some people it lasts for a protracted period, and for others it lasts throughout their lives.

Notwithstanding the sometimes exaggerated and sometimes deliberately misleading fulminations in the press, the vast majority of people want to live in a country in which we all put a little more into the pot to support those who have profound disabilities and who genuinely find it difficult to work and provide for themselves and their families. It is not just that we know that one day we might need to rely on that support ourselves. We also all agree that “need” is not the same thing as “want”. Sometimes people want financial support from the taxpayer, or from wherever else, but do not actually need it. Occasionally, the most supportive and honourable course is to say, “No, there is not going to be a benefit available to you, and you are going to have to pursue as hard as you can any work opportunities there might be.”

I am MP for an area in which a large number of people of working age—between 25% and 27%—are on some form of incapacity or disability benefit. That is much higher than in most areas of the country, largely because for a period one industry was entirely dominant. In four generations, that industry went from employing 75,000 men to employing nobody. Many people in Rhondda used to suffer from conditions associated with mining—particularly musculoskeletal and chest conditions—but today those who have chronic obstructive pulmonary disease are far more likely to have it because of smoking than because they worked in a mine. However, patterns of poverty and multiple levels of deprivation are, as my hon. Friend the Member for Edinburgh East said, often concentrated in areas in which one heavy industry—whether shipbuilding, iron, steel or coal—dominated and then disappeared. That creates a set of challenges for how we support disabled people through the social security system.

As my hon. Friend said, Governments of both stripes—there are three stripes now, because we have had coalition, Labour and Conservative Governments—have found it challenging to get this issue right. We want to show compassion to those who are in need, but the Treasury and the taxpayer have legitimate concerns. I have a passionate desire to see as many people as possible working who would otherwise be living in poverty, because, frankly, a life on benefits is not the fullest life available to the vast majority of people. I conceive trying to get as many people as possible into work as a socialist endeavour. I say gently to the Minister that when the Secretary of State and other Ministers suggest that Labour had no interest in people on disability benefits throughout our 13 years in government, that is a misrepresentation, and in their heart of hearts they know it.

Something else on which the Minister and I can agree is that people with disabilities face significant disadvantages in the workplace. It is not just the obvious disabilities such as blindness and deafness or being in a wheelchair that make it more difficult for people to get jobs; it is often much more difficult for people to sustain paid employment when they have a condition that is not linear, continuous or regular but has a chaotic pattern. A lot of work in former industrial areas is no longer available in those areas and people are required to travel. There are significant challenges for those with disabilities and they must be taken into consideration.

Disabilities tend to come not as single spies, but as battalions. Someone who is out of work because of one disability for more than six months is six times more likely to acquire a significant mental health problem. Mental health conditions are often the most difficult to assess in terms of need, and mental health charities have argued strongly that the best route back to mental health for the majority is going into work. It provides self-esteem, as my hon. Friend said, it socialises people so that they are not isolated at home, and it improves their financial situation. When all those issues are considered, the more we can do to get more people into work the better.

One of my biggest concerns about the cost of social security when we were in government was that it was often born in the mental health of those who were still out of work because they had no opportunity to change their situation. People on incapacity benefit often experience a double layer of anxiety because their next-door neighbours may think they are swinging the lead and automatically presume that a mental health problem is not as serious as a physical problem. Clearly that is not true, but the stigma attached to mental health is significant. Some 50% of the people we are talking about may be in receipt of benefits for conditions related to mental health or with a mental health condition on top of other problems. That is one of the most difficult problems in enabling people to get into work, and tackling it is a challenge.

I also believe, as does the Minister—I have never heard him say so, but I think he agrees—that the move we undertook before the last general election away from the old set of benefits to employment and support allowance was right. It provided greater consistency and coherence and we were right to insist that instead of assessing what someone could not do, we should assess what they could do.

[The Minister of State, Department for Work and Pensions (Mike Penning)]

As Hansard may not be able to record my nod, may I say that I completely agree with what the previous Government were trying to do before the last election? Assessment is vital, and I reiterate the shadow Minister’s point that the issue should be what someone can do rather than what they cannot do. That should apply to life in general, not just to work.

[Chris Bryant]

I am grateful for the Minister’s intervention. I am aware from my experience in the Rhondda that historically, under both Conservative and Labour Governments, when mines closed there were many men with musculoskeletal or chest problems related to their work in the mines who could no longer work in a mine or do heavy labour, but there were other jobs they could have done. In many places, it became part of the mindset that someone was either fit for work or unfit for work. Those were the only two categories. I wonder whether the phrase “fit for work” contributes to that. This may be a trite comment, but Douglas Bader worked. I know many constituents with profound disabilities who work hard every day, but others find it much more challenging. There is a mindset in some parts of the country that has been difficult to transform over the years.

Some years ago, before ESA was introduced, a man came to my surgery having been assessed as fit for work. He told me angrily that that was disgraceful because he had had a heart attack 14 years previously and two major operations, and had been on incapacity benefit since then, but he had worked all his life. I suggested that he had not worked all his life, and he said he had worked all his working life. I said that I was not a doctor and could not assess whether he was fit for work because I had no means of working that out. He said, “I knew you’d be rubbish. Everyone tells me you’re rubbish, and the worst of it is that the Labour party is so pathetic in the benefits it gives me that I have to go and mix cement on a building site every day of the week.”

What was shocking about that was not so much the fact that he did not quite understand the system and that he was clearly fit for work because he went to work every day and did manual labour, but that he thought that was a legitimate argument to put to a Member of Parliament. Fortunately, he had already given me his name and address so he was not in receipt of benefits thereafter. I hope he went on to get a proper job that was more fulfilling for him instead of going through the black market. If the ingenuity that some people have used in the black market were used in the legitimate market, we might be a far more entrepreneurial nation.

[Mike Penning]

I am sure the hon. Gentleman was coming to this, but we have all heard of such examples face to face in our constituency surgeries, although perhaps not so abruptly. Such behaviour is damaging to those who receive benefits because they are not capable or working, and infuriates disabled people who are in work and have worked all their lives. I am thinking of a proud Welshman, Simon Weston, who we all know has given so much to his country and was recently voted the nation’s most heroic figure. Not only is he an entrepreneur, but I understand that he has never taken sickness benefit at any time, even though his injuries are profound.

[Chris Bryant]

I do not want to leap from that to the suggestion that someone who is in receipt of disability benefit is not a hero. The situation often depends on someone’s family and community support, the nature of their condition and so on. Sometimes a single condition may be predictable in how it will play out for the rest of the sufferer’s life. Other conditions, particularly degenerative ones, are much more chaotic and their effects cannot be predicted.

[Sheila Gilmore]

There will always be people at all levels of society who try to exploit the system. Many people who are being found to be fit for work may need much more attention to their special situation. Many people with learning disabilities need a lot of help and support to hold down jobs. A voluntary organisation in my constituency runs a café and bakery, and trains learning-disabled youngsters, but the problem for many of them is that working in mainstream catering would be difficult, and they could not cope with McDonalds or Starbucks.

[Chris Bryant]

I do not go to Starbucks any more because of tax issues, but my hon. Friend is absolutely right.

I do not want to stereotype the Rhondda, but my surgery is held in a room with thin walls and by the end of the encounter with my constituent we were shouting at one another. When he left the room saying he was going to report me to the police—I was not sure what for—everyone queuing outside applauded me, not him, because they had the same attitude as everyone else: stealing from the system is fraud, and it is theft from other people. There is no innocence, and in one sense it is the worst form of theft. However, the level of such fraud is small, and such stories are sometimes blown up out of all proportion so people get the impression that everyone is at it, which is not true.

[Dame Anne Begg (Aberdeen South) (Lab)]

The Select Committee on Work and Pensions has just embarked on an inquiry into fraud and error in the benefits system, and I would say that the extent of that is fairly small. However, may I give my hon. Friend another example? Somebody came to my office as a cleaner through the new deal for disabled people. There are people who have been out of work for 10 years, as she had, with mental health problems. She thought she would never work again, but the correct support—with a job broker, with someone just building up her confidence—got her into work and she ended up expanding from that job into other jobs as well. As it turns out, she had Parkinson’s disease, not mental health problems, and I have never seen anybody so relieved to get a diagnosis of Parkinson’s disease, because she knew what that was and she could cope with it. However, the key was the specialist, detailed help that she got as an individual, and my concern is that that is perhaps what is lacking in some of the new areas that the Government have introduced in order to try and get people with disabilities into work.

[Chris Bryant]

I would go further—I think that sometimes the organisations that are most fleet of foot, most sensitive and come without some kind of governmental sanctions regime, such as those in the voluntary sector, can be the most successful at enabling somebody to gain the self-esteem that enables them to get into work.

I remember working with the Prince’s Trust in my constituency with kids who are at risk. People there were saying that they could not understand why kids who really enjoyed coming on some of the courses that they were doing, which were all about confidence building and so on, all turned up uniformly late—not uniformly late in the sense that they all arrived at the same time, but that they always arrived late. It was only when they worked out that the kids could not tell the time that they realised what the problem was: because the kids were in families where nobody was in work, nobody was used to getting up in the morning to go to work. That is why a basic skills assessment is vital.

Of course, schools should be dealing with all these issues, but sometimes that does not happen. It is a fact that we still have a significant number of people who are, to all intents and purposes, innumerate and illiterate, and tackling those basic skills and providing an assessment very early on is one of the important changes that we need to bring in. I worry that the voluntary sector, which has had a very tough time since 2010, certainly in my patch, is not able to provide the support that leads to people being able to get into jobs, as it was able to do historically.

[Dame Anne Begg]

Will my hon. Friend give way?

[Chris Bryant]

I will, but I am conscious that I have now gone on for quite a long time.

[Dame Anne Begg]

I thank my hon. Friend.

It has become an afternoon for anecdotes. When I was teaching, there was a young boy who could not turn up to school on time. I was his form teacher, and I discovered that the rest of his family had all been schoolphobics, that his parents did not work, and that although they did have a clock at home they could not work out how to set the alarm. I got him to bring it in and that is exactly what we did. We were able to keep him in school a bit longer than we managed with his siblings.

[Chris Bryant]

I cannot set the alarm on nearly any of the things in my house and I have not got children to be able to do it for me—they are basic skills. I will move on, if I may.

It is also true, as I think we all agree, that poor initial decisions end up being expensive for everyone. I think Governments of whatever stripe would like to be able to improve the quality of initial decisions. As was found in the run-up to 2013, £26.3 million had been spent on the tribunal service. The Government have changed the way in which that operates, and I shall come to that later, but when 19% of appeals are still overturning the initial decision, a lot of money is effectively going down the drain on behalf of the taxpayer. I suppose some lawyers would say that paying them is not money going down the drain, but if we could improve the quality of initial decisions, whether that is down to form-filling, ensuring that the correct information is available from the very beginning, or whatever it is, we would be saving ourselves time and energy, and most importantly, saving a great deal of heartache for a considerable number of people.

I shall move on to some of the problems that exist at the moment. It is uncontested that Atos has not been a great success. I think Atos itself would say that—in fact, it has done. It has effectively put its hand up and said that it has not been a great success. We note that the Government are now ending the deal; that is an established fact, but I would like to ask the Minister a few questions and if he is not able to answer fully now, I completely understand, because the questions are relatively technical, but I should be grateful if he would write to me.

The Minister referred, I think in questions on Monday, to the fact that Atos will be paying him—

[Mike Penning]

Not me personally.

[Chris Bryant]

No, not him personally—paying the Government. Will the Minister clarify exactly how anyone is arriving at a figure and what that figure is likely to be, because it will undoubtedly affect whatever the tender process is for a new contract? Will he also lay out exactly how he thinks that new tender process will go? Does he have a time scale for it? When does he think that might be in play?

I note that Atos said that it has been worried about death threats for its staff and so on. Even if we were to take out of the equation the fact that lots of people think Atos has done a terrible job—people have been able to point to some terrible mistakes and hideous instances where people who were either already dead or nearly dead were being told that they were fit for work, which has undoubtedly inspired a great deal of anger—whoever is doing work capability assessments in future will have to make unpopular decisions, by definition, because they will be turning some people down. What assessment have the Government made of the provision that there needs to be in any tender process, or for that matter, in future ongoing relations with whatever company will be doing this, to make sure that there is protection and that security is not compromised?

Capacity is another issue. Certainly by mid-2010 or by the end of 2010, it was pretty clear that there were not enough doctors and other medical staff—or, for that matter, administrative staff—to be able to do the work at Atos, so how do we make sure in any future tender that that does not happen all over again? It means that even if the Government want to say, “We are going to do more assessments,” they are unable to do so, which is why, because of the capacity problems, the Government have had to change what they are doing about people who are already coming up for reassessment after two years. Making sure that the capacity is there from the start is an important part of it.

As I said, the Government have now suspended reassessment for those on ESA for two years. I wonder what the cost of that is now going to be. I presume that the Government have made an assessment of that, because they would have been presuming that the reassessment was there for a purpose and that it would take more people off ESA. I wonder how many people they reckon will stay on who, in a sense, they would have thought otherwise might not be on it. The Government made assumptions when they introduced the policy, which they are presumably now unbundling. What are they assessing the future cost to be for each of the future years? How many people does that affect? How many people on ESA for two years would have been being assessed now, but are not being assessed?

On cost, the Office for Budget Responsibility report states:

“ESA is higher by £0.8 billion in 2014-15 and 2015-16…because the latest evidence suggests the caseload is higher than we assumed in December, despite substantial upward revisions made at that time. We have also updated the modelling on repeat work capability assessments, which has increased our assumption about the length of time and number of claimants waiting for a repeat assessment, meaning more claims continue for longer”.

It may be that I have just answered my previous question to the Minister, because it may be that the £800 million is all to do with not doing the extra reassessments—in which case, does he have any idea when we might be able to start doing reassessments? That might be a capacity question, but that £800 million is a significant cost.

[Sheila Gilmore]

Given that reassessments have been delayed or suspended—out of necessity, it appears, rather than conviction—does my hon. Friend agree that this might be an appropriate time to look again at reassessment periods? Part of the criticism has been that people, even those in the support group, are being called back for reassessment relatively frequently, and that that is an expensive, distressing and probably pointless activity. Given that we now have a hiatus in the system, is it not time to look at all that again?

[Chris Bryant]

I think that we always have to keep the matter under review; otherwise we are wasting time and energy on a process that is just injurious to the health of people whom we are trying to help, and at a cost to the taxpayer that does not provide a dividend. So, yes, of course the Government should do that. I was just hoping that the Government would be able to say whether the £800 million relates to the people who would have been reassessed. How many people will continue to receive benefits even though the Government have basically decided that they should not?

I want to talk about access to mental health services, because one of the issues that arose in Health questions earlier this week was that there has been a significant fall-off in the availability of talking therapies, and there is clear evidence that talking therapies, whether cognitive behavioural therapy or others, are predominantly concentrated in areas where there are fewer people on the various kinds of incapacity benefit. That is rather unhelpful to the process of trying to get people with mental health needs back into work, so I wonder what strategy the Government have to try to ensure that it is addressed.

Incidentally, one other thought occurs to me in relation to the point that my hon. Friend has just made. There are only so many doctors in Britain. If the Government decide to take a lot of doctors into Atos to make assessments of people’s fitness for work, there is a danger that they will simply be taking doctors out of the national health service, and that may have an impact locally on whether people are being helped back into work by getting better, rather than being forced back into work by being assessed by Atos. Of course, that is where there has to be a joined-up Government approach.

I want to ask the Minister about the Work programme, because, as my hon. Friend rightly said, there is a significant problem in that respect. The Secretary of State effectively admitted that in Work and Pensions questions on Monday. I think that he had hoped and expected that a much larger percentage of people would have been helped into work through the Work programme. Of those with disabilities, it is something like 5%, which is a very low level.

Of course, we all know from our constituency case load that some people need dramatic intervention to be able to get into work. Drug and alcohol abuse, leading to and coming from chaotic lifestyles, often makes it very difficult to assist people, even though there are many people with addictions of various kinds who are fully functioning in a work environment—we have only to look at the history of Parliament to see that. What assessment have the Government made of how the Work programme could be improved to enable more people with disabilities to get into work, or do the Government believe that the situation is not improvable and that 5% is what the level is going to be?

[Dame Anne Begg]

Is my hon. Friend aware that the specialist employment programme for people with disabilities is called Work Choice? One would expect that the majority of the people on Work Choice, if not all, would be in receipt of ESA and be in the WRAG group, but actually almost all of them are on jobseeker’s allowance; they have been found fully fit for work. That might explain why Work programme providers are not being successful in getting ESA claimants into work—that specialist help is not for them; it is for people who are closer to the labour market than they are.

[Chris Bryant]

Which is the next paragraph on my sheet of paper. We just managed to hear it from a different voice, and I am grateful to my hon. Friend.

I want to move on to the issue of discretionary housing payments. The Papworth Trust has found that over three quarters of councils include disability living allowance in assessing people’s eligibility for discretionary housing payments. That is against Government advice. Of course, because the system is discretionary, it is not Government-enforced, but that is one of my concerns about the discretionary system. People can be living on either side of a street, and just because one council decides to include DLA in the assessment and the other decides not to, they are treated differently.

My anxiety about that is that it leads to people not trusting the system in the end, because people do not know the specifics of who is in charge of deciding what. They just think, “He’s got it; I haven’t got it. That seems unfair.” When that is alive in the system, confidence in the whole of Government and the welfare or social security system falls apart, especially because the clear evidence now is that people with disabilities are less likely to be granted an award under the discretionary housing payment system than people without a disability. That seems to be at odds with what I presume the Government would like to achieve, so I wonder whether their advice needs to get stronger, whether we need to lose the word “discretionary” or whether the system needs to be restructured.

[Dame Anne Begg]

The Work and Pensions Committee’s report that was published yesterday on support for housing costs states:

“We recommend that the Government issues revised guidance to local authorities which advises them to disregard disability benefits in means tests to assess eligibility for DHP awards.”

[Chris Bryant]

That rather chimes with what I was suggesting, and the Minister has just winked at me, for the record, so I can only assume that that was not a personal recommendation, but—

[Mike Penning]

I have a piece of grit in my eye.

[Chris Bryant]

I hope it is not a plank. Anyway, I hope that we are singing from the same hymn sheet.

I have one more serious point, which relates to mandatory reconsideration. Obviously, the Government have changed the system of appeals. We have now moved on to the system of mandatory reconsideration. There seems to be some evidence that that has meant that quite a lot of people have shifted on to JSA, because they are nervous about what will happen. That may, as my hon. Friend the Member for Aberdeen South (Dame Anne Begg) says, take them away from further support, rather than end up enabling them to get into work. I want to ask the Minister how many people that now applies to. Is the number of people seeking mandatory reconsideration higher or lower than the previous number of people who would go for appeal?

Because the Department has no fixed limit on how long the process can take, I wonder how long on average it is taking for a mandatory reconsideration to be arrived at. Someone would be in limbo, potentially, for a considerable time. We have seen that in other areas. For instance, assessments for the personal independence payment have been taking three months, six months, nine months, a year and so on. I think that all of us would be rather hesitant about allowing the Government to have a blank sheet on this and to reply whenever they felt like it.

I would like to talk about sanctions, but a debate is happening in the main Chamber on sanctions, so I think that we will leave that issue to hon. Members who are there. As I said, I hope that where the Minister is not able to provide instant answers, he will write to me. If he has not replied at the end, I will write him a letter, so he will have to write to me then anyway.

14:38

[The Minister of State, Department for Work and Pensions (Mike Penning)]

It is a pleasure to respond under your chairmanship, Mr Turner, to this wide-ranging debate on incapacity benefit migration. Let me touch on the last point made by the shadow Minister, the hon. Member for Rhondda (Chris Bryant). He knows me well enough to know that I will naturally write to him and other colleagues on any points that I do not manage to cover in my contribution. I congratulate the hon. Member for Edinburgh East (Sheila Gilmore) on securing the debate. She and other colleagues know that my door is open. She has used that opportunity to come to see me in the past, and I am sure that she will come to see me in the future.

If it is okay with you, Mr Turner, I will not go back over the history of this matter, because the hon. Lady covered it eloquently. I will touch on some of the relevant issues that are around now; obviously, some of them have existed since the system’s inception.

There will be some Members and other people who passionately believe that assessment should not take place. I disagree with them, and I think that the hon. Lady is agreeing with me, from a sedentary position, that assessments should take place; I think that that is her position.

[Sheila Gilmore]

I certainly agree that assessment should take place. I am not sure how, without assessment, we could establish that people were unwell or incapable of work, however we want to define it. The question is really about the process that we use.

[Mike Penning]

I wanted to give the hon. Lady the opportunity to clarify her position. In some cases, face-to-face assessments are what is required, unlike on IB where it was hardly ever face to face.

[Sheila Gilmore]

On the question of face-to-face assessments, one of the interesting points has been that sometimes they are better and sometimes they are not. It depends on the person. One of the things that I have come across in the past year or so is that quite a large number of people have been reassessed on paper rather than face to face, but have been placed in the work-related activity group and later discovered that not all the information was in the paperwork in the first place. I can see that we need both.

[Mike Penning]

As I said, there are some who agree with us that in certain circumstances, face to face is required. I passionately believe that face to face is not required in every case, whether in the WCA or in PIP. We have to make sure that we get it right. There are people who do not think that that should be the case.

[Julie Hilling (Bolton West) (Lab)]

I am very sorry that I have not been able to be part of the debate, because I was taking part in the sanctions debate. On that point, would it be possible to consider face to face if a different decision was due to be made? If someone was going to continue in the support group or in the WRAG, they would not need to be called in for the face-to-face interview, but if a different decision was to be made, that is when a face-to-face interview should take place.

[Mike Penning]

I am not certain that that would work, not least because decisions that had been made would also have to be reversed. The decision must be based on the evidence that is before the decision makers. I agree with many of the things that the shadow Minister has said, but it is crucial that we remember that this is not about diagnosis. The diagnosis has been done by the clinical experts. In response to the shadow Minister’s concern about a drain on NHS doctors, a lot of the assessments are done not by doctors, but by trained clinicians.

Like other hon. Members, as a constituency MP I have had correspondence about the matter, so when I took on this portfolio a couple of months ago I desperately wanted to dig down and look at it. Dr Litchfield’s report came out almost simultaneously with my arrival in post. One of the first things I did was to go off to a tribunal and listen, as a member of the public can do, to two cases being put before the tribunal judges. As I left the building, I said to my officials—I have said this in the House before—“Clearly, we are not getting decisions right.” The first case that I listened to should not have been at the tribunal; we should have sorted it out before. In the second one, interestingly enough, the Department had not seen the evidence until the morning of the hearing. Extra evidence was produced, and the judge had used his autonomy to waive the four-week rule and allow it to be presented.

I have been urgently looking at how we get the right decisions by ATOS professionals being sent to our decision makers. The final decision is made by the Department, not by Atos; Atos makes a recommendation and we look at it. I looked carefully at the quality of the decisions that were coming from our contractor, which in this case was Atos. I have said on the record several times that I was not happy at all about the quality of the decisions. Before I arrived, the Department had been putting pressure on Atos to improve quality, so we were also starting to get an ever-increasing backlog. So many cases that could have been decided through paper assessments were instead being assessed face to face. Even then, people were appealing, and because we were getting the assessments wrong, we were losing the appeals.

We will always lose some appeals, as the Chair of the Work and Pensions Committee, the hon. Member for Aberdeen South (Dame Anne Begg), knows. It is for judges to weigh up what the will of Parliament was in making regulations, and apply that to the case before them. I was keen to make sure that we got this right, because we are talking not only about taxpayers’ money, but about individuals. The shadow Minister described the welfare system as a safety net. For some people, it will be there from birth onwards, and for others it will come into play because of circumstances, events, traumas and illnesses over the course of their lives.

The shadow Minister was quite right to say that there will be things that I will be unable to answer, and other things that I will not be able to discuss because of confidentiality within contractual obligations. Regarding Atos’s decision to exit its contract early, I was pressurised by colleagues from both sides of the House to remove or sack Atos. One of the shadow Minister’s colleagues said that I should sack Atos. The problem with that was that because of the form of the contract, we would almost certainly have had to pay compensation to Atos, and I do not think that anybody inside or outside the House would have wanted us to do that. We have negotiated an early exit for Atos and have arranged for a team to work alongside its management as it continues to do the work while we exit it. I cannot simply turn off the tap, because we would have no capacity. The biggest issue with Atos has been with its management controls, rather than with its front-line decision making.

[Dame Anne Begg]

Under the original time scale, the migration from incapacity benefit to ESA was meant to have been completed by now—I believe the date was the end of March 2014—but a sizeable number of people have yet to be migrated from IB to ESA. The original contract must have worked to the original time scale, so Atos surely was not still contracted to carry out the migration, even though it was contracted to do the reassessment. Surely, an automatic break must have been built into the contract; otherwise, Atos would still have been employed even when there was no work to be done, because it was meant to have been finished by now.

[Mike Penning]

Clearly, as the Select Committee knows, Atos was already getting into backlogs. That is why I talked about turning off the tap—stopping the reassessments and doing only the new applications, to ensure that we got those right. By doing that, we were allowing people who needed it to get through the system as fast as possible, and we intended to get to those who already had it later, because the backlog was becoming intolerable and unacceptable.

When I made the statement last week, we also issued an invitation to tender. We had already put out an invitation to tender for multiple contractors. We cannot go as fast as we would like with Atos leaving, so we will now be seeking a tender from a single contractor, and within that process there will be the decision to move to multiple contractors. That gives us a great opportunity to make the contract into a better format than we had before. We can deal with capacity issues by making sure that we get the flow correct and take care of the backlogs. Atos is still committed to working on the backlogs as we approach the date of its exit. There are issues around the software that we are using, which is Atos’s software and which we will continue to use. The new contract gives us an opportunity to migrate to a new supplier with the capacity and the skills that we need. We also have an opportunity to learn from Dr Litchfield’s report so that we get the assessments right, particularly when it comes to mental health, which the shadow Minister mentioned.

[Sheila Gilmore]

There clearly is a capacity problem, which has been building up. The Select Committee raised that point back in 2011, when there were problems with potential capacity. Will it be more expensive to take on a new contractor to get the capacity right, or does the Minister feel changes could be made, for example on reassessments, which could keep the cost down, similar to that with Atos?

[Mike Penning]

I think we are going to have to wait for the tenders to come in, but we are asking for a contract of a different sort from that let to Atos in 2008. No Minister coming into government is allowed to see advice from a previous Administration. With hindsight, that is probably right, although I have struggled with it in the three Departments I have been in over the past four years. One difficulty is that I therefore cannot see the assumptions that Atos made, based on the bid, about how it was going to make a profit out of its part of the scheme. I can now see such detail going forward, and there will be assumptions in the contract about what the profit margins will be, but the biggest thing for me will be putting capacity and quality together simultaneously. If we do not get that right, we will end up in the position to which the hon. Lady alluded.

Capacity is important, but—this falls partly within my ministerial portfolio, but not wholly—so is getting individual help to those moved on to the Work programme. Getting that right is really important. I will write to colleagues with more up-to-date figures on where we are on that, but it is crucial that we give confidence to people who want to go into work that they can go into work. Many people think that they cannot work until we give them the confidence and skills to return to the workplace or to enter it for the first time.

Something that I have touched on a couple of times, but will mention again, is the fact that when the Prime Minister asked me to take on my new portfolio, which is very different from how previous Administrations, and indeed the current Government, have previously run things, I asked for responsibility for the Health and Safety Executive. One of the biggest reasons was that I am an ex-firefighter, so I have seen how health and safety can work to make the environment we live in much safer, but I have also all too often seen health and safety being abused and used as an excuse for why something cannot be done, whether in the leisure or commercial sector. I was passionate in thinking that if I could look after health and safety along with my other responsibilities, I could break some of the myths about why people cannot get back into the workplace, or ensure that disabled people already in the workplace did not have to leave. We are currently working on that, and that has gone down particularly well with commerce and a lot of disability groups.

There have been some myths out there about why people cannot work. It is all about confidence. That is why I have been taking the Disability Confident campaign around the country, asking employers to give people an opportunity and to have the confidence to take people on. The larger companies have always been good at that, but small and medium-sized enterprises, which employ more people in this country than all the corporates put together, have some real confidence issues. We have been ensuring that they have as much confidence as possible.

[Mr Adrian Sanders in the Chair]

It has been a real eye-opener for me to be in a position to see Atos coming away from the system and the new contracts being issued. I have tried desperately to ensure that we listen, because no matter what our political colours, I passionately believe that we need to get this right. That is true not only of me—Ministers and Governments come and go—but of all of us, because we must get the right system in place for those who need it. It must be right for the taxpayer and for those who need help.

It has been a pleasure to serve under your chairmanship for about 30 seconds, Mr Sanders. I congratulate the hon. Member for Edinburgh East on her debate.

Question put and agreed to.

14:53

Sitting adjourned.