Universal Credit

Baroness Sherlock Excerpts

Wednesday 30th July 2014 Lords Chamber

[Lord Freud]

One of the things that we are doing as we roll this out is to watch key factors very closely. That is the point of going at this pace, so that we can see small numbers to start with and see what is happening. I will watch this very closely. I talked to the Women’s Aid groups intensively on a number of things of great concern to them and to me, and I will keep watching this one very closely.

[Baroness Sherlock (Lab)]

My Lords, although I welcome the Minister’s commitment to transparency, I was reading this week about the DWP’s battle to stop the publication of the risk register and other documentation relating to universal credit. The Information Commissioner said that the other papers should come out, and a tribunal added the risk register, but the department has appealed. One journalist has pointed out that the judge said that he could see,

“no support for the argument”,

and that the department had not, “provided any persuasive evidence”. The department now wants to appeal again. I have two questions for the Minister. First, what exactly are the Government trying to keep from us? Secondly, how much public money have they spent in the attempt?

[Lord Freud]

This is a government policy; it was equally a matter for the previous Government as it is for this one not to publish particular information about the business case, risk registers and so on. It is something that we are maintaining not just for this programme but generally. I will say, however, that there has been an enormous amount of information put out on this programme, more than for any of our other programmes. There have been reports from the SSAC, from the NAO, from the PAC; it was in the MPA; and it was in our annual report. We are talking to the Select Committee and going through the contents and information within those business plans without breaking the norms of what Governments do in terms of providing a specific document.

Youth Employment

Baroness Sherlock Excerpts

Wednesday 30th July 2014 Lords Chamber

Asked by

[Baroness Sherlock]

To ask Her Majesty’s Government what action they are taking to reduce levels of youth unemployment following the recent closure of the youth employment contract incentive scheme.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)]

Tackling youth unemployment remains a priority for this Government, and our successful Youth Contract will continue. The wage incentive will end as planned next March, just three and a half weeks earlier than anticipated. The youth claimant count has fallen by 134,000—the largest annual fall since 1997—taking it to its lowest level since 2008.

[Baroness Sherlock (Lab)]

My Lords, I have asked repeatedly about the Youth Contract wage incentive scheme in this House, and the Minister has repeatedly assured us that all is well. On 20 March, in relation to youth unemployment, he talked about,

“just about the most comprehensive response that has ever been seen”.—[Official Report, 20/3/14; col. 280.]

On 5 February, of the Youth Contract, he said: “Our approach is working”. On 7 April, he said:

“Our approach continues to work”.—[Official Report, 7/4/14; col. 1129.]

On 17 June, we were back to “the most comprehensive response”, et cetera. Now we learn that the wage incentive scheme is being scrapped. Can the Minister tell the House, first, how many of the target 160,000 wage incentive payments have been made? The last note that I saw had a figure of 10,000. Secondly, when did he realise the scheme was not going to reach its target and why did he not tell the House sooner?

[Lord Freud]

My Lords, I am keen to reaffirm that the Youth Contract is both comprehensive and working. One element, the wage incentive, has now helped more than 65,000 youngsters into jobs. The other elements of the programme are performing powerfully: 148,000 youngsters have started work experience on the programme, and 46,000 have gone into sector-based work academies.

Housing: Underoccupancy Charge

Baroness Sherlock Excerpts

Tuesday 22nd July 2014 Lords Chamber

[Lord Freud]

My Lords, the private sector had the LHA introduced, as my noble friend pointed out, by the previous Government. We had to take steps to constrain the spending on that. We have taken £2 billion out of that benefit for savings. The results of that also came out last week. The final report was dramatically less in its impact than the predictions that we had. Instead of landlords pulling out of the market, they have increased their supply by 7%. There has been very little evidence of displacement; a very marginal probability of moving home; and again we have had homelessness acceptances coming down. We are on the same trajectory with the spare room changes as with the LHA changes.

[Baroness Sherlock (Lab)]

I am starting to wonder whether the Minister and I have read the same report—

--- Later in debate ---

[Lord Freud]

My Lords, I have told the House on previous occasions that the difference here is that there is very little changeover or moving within this particular group, so there is no way in which one could introduce this kind of policy on that kind of basis. It therefore has to apply to stock. I remind noble Lords that the impact assessment for this measure envisaged moving or downsizing on the part of about 50,000 people. Nineteen thousand people have moved during the first eight months, which is on the trajectory of our expectations.

[Baroness Sherlock]

My Lords, the Minister has read the report. The House will be aware that he has previously reassured us not to worry about the hundreds of thousands of people affected because of all the things that they can do. This report shows that every one of those has failed: they are not taking in lodgers; they cannot move; they cannot find additional hours; and they cannot downsize because there are no properties out there. This week, Chambers put “bedroom tax” into its dictionary. Is it not time for the Government to accept that they have got it wrong and make that term archaic for ever?

[Lord Freud]

The report was an early look at the policy. As the research says, it provides a baseline. There is evidence of people looking for work—18% of those affected are looking to earn more in work and 50% of the unemployed are doing so. As I told the House last week, the number of people in workless households in social housing is dropping dramatically. People are moving, as I just said. Nineteen thousand people have moved in the early months of the policy, which is in line with our expectation of 50,000. It is clearly stated in the report that, over two years, one might expect to see 20%.

Poverty and Social Exclusion

Baroness Sherlock Excerpts

Thursday 17th July 2014 Lords Chamber

[Lord Freud]

It is clearly vital, as my noble friend says, to close the gap. There are lots of interesting statistics, particularly about what is happening in the London schools that are outperforming—although we do not know exactly how that has happened, and it is vital that we find out. It is the London Challenge, and there are quite a lot of analyses of exactly why that has come about.

[Baroness Sherlock (Lab)]

My Lords, the long-awaited interim report on the bedroom tax emerged this week. It slipped out at the height of the reshuffle without so much as a ministerial Statement, and it confirms what we knew—that only 4.5% of claimants have downsized, arrears have gone up, half of claimants have cut back on essentials such as food, and a quarter have gone into debt to avoid losing their home. I ask the Minister two questions. First, what assessment have the Government made of the effect of the bedroom tax on child poverty levels? Secondly, given the rather extensive briefing in today’s media that the Liberal Democrats are doing a U-turn on the bedroom tax, is it still government policy?

[Lord Freud]

Maybe I am not the best person to comment on Liberal Democrat manifesto planning. I can, however, assure the House that the removal of the spare room subsidy remains government policy—and I remind the House that this was coalition policy, which was decided in 2010 at the highest levels of government.

Universal Credit

Baroness Sherlock Excerpts

Wednesday 9th July 2014 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for repeating that Answer. It was an interesting history lesson, but it did not shed as much light as I would have liked on the Question that was asked. We have been very supportive of the principle of universal credit, but the enormous problems that his department has been having in implementing it are sorely testing our support. If the Minister is to maintain cross-party backing for universal credit, a project to which I know he is personally committed, then we need rather more transparency than the Government have been able to offer during the process hitherto.

On 30 June, the Employment Minister, Esther McVey, said that the Chief Secretary had approved the strategic outline business case for universal credit. On Monday, the head of the Civil Service, Sir Bob Kerslake, said to the Public Accounts Committee:

“We shouldn’t beat about the bush. It hasn’t been signed off”.

I ask the Minister two simple questions. First, Esther McVey and Sir Bob Kerslake cannot both be right: which of them is? Secondly, can he assure the House that universal credit is, and always has been, on time and on budget?

Pensions Act 2011 (Consequential and Supplementary Provisions) Regulations 2014

Baroness Sherlock Excerpts

Wednesday 9th July 2014 Grand Committee

[Baroness Turner of Camden (Lab)]

My Lords, my noble friend Lady Drake has made an exhaustive study of this complicated matter. I certainly do not have her kind of in-depth understanding. I came this afternoon because I am interested in what happens to members of DB schemes who have been concerned that the various changes would threaten the safety of their benefits.

As we have heard this afternoon, there have been quite heavy assurances from the Government that the protection of members is paramount to them; that is of course important. We have already heard that there have been assurances on retrospection. The changeover in some schemes from non-money purchase into money purchase can give rise to uncertainty and a lack of assurance among the people receiving it. I am therefore interested to hear what the Minister has to say in response to my noble friend, who has raised these points sharply and with great clarity. It is necessary when you are making adjustments in pension benefits in whatever area to make sure that people who are on the receiving end are confident that what they have been paying for and supporting all their lives will be safe. That is terribly important.

We understand that the Government have given assurance both in relation to protection under the ECHR, which is important, and to general protection as well as protection of some means of challenging if people feel concerned and are not happy about what is happening. I await with interest what the Minister has to say in response to the issues which have been raised, which are very pertinent in the circumstances.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for his introduction to these regulations and for explaining how we got to this place, the noble Lord, Lord Kirkwood, for some very good questions, and my noble friends Lady Drake and Lady Turner for raising some significant concerns.

There has rightly been a long consultation on this issue, and it is right that the Government have taken the time to listen to a wide range of voices, particularly regarding the retrospective nature of the changes, the significance of which has been highlighted by the noble Lord, Lord Kirkwood, and others. While on one level these are very technical changes—I say to my noble friend Lady Drake that, being a relatively normal person as far as pensions are concerned, if in no other respect, I found that “complex” did not begin to describe my emotions—sadly, I felt the same way as Brazil when I was reading these. None the less I confess that the questions I am asking the Minister are quite genuine and I will find the answers fascinating, because I certainly do not pretend to understand the exact implications of what is happening here.

As my noble friend Lady Drake explained, the original draft SI was withdrawn after being challenged by the Joint Committee on Statutory Instruments. It has been replaced by two orders: this affirmative draft instrument and a negative instrument, the Pensions Act 2011 (Transitional, Consequential and Supplementary Provisions) Regulations 2014, to which I shall refer from now on as the negative instrument, if noble Lords will bear with me. Those two orders are completely intertwined. Indeed, the Government issued a single impact assessment covering both. Therefore I hope that the Minister will forgive me if some of my questions end up straying into that territory. I simply want to understand the settlement that the Government reached, and inevitably the ground is split in practice between the two instruments.

On commencement, my noble friend Lady Drake explained that these regulations will apply primarily with prospective effect, with the exception of two limited circumstances relating to winding up and to employer debt where there is a risk to member benefits. However, there will be retrospective protection for the affected pension schemes, with earlier decisions effectively being validated. The key effects of that of course—as has been mentioned—are on schemes that switch from being money purchase to defined benefit, with all the significant regulatory, governance and funding implications that that switch carries. There is also the effect on wind-ups and administration and the impact on employer debt. The Government originally intended that the provisions should all be retrospectively applied, but changed their position on consultation. The Government response to the consultation on the definition of money purchase schemes says at paragraph 50:

“However the Department has been persuaded that, where there is negligible risk to member benefits, it would be unduly burdensome to require schemes to revisit past decisions. This would give rise to expensive administrative costs that could deplete scheme assets and therefore, the ability to fund members’ benefits”.

Paragraph 51 continues:

“Nevertheless, where there is a real risk to member benefits, it is right that the legislation provides that employers fund a scheme deficit if a scheme is underfunded on wind-up, or if the scheme is unable to put in place a recovery plan”.

The response goes on to explain that in practice the transitional regulations validate the actions of trustees or managers in respect of those non-money purchase benefits, except in limited circumstances.

If that is the basis of the transitional protection that is being offered by the Government, can the Minister tell the Grand Committee a bit more about the basis of their assessment? The impact assessment says that,

“there is insufficient information available to accurately estimate the number of schemes affected by these regulations”.

It goes on to say that there are approximately 40,000 private occupational pension schemes in the UK that include money purchase benefits, of which about 2% are hybrid schemes.

The impact assessment says that during the consultation the department held four stakeholder forum events, with more than 100 stakeholders in attendance. It had 95 responses to the consultation document. The department also made direct approaches to relevant organisations, including employer representative bodies. As my noble friend Lady Drake mentioned, it also went out and made direct attempts to get data, in order to better understand this. However, paragraph 25 of the impact assessment says:

“Despite these efforts the Department is unable to quantify the impact of the regulations on the schemes that are likely to be affected. There is no data available at an industry-wide level and the consultation did not elicit sufficient data at scheme level to allow us to produce reliable estimates of the impacts on schemes, employers or members”.

However, the Government were obviously given a pretty clear steer by the industry that the consequences of retrospection would be significant, because the impact assessment says at paragraph 30:

“The Department have taken into account the strongly expressed views of those in the industry. Having carefully considered these responses, the Department is persuaded that this change to the policy”—

as was quoted—

“will not appreciably increase risk to members’ entitlement or make any material difference to members’ pension outcomes, given the protections put in place through these regulations”.

My noble friend Lady Turner said that she was pleased the Government were able to give assurances that members would not find their benefits being affected. However, I have to ask—along with my noble friend Lady Drake—how the Government can be confident that the risk to members’ entitlements is negligible and will not increase appreciably, when they are unable to quantify even the number of schemes affected, never mind the number of members, and when they do not seem to have been able to gather any data about what the quantum of that effect might be. I understand that they are in a difficult position, but I wonder what degree of confidence the Government have, and therefore what degree of assurance the Minister can offer the House through this Grand Committee, that these regulations will have the effects that the Government believe they will.

Benefit Cap

Baroness Sherlock Excerpts

Wednesday 2nd July 2014 Lords Chamber

[Lord Freud]

One of the things that we are doing is reforming the whole of the welfare system in order to find out the barriers to going to work that people have and helping to address them. In the particular case of the introduction of the benefit cap, we had an enormous initiative to work with those individuals through Jobcentre Plus. We wrote to them, talked to them and provided intensive employment support. We worked with local authorities to help them with budgeting, housing and childcare. In this particular case we worked hard, and that seems to be an effective set of interventions.

[Baroness Sherlock (Lab)]

My Lords, how much has been spent on discretionary housing payments to those affected by the benefit cap and what impact has that had on the planned savings from the policy? So, for 2013-14, how much was spent on discretionary payments, to what extent has that reduced the savings for central government and what impact has it had on local government?

[Lord Freud]

The department pays out a lump sum of discretionary housing payments that local authorities apply to the various policies that they are tackling. There is a specific amount, £110 million, that goes to this particular policy although actually, when you look at the analysis of how local authorities attribute the spend, it is rather less than the amount attributed to the benefit cap. The total AME savings set against that are £225 million. As I said, the importance of this policy is that it sends out a message about the direction of travel, which is that the way to get people out of poverty so that they have proper support is to get them into work.

Jobseeker’s Allowance (Supervised Jobsearch Pilot Scheme) Regulations 2014

Baroness Sherlock Excerpts

Tuesday 1st July 2014 Grand Committee

[Lord Kirkwood of Kirkhope (LD)]

My Lords, I am grateful to my noble friend for the lucid way in which he introduced these important regulations. I declare an interest as a non-executive director of the Wise Group in Glasgow, which works in JSA service provision.

I am grateful also to the Secondary Legislation Scrutiny Committee, which looked at these regulations. It does excellent work; it is hard to overestimate the value it brings to some of these very complicated schemes. The committee came to the conclusion that it was not impressed. There are two issues here: the policy behind the pilot and the structure of the pilot—whether that is worth the candle. I want to rehearse some of its concerns, because they are self-evident to anybody who has studied these things. Pilots are very useful; they have played an important role in the past in developing policy and I am sure the Scrutiny Committee accepts that. But how do we expect to get real value out of something that starts on 6 October and ends on 15 April, when we are dealing with the possibility and the opportunity that these regulations provide, as the Minister rightly described, in helping people into sustainable work? In my book, sustainable work is a 12-month contract, with support that a jobseeker can take advantage of from being on benefits into that sustained job outcome. I have severe doubts, as does the Scrutiny Committee, that we will get anything of value in what I think is insufficient time. Why are we stopping on 15 April? Obviously, there is an election. I can see that coming—I am not that stupid. However, it is more important to get this policy right than to have niceties about purdah or any other technicality of that kind. I have serious doubts about what value we will get from the shortness of the period of the pilot. Indeed, client groups of 3,000 are not that useful, either. Before the debate started the Minister helpfully handed us a long list of exclusions of clients who cannot be included.

We have a very limited pilot here, and I think we could have had a much more useful opportunity to test some of these things. We have very minimal information about what will actually happen. Jobsearch is something that, if people have been in the Work Programme, should have been deployed for two years—and intensively, I would like to have thought. Now we have supervised jobsearch, which comes six months after two years so it will be really intense. The new system of Universal Jobmatch—which I have seen; it is very good—takes only about half an hour to prospect for jobs across the United Kingdom, because it is so efficient. This is a full-time commitment. People are being mandated to come in for 35 hours a week. How many hours will they spend over a Universal Jobmatch machine? They can get the full value out of it in half an hour, in my experience. It would help me to understand the value of these pilots better if the Minister could flesh out what would be done over this extended period of 13 weeks at 35 hours a week. What on earth are they going to do? We are told at paragraph 7.19 that:

“On day one, the provider must: assess the claimant’s skills and experience”,

et cetera. Then we are told:

“In week one, the provider must: carry out a number of activities with the claimant … On an ongoing basis, providers must: review and update the claimant’s portfolio, CV and action plan”.

These are things that I always assumed would be taken account of in the Work Programme anyway. Now they are doing it full time, for 35 hours a week for 13 weeks. I am in favour of providing support for people, but I do not know how that intense job-searching activity will look different from what they are supposed to have been doing for the previous two years.

I am interested in the pre-Work Programme group, because I do not understand where it came from. There is a logic to involving people who have been in the Work Programme. In any commonsense view, if someone has been unemployed for two years despite being in the Work Programme, in which they get a lot of help, it would suggest that more than their CV needs fixing. I do not know if it is possible to translate those people into the Troubled Families Programme; I hate that term, but the programme is interesting. It takes a holistic view, going beyond the front door of the family home, looking not just at the CV but at everything that is going on. Somebody who has been unemployed for two years despite the Work Programme’s assistance has got some serious issues behind the front door of the family home. It would be much more sensible for some of these people to at least be offered the option of taking a different route from that of looking at a Universal Jobsearch machine for 35 hours every week. That would drive me crazy.

The Scrutiny Committee says that there is scant information about the cost-benefit ratio for this. We have been told that there is a cap of £5,000 per head. I understand that if this is to be competitively tendered for, the department has got to be a bit canny in determining costs for contracts which will be bid for. However, Parliament requires a little more information, particularly given the department’s straitened circumstances, with departmental expenditure being squeezed so ruthlessly.

In passing, the whole-time staff equivalent costs are being substantially reduced. I looked at the annual report which came out a couple of days ago. In 2012, there were over 100,000 whole-time equivalent staff in the DWP. It fell to 98,000 in 2013. It is now 88,000. We are laying extra layers of responsibility on to a smaller cadre of hard-pressed staff. These job coaches will have their work cut out to do the work they already do on top of this pilot. The Minister was helpful in his introductory remarks, but any more information we can have about what will actually be done during this intensive period of job searching would certainly help me a lot.

I am looking at the Autumn Statement 2013, where the Chancellor said that,

“the Government will invest £700 million over 4 years in a new Help to Work scheme”.

He went on set out what that would do. He said it would,

“require all JSA claimants who are still unemployed after 2 years on the Work Programme to undertake intensive, often daily, activity to improve their employment prospects”

Is this part of that? Is this part of the £700 million four-year programme that the Chancellor set out in the Autumn Statement? I would like to know about that because, if it is, it would make it possible to place this pilot in a wider context. I must sit down. I have just realised how long I have been talking for.

My view about conditionality and support for getting people off welfare into work is captured accurately in the study that Paul Gregg did in 2008 for the previous Government. If the Minister will promise to read it at the weekend, I will say no more about it. That is a deal that he had better accept because, otherwise, it will take me another 20 minutes to explain its detail.

There are some opportunities here. I understand that. I am not against sanctions. I think sanctions should be restricted to a much smaller band of people than the 800,000 or 900,000 that we are headed towards. I am prepared to look at this. I know the Explanatory Memorandum states that the results of the evaluation will be published. I hope the Minister will confirm that on the record because that would give it some solidity and be an assurance. I hope this pilot produces something useful. I have great doubts that it will, but I understand why the Government are taking the powers they are taking. I wish the pilot well and I hope it works.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for his introduction to this order and the noble Lord, Lord Kirkwood, who should not have worried about going on too long. I should apologise because I intend to go on for a great deal longer than that, I fear. My speech will be composed mostly of questions to which—like the noble Lord—I struggled to find the answers. The Secondary Legislation Scrutiny Committee, the noble Lord, Lord Kirkwood, and I have been together wandering around the Palace hunting. I was so much driven by desperation that I even went to watch the House of Commons Delegated Legislation Committee debate these regulations yesterday. I have to admit that that the exercise was slightly more entertaining than it was informative—and it was not actually that entertaining, in truth. It was an attempt to try to find out what was behind it. Yesterday, the Minister did not manage to answer many of the questions, but I have confidence in our Minister who I know will answer them. If he cannot, I ask him to write on any questions that may be outstanding at the end.

The noble Lord, Lord Kirkwood, mentioned the report by the Secondary Legislation Scrutiny Committee. It was interesting reading. It might be worth reading a bit into the record. It commented rather drily:

“While the Committee has in the past commended well-structured pilot exercises as a means of informing policy development, it is unable to do so on this occasion due to a lack of information on how the scheme will work in practice. The Explanatory Memorandum provides minimal information on the pilot scheme and none at all on the cost of the exercise. We found virtually no material in the public domain about this proposal. No evidence is offered on why DWP expects the format and 13 week duration to be more successful than the existing interventions or why a shorter intervention might not be more cost-effective. We understand that the pilots will cost more than the existing programmes to run but not how they are expected to provide value for money, particularly when the candidates selected will be those who have failed to engage with the Work Programme”.

Apart from that, it loved it. It goes on:

“We therefore suggest that, before the House is asked to approve these Regulations, DWP offers … a revised Explanatory Memorandum”.

I discovered this morning that DWP had produced a revised Explanatory Memorandum which was put on the website last Thursday. Will the Minister take back a thought, which is one for all sides to consider? In circumstances such as this, where a department revises an Explanatory Memorandum very late in the day, he might reflect on the best way to bring that matter to the attention of Members of the House who might be interested—which I say, for the purposes of the avoidance of any doubt, would include Her Majesty’s Opposition on occasions such as this. I wonder whether he might consider whether there is any way we could make the communication process work better.

The noble Lord, Lord Kirkwood, asked about context. These pilots were first announced by the Secretary of State for Work and Pensions, Iain Duncan Smith, at the 2013 Conservative Party conference. Their aim was made clear when he said that,

“alongside the Mandatory Work Programme and our tough sanctions regime, this marks the end of the something for nothing culture”.

That is the context. To understand what this is about, it is worth looking at those two other bits of the package because what is happening here is connected directly to the Work Programme.

Its record, as noble Lords will know, is not hugely encouraging. Its performance is inconsistent and it has helped primarily those who are already closest to the Labour market. In another place the Minister of State, Esther McVey, responded on this point by talking about unemployment levels. Thankfully, I know that we have in the noble Lord a Minister who is better able to distinguish between the level of employment and the contribution made to it by the Work Programme, which is carefully evaluated.

While it is good news when anyone gets a job, there are significant gaps in the Work Programme. Over 1.5 million referrals have been made to it but fewer than 300,000 job outcome payments have been made. The success among disabled people is particularly bad, and not much more than one in 20 people on ESA are getting a sustained job outcome. However, the key point is that that means that 477,480 people have gone back to Jobcentre Plus after two years on the scheme. This is over two-thirds of participants who have completed their allotted time. Can the Minister tell the Committee if it is the intention to roll out this scheme, should it be deemed successful, to all of those 477,000 people?

It may be the case—given the piece of paper he handed to us at the start—that once those 11 categories of people who will be excluded are taken out, the number is smaller. If so, by how much? What is the size of the population who would potentially experience this, should it be rolled out? If so, what would that cost? My back-of-envelope maths suggests that at £5,000 a head, the cost will be about £2.4 billion. Are the Government really considering spending that on rolling out this programme to 477,000 people? If not, why are they piloting it?

I am sure that the noble Lord, Lord Kirkwood, is of a more generous spirit than me—which I confess is not always hard—but I am ever so slightly suspicious that it was announced that the Work Programme was not doing well but there was nothing to say what you do to people who get to the end of it. Labour had suggested all kinds of things such as compulsory job guarantees. This scheme is not a good thing, but it is a thing. I will wait for the Minister to correct me, as he often does.

In relation to sanctions, the other part of the package, we have heard a lot of complaints repeatedly from people concerned that jobcentres are being pushed to sanction too many people, or inappropriately. As regards communication, the Minister has a job to do in reassuring the Committee about how the Government will make sure that anyone who is sanctioned is sanctioned appropriately.

There is, however, a serious issue behind this, as the noble Lord, Lord Kirkwood, pointed out. We need to do something to redress the position of those who are still struggling, even after having received considerable amounts of help. The Government could usefully look at a more effective process of assessing jobseekers right at the beginning. Also, the Government’s proposals are not ambitious enough for the long-term unemployed. The Minister knows the Labour approach. We would offer a compulsory job guarantee to any young person out of work for a year, and to anyone else who was out of work for more than two years; basic skills tests; a more devolved model of commissioning; and different support for young people. However, these regulations are what the Government have produced, so I should be grateful if the Minister would tell us why their proposal will make a difference that our kind of schemes will not.

I have some specific questions, and I apologise for their number. As the noble Lord, Lord Kirkwood, asked, can the Minister tell us what people will do for 35 hours a week for three months? Will they all be doing the same thing as one another? Yesterday in the House of Commons, Esther McVey said that the Government were refining and tailor-making support for individuals. How individualised will the programme be? Will all the participants from any one provider be doing the same thing or different things? What range of things will they be doing?

The Minister there also suggested that they would vary according to client need and provider inclination. How then will the Government ensure that provision and supervision will be of good quality? If a provider bids low and does only what the noble Lord, Lord Kirkwood, suggested and keeps claimants in a room with a computer screen and Universal Jobmatch for 35 hours a week, will that pass? It might be value for money because it would not be very expensive, but would it pass the quality threshold? The noble Lord is wrong to think that he would go completely mad; he could probably read the adverts for careers at CosaNostra Holdings several times to amuse himself before he became too bored with Universal Jobmatch; so he need not do it down too much.

Regulation 3(a) states that the scheme is to provide support,

“for up to 35 hours per week over a period of up to 13 weeks”.

Is it the intention to test varying periods and durations, or will everyone be expected to be there for 35 hours a week for 13 weeks?

--- Later in debate ---

[Lord Bates]

I begin by thanking my noble friend Lord Kirkwood and the noble Baroness, Lady Sherlock, for their scrutiny, which compared and contrasted interestingly to the sparks flying and a lot of heat and not much light that took place in the other place when it considered these regulations. I totally accept their spirit of genuine inquiry and the need to flesh out the important issues and details, which we need to get on to the record. At the same time, I ask them to recognise the fact that what we are bringing forward here is a pilot, which in its nature is going to have areas of ambiguity that will be resolved as it takes effect and is rolled out. So a tolerance of that would seem fair.

Another thing should be said and needs to be put on the record. I accept that there is criticism of the Work Programme—but the noble Baroness will accept that there was criticism of the New Deal and even of the Flexible New Deal. The IPPR report came out just last week; it is not normally a champion of government social policy, but it actually said some very positive things about the way in which the Work Programme is going. Of course, 294,000 outcome payments have been paid to providers on the scheme, which suggests that something is happening in the labour market. In addition, at the risk of slightly straying into the territory of the other place, we need to put it on record that there is a changing employment environment. We have employment at record levels in this country and we seeing the number of vacancies increase quite dramatically; it is up 100,000 at 600,000. We are seeing a lot of people getting off benefits and into work; unemployment is down 27%, while youth unemployment is down 33% and long-term youth unemployment is down 39%. So in the interests of balance, one ought to put that record out there, to say that what Her Majesty's Government are doing in trying to help people is not without effect. Therefore, it is progressing.

I turn to the specific points. First, I recognise the sterling work of the Secondary Legislation Scrutiny Committee, which looked at these regulations and commented in a fairly detailed way. It asked that the Explanatory Memorandum be enhanced and updated with a lot more detail, and the department did that. That Explanatory Memorandum was published last week ahead of the scrutiny which is now taking place in Parliament.

The noble Baroness raises a very interesting point about whether there ought to be a mechanism. Whether it is for the House or the Secondary Legislation Select Committee, there should be something that says that when a report makes a recommendation there should be some mechanism for ensuring that people who have a close interest in this—certainly, perhaps, the spokesmen of the respective parties or groups—are systematically made aware. I will take that back to the department, and we will certainly try to respond to it.

Many points were raised. My noble friend Lord Kirkwood and the noble Baroness, Lady Sherlock, referred to many of the same issues, and I will work my way down them. On why the power is for 13 weeks and whether that is too long or too short, this is a new initiative and that is why we are testing it. The evaluation will help inform us about whether it is the right length of time to refer claimants to this more intensive activity. The length of the programme gives sufficient time for claimants to adapt and benefit from the enhanced jobsearcher’s routine. It also gives providers a reasonable amount of time to work with claimants to ensure that the support is effective.

I was asked why claimants will be on the programme for a maximum of 13 weeks. We will track them for as long as it takes after they have left the programme, typically for at least six months, to establish the impact of the pilot. I confirm that the pilot is being run on a randomised control basis, which is regarded as the gold-standard methodology for evaluation. I confirm that we will publish the results of the evaluation.

At this point, I turn to my colleagues behind me because the noble Baroness made a very interesting point when she focused on selection and randomised control and asked about the predominant methodology. The pilot we are talking about is a randomised control trial. The type, category and number of individuals will be the overriding methodology that will be used.

[Baroness Sherlock]

Something is either a randomised control trial or it is not. I am going to try to help the Minister here. It is not impossible that what the department is trying to do is select people to go into the pool, and then people from that pool of those deemed to be eligible will randomly be chosen to go into the programme or a control group. If that is what the department intends to do, will the Minister explain how people get to be in the selection pool in the first place? If I have got that wrong, he will of course correct me.

[Lord Bates]

The normally impassive officials behind me are nodding sagely to say that that is indeed the methodology that has been adopted. Advisers will have discretion on those who are eligible for the pool. Let me make a little further progress and perhaps some further inspiration will be on its way.

I was asked how claimants can possibly look for work for seven hours a day and what a typical day will look like. The Select Committee, the noble Lord, Lord Kirkwood, and the noble Baroness, Lady Sherlock, all asked this. A typical day will be tailored to meet the needs of each individual participant. While there are generic skills that underpin jobsearch activity, participants will have tailored work plans that address their specific needs. They may include work on IT skills, interview techniques and job application skills, which do not just involve visiting the jobsearch website, looking at this person who has been on the Work Programme and has applied for up to 100 jobs without success for two years, and asking what are they lacking that would ensure that they get off benefits and into work, which is the outcome that we all seek. The Government have introduced the principle that looking for work is a full-time job, as has been said.

--- Later in debate ---

[Lord Bates]

We can certainly look at that. One of the reasons why it needs to be tailored, rather than just having a letter generated, is that a lot of those people will have literacy or numeracy problems. They cannot comprehend it, whatever form of English it happens to be delivered in. Therefore the ability to talk that through with someone in person, so that they can explain it at the meeting while giving claimants the formality of the letter, would seem to be the right way to do that.

In terms of how we will ensure quality of service throughout the contract, the majority of the payment made to providers will be based on service delivery. The standards of service delivery will be monitored throughout the contract and payment will be related to providers consistently meeting the required minimum service levels outlined in the specifications. In terms of what will happen if the work coach ignores the claimant’s view that they are not suitable, at the point of referral claimants will be able to make representations if they feel that a pilot will not be appropriate for them. The work coach would take this into account before making a referral. Where the work coach decides that a referral should nevertheless be made, the normal appeal route will be open to the claimant who refuses to attend and is sanctioned as a result.

In terms of varying periods and whether they will all be 35 hours, everyone will be attending for 35 hours unless they are not able to do so because of restrictions. That is the point that was made earlier. We acknowledge that people are caring for other people; for instance, there are parents caring for young children and they might have other responsibilities that are entirely legitimate and need to be built around. Again, that is the reason why it is a tailored and individual approach.

[Baroness Sherlock]

I thank the Minister for answering a great many of my questions. I shall flag up one or two that I think he may have missed. One is the question of childcare and travel costs. Can he confirm that those will be available up front—that people will not have to find the money to pay for childcare and then reclaim it from the provider? On the same point, will the Minister clarify the answer he has just given to the noble Lord, Lord Kirkwood? Is he saying that an individual judgment will be made about whether somebody does not need to do 35 hours because they have other needs or responsibilities, or is he—as I suspect—saying that if somebody is not required to be available full time for work, in a comparable manner they will not be required to be available full time for this programme? Perhaps the Minister can clarify that for the record.

I do not think that he answered the point about whether somebody was engaged in doing something at the suggestion of the Child Poverty Action Group, or if somebody is already engaged in doing something that in fact makes it more likely that they will get a job. With that, can he clarify that anyone doing voluntary work will therefore not be covered by the programme, because that is what the list seems to say?

Finally, will he clarify his answer about the randomised control trial? One of the biggest problems that can befall a randomised control trial is if the selection pool from which people are chosen is itself biased. One of the difficulties in having what is essentially a subjective judgment made by coaches about referring people into the pool is that it does not matter how rigorous the randomisation is from the pool if entry into the pool itself is not biased. Can the Minister say whether the Government have been thinking that through? Do they have any concerns in that direction?

[Lord Bates]

I am grateful to the noble Baroness for saying that there are only one or two issues to cover, which suggests that I have worked my way through the list. I feel as though I am doing well, or, rather, the wonderful officials behind me are doing well.

The point about childcare is a serious one and I want to get my reply on the record. As regards childcare travel guidance, extra costs incurred by claimants will be provided. This is not currently published but has been stipulated in the terms and conditions. The provider is encouraged to consider claimants’ circumstances when awarding this and, if possible, to do this in advance. Good reasons are always considered before applying any sanction, and whether travel costs had been issued would be taken into account.

As regards how the randomised control trial will work, for the pre-Work Programme strand of the pilot, the Jobcentre Plus adviser will first identify suitable claimants, after which they will be randomly allocated to a treatment or control group. I think that I have mentioned that already. The 35-hour period is currently part of the claimant commitment, so that would apply.

As regards the Child Poverty Action Group’s view on charitable or voluntary work, perhaps the noble Baroness would be good enough to send us more information on that group’s recommendation on that.

[Baroness Sherlock]

That group simply asked whether, if somebody was already doing something that made it more likely that they would get a job than by going on the programme, that would do. I am sure that it was not thinking about work experience at a high-level cultural institution, for instance, but I give that by way of example.

[Lord Bates]

I thank the noble Baroness for that very helpful further intervention, which enables me to confirm that those engaged in voluntary work will not need to participate. A work coach will consider any other activity in which the claimant is engaged before deciding what action is taken. I again thank my noble friend Lord Kirkwood of Kirkhope and the noble Baroness, Lady Sherlock, for their scrutiny. I hope that this debate has been helpful. I believe that it will make a positive contribution to understanding how we can help some of the hardest to reach people in our society and give them employment, hope and a future.

Housing: Underoccupancy Charge

Baroness Sherlock Excerpts

Tuesday 24th June 2014 Lords Chamber

[Lord Freud]

My Lords, for obvious reasons, I have not seen the report. It will be published but I am not aware of that kind of detail at this stage. Clearly once the report is out we can look at the issues that remain uncovered. There will be a full report, which will be published next year in 2015.

[Baroness Sherlock (Lab)]

My Lords, the Minister has often complained about councils underspending the discretionary funds that mitigate the effect of the bedroom tax. Did he see the report in Inside Housing last week which stated that £7 million of the extra £20 million allocated by the Government last July remains unallocated to councils by the Government? An FoI request showed that 27 councils did not get the money they asked for mostly because the department decided that this would allow them to buy out the effects of the bedroom tax. So people asked for money, were turned down because it would have the effect that was wanted, and then it is claimed that the underspend shows that they did not need any more money in the first place. How can the Minister explain that to the thousands of people affected by the bedroom tax?

[Lord Freud]

My Lords, some of my more sharp-eyed colleagues here will have seen the information we put out on the discretionary housing payments for last year. That showed that there was a £13 million underspend by 240 councils and that of the £20 million bidding fund, £7 million was not spent. The £20 million was not applied for in its entirety. However, we allocated that money on the basis of parity of requirement. There was an extensive process to make sure that we gave the appropriate amounts of money to those councils.

Personal Independence Payment

Baroness Sherlock Excerpts

Tuesday 24th June 2014 Lords Chamber

[Lord Freud]

My Lords, the Government remain committed to maintaining support for disabled people. We spend roughly £50 billion a year, every year, and that is held in real terms. That is a fifth higher than the EU average. The overall spend on incapacity benefits has remained roughly flat in real terms over the life of this Government, and indeed the benefits about which we are talking—PIP, DLA—have actually been going up in real terms over the past four years.

[Baroness Sherlock (Lab)]

My Lords, the Minister’s assurances would be rather more encouraging were it not for the fact that, as well as this shambles of the WCA and the 42-year backlog, employment and support allowance has been delayed and proved not to be succeeding; the Work Programme has a 94% failure rate; the bedroom tax is not meeting its objectives; and at current speeds, universal credit will take 1,052 years to roll out. Is the Minister proud of these achievements?

[Lord Freud]

My Lords, we are transforming the welfare system in this country. We are doing it across the piece. It is all very well for the Opposition to complain about the speed at which we do these programmes. These programmes are difficult to do. They were shied away from by the previous Government. I think that Peers all round the House will be pleased to see these transformational changes go in and transform the way in which this country operates at a fundamental level. There is a level of cynicism about what is always a difficulty: getting difficult, complicated programmes through exactly to timetable. People who know how difficult projects are know that process, but this is critical work for our country.