Jobseeker’s Allowance (Mandatory Work Activity Scheme) Regulations 2011

Lord Freud Excerpts

Tuesday 10th May 2011 Lords Chamber

Finally, coming from a rural area of south-east Scotland, I am really concerned about how transport costs and childcare costs are dealt with in rural areas. My honest opinion is that the £8 million would have been better spent on training schemes, but if we are going to do this, we are entitled to seek more detail. I think that as things stand, these schemes are of doubtful value. The sanctions are very severe, and I will need some persuasion by the Minister not to support the Motion moved by the noble Countess, Lady Mar, if she presses it to a Division this evening.

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

My Lords, thank you for giving me the opportunity to clarify the objectives of the mandatory work activity scheme and to explain further how the scheme will operate.

Before I go into that, I want to say that the department takes the concerns raised by this House very seriously. The concerns raised here and by the Merits Committee tell the ministerial team in the department that something has gone wrong. I am aware that this is not the first time in this Session that the department’s instruments have been called to the attention of this House, and we find that very serious. The full ministerial team is in agreement that providing the Merits Committee and the House with all the necessary information is of central importance, and we all regret—I particularly regret—any occasion when the Committee felt it received inadequate information. We are working hard to improve on this. We have arranged for senior officials to meet with the committee’s advisers this week in order to take a serious look at how we are falling down, and they will work with the committee team to ensure that the House is in future supplied with all necessary information. I can assure noble Lords that I am going to make sure that there is a process in the department that makes sure that the right information goes to the committee. This will not continue in this way.

Let me now offer some assurances about this particular instrument. The mandatory work activity scheme represents a new approach. I understand why some noble Lords feel that we should have conducted a pilot before introducing the scheme nationwide. Such an approach may have been the norm in the past, but there has been a change of philosophy in this area. The problem with small, limited pilots is that in the mean time they leave you with a moribund system. Central to the new philosophy of the department is that it is best to provide the freedom to allow initiatives to flourish into success. That is what the structure of the work programme is designed to do. It provides our own staff with the freedom to innovate. Advisers are given greater flexibility to make decisions on what help an individual needs in order to find work. It is one of a range of available support options that can be considered.

The budget is set by a central contracting process, but it will up to Jobcentre Plus to decide whether to use it and in what numbers. It will depend on whether there are claimants in a particular Jobcentre Plus area whose characteristics suggest that they would benefit from this intervention. Contracted providers will not be paid for places we do not use, so there is no incentive to use places that customers do not need. My noble friend Lord Kirkwood’s maths on his calculator is more or less spot on. We have the money for up to 19,000 places costing £8 million, which on the calculation of my team in the Box comes to £421. That is close enough to my noble friend’s answer of £423. How he got that discrepancy suggests that it is obviously a Hewlett Packard calculator.

It is important to recognise that we are not undertaking this work without assessing its place in the wider picture. We intend to learn from how mandatory work activity is used and what impact it has on the customers who are referred to it. I shall come back to precisely how we plan to report to the House on that.

I should also like to take this opportunity to address some of the other concerns that have been raised in the debate. It is vital to recognise that this support was asked for specifically by Jobcentre Plus personal advisers themselves. After all, they are the people best placed to understand what help those struggling to find work really need. During the summer, ministerial colleagues went out, listened and gathered opinions from Jobcentre Plus advisers. The consistent message was that they wanted a tool like this to engage a particular group of people. So the introduction of the mandatory work activity programme has been driven by the grass roots. The programme is aimed at a particular, rather small group of people who have become disengaged and stuck in a rut in their search for work. By getting them involved in mandatory work activity within their local communities, the aim is to give them the confidence they need to approach finding employment proactively as well as the basic disciplines that any employer would expect.

The noble Lord, Lord Rix, was particularly concerned about people with learning disabilities. We aim to replicate all the existing protections in referring people. JCP advisers are not looking for customers in this group. Equally, I shall pick up the concerns of the noble Countess, Lady Mar. Customers in poor health are absolutely not the target group for this scheme, which is aimed at those whose key barriers to work are the disciplines of employment. We know that every customer’s circumstances are different. As much as possible, we are giving discretion to Jobcentre Plus advisers on when to refer customers to mandatory work activity.

Although we are not being prescriptive, we are providing guidance to JCP so that it can provide a framework and achieve continuity of approach across the country. The guidance will indicate the type of characteristics that we expect claimants who benefit from this provision to display. As a department, we are choosing to trust those who have day-to-day experience of working with jobseekers. They are, after all, the people who are asking for greater freedom in how to help customers.

The noble Lord, Lord Rix, was concerned about the complaints procedure. A clear, independent complaints procedure exists through the independent case examiner. If providers are at fault, a hefty fine will be attached. The noble Countess, Lady Mar, expressed concern about trickery and quoted from an article in the Guardian. I can assure her that there are no targets in place to deliver sanctions, either in JCP or among providers. The noble Lord, Lord Knight, was concerned about costs. We have taken on board the recommendation of the SSAC that we pay childcare costs. Lack of suitable childcare is good cause for failing to attend. Therefore, there would be no sanction. We also pay transport costs under the programme. More detailed guidance will be available to JCP advisers. The guidance will be internal for them, so it would not make much sense to publish it.

We have now completed the procurement process and are able to discuss the suggestions of those who participate in the scheme. That may be helpful in clarifying how mandatory work activity will help customers as they look for employment. The noble Lord, Lord Knight, and the noble Baroness, Lady Lister, said that research shows that workfare is not effective. We must make it clear that this is not workfare; it is a short, supportive and personalised programme. That is why flexibility is built into it. The noble Baroness said that that can be looked at in two ways, but the intention here, given the brevity of the programme, is to be supportive.

We have not asked contracted providers to give us details of every placement, but, as an example, several organisations have suggested that they will place people with charities that renovate old furniture to be used in social housing or by low-income families. The noble Baroness, Lady Thomas of Winchester, spoke of benefiting the community. Examples of placements include improving local green spaces, improving community cohesion by working with excluded groups, maintaining cultural spaces and helping the development of social enterprises. Our aim is not only to provide visible benefit for local communities but also to give people the chance to develop skills that they can take forward when looking for work in the future. Most importantly, they will be expected to turn up for work every day for four weeks. They will be expected to work with their colleagues and to complete tasks that they have been set in a timely way.

In response to the concerns of the noble Baroness, Lady Lister, about placement monitoring, we will monitor placements through direct relationships with providers. It is clear in the contracts that placements must not replace current or future employees. We are seeking in this programme to instil essential work disciplines. Research with employers has consistently shown that they value such characteristics highly. A short experience of the workplace can help that development.

My noble friends Lady Thomas and Lord Kirkwood were concerned that there was no indication about how we would operate good cause. We will explicitly include good cause in the guidance in a similar way to that in other regulations. The noble Lord, Lord Knight, was concerned about there being no appeal for mandation. The decision to refer is an administrative decision subject to judicial review if it is unreasonable.

I thank noble Lords for allowing me this opportunity to try to explain these regulations more than we seem to have done to the Merits Committee. I hope that I provided some enlightenment. I recognise that some noble Lords hold deep concerns and I respect and acknowledge those. But in response to those concerns, I assure noble Lords that as well as monitoring the management information generated by the scheme from day one, we will be conducting an impact assessment in November 2012 to assess how mandatory work activity has changed outcomes for individuals.

On top of that, we have set aside £150,000 to conduct external independent research in February 2012 to learn about the experience that customers have while on the scheme, and the difference that it makes to the approach that customers take on their job searches. That will report in summer 2012. Any decisions about the future of the scheme will be based on the outcome of those reports. In order to ensure that the House has the opportunity for further scrutiny of any future changes, I commit that these reports will be laid before the House and noble Lords will be alerted that that has occurred allowing for further debate at that time. I hope that those offers are satisfactory and I urge noble Lords not to press their Motions.

[The Countess of Mar]

My Lords, I am grateful to the noble Lord, Lord Freud, for going to so much trouble, and I have no doubt about his sincerity. I doubt that any noble Lord in this House is completely against these regulations. We agree that some people need to be offered the discipline of work. But we are not happy about the sanctions and the noble Lord has made no effort to justify these draconian sanctions—they are very severe.

I am very grateful to all noble Lords who have taken part. I will not go through their speeches individually because I know that everybody is hungry and will want to go to dinner. I am not satisfied despite the Minister's efforts that he has filled in all the gaps. We have a statutory instrument before us that is not clear and I wish to test the feeling of the House.