Social Justice Strategy

Lord Kirkwood of Kirkhope Excerpts

Thursday 16th October 2014 Lords Chamber

[Lord Kirkwood of Kirkhope (LD)]

My Lords, it is always a pleasure to follow the noble Lord, Lord Northbourne. His speeches always repay careful study. He is an expert in the field of children and has made a valuable contribution to this debate. I absolutely agree with him about prevention and the importance of breaking the chain of disadvantage. I hope that the Minister will give that appropriate consideration when he reviews this important debate.

I am pleased that my noble friend Lady Tyler of Enfield has secured this slot. It is a bit of a graveyard slot in the parliamentary week but it means that at least we have the chance to make speeches lasting for more than four minutes. She also has huge experience in this area, and the House is indebted to her for raising this subject in the way she did. Of the many important points that she made, the most important for me was the appositeness of the timing. From a political calendar point of view, the next few months are going to be crucial not just for manifesto content, which all the parties are properly engaging in at the moment, but for the battle for public opinion, which is important. I will come back to that in a minute.

I am very pleased to welcome a new recruit to the parliamentary desperadoes who are obsessive about social security in the right reverend Prelate the Bishop of Ely. I will sign him up as a member of this distinguished band and I look forward to his contribution. The church does absolutely excellent work in this House, dealing with what some people choose to call the “undeserving poor”. It is right and proper that it should, and it does it well. The House is indebted to it.

I should declare an interest: I am a non-executive, non-remunerated director of the Wise Group in Glasgow, which does welfare to work programmes. I derive a lot of my interest and knowledge in this subject from that work. I hope my English colleagues do not mind if I refer to the experience that we Scots have had in the recent past with the referendum. The social justice strategy has very important elements that are deployed by the Department for Work and Pensions and others which straddle the border.

The referendum was a salutary experience for me. I have looked at social security issues for more than 30 years, man and boy, in this place and elsewhere. A message of alienation that I have never experienced before emanated from some significant parts of the hard-pressed households, particularly in communities in west central Scotland and Dundee. Some of that was politically excited and stimulated by some of the participants in that debate, but I do not want to get into that now. Significant numbers of people who do not vote at elections sent the institutions of both House of Parliament a message that they will vote for anything that will get some measure of hope into their lives, which is currently absent and to which general elections do not, as they see it, provide any answer. That is my anecdotal experience and it is difficult to prove. I was in south-east Scotland for most of the time and, as the noble Lord, Lord McAvoy, knows, we are much more genteel folk in south-east Scotland than in the central belt. However, there is a significant change that I do not think is specific to west central Scotland. The same would have been the case in Liverpool, if an event of that kind had taken place in that context.

The political process has to understand that we need to deal with this alienation in a way that we have not done before. I have spent my time advocating better provision for social security by looking at rates, benefits and entitlements. The kind of work that my noble friend Lady Tyler is engaged in professionally concerns support, as well as the cash transfers that the social security system provides. I have now come to the conclusion that interventionist support at a public service level across the border in some of the ways that she very expertly described is now more important than it has ever been, partly because of austerity.

Some public services are now degraded to the point of danger. That is going to get worse. I heard someone on the “Today” programme saying that everybody knows that things are going to get worse, particularly for this cohort of the population of which I speak. If that is what we really believe, we really need to respond to that. That needs political leadership. It is a very hard thing to do: leading a country to a poorer place and expecting to get the credit at the ballot box is not a trick that has been successfully managed by anybody in political history, as far as I am aware. So there are real challenges of leadership that all the party leaders need to focus on in the coming election to deal with this.

The language that they use is important, too—a point I have made previously in this House. The tabloid press are not helpful in this regard. They have their own agenda and they poison and make much more difficult the public debate about some of these crucial issues of public priorities and expenditure. However, my view is that social protection benefits everyone. Social protection is every bit as important an expenditure priority as infrastructure. It is as important as HS2, housing and all the other things that provide physical benefits and facilities so that the Government may prosper.

The recession that we have been through would have been much, much worse without the tax credits that were introduced in a Budget in the early 2000s. People have managed to survive this recession in a way that they will not be able to in the next five years because it is planned to withdraw a lot of this support. I want to make the case for social investment and to encourage people to be brave enough to support a cohort of people who are suffering disadvantage and are very unpopular. We must make the case for those whom people call the “undeserving poor”. I do not believe that anyone can sensibly be described as that. Some families need support and people do not recognise just how many barriers they face to get to a fulfilling life.

The work that Louise Casey has been doing is exemplary; my noble friend Lady Tyler was right about that. I like her idea of a “troubled families” initiative, although I hate the term. We must find some way of describing these households that we are approaching. I have always been sceptical about the role of the state behind the front door of the family because that is the family’s business. However, I now think we need to be much more interventionist. If people said that they were willing to go down that route, there is an easy fix because the predetermining risk factors are staring us in the face. They include lack of educational qualifications, big families and, to a degree, ethnicity, which is difficult but it is there in the data. If someone has been workless for three or four years, fixing their CV will not do the job. There are multiple reasons behind these circumstances.

The work that Louise Casey is doing is not perfect yet. Trying to get the evaluating indicators of success on a payment by results basis has not been properly fine-tuned. The private sector and, indeed, the non-profit and charitable sectors do very valuable work, but how they get value for money and how they can work with payment by results contracts—because many of them need money upfront—still needs work. It all needs investment and it all needs to start really quite soon. I think we will find that, over the next five years, people will face much more financially difficult circumstances.

Everyone knows that in the next 12 months interest rates will increase. Household debt is a dramatically difficult problem for many lower-income households. We may not be talking about big numbers—maybe 10% or 15% of the case load. Maybe the income decile distribution catches it or maybe it does not. I should not like to put a figure on how many families we are talking about. The noble Lord, Lord Stevenson, chairs StepChange, which produced a very good report in the past few days about the extent of debt. I am studying it and I hope that colleagues in the House who are interested will read it because it repays careful study. Debt in individual households is ignored by the current social security system. For my money, it is necessary to become engaged with some of these families who are facing all sorts of difficulties, tease out their exact levels of debt and start helping them to deal with it. Until the last couple of years, the government service on financial inclusion went through a phase of quite high activity with a task force, but I have seen nothing much since. I have just joined a financial inclusion commission which is doing some work looking at this issue. I think that the Government have lost the thread of the importance of getting proper money advice across to people. The credit union money has been put in and that is welcomed, but it is not enough. We need to think more about that kind of thing.

Finally, I notice that at the end of the Social Justice Outcomes Framework we talk about social investment. I do not think that the potential for that has been realised. I do not know whether that is partly because of the commercial and economic environment that we are in, with there being not an awful lot of money to invest. There is a huge amount of potential in all sorts of areas—not just in connection with ex-offenders, which I know is the area that people have been working on most directly and most immediately. A huge amount could be done to promote social investment, getting the not-for-profit and charitable sector engaged. There is an enormous amount of work to do.

Debates such as this one are very important, but I think that we have to be honest with one another about how difficult things are going to be. Only if we acknowledge how hard some of these families’ circumstances are will we have any chance at all of having a public debate and getting more public support for a cost-benefit analysis of the preventive expenditure that we heard about from the noble Lord, Lord Northbourne, as well as getting young people properly upskilled so that they can become productive, wealth-creating individuals. My pension depends on wealth creation from some of the youngsters who are currently NEETs. That is not a comfortable position for a man of my age to be in. Therefore, I think that we all have to work hard and try to get something done.

Again, I am very grateful to my noble friend for giving us the opportunity to discuss this important subject this afternoon.

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[Lord Nash]

I think that I must continue. These are the only ways in which we can break that dreadful cycle of generational unemployment and/or family breakdown to which many noble Lords have referred. That is why this Government have the biggest programme of educational reform for 70 years in train, and substantial welfare reforms under way.

Over the course of this Parliament my department has brought in a substantial number of reforms to support better educational outcomes for all children, but particularly for the most disadvantaged. We have introduced the pupil premium to ensure that the most disadvantaged children realise their potential. Funding for this will reach £2.5 billion in the coming year: £1,300 for primary pupils, £935 for secondary, and £1,900 for looked-after children. More children from deprived backgrounds than ever before will benefit from free childcare at the same time as we strengthen the quality of early years education. From this September, every pupil in reception, year 1 and year 2 will receive free school meals, which will make a huge difference to ensuring that every child, regardless of family circumstances, is ready to learn.

Noble Lords will know how passionate I am about the academy and free schools programme. We have created more than 1,000 new sponsored academies, turning around schools that had previously been failing for years and which often serve the most deprived communities. We have approved 363 new free schools, including 39 alternative provision schools, 22 special schools, 56 university technical colleges and 46 studio schools. When open, those will provide 250,000 new places in total, the vast majority of which are in places of need. Some 25% of open free schools have been judged outstanding, making them our top performing group of non-selective schools.

We are also reforming the curriculum and exams, both academic and vocational. Increasingly schools are doing more EBacc subjects, giving pupils, particularly those from deprived backgrounds, the essential cultural capital they need, given that they do not get it at home. We have dramatically overhauled vocational qualifications and substantially expanded and improved apprenticeships. We are reforming teacher training with far more of it conducted in school. We have introduced bursaryships into teacher recruitment, and have introduced phonics into primary schools. We are also investing in the school estate and are arresting the sharp decline in our relative educational performance that took place in the first decade of this century.

I congratulate the right reverend Prelate the Bishop of Ely on his excellent maiden speech and thank him for all the work he does in support of social justice, but particularly in the field of education, with academies and in general, and I wish him well in his new position as chair of the National Society. The church’s contribution to education in this country is long-standing, very substantial and highly impactful, as it is of course in its work on poverty in general.

So far as welfare is concerned, at the beginning of this Parliament it was clear that a new approach to supporting the most disadvantaged individuals in society was needed. Too many people spent their lives moving between different support mechanisms, never receiving the support to make a long-standing difference to their life. Too many people were faced with multiple barriers to improving; for example, poor education and lack of skills, drug or alcohol addiction, a criminal record, lack of stable family support, no stable home, problem debt and health problems. Those problems do not exist independently of each other. They can interact, and together create a vicious cycle which is hard to break out of. The piecemeal approach of the past did not effectively tackle the multiple problems people face, so this Government wanted to look for new ways to tackle these issues. We wanted to deliver real and sustained change.

First, we recognised that this was not something that could be solved by central government alone—the old top-down approach had not worked. We needed to involve local authorities, the voluntary sector and business; in other words, we needed a community-based approach. We needed to ensure that we got value for money—we knew that large sums had been wasted in this area in the past. We had to build an evidence base of which interventions work, solutions had to be on a payment-by-results basis, and we had to measure the progress we made against key indicators.

Most importantly, our reforms needed to achieve a long-lasting recovery rather than management of entrenched problems. That meant looking for and treating the cause of the problems rather than the symptoms. It also means intervening early in people’s lives to prevent problems in the first place. For example, we can work with a drug user to help them tackle their addiction. However, to turn their life around we need to ensure that they have stable housing and the skills to find employment, and we need to tackle other underlying health problems. Without that rounded support it is unlikely that an individual will be able to make a long-standing change to their life. We are delivering the strategy through growing the social investment market, using payment-by-results models and collaborating with local authorities, the voluntary sector and employers. These are not easy problems to tackle and there is no quick fix; making our vision a reality will take time. However, we have made great progress towards our goals. Our first progress report was published in April 2013. This autumn we will publish the second social justice progress report, giving details of how we are implementing the strategy and our achievements so far. This November also sees our third annual social justice conference. This brings together delegates from government, the private sector, the voluntary sector and most importantly the people whose lives we are transforming to work together to deliver social justice.

I will give a few examples of the progress we have made across the social justice strategy. The family environment is the foundation of a child’s life and we are committed to supporting safe and loving family relationships. Relationship support policy is being brought under one department, with DWP investing £30 million to successfully deliver marriage preparation, couple counselling and relationship education. However, when relationships break down, we are trying to minimise the negative impacts on children by promoting more collaboration. The child maintenance system has been reformed to encourage separated couples to agree their own arrangements and reduce disputes.

[Lord Kirkwood of Kirkhope]

In relation to child maintenance, has the Minister seen that the first results of the applications that have come in since charging began earlier this year indicate a drop of 38% in parents pursuing formal applications? The Government thought that it would be 12%. Is that not something of deep concern as it will exacerbate child poverty?

[Lord Nash]

My noble friend makes a particular point on a particular statistic. I shall take it away and write to him.

With the new Children and Families Act we are introducing a requirement to consider mediation before taking action through the courts. There is also better access to information for couples through the Sorting out Separation online service. Care leavers are at an increased risk of falling into a cycle of disadvantage, given the lack of support as they move into adulthood. JCP can now identify care leavers in the benefit system and offer more tailored support through earlier referral to the Work Programme. Following the launch of the first ever cross-government care leaver strategy in 2013, a further One Year On report will be published on 29 October and will set out how each department has met its milestones and what more will be done to continue the push for better services for care leavers. As part of care leavers week later this month, Ministers and care leavers will be undertaking exchange visits. These types of activities help to bring the voice of the people closer to policy-making. That is so important, as my noble friend Lady Tyler has said.

Earlier this year, it was my privilege to lead the Children and Families Bill, now an Act, through this House, a key plank of which was the new “staying put” duty on local authorities. It will mean that young people in foster placements can continue to live with their former foster carers beyond the age of 18, when that is what they both want to do, providing them with the opportunity to experience the stability and security of family life enjoyed by their peers.

Social justice is underpinned by work. This is the best route out of poverty. Work increases self-esteem; introduces routine into what can be chaotic lives; the individual becomes a valued member of society rather than sitting on the fringe, and they are a role model for their children. Work can replace the vicious cycle of disadvantage with a virtuous one. DWP’s innovation fund is working with 14,200 young people who are already or are at risk of becoming NEETs to improve their lifetime employment prospects. Each month’s labour market statistics bring new records. Employment is at a record high, with 30.8 million people in work. Unemployment fell by more than 500,000 on the year, the largest annual fall on record. The unemployment rate is at its lowest since 2008. Long-term unemployment, for those out of work for more than 12 months, is down 194,000 on the year, and 77,000 since 2010. The number of workless households is down over 400,000 since 2010 and that rate is now the lowest on record. In the past, the welfare system has been a barrier to people moving into work. Universal credit will restore the incentive to make the step into work, and to progress once there. It will remove the gap between out-of-work and in-work support. The Work Programme is providing specialist support for those furthest away from the labour market. So far, it has helped 330,000 people into sustained employment.

The Government are also providing support to make a sustained change to the lives of the most disadvantaged adults. Transforming Rehabilitation is changing the way the Government are working with offenders. Every offender released from custody will receive supervision and rehabilitation in the community. We are working in prisons to improve the prospects for offenders when they leave prison. Prisoners receive training aligned with employers’ needs, and advice from National Careers Service advisers. My noble friend Lady Tyler raised the question of a breathing space for those in debt. We support the principle of ensuring that people who fall into difficulties are given time to get back on their feet. The FCA has stringent rules about forbearance and how people in financial difficulties are treated. We have taken firm action to tackle those lenders who are exploiting those in difficulty. In April this year, the FCA took over responsibility for regulating all consumer credit firms, including payday lenders. It has demonstrated that it will take tough action, with Wonga recently being made to write off more than £200 million worth of unaffordable debts.

To deliver long-lasting outcomes for disadvantaged people, we need to engage locally with the people best placed to deliver real change. This is why we introduced social impact bonds, with the UK being a world leader in this area. In 2010, there was just one social impact bond, now there are 17. My noble friend Lord Kirkwood talked about social investment, which has grown over recent years. The social investment market was worth £200 million in 2012. Big Society Capital was also launched in 2012 with £600 million of funding to be both an investor in and a champion of the social investment market. We also established the Centre for Social Impact Bonds within the Cabinet Office in 2012 to encourage innovation in public service delivery, grow the social investment market and build an evidence base of what works.

Government will continue to work with localities to identify gaps in the national welfare system and reduce or remove duplication or fragmentation. Government will work with local enterprise partnerships to support their plans to strengthen their local economy by developing a response to the question of how integrating local services across geographical areas can provide value for money and improve outcomes for claimant groups.

Good evidence and data are essential to tackling social problems. The Centre of Excellence for Information Sharing, an innovative collaboration between central and local government, has been set up to break down the practical barriers to information sharing and is working across a number of areas, including troubled families, welfare reform and justice, to achieve practical, on-the-ground solutions to break down information sharing barriers.

My noble friend Lady Tyler has raised some very important points today about listening to the voices of people with multiple needs and making local areas accountable for delivering effective, joined-up services. She also suggests building on the troubled families model with a troubled individuals programme and working with the voluntary sector. We will consider these points carefully. I will take this opportunity to say a little about the Troubled Families programme, which is an example of where the partnership between central and local government is helping to turn around the lives of 120,000 families with severe problems and multiple needs, thereby reducing the cost to the taxpayer. Working with local authorities, we are now helping 110,000 of the most troubled families in England. Of these, nearly 53,000 have had their lives turned around thanks to the intensive and practical approach. In August, we announced an expansion of the programme to an additional 400,000 families. The Department for Work and Pensions will double the number of specialist employment advisers—