Oral Answers to Questions

Anne Begg Excerpts

Monday 24th February 2014 Commons Chamber

[Mike Penning]

Since we came into power, we have been warning Atos of the need to improve its service. We are seeking agreements with it to ensure that that is done, some of which have not come to fruition. If we terminate the contract today, as the Opposition have suggested, the financial consequences would fall on the taxpayer and not on Atos, which would be absolutely wrong and something that I will not accept.

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

I am not sure whether the Secretary of State is glad that he is here rather than in my area where there is a clash of the Cabinets. At least, he has managed to avoid the travel chaos.

Atos has acted as a lightning rod for all that is wrong with the work capability assessment. However, it is delivering a Government contract to Government specifications. What guarantee has the Minister got that any new contract will recognise the problems and the flaws of the system and the sheer misery that Atos has caused in delivering its contracts to ensure that they are not repeated?

Oral Answers to Questions

Anne Begg Excerpts

Monday 13th January 2014 Commons Chamber

[Mike Penning]

The Department’s officials and the contractors, Atos and Capita, are working closely every single day. We need to ensure that we get the decisions right. In such situations as the one brought to the House’s attention by my hon. Friend, we will work closely. If my hon. Friend contacts me later, we will look exactly at that point.

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

When the Minister appeared in front of the Select Committee, he admitted that there had been very long delays in getting PIP assessment determinations. People had applied in the summer and still did not have a determination by December. We are a month further on and they still have not yet heard anything. I am now receiving e-mails from people across the whole country, as well as from my own constituents, who have been waiting for more than six months since they had their face-to-face assessment. They still have not heard whether they will get the benefit or not. What is the Minister doing to ensure that people find out whether they qualify?

[Mike Penning]

The evidence I gave to the Select Committee—the Committee’s questions were useful to me and I hope the evidence I gave was useful—is that the key to this is that we roll it out until we get the decisions right. The next part of the roll-out is taking place today in south Scotland. If we get it right, it will be a much better benefit for everybody. As we know, there are delays, but they are based on getting the quality and the decisions right. We are working very closely and very hard to make sure that decisions are correct when they are put out.

Food Banks

Anne Begg Excerpts

Wednesday 18th December 2013 Commons Chamber

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

At the moment, Aberdeen is doing well. Despite the recession, the economy there is booming. There is so much activity in the North sea oil and gas sector that we are experiencing a labour shortage, and today’s unemployment figure in my constituency is down to 1.5 %, which comes pretty close to full employment. In spite of all that, something else is booming: the use of food banks.

The Secretary of State said this morning that the rise in the use of food banks was a result of decent people wanting to help those who found themselves in temporary difficulty, but I do not think that that is the case. Like my right hon. Friend the Member for Birkenhead (Mr Field), I think that there is something fundamental going on.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Will my hon. Friend give way?

[Dame Anne Begg]

I give way to my colleague on the Select Committee.

[Debbie Abrahams]

Does my hon. Friend agree that it is a real worry that the demand for food banks seems to be related to the targets relating to social security sanctions? That is certainly the experience in my food bank in Oldham. One of my constituents has been waiting for an appeal against a sanction for four months without any money. For him, the food bank has been a lifeline.

[Dame Anne Begg]

My hon. Friend, like me, has been lobbied by a number of organisations saying that failures in the benefit system are causing much of the increase in food bank use.

If the use of food banks were just a passing phase born out of the global banking crisis and the recent years of austerity, we would not be seeing their growth in places such as Aberdeen. If their use is temporary, why is it still growing when the Government say that the economy is picking up? If their use is nothing new, why are more families depending on food parcels than at any time in history?

[Derek Twigg]

rose—

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

rose—

[Dame Anne Begg]

I might give way later, if I get through my speech quickly.

The number of organisations operating food banks is growing, as is the number of food parcels that are distributed each week. Before 2010, there were some people who required food parcels but their numbers were tiny and the food parcels were a stopgap measure to get them over an immediate crisis. However, in the first six months of this financial year, 27 tonnes of food were distributed across Aberdeen by just four of the organisations operating food banks. That figure does not include the food distributed by the Trussell Trust. Something must have changed between the financial crash and today. One thing that has changed is the Government; another thing is the Government’s social security reforms. The attitude of the Government towards those on welfare has changed, too. So even in relatively affluent areas such as Aberdeen, families are depending on food parcels to eat.

Many organisations point to failures in the benefits system as the primary cause of the increase in the use of food banks. Oxfam and Church Action on Poverty thought the situation serious enough to encourage their supporters to lobby their MPs and ask them to lobby the Work and Pensions Committee to look into the link between the increase in the use of food banks and the increase in the use of sanctions, as well as the increase in long delays and mistakes in benefit payments by Jobcentre Plus. A large number of MPs on both sides of the House—reflected by the large number in attendance here today—passed on their constituents’ concerns to us on the Committee.

The belief that much of the problem is caused by errors in benefit payments is shared by Citizens Advice Scotland, which reports that 73% of the people using food banks cite problems with their welfare payments, that 30% are experiencing delays in getting the payment to which they are entitled, and that 22% are the subject of jobseeker’s allowance sanctions. However, people who have been sanctioned make up less than a quarter of those who are using food banks. All too commonly, people are using them because they have fallen on hard times through no fault of their own. People are still falling ill and losing their jobs as a result, only to face a long delay in getting any benefit. Those delays have got worse in recent years. It also seems to be taking longer and longer to get benefits reinstated once they have been stopped, even by accident. Cuts are also being made to the benefits that people get, including the most pernicious of all—the bedroom tax—and this is all before the largest change of all, universal credit, has been introduced. So things could get worse.

We should be breaking dependency, not making it worse. The Government need to recognise that the increase in the use of food banks is no accident, that it is not just a result of the economic downturn, and that it is not happening just because the food banks are there. It is a result of the policies being actively pursed by the Government. The use of food banks will not drop until the Government realise that and do something to ensure that those who have fallen on hard times are able to feed themselves, rather than having to rely on charity.

Universal Credit

Anne Begg Excerpts

Tuesday 10th December 2013 Commons Chamber

[Mr Duncan Smith]

My hon. Friend is absolutely right. The Opposition want to talk about universal credit, but the reality is that, unlike tax credits, it will roll out without damaging a single person, and it will also deliver massive benefits, under control by our test, learn and implement approach. The waste that we inherited was the waste of people who did not listen, rushed programmes and implemented them badly.

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

The Secretary of State promised that universal credit would be digital by default—it isn’t; he promised that all new claims would be on universal credit by May 2014—they won’t; and he then promised that 10 areas would be assessing the simplest claims by the end of October—they aren’t; so why should anyone believe him when he says that the delivery of universal credit is now on track?

[Mr Duncan Smith]

The proof of this will be as we roll out the programme. I say to the Chair of the Select Committee that we intervened early when there were problems. We did not let this programme roll out so that anybody was damaged, unlike the Government whom she served, who rushed IT programmes into service, damaged vast numbers of people and wasted a huge amount of money. I wonder whether the Chair of the Work and Pensions Committee ever asked the shadow Chancellor or the previous Prime Minister why they did that.

Oral Answers to Questions

Anne Begg Excerpts

Monday 18th November 2013 Commons Chamber

[Mr Duncan Smith]

I already take full responsibility for everything that goes on in my Department. I have to say that I take responsibility for making sure that universal credit as originally planned was stopped and reset. Before anybody was affected, we made absolutely sure that when we roll it out, as we have begun and will continue to do, it will deliver maximum benefits of more than £38 billion to the public.

I take no lessons from the Opposition, who spent years rolling out programmes regardless of how they affected people—a disaster on IT for tax credits and a disaster on the health service. A little bit of humble pie on their part might not be a bad thing.

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

The pathfinder mentioned by the Secretary of State was meant to include 10 separate Jobcentre Plus areas by October this year, but only one has come on line, in addition to those already in place, so there has been a further slowing down of the roll-out of universal credit. Indeed, the ones assessed have been the very simplest cases. When will the Department deliver on its original timetable, far less on any speeded-up timetable?

[Mr Duncan Smith]

As I said to the hon. Lady when I appeared in front of her Committee in July, we have been very clear that we would roll out universal credit on the plan and programme already set out. The pathfinders are on track. Those before Christmas and those after Christmas are on track—[Interruption.] Yes they are. It is not just the pathfinder centres; we already have a huge amount of change. We are putting 6,000 new computers into jobcentres to be ready for universal credit, and we are training 25,000 jobcentre staff to ensure that they are ready for its delivery. We are on track to make sure that universal credit—the bit that follows next—can use those pathfinders to deliver a universal credit programme that works, unlike so many of the programmes that the previous Government used.

Housing Benefit

Anne Begg Excerpts

Tuesday 12th November 2013 Commons Chamber

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

Let me begin by putting on record that I think that the bedroom tax should be abolished. This is a pernicious and vindictive measure that blames people and is causing a huge amount of distress. It blames, then punishes, people who very often have had little control or choice over the house in which they live. It punishes people whose crime is not to earn enough money to afford their rent. It punishes people who have lived in their council house for most of their lives but have temporarily lost their job and are now deemed as having an extra bedroom. It punishes the victims for a failure of housing supply, and punishes those who would like to move to a smaller property but cannot because none is available.

[Andrew George (St Ives) (LD)]

The hon. Lady says that the bedroom tax should be abolished. Does she agree that it should be abolished for private sector tenants, too?

[Dame Anne Begg]

There is a fundamental misunderstanding about the nature of social housing. When my parents got their first council house, they thought that that was their home for life. That is not the same for people who rent in the private sector as a stepping stone to buying a house. My parents never had that expectation, and anyone who has lived in a council house would understand that.

The bedroom tax hits the most vulnerable, many of whom do not qualify, despite everything that has been said, for discretionary housing payments. In Aberdeen, I have been hearing the stories of people who have fallen on hard times and become victims of drug or alcohol abuse. They are now trying to get their lives back together but cannot, because they are being hit by the bedroom tax. For example, a 37-year-old merchant seaman sustained injuries in a car accident, and he therefore needed a ground-floor flat. He was allocated a two-bedroom flat because that was all there was, and he has now been hit by the bedroom tax. A 47-year-old disabled man, who, after his parents died, continued to live in the two-bedroom flat that he had been born in, has been hit by the bedroom tax.

[Caroline Lucas]

The hon. Lady is making a powerful case. Does she share my concern about the scale of debt being created by the Government’s brutal policy? Freedom of information figures show that one in three council house tenants are being pushed into rent arrears. Given that not enough smaller properties exist, how is that possibly fair or progressive?

[Dame Anne Begg]

And in many of my examples, people’s situations have been made worse, because they now have housing debts, so they cannot be re-housed and have to return to the very hostels that they thought they were escaping from.

Also hit by the bedroom tax is a 52-year-old woman who suffers from depression and chronic anxiety and who depends on her neighbour and so cannot contemplate a move. I know of many more examples. Some people would move but cannot, because suitable properties are not available, while others cannot move because they would lose the support that they depend on to lead independent lives.

Even if the Government do not accept Labour’s proposal to scrap the tax—I always live in hope—they must extend the exemptions. I shall propose just two very modest ones that they should accept, if only because, given how they have been shouting this afternoon, their Back Benchers obviously think these things are exempted already. The first exemption should apply to homes specifically adapted for disabled families, about which I really do not accept the Minister’s argument: this is a man who thinks that he will change the whole pensions system in Great Britain, yet he is not clever enough to come up with a definition of an adapted home. I don’t think so! The second exemption is for situations where it is unreasonable to expect a couple to share a bed or room because one or both have a disability.

On the first exemption, it is incredibly difficult and expensive for someone who needs adaptations to their house to move. Council tax regulations recognise that people who need extra room because of a disability pay council tax on a lower band, so it is ridiculous that this space requirement is not recognised in housing benefit regulations. I know from personal experience how difficult it is to find suitable housing and how long adaptations take to make, and this is an exemption that the Government could easily include.

On the second exemption, whoever in government thought it acceptable to expect a couple, one of whom is disabled, to share a bedroom clearly has no idea of the size of the average council house bedroom. It is certainly not big enough for a hospital bed, possibly some lifting equipment and a second bed for the other person, and such an arrangement would not give a good night’s sleep to someone who might also have an important caring role. Discretionary housing payment is not a solution. It is meant to be transitional—to get people from where they are now to where the Government want them to be —whereas the situations that I am describing are permanent.

I could talk about disabled children, but those two situations should certainly be exempted, and those people should not have to apply year on year either. No matter how much money is made available, it is wrong that they must apply for a discretionary payment, and the word “discretionary” is the key, because it means that they will not necessarily get the money. If Ministers do not accept the need to get rid of this measure, at least they could extend the exemptions; these modest measures would not cost more either, if what the Government say is right, because these people are already getting discretionary housing payments. The exemptions would alleviate a great deal of anxiety and make this appalling measure a bit more bearable for some of our constituents. But I stand by my original comment: it is time that this measure was abolished.

Pensions Bill

Anne Begg Excerpts

Tuesday 29th October 2013 Commons Chamber

[Steve Webb]

My particular responsibility is automatic enrolment. We are about to put 10 million people into mainly defined-contribution pensions, the vast majority of whom, all things being equal, will then buy an annuity at the end. For understandable reasons, our focus in the past few years has been to get the infrastructure in place to get those 10 million people into pension saving and building up pension pots. Then, when they have a pension pot, we will ensure that they receive good value at the other end. There will be a set of people who will be auto-enrolled today and will retire tomorrow, but they are a minority. We need to get to grips with this issue. Annuity policy is led by our colleagues in the Treasury, which is why we are working closely with them. We hope to make further announcements soon.

Government amendment 31 relates to the Pension Protection Fund compensation cap. In Committee, we amended the Bill so that workers entering the PPF would have a more generous cap if they had been long-serving employees. The amendment applies the same provisions to people who are already in the PPF. We will not go back years and increase pensions retrospectively, but once the Bill and secondary legislation are passed we will increase their pensions going forward in line with the provisions we have already made for new employees going into the PPF.

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

Will the Minister explain what the position will be with regard to the cap for those who are in the financial assistance scheme and are not yet in the PPF?

[Steve Webb]

I am grateful to the Chair of the Select Committee. As she knows, the PPF scheme is funded by the PPF levy, and the financial assistance scheme is funded directly by the taxpayer. I think the FAS will be moving next year to the Department’s annually managed expenditure budget, so we will then have to find taxpayers’ money to make a parallel change to the FAS. We are continuing to reflect on whether we should do so. No final decision has been made, but I understand the case for some matching change.

To conclude, the change to the compensation cap will mean that relatively small numbers of people—who, having worked for their firm all their life, should have got a good pension, but on whom the cap was biting particularly harshly—will now get a fairer pension, which has been widely welcomed by those affected.

In summary, this section of the Bill deals with making automatic enrolment and private pensions work. Automatic enrolment has been a great success so far, but there have always been a lot more aspects to sort out, small pension pots being one in particular, scheme quality another. I am delighted to say, therefore, that this is the week we finally tackle the scourge of excessive pension charges, and I commend the Government amendments to the House.

--- Later in debate ---

[Dame Anne Begg]

These amendments can all be categorised as trying to do something for those who have lost out as a result of the Bill. Many of the issues were picked up by the Select Committee on Work and Pensions during our pre-legislative scrutiny of the Bill and it is a little disappointing that the Government have not always taken our advice on how they might be able to sort out the outstanding problems. One such problem, which has already been mentioned by my hon. Friend the Member for Edinburgh East (Sheila Gilmore), is that of inherited rights, usually those of women who expected to get their part of their state pension through their husbands’ contributions. Those who are nearing retirement would have no opportunity to meet the de minimis rule of 10 years if they were to start to make contributions now. Our suggestion was that there should continue to be some transitional arrangements for those within 15 years of state pension age.

Although it does not fall within this group of amendments, there is also the issue of those people who fell below the national insurance contribution threshold, particularly those who have had two jobs that together would have added up to take them above the threshold but have not. Perhaps the Minister could give us some hint of what might happen to that group, who are again predominantly women and will continue to lose out. Of course, there is also new clause 6, which makes a request on behalf of the group of women born between 6 April 1951 and 1953. They obviously feel hard done by.

There is also the group who have so-called frozen pensions, who have been so eloquently described this afternoon. We did not recommend that the Government should roll back the clock for those who have frozen pensions, but we should not import into a brand-new system the anomaly that those in Canada have their pensions frozen whereas those in the United States do not. That did not seem fair to us as a Committee, and we hoped the Government would act.

[Greg Mulholland]

I thank the hon. Lady for giving way and for the contribution that her Committee continues to make. Let us face it, those of us who have been in this place for more than one Parliament have been hearing about frozen pensions for all that time—some of us for many years. Rather than our trying to solve it today through this Bill, is it not time that all the parties sat down together to discuss what commitment could be made for the next Parliament, regardless of who gets in, rather than the next Government being able to say “Well, the last Government didn’t do it, so we’re not going to either”?

--- Later in debate ---

[Dame Anne Begg]

I think that may have been the problem with this Government and with the previous Government. Any Government who come in do not want to do it. The Select Committee’s straightforward recommendation was that the new system should not contain the same anomaly as the old system. I still stand by that. I hope the Government are listening and will change their mind and I suspect that the House of Lords will have quite a lot to say on this subject.

[Hywel Williams (Arfon) (PC)]

Let me say first of all that I support amendment 1, which I was very glad to put my name to.

My new clause 13 delays introducing part 2 until the Secretary of State has reported an assessment of the differential effects and impacts of the pensionable age in England, Wales and Scotland. People are now living longer and the better-off live longer than the worse-off, who work more years and start working earlier. The latest evidence suggests that the gap is widening and that is certainly the case as regards the differences between England and Wales. Wales has the lowest gross value added of the UK nations and regions. Welsh workers in general are less able to save for their pensions, which means that many people in Wales are reliant on the state pension. Life expectancy in Wales is also lower than it is in England. In my constituency, life expectancy is 78.3 years for men whereas in Dorset it is 83 years. Wales also has the appalling legacy of large-scale de-industrialisation and subsequent long-term worklessness. That means that many people have broken employment records and a disproportionate number might not qualify for a pension because of their lack of contributions.

The Government have stated that they intend to review changes in life expectancy every five or six years, and I think Lord Turner suggested that they did so every seven years. I have proposed a new clause to encourage Ministers to ensure that the panel reviewing life expectancy looks further and also considers Britain’s human geography of low incomes, no incomes, long-term unemployment, sickness and disability. That broader inequality must be addressed, as it will certainly persist.

Oral Answers to Questions

Anne Begg Excerpts

Monday 14th October 2013 Commons Chamber

[Esther McVey]

I agree with my hon. Friend that the Work programme is working. In particular, let us look at the figures for youth unemployment. The number of 18 to 24-year-olds on jobseeker’s allowance has fallen for 15 consecutive months. It is now 60,000 less than in May 2010. Youth unemployment is down from the numbers we inherited from Labour, and the number of young people not in education, employment or training is at its lowest for a decade.

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

But for one group of people—those who have health problems or a disability—the numbers are truly dreadful. What will the Government do to change their approach so that that group of people is not left behind?

[Esther McVey]

For the first time in history, we are dealing with the people the hon. Lady—the Chair of the Select Committee on Work and Pensions—is talking about. Labour Members shake their heads, but I am afraid that they abandoned those 1.4 million people; we are supporting them. Of those on the Work programme, more than 380,000 are in work, and 168,000 have found lasting work. Ninety per cent. of those have been in employment for nine months or more. We are working on and dealing with that matter, but Labour abandoned it.

Work Programme

Anne Begg Excerpts

Thursday 10th October 2013 Westminster Hall

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

I am delighted to be given the chance, Mr Walker—five minutes early—to debate the report on the Work programme that my Select Committee published at the end of May this year, and the Government’s response to it.

Other colleagues will arrive, hopefully, in time for when they thought that the debate would start, but in the meantime I extend my congratulations to the new Minister; this is perhaps her first outing in her new role. She may be new to the employment aspects of the role, but she is all too familiar with certain issues that I shall raise this afternoon to do with people with disabilities and their ability, or inability, to get into work. I appreciate that when I refer to “the Minister” this afternoon, it is probably not her that I am speaking about, but her predecessor. I extend my condolences to him, in as much as he proved to be a capable Minister whenever he appeared before our Committee, and he knew his brief well.

The report that we are debating was the result of our second inquiry into the Work programme. The first, in May 2011, was on the contractual arrangements of the programme just before it was introduced. At the time, we said that we would return to the subject, to see how things were working out in practice and whether the Work programme was delivering on its promises. As a result, we carried out a further inquiry into the experience of the people on the Work programme; as that inquiry progressed, we realised that while the programme might be delivering sustained job outcomes for some people, it was not effective in helping those who have major barriers to work, such as those who are homeless, have drug or alcohol problems or, in particular, have a disability or health problem, diagnosed or undiagnosed.

The report is therefore called “Can the Work Programme work for all user groups?” The question mark is important. In short, the answer is no. To be generous, I could say that the answer is not yet, but there would have to be major changes to the way in which the contracts are delivered, and to how the differential pricing structure works, if the Work programme is to begin properly delivering job outcomes for those with the highest barriers to work.

My Committee’s starting point was one of broad support for the programme’s policy intentions and innovative approach. It was a replacement programme—a single one, instead of all the various welfare-to-work schemes introduced by the previous Government. It was to focus on sustained job outcomes and to be a payment-by-results system. Elements such as the differential pricing structure were meant to encourage providers to focus on those who were furthest from the world of work, not just those who were easiest to help.

There was also to be a prime provider model, in which large providers—predominantly from the commercial sector—would bear most of the financial risk of operating in a results-based system, but draw on the expertise of a wide range of subcontractors to deliver services, in particular to meet the requirements of jobseekers with more complex needs.

The debate is timely, in that the Department for Work and Pensions has just published its latest set of statistics on Work programme performance; it is the third set of statistics, covers the period between July 2012 and June 2013 and was published at the end of September. The statistics bear out the conclusion of our report: the performance levels for mainstream jobseekers have continued to improve—some commentators say that they are plateauing, but they have improved after a shaky start—and are now above the Department’s minimum performance levels.

For those claiming employment and support allowance, however, the results remain very poor: only 5.8% get work, which is way below the minimum performance levels, set at 16.5%. Only six people out of every 100 in that group are getting a sustained job. In fact, for that group of claimants—the group that the Government said they would not leave languishing on benefits as the previous Government did—the Work programme is delivering a worse outcome than the previous, specialist welfare-to-work programmes for the recipients of incapacity benefit, such as pathways to work.

Pathways to work varied in different parts of the country, but the programme had job outcomes of between 10% and 30%. The coalition Government, on coming to power, said that those results were simply not good enough—but if the 30% was not good enough, the 5.8% must be a cause for shame. That is why our key conclusion was that differential pricing had not had its intended impact. Creaming and parking persist, and we believe that segmenting jobseekers into payment groups according to the type of benefit being claimed is proving ineffective. We also have concerns about how the prime provider model is operating in practice, having heard evidence that smaller niche providers with the experience to support more disadvantaged jobseekers have received far fewer referrals than anticipated, and in some cases none at all.

Our inquiry was hampered by a lack of transparent data. We were unable to assess from official statistics the level of specialist providers’ involvement in the programme, or how effective those providers are. Publishing official referral and performance data at subcontractor level would not only aid effective scrutiny, but facilitate the development of a more effective welfare-to-work market.

As this debate is about the Government’s response to our report, I would like to turn my attention to some of our concerns about the process for formulating Government responses. The quality of the Government’s response is poor and includes some perfunctory responses to individual recommendations. There is no explicit indication of whether the Government agree with the overall thrust of the report. Some of their actions suggest that they share at least some of the Committee’s concerns, but those are not mentioned in the response, or are mentioned only perfunctorily. I will give a few examples.

The current consultation on Work programme statistics, which accepts the need for the Department to improve the scope and clarity of official data, is not mentioned. The response alludes briefly to a pilot in which Work programme participants who are undertaking or recently undertook treatment for drug or alcohol dependency attract increased outcome payments. That is exactly the sort of pilot we recommended. Clearly, the Government share to some extent our concern that the Work programme pricing structure does not sufficiently incentivise providers to help some groups of harder-to-help claimants. A fuller description of the pilot and how it will be evaluated would have been appropriate. We are aware of a further pilot that tests closer working between the Work programme providers and treatment programmes to support participants with a history of drug or alcohol problems, but that is not mentioned at all in the Government’s response.

The response gives the strong impression that no official in the Department for Work and Pensions has read the report in full. In some cases, it addresses only the text of the individual recommendation paragraphs, instead of engaging with the preceding evidence-based discussion and argument in our report. A particularly egregious example is the Department’s reply to the Committee’s concern that smaller specialist providers seem not to be involved in the Work programme to the extent anticipated. The Department states:

“In fact, the latest stock-take of the Work Programme supply chain shows that 43% are from the voluntary and community sectors, and charities.”

That sounds good, unless our report has been read. The official who drafted that sentence seems ignorant of the fact that in the paragraphs preceding the recommendation the report casts serious doubt on the usefulness of that stocktake exercise. It notes evidence that many organisations included in the 43% cited by the Department for Work and Pensions have received no Work programme referrals at all.

The report highlights the results of a BBC “Panorama” survey of voluntary sector organisations listed as Work programme subcontractors, but 40% of those organisations did not even consider themselves to be part of the Work programme when they were approached, and 73% had received fewer referrals than expected. The stocktake seemed to us to be merely a list of organisations named by prime contractors as being part of their Work programme supply chains, regardless of whether those organisations have received a single client via the Work programme. It was clear from evidence to our inquiry that the stocktake tells us nothing about the availability of specialist support within the programme.

We had other concerns about responses to some of our recommendations. The response to our recommendations on minimum performance levels does not engage with the Committee’s concern that the Government’s calculation of minimum performance levels seems to be based on unrealistic economic forecasts made prior to the launch of the programme. Paul Lester’s independent review, which the Department holds up as evidence that it has dealt with this issue, seems to have concerned itself only with how data on performance are presented, and not with how more realistic performance expectations can be calculated.

The Department’s primary concern seems to be that performance in year one of the Work programme looked low to commentators and the media. Our concern, which was not addressed in the Government’s response, was that performance was in fact low—it did not just seem low; it was low—when measured against the Department’s unrealistic expectations.

This is fundamentally important in a payment-by-results programme. If contractual performance expectations are set too high, they risk starving providers of funding, with inevitable consequences for service delivery. Our recommendation that the Department explore, with independent experts, new methods for setting minimum performance levels that are more responsive to economic conditions and can be more transparently calculated and applied deserved a more considered response from the Government.

We also made recommendations about jobseeker segmentation. It is clear that the Department knew from the outset that segmenting participants predominately by benefit type and using that as the basis for the differential pricing structure was a risk. Everyone accepted that benefit type was only a very rough proxy for claimants’ level of need. There is now strong evidence that segmenting claimants in this way ignores important information that is crucial in making an accurate assessment of claimants’ distance from the labour market. Participants most at risk of not having their needs recognised or addressed include homeless people, those with unrecognised health or disability-related barriers to work, and people with a history of drug or alcohol problems.

The Department says it is

“currently exploring whether we can more effectively identify and segment those claimants who are likely to be particularly difficult to help back into sustained employment.”

However, more details about the Department’s work and the approach it is considering would have been appreciated. We believe it should pilot an initial assessment along the lines of the Australian jobseeker classification instrument, testing its effectiveness in jobcentres. We hope that in that way the specialist help will go to those who are furthest from the labour market.

Another recommendation was that the money that was returned to the Treasury because of the year one underspend should have been redirected to the Work programme. Due partly to the underperformance I have referred to in terms of the data, £248 million was unspent in year one of the Work programme. That could have been used to address some of the programme’s clear shortcomings over the course of the current contracts. The recommendation received the most dismissive of responses. The Department simply told us:

“All in-year under-spends are returned to Her Majesty’s Treasury.”

That might be a statement of fact, but it is despite the then Minister telling us in oral evidence that he had entered into discussions with the Treasury on that very point.

Our view is that it was short-sighted not to use that money to help those jobseekers who are currently being failed by the Work programme. The Government should not lose sight of the fact established by Lord Freud in his 2007 review of welfare-to-work that well-targeted and effective employment support for those furthest from the labour market has the potential to achieve large savings for the Exchequer in the long run.

We welcomed the establishment of a best practice group looking at minimum service standards, which are so vague in some cases as to allow providers virtually to ignore some Work programme participants, if they so chose. However, it is unfortunate that the Department appears to have ruled out a single set of core minimum standards on the grounds that it would in some way inhibit providers’ ability to innovate—the black-box approach, I suppose. We simply do not agree. It is perfectly possible to establish core minimum standards that offer all participants protection and service assurance without being overly prescriptive about the services providers offer.

There is no attempt to address the problem of high adviser case loads. Average case loads are between 120 and 180 participants per adviser, which is far too high to allow an acceptable level of service for all participants. Advisers have no choice but to prioritise certain participants to support. The Department’s response to our recommendation that it, together with providers, consider ways of reducing case loads amounts to fewer than four lines of text. Its assertion that compliance monitoring officers

“provide assurance of service delivery at individual claimant level”

is simply not plausible. Addressing high case loads means finding resources for more advisers or offering alternative provision for some participants. It is not just that the differential payment structure is not delivering for those furthest from the labour market, but that an assurance of service quality is not built into the system, which makes it clear why many advisers are not working with those who are most difficult to help.

The Committee also took evidence about the Merlin standard. Much of it was from subcontractors, many of whom felt they had been unfairly treated by primes. Most had received far fewer referrals than they had been promised; some had received none at all. A number had withdrawn from the Work programme altogether. Many felt that, far from shouldering the burden of financial risk, prime contractors were passing the risk involved in payment by results further down the supply chain. We are concerned that the Merlin standard—the regulatory regime intended to monitor the quality of supply-chain relationships—appears incapable of addressing these very real issues. A review of the Merlin standard is necessary, so we welcome the news that the Department for Work and Pensions, together with the Merlin advisory board and the accreditation service provider, is seeking views from across the sector on the regime’s effectiveness to date. Our strong view is that changes are required to strengthen the regulatory regime.

What should be the future shape of the Work programme? The Committee’s key conclusion—that the programme as currently contracted has the potential to work well for relatively mainstream jobseekers, but that it is unlikely to do so for those facing more severe barriers to employment—has been borne out by the published data, and particularly the most recent data. In line with our conclusion, the Employment Related Services Association—the welfare-to-work industry body—openly accepts that the programme is not working well for disabled jobseekers.

Clearly, changes are required. The Government must decide whether improved support for disadvantaged groups can be achieved through changes to the Work programme’s design, pricing structure and payment model, or whether alternative, specialist programmes are required, so that appropriate support is available for everyone who requires it.

Work programme 2, or whatever programme or collection of programmes replaces the current contracts, will need to be in place by 2015. No doubt the Department is beginning to consider its options. It would have been a good start if the Government had engaged properly with the recommendations in our report.

--- Later in debate ---

[Dame Anne Begg]

This has been an excellent debate. We had extra time through starting early, but we needed that time, and might have used even more.

There has been quite a lot of agreement across the party political divide. Much of what the hon. Member for Aberconwy (Guto Bebb) said reflected comments from members of the Select Committee. He waxed lyrical about the youth contract, which is not of course part of the Work programme, but helps to illustrate that there is a need for specialist help, including for more specialist help to be directed to certain people. Both he and my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) said that there is a real problem with the rigidity of Work programme rules, meaning that access to training can be quite difficult, even when it is available. The Committee was certainly clear that such access is needed.

The hon. Member for Aberconwy mentioned that some people should have early referrals, but that would of course require a proper classification system, which was one of our main recommendations, while another recommendation was to extend referrals for some clients. Both the hon. Member for Eastbourne (Stephen Lloyd) and my hon. Friend the Member for Oldham East and Saddleworth mentioned the failure of the work capability assessment. That and the differential pricing structure are simply making life very difficult for prime contractors, which is why it is so hard to deliver on the most difficult-to-reach group.

The Minister suggested that we are saying that the Work programme does not work for anyone, but nobody is saying that. It does work for many people. The examples she gave could have been given at any time in the past 15 years; the real test of the Work programme is not how it works for the easy to reach, but how it works for the most difficult.

Universal Credit

Anne Begg Excerpts

Thursday 5th September 2013 Commons Chamber

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

I am very disappointed by the bullish way in which the Secretary of State has behaved this morning. I believe that it was the same attitude that dismissed the voices of members of my Select Committee and those of many others who suggested that the implementation of universal credit was not going as well as was being claimed. From now on, will the Secretary of State set realistic time scales for the roll-out of universal credit, will he be honest, open and transparent about the challenges posed by the introduction of such a large and complex system, and will he stop over-promising what cannot be delivered?

[Mr Duncan Smith]

When I appeared before the hon. Lady’s Committee in July, I was very clear about the changes that were being made, and also about the fact that we would return to the Committee with the full roll-out timetable in the autumn once we had delivered it. That is what we were asked to do, and I will do it.

I am not being over-bullish about this. The fact is that it takes determination to drive a reform through. I have that determination, and the Department is determined to make this happen, with support and help. It is in all our interests for that to be done. We believe all those who have been charged to deliver it and who say that it can and will be delivered on time and on budget. I see no reason why that should not happen, and indeed the National Audit Office said that it was wholly feasible for it to happen.