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The Minister of State, Department for Work and Pensions (Esther McVey)
It is a pleasure to serve under your chairmanship, Mr Amess, as everybody has said. I thank the Select Committee on Work and Pensions for its work on the report that we have been discussing. The Government welcome the Committee’s endorsement of the role of Jobcentre Plus in a reformed welfare system. Through the recession and into the period of recovery, it has provided good value for money and excellent levels of service to claimants and employers.
With employment rising to record levels, unemployment falling and sustained reductions in the number of people on welfare benefits, Jobcentre Plus continues to be a model other countries follow. As the right hon. Member for East Ham (Stephen Timms) said, they use it in Germany. They totally copied it and are following our model, as other countries are coming to follow what we do. More recently, the creation of Jobcentre Plus is reckoned to have raised national GDP by 0.1%—worth £5.5 billion to the UK economy by 2015.
The achievements of Jobcentre Plus stand as a testament to the hard work and dedication of the Department’s staff. I thank the staff who came into work today to ensure that all our jobcentres are open and that everybody who requests to see an adviser can do so. Despite staff reductions, Jobcentre Plus continues to make a major contribution to improvements in our labour market. We know that more people are working now than ever before: a record 30.5 million, up 780,000 over the past year and 1.7 million since 2010. That is a record-breaking number of people into work in a year, and it must be down not only to the hard-working staff of Jobcentre Plus but to all the people working so hard in the welfare to work industry.
The unemployment rate has fallen in every country and region of the UK over the last year. We have had the largest annual fall in long-term unemployment since 1998: 108,000 in just one year. The Work programme, which was set up in June 2011, has made a major contribution to that fall—the biggest since 1998, as I said. We have seen 1.5 million people go through the Work programme. Of those, 550,000 have got a job start and 300,000 have gone into sustained work. That is a significant contribution. I agree with the National Audit Office that the programme had a slow start, but it has improved considerably and its stretching targets will be achieved by its end.
If people have read the NAO report, they will know that the Work programme will actually be 12% better than the flexible new deal and 17% better than the pathways scheme once we have completed our work. It is therefore undoubtedly better than any other programme that has gone before, despite its being talked down. It is hard for me to reconcile what I have heard today with what the NAO agreed, which has to be welcomed.
When I looked into the sanctions applied under the Labour Government’s pathways into work scheme, I saw that they were significantly higher for ESA claimants. It is interesting to note the difference between what has been said today and what the previous Government delivered.
Pamela Nash
I admit that I have not seen the NAO figures, but is there any specific focus on youth unemployment? Although unemployment figures are coming down—I completely welcome that and the success in my constituency—youth unemployment is not coming down at anything close to the same speed, particularly not in my constituency. Is there any focus on how the Work programme is affecting youth unemployment?
Esther McVey
If the hon. Lady had looked at the youth unemployment figures, she would welcome them as much as I have. We have had nine consecutive months of decreasing unemployment, and the figure is now nearly 100,000 lower than at the general election. We have given significant focus and support. We have put in place a youth contract that helps people with work experience—I am delighted that people now agree how important that is—and 180,000 people have now gone on work experience. Of those, around 150,000 have been young people—other people are eligible—and 40% have got a job. So I feel I have answered the hon. Lady’s question—
Esther McVey
We have done a considerable amount of work and we continue to do so. That is key and should be welcomed. Youth unemployment has fallen across the country.
Esther McVey
We know that at the heart of the Government’s plan is the desire to build a stronger, more competitive economy.
Esther McVey
I will give way in a moment, but I want to ensure that we hear what Jobcentre Plus is actually delivering, which is a significant amount. I want people to understand how the more than 26,000 jobcentre staff are helping people and how many people come through the doors each day.
Stephen Timms
I have just been looking at the National Audit Office report, which seems slightly different from the impression the Minister is giving. A press release on the NAO website from 2 July says:
“After a poor start, the performance of the Work Programme is at similar levels to previous programmes, according to a report today by the National Audit Office.”
It also says:
“The Programme has…not improved performance for harder-to-help groups compared to previous schemes.”
Esther McVey
I will give the right hon. Gentleman greater clarification: that was at the very start of the scheme in June 2011, but the report says that, given the way performance has increased and what would be expected by the end of the programme, it would be 17% better than the pathways to work programme.
Stephen Timms
As the Minister says, the report does make the point that the Work programme got off to a rocky start and has improved, but its conclusion is currently that the programme has
“not improved”—
this is now, not at the start—
“performance for harder-to-help groups compared to previous schemes.”
Esther McVey
If the right hon. Gentleman looks into all the footnotes, everything associated and all the figures about what is expected by the end of the programme, he will find the numbers I cited. I can get the report out and go through it—I know that he has been flicking quickly to various points on his iPad, but I can give the full report because I went through it in quite some detail.
We are here to look at what Jobcentre Plus has been doing. It has carried out more than 25 million adviser interviews to help to prepare people for work. We talk about the scale; it is huge. Jobcentre Plus advertises 4 million job vacancies for around 390,000 employers. More than 97% of our JSA claims were processed within 16 days—an improvement of 10% from last year. The process of continual improvement that we talk about is happening.
We have reduced the average time taken to answer calls at our call centres from 4.55 minutes in 2012-13 to 1.07 minutes in 2013-14. According to our last survey, nine out of 10 employers were satisfied and a quarter were extremely satisfied with what we are doing. More than eight in 10 claimants on disability, carer or unemployment benefits report that they are satisfied with the DWP’s service. All that shows—
Esther McVey
I am afraid that, because the right hon. Gentleman has just walked into the debate as I am giving my closing speech and has not heard from other Members, I cannot give way. There is only a limited amount of time, and since it is a three-hour debate, I have many questions to answer.
We have seen the complete modernisation of the Jobcentre Plus system. The system has been personalised and adapted to new technology. We have seen greater employer engagement—how do we get a tailor-made service so that a jobseeker really is ready to go into work? That is what we have tried to do.
When we talk about personalising the service and getting as many people as possible into jobs, one key thing that has come out is the claimant commitment. The claimant feels that they are in charge of the journey they are on and that the adviser can help them. I am pleased to say that more than 26,000 of our staff have received the required training and now all 714 jobcentres offer the service. That is helping 600,000 claimants who have signed the new agreement.
Esther McVey
I appreciate the hon. Lady’s request, but she has just taken the question from the right hon. Member for Birkenhead (Mr Field). I will not be taking questions until I have finished responding to everything. I appreciate what she is doing, but I will continue.
We are also increasing technology: we will be delivering wi-fi across all jobcentres, with 6,000 new access devices. All that is key in helping to get record numbers of people into work.
Many Members mentioned segmentation, which is, of course, important and one of our aims. How do we support people best, help them and target support at them? We looked closely at the Australian jobseeker classification instrument and tested it against our own version in 2010. We found that it was not accurate enough at predicting whether someone would become long-term unemployed. For every accurate prediction, it made two wrong predictions. For that reason, it was better for us to pursue what we were doing and make our system better.
That is why we have done things such as introduce the claimant commitment. We are getting people ready for work straight away and really focusing on day-one support so that we can see whether someone needs extra IT support or NVQ maths and English training. That is what we are now doing from day one so that we understand people’s ability, or perhaps lack of ability, and how to support them.
Esther McVey
I presume that the hon. Lady wants to ask the question passed to her by her right hon. Friend the Member for Birkenhead, but go on.
Sheila Gilmore
I wanted to ask this: to what extent is the claimant commitment really a substitute for a segmentation tool? Is the Minister now saying that she has given up on looking at such a tool?
Esther McVey
Nobody has given up. That is the whole thing about welfare to work—we continue trying and we continue pilots, to see how we can best support people who need to have a job. No, the claimant commitment is not a substitute, but what we have brought in to give both sides greater certainty and it is working very well. It is also about empowering the individual who is looking for a job. Equally importantly, within it we can look at what the barriers are. They could be disability or health barriers, but we would modify the claimant commitment to reflect what somebody needs to do, so that it really is tailor-made for them.
What we have seen with the claimant commitment is that, despite what has been said today about how people who work at Jobcentre Plus feel, actual engagement and positivity within the work force has gone up by six percentage points. Again, that has to be praised, as well as being a positive step in the right direction.
Many people today have brought up the issue of sanctions. We all know that, as the right hon. Member for East Ham said, sanctions have always been a part of the benefit system, ever since it began. We know that there is a balance to be struck between providing support and expecting claimants to meet the conditions for receiving benefit. What the Government have done more than ever before is to increase that support. The number of traineeships has gone up in the past year—by more than 39%, I think. We have changed the rules and regulations, so that it is not only 16 hours that someone has to do for their traineeship; the figure can go up to 30 hours. We are looking at these practical, pragmatic steps that can be taken. We are doing all these things.
We also know that more than 70% of claimants say they are more likely to follow the benefit rules because of the sanctions that might be applied to them. So claimants themselves know that sanctions are key. Academic studies from across Europe show that when there is a sanctions system and regime, people remain in work for longer too. All these things are key in what we are doing.
Sheila Gilmore
The hon. Lady has just thrown in a statistic about attitudes of claimants, saying that 70% of people say that sanctions will make them do things differently. Is that part of some published research? Is it perhaps part of the research that we still have not seen? If so, when are we going to see it?
Esther McVey
I will give the hon. Lady a copy of that research, and there are other debates—various debates—in which it has been used. I will provide her with that information if she would find that helpful.
Most claimants do not get sanctioned. In an average month in 2013, around 5% of jobseeker’s allowance claimants and fewer than 1% of employment and support allowance claimants were sanctioned. We know that those people who follow the rules and take up all the support—
Esther McVey
No, I will not give way at the moment. Those people who take up all the support given to them find it easier to get into work.
We also know that more than three quarters of new claims to JSA end within six months, and that around 90% of new claims to JSA end within a year. So most people are going back into work. However, when I hear stories—whether they come from whistleblowers or otherwise—and when people have concerns, I act. The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) knows that I brought her and her constituent in to meet me, the Secretary of State and the head of Jobcentre Plus. Her constituent brought his concerns to that meeting and they were looked into. I am afraid that with some of the things that were brought up, we did not actually find anything that would—
Debbie Abrahams
Will the hon. Lady do me the courtesy of giving way on that point about my constituent?
Esther McVey
If the hon. Lady does not mind—she has spoken at length and I am now replying, and once I have finished I will let her back in to say what she has to say. I promised that that meeting would be anonymous and I would not talk about it, so it is rather unfortunate that she issued, I think, a press release about the meeting.
There are no targets for sanctions and that has to be key, despite what anybody has said; what was said to be happening is not happening. Where people bring in their concerns, I rightly bring people in to speak to them. We see them all the time in our constituencies, but if it is a whistleblower it is only right that we bring them in and listen to them. I brought into the meeting that I mentioned the head of Jobcentre Plus to look into the matter that had been raised.
Debbie Abrahams
I am very grateful to the Minister for finally giving way. She mentioned my constituent, who is a former JCP adviser, and yes, we met her. However, he has not yet had any response to the issues that were raised at that meeting and that is a real concern. As she knows, because it was discussed at the meeting, there are other whistleblowers who have also provided their evidence, which verifies claimants’ issues. How does she respond to that, and will she finally commit to an independent review to sort out, once and for all, what is happening about unfair sanctions, which is the key point?
Esther McVey
No, I will not. As I have said, not only was it a point of order and not only was it in the last Select Committee—I never said that there would be an independent further review. That was not said. And of course the Matt Oakley review will come out. I said it will come out in due course and that will be this month. The right hon. Member for East Ham asked about that. When we have that report, we will all see what recommendations it makes and what issues have been brought forward. Despite Members here today saying that they did not think that the Oakley review was an in-depth review, yes it was. It was about communications and process; all those things are key.
As I said, we continue to look into these issues, because as was said—it may have been said by the hon. Member for Aberdeen South (Dame Anne Begg), the Chair of the Select Committee—at the end of the day what we need is people to comply and to do what is right to get a job. The ultimate aim would be that less sanctions are given, because that is what we want. We put more and more support into the system; we work with people, and the claimant commitment is there to do that; we see what people’s needs are; and we have got to make sure that we are working with voluntary organisations and charitable organisations, and understanding the needs of the individual and also their vulnerabilities. When we have got all that right, then we will all be going in the right direction.
However, what we know we have got right is the extra support and getting more people into work than ever before. The hon. Member for Airdrie and Shotts (Pamela Nash) said that she had spoken to people who had been unemployed for 10, 15 or 25 years, and she also said how delighted those people now are to have a job, and that it has transformed their lives. Those are the type of people I meet all the time; people who were left on benefits and some people would say that they were forgotten about, and that they were not reached out to and connected with. Well, we said that we, as a Conservative party, do not agree with that; we totally do not agree with it. We will reach out and support them, and help them to do as best they can. But it is a system in the round; it is about support, sanctions and what we can do to get people to support themselves.
Pamela Nash
I thank the Minister for giving way and, yes, those are the good news stories and I love meeting those constituents. However, have there been constituents who have gone to her surgery because they have been sanctioned? Maybe they were sanctioned rightly, but maybe she suspects that they were sanctioned wrongly. What advice has she given them about how to feed themselves that week, and how did that make her feel?
Esther McVey
In what we have heard today in some of the stories about whether sanctions were applied or not, I know that some of them would have come under good cause and they would not have had a sanction applied. Where I would send people who are sanctioned, as do Jobcentre Plus, is hardship funds; they could get support, although the case has to be worked through. Why do people continue to sign on for benefits and remain on the claimant count? Because they would not get that hardship fund, which is either 60% or 80% of the benefit, if they do not. That is what I would say: “How do we support you? How do we get you back re-engaged?” I would also work out the vulnerability of the claimant.
Esther McVey
I will not take another intervention for the time being; I will move forward with some of these answers.
Claimants are given the opportunity to explain why they have not complied with a requirement. If they provide good reason, they will not get sanctioned. Once sanctioned, claimants are informed of how to apply for these hardship payments. Vulnerable claimants, including any claimant with responsibility for a child, can receive payments immediately. We believe that we get the vast majority of our decisions right. In 2013, our decision makers considered nearly 2 million cases that were brought to them, but they imposed just over a million sanctions. So the information comes from the adviser and it goes to a decision maker, who looks at all the evidence before deciding whether a sanction will be given. Of those cases, only 130,000 were overturned on reconsideration or appeal—just over 13%—not the figures that I heard from the Opposition Benches; I am not sure where they get those from.
Stephen Timms
I remind the Minister of the letter from a whistleblower—a constituent of mine—with whom she has been in touch, who says:
“I am not sure if the providers are aware of a ‘good cause’ clause in the process…I don’t think it is being exercised much within the Jobcentre either as it would affect the number of off flows”.
I understand the theory, which the Minister set out, but the reality is rather different.
Esther McVey
The right hon. Gentleman quotes an anonymous whistleblower, but I am the Minister replying and I am not anonymous. We do know what good cause is. For example, if there were confusion about someone going to a job interview who thought they should have been at Jobcentre Plus, that would be good cause, and if somebody had to go to a funeral of an immediate family member, that would be good cause, too. There is a list of various good causes. If it makes common sense, that has to be right and those people have to be looked after.
Of course, we are far from complacent and continue to look for ways to improve the system and ensure that sanctions are applied appropriately. Some improvements have already been made, including introducing a telephone line for providers to check whether a sanction is appropriate, and we have introduced a new quality assurance framework, to improve standards and consistency in decision making—that has to be key.
The Matthew Oakley review will make a significant contribution to our drive to improve the system. The scope of this review was JSA sanctions for claimants on mandatory back-to-work schemes, focusing on clarity of information and claimant understanding. He has been generally positive about the sanctions system and we welcome his recommendations, which we accept and which will, as I said, be with us before the end of this month.
We need to know where we are going and we are now focusing our attention on the hardest-to-help claimants. Record numbers of people are now in work—[Interruption.] I am glad the right hon. Member for Birkenhead is listening rather than laughing, because many extra people are in work in his constituency, too, and right across Wirral. However, we must concentrate our efforts.
Mr Frank Field
Will the Minister not answer my question, since she has now named me? Will she give way?
Esther McVey
I am afraid that I will not. I will continue with what we are doing.
Esther McVey
We do, indeed.
We are concentrating on the hardest to help and focusing our efforts on them. As I have said, the Work programme is part of that and we have seen the results from the 1.5 million people who have gone on it: 550,000 have had a job start and 300,000 of those are in sustained jobs. Equally, our Help to Work programme is helping another 200,000 people, whom our coaches will be working with to assess their needs and refer them to further intensive support, whether daily signing or community work placement, to find out what limiting factors are not helping them into work. Is greater support needed? Is it about employability skills? Do they need more work skills? Those are the things that we are really trying to get to grips with, understand and reach out further on. Early trailblazing of this approach shows that continuing this support has a long-term positive impact on claimants. Participants spent less time on benefit and more time in work over a 21-month period.
Many questions have been asked. I shall answer some of those asked by the right hon. Member for East Ham. We have talked about good cause and personalisation, the claimant commitment and extra support, and about the whistleblowers. Yes, the Prime Minister met the Trussell Trust, as did I. I have also been to my local food bank. We will all agree—there is no doubt—that those organisations are doing a good job, supporting people, but we have to look at the bigger implications for society as a whole, which is why it was right that the Prime Minister met the Trussell Trust. We know that it was set up in what was regarded as a boom time, when things were going well, before 2007. That was back in 2002 and the organisation increased tenfold, just as it was setting up, up to 2010. It went to the then Labour Secretary of State for Work and Pensions, asking, “Would you signpost?”, but the Labour Secretary of State said, “We will not”, because the Government did not want it growing even bigger and did not want to help people out, because it was growing on the ground. However, when it approached the Secretary of State in this Government, he said, “I will signpost people to those, if need be, because you need to help people as best you can.”
So many things come into play, as the people who run food banks say: understanding how to cook; prioritisation of bills; debt; and debt cards. So many things are tangled up with this issue that we have to educate and support people, as well as doing things right in an emergency. However, this Government and Jobcentre Plus are getting it right on taking the first step to get people out of poverty, by any standard and according to all parties in the House, because we are seeing record rates of people getting into work.
Esther McVey
Being able to provide for themselves and their family is people’s best way out of poverty I will now give way.
Stephen Timms
The Minister told us she met the Trussell Trust, by which I take it she means that she met people at the local food bank. I welcome that. Is she willing to meet the chief executive of the Trussell Trust, to discuss these issues with him?
Esther McVey
I have always said that I am there. Really, the key person who met him is the Prime Minister, and it is right that he did so.
Esther McVey
I have always agreed. I have met the Trussell Trust in my area and the food bank. We decided that the Prime Minister should meet him to discuss the issues.
We are increasing the percentage rate for our processing and getting more people into work.
Esther McVey
I am afraid that I will not at the moment.
When we talk about a change in culture at Jobcentre Plus, about reputation and how people feel about doing their job, the response is that there has been a significant culture change, in that staff are, ever more than before, helping people who come through the door into training and into a job. With the claimant commitment, they are really personalising that support. Yes, there has been a culture change, for the benefit of everyone.
Sheila Gilmore
Is the Minister aware of considerable research evidence showing that people on low incomes are good at budgeting, and that her attitude—that many people need somehow to be taken by the hand and taught to do basic things, such as budgeting—is intensely patronising and quite unnecessary?
Esther McVey
I certainly do not believe that I have such an attitude. I disagree on that point.
The people who come into Jobcentre Plus need help and support, and we have been led by many of those who have been in debt and have not been so good at looking at their finances, for one reason or another. Perhaps some hon. Members in this Chamber have not always been great at looking at our budgets, or support, and may have been caught unawares, if not in work and if they had been expecting a wage and not had one. It does not matter whence you come; you can always have difficulties with finances, fall on tough times and be out of work.
I certainly do not have an attitude. I always say, “Don’t pass comment on anybody else. You haven’t walked 12 miles in their shoes,” and “There but for the grace of God go I.” I work on a completely different premise to the one suggested by the hon. Lady.
We are pushing ahead with changes to our welfare system and those changes are already paying off. We are rolling out universal credit. By 2016, all new benefit claimants will be for universal credit. The majority of existing claimants will move on to UC by 2017.
I thank the Chair of the Committee and praise all the people who work in our Jobcentre Plus offices.