Covid-19: Department for Work and Pensions Update

Baroness Scott of Bybrook Excerpts

Tuesday 5th May 2020 Lords Chamber

The Statement was made in a Virtual Proceeding via video call.

[Baroness Scott of Bybrook (Con)]

My Lords, with the leave of the House, I shall now repeat a Statement made yesterday by my right honourable friend Thérèse Coffey, the Secretary of State for Work and Pensions. The Statement is as follows:

“With permission, Mr Speaker, I will make a Statement updating the House on the work of my department. I want to pay tribute to the civil servants in my department as well as to contractors and partners who have been working tirelessly to provide help and support to those in need. They are the hidden heroes for many people in this country. They should take great pride in their hard work and dedication to supporting people through these difficult times.

Since 16 March to the end of April, we have received over 1.8 million claims for universal credit, over 250,000 claims for jobseeker’s allowance and over 20,000 claims for employment support allowance. Overall, this is six times the volume that we would typically experience, and in one week, we had a tenfold increase. The rate for UC claims appears to have been stabilised at about 20,000 to 25,000 per day, double that of a standard week pre Covid-19.

I am pleased that my department is standing up to the challenge. We have redeployed a significant number of DWP staff, about 8,000 so far, and staff from other government departments, about 500 so far, to process these claims. Our payment timeliness for universal credit is running at a record high. We have also issued almost 700,000 advances to claimants who felt that they could not wait for their first routine payment, and the vast majority of these claimants received their money within 72 hours.

Where possible, and mindful of risk, we have also streamlined our processes. We will consider carefully learnings from this time in the response phase on whether any of them can be made permanent. We have also sought to make it possible for people to work from home and have already deployed 10,000 computers. We are now at a level of deploying 750 new devices a day to enable working from home and have added to the IT capacity for remote users.

However, where staff need to continue to work at the office, we are applying social distancing. From 17 March, we suspended all face-to-face assessments for health and disability benefits. We automatically extended awards for existing claimants that were due to be reassessed by three months and will undertake reviews or reassessments only when claimants notify us of changes which could lead to a higher payment. Any claim made under the special rules for terminal illness continues to be fast-tracked, it taking an average of six days to process these claims. From 24 March, jobcentres have not been open for regular appointments, but we have continued to offer face-to-face appointments in exceptional circumstances, when claimants would otherwise not be able to receive support. Claimants can continue to receive support over the phone or through their online journals. All local jobcentres have been turned into virtual processing teams, prioritising advances and the registration and payment of new claims. We have also been pairing jobcentres across the country to support each other with processing, fully using the capacity of our network.

This focus on the processing of claims has also meant that we stopped checking the claimant commitment regarding looking for and being available for work for three months. However, we want claimants to continue to look for work wherever they are able to do so. Ministers are working hard to ensure that existing vacancies can be accessed by people who have been made unemployed, and we will continue to support those people while they are waiting for the opportunity for work. We have created a new website to guide people, jobhelp.dwp.gov.uk, and we have 58,200 vacancies advertised.

While our IT systems worked, thanks to extensive work by the universal credit team, including our contractors, I know that some claimants experienced significant delays in verifying their identity. Identity checks are crucial in reducing fraud risk, so we worked closely with the Cabinet Office substantially to increase the capacity of the online Verify system. Average wait times are now below five minutes. Call volumes have also been extremely high, with over 2.2 million calls in one day at our peak. Recognising again the delays people were experiencing—or indeed not being able to get through at all—we turned this around with our “Don’t Call Us, We’ll Call You” campaign. A bolstered front-line team now proactively calls claimants when we need to check any information provided as part of the claim. This has been very successful in freeing capacity and reducing the time customers need to spend on the phone.

Regarding other operations of the department, while we have redeployed staff we have kept critical work ongoing in child maintenance and bereavement. We are monitoring our performance and will return staff to these areas if the response rate becomes unacceptable. On pensions, we have cancelled the pension levy increase, supported defined contributions through the job retention scheme, and worked with regulators to assist DB pensions and combat scams.

I think it is worth reminding the House of our financial injection of over £6.5 billion into the welfare system so that it can act as a safety net for the poorest in our society. We focused on changes that could be made quickly and would have significant positive impact. We have increased the standard rates of universal credit and working tax credit for the next 12 months by about £1,000 per year. We have increased local housing allowance rates for universal credit and housing benefit claimants, so they can now cover the lowest 30% of local rents. We also increased the national maximum caps, so claimants in inner and central London should also see an increase in their housing support payments.

I have been made aware that some councils have not made the adjustment in housing benefit, and my department is communicating with them all this week. Furthermore, across England we had already increased the discretionary housing payments by an extra £40 million for this financial year.

The 1.7% benefit uplift was implemented in April, ending the benefits freeze, and the state pension rose by 3.9%, as per the triple lock, reflecting last year’s substantial rise in average earnings. We have also introduced regulations to ease access to benefits. We legislated to allow access to employment and support allowance from day one of a claim. We relaxed the minimum income floor so that the self-employed can access universal credit more easily. We have also made it easier to access ESA by launching our ESA portal for online applications. We legislated to ensure that employees had statutory sick pay available from day one of sickness or self-isolation due to Covid-19. I remind the House that statutory sick pay is the legal minimum.

We will continue to look at issues that arise—for example, we are ensuring that maternity pay is based on standard pay, not furloughed pay levels—and will see what we can do quickly and straightforwardly to fix either unintended consequences or unforeseen issues. But it is not my intention to change the fundamental principles or application of universal credit.

A significant project that we have undertaken is to support MHCLG and the national shielding service by establishing the outbound contact centre. Furthermore, we use this contact centre to proactively contact the most vulnerable customers, who receive their benefits or pensions solely through Post Office card accounts. I want to thank the Post Office for helping us to support this group of customers. We have been able to provide contact-free cash payments by Royal Mail special deliveries. We were also able to signpost people to extra support from their local council.

I can also inform the House today that the DWP will stop any new benefit and pension claimants from using the Post Office card account from 11 May, as we prepare for the end of this contract. The uptake of accounts in the past year has been exceptionally low but, in any event, given that the vast majority of people using POCA already have a bank account, the cost of the contract is poor value for taxpayers. Existing customers who currently receive payment through the Post Office card account will see no change and will continue to receive payment into their accounts for the remainder of the contract period. We can use the HMG payment exception service for people who cannot access any bank account.

I want also to thank the Health and Safety Executive for its work on Covid-19. It is an arm’s-length body for Great Britain that is sponsored by my department. It has been doing crucial work with the Department for Business, Energy and Industrial Strategy and Public Health England to provide guidelines for employers to adhere to once restrictions can be eased. The HSE is working hard, along with local authorities, to enable work to continue safely in the sectors for which it is responsible. It has developed practical guidance and is enforcing the law where workers are exposed to unnecessary risk.

My department is standing up to the challenge of unprecedented demand for our services and we are getting support to those who need it. We will continue to work across government to help the nation get through this health emergency. I commend the Statement to the House”.

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[Baroness Scott of Bybrook]

I thank both noble Baronesses. I realise that I am quite new to this, but they have a large amount of knowledge and experience. I will start with the five questions put by the noble Baroness, Lady Sherlock. The first was about increasing legacy benefits. If we had those in place now, the whole system would have been far slower than universal credit. We have looked at the people who are in most need and who need their benefits much more quickly. Much of the change has been to put money into those things, but we will continue to look at all other benefits as we move forward.

Suspending the benefit cap will not happen; the Government are not looking to do that. The savings limit is there because universal credit is to support those people who cannot support themselves. For the self-employed, the savings limits can be used for pensions or tax purposes. That might help some self-employed people who have to go into universal credit. The two-child limit has been discussed continually. The Government have no plans to change it. The policy ensures fairness by asking families getting benefits to make the same financial choices as people who support themselves solely through work. However, exemptions and safeguards are in place and I urge the noble Baronesses to look at those.

The five-week wait has also come up many times in the Chamber. About half a million advances have gone through already on the basis of 13 payments in 12 months. I think people are beginning to understand how the advances can be paid back. They are now being paid quickly—within 72 hours—so there should be fewer problems with people requiring food banks and such things, as referred to by the noble Baronesses. Councils also have emergency funds for anybody who needs help in those 72 hours; this needs to be better communicated.

The noble Baroness, Lady Sherlock, asked about maternity allowances. This was brought up in the other place yesterday. I will certainly make sure that she gets a full answer on this, rather than me trying to answer it. Maternity allowances are now paid on full salaries, not on furloughed ones, which is a good move. I do not know about the DWP on the phone, but I have heard good case histories of people who have been phoned by the DWP who were not expecting it but who were pleased to have had the call. So we probably do ring them, but I will get the noble Baroness an answer to her question.

I know that, from her background, the noble Baroness, Lady Janke, knows a lot about what local authorities can do to help people through these difficult times. I have answered the questions about the two-child limit and the benefit cap. Advancing universal credit to five days is important; I cannot add anything further.

[Lord Balfe (Con)]

I thank the Minister and the staff of the DWP for this amazing effort. We should really be loving not only the NHS, but the DWP. I am reminded during this crisis of the old saying that politics is about giving other people’s money away. There has to be a limit to how much we can spend. I would like the Minister to tell us, first, what is being done to advertise these 58,000 vacancies, because everybody who takes one is someone who is not reliant on public funds. Secondly, at the risk of being unpopular, I remember the outpouring of sympathy after Grenfell Tower but none the less, a number of people were convicted of fraud. Is the DWP still vigorously pursuing people who are wrongly claiming? I am sure that there are some and we should not let the present situation blind us to the fact that some people might be trying to take advantage of it.

[Baroness Scott of Bybrook]

I thank my noble friend. Yes, there are still 58,000 jobs on the website. It is a new website and it is easy to access. For anybody who is still looking for a job—I know that there are jobs and schemes for fruit and vegetable picking this summer for those people who might be furloughed but still want to work—the website is there. We are still encouraging people to go for jobs that can be done safely. As far as fraud is concerned, the capacity in the system at the moment is creating difficulties, particularly for lawyers in the department, because of everything else that they are doing. I will get an answer to my noble friend on what we are doing about that.

[Baroness Drake (Lab)]

My Lords, it took 16 years to get consensus and fully implement pensions auto-enrolment, so I certainly welcome the decision to maintain employers’ auto-enrolment duties, thus avoiding undesirable consequences and the negative impact on younger generations, and the fact that the job retention scheme allows grants to cover employers’ statutory contributions for furloughed workers. However, with 6.3 million furloughed workers, that scheme cannot suddenly cease without triggering widespread redundancies and loss of earnings. Are the Government committed to maintaining adherence to employers’ auto-enrolment duties in the rebuilding of the economy? What discussions is the DWP having with the Treasury on the manner and timing of the phasing down of the job retention scheme, the consequential increase in the number of benefit claimants, and the number of furloughed workers becoming redundant? Finally, I too thank DWP staff.

[Baroness Scott of Bybrook]

I thank all noble Lords who have spoken so far who have thanked the staff in the DWP, who have been amazing and are still under huge pressures. The noble Baroness asked a lot of very detailed questions that I will not try to answer at the moment, but I promise her a written response as soon as I get back through to the office tomorrow.

[Baroness Thomas of Winchester (LD)]

My Lords, I am concerned about online tribunals for PIP appeals that do not allow tribunal members to question claimants directly by speaking to them, as they can in face-to-face tribunals. Could this not be done by phone, as well as online?

[Baroness Scott of Bybrook]

I thank the noble Baroness very much. I know that this issue is dear to her heart. However, in line with government guidance, face-to-face hearings obviously had to be stopped. First-tier Tribunals —ones for social security and child support issues—have been replaced with telephone hearings and the use of other remote hearing technologies. As many of those hearings as possible have to be held remotely. All parties in the hearings are being contacted directly to confirm how they can be part of that tribunal. We are also working very closely with our colleagues in HMCTS, who continue to undertake paper-based and telephone hearings. The DWP continues to join these when directed to do so. What is important is that we are working with HMCTS to test video hearings, because that would be a great way forward.

[Baroness Meacher (CB)]

My Lords, I am grateful to the Minister for the Statement and for the short-term loosening of the sanctions regime.

Covid-19 is not a three-month problem. As the UK comes out of the pandemic over the next year—if it does—we will find ourselves with many broken sectors in the economy and millions of unemployed workers. One of the most serious consequences of the pandemic—there will be many—will be the re-emergence of high levels of long-term unemployment, last seen in the 1980s. In view of this grim reality, will the Minister ask her colleagues for a full-scale review of the sanctions regime upon which universal credit is based? Minor adjustments here and there will not make a significant difference: we need active labour market policies. In the 1980s, unemployed young people who were out of work for six months or more were offered work in the public or charity sectors and paid the rate for the job, probably something like the minimum wage. Importantly, they did not lose their capacity to work, their confidence or their mental health. Idleness destroys us all. Yes, it would cost money, but the benefits would outweigh the costs by a very big margin. I ask the Minister for her response to this proposal.

[Baroness Scott of Bybrook]

The department is keeping all welfare changes under continual review. Not only that, it is already working on forward planning for when the economy first starts to increase again. As the noble Baroness says, there may be more unemployment. We are therefore working on how we can deal with that and support people back into work, although it may not be the same work. All that work is being done in the department at the moment.

[The Lord Bishop of Durham]

My Lords, I thank the Minister for repeating the Statement. I add my thanks to all those in DWP for the incredible amount of work that they are doing.

I want to return to the two-child limit. I am sorry but it simply will not do to keep parroting back the same answer every time we raise this issue. Today, the Church of England and the Child Poverty Action Group published our latest information and a report on the impact of the limit. It includes evidence from the early days of the Covid crisis. Sixty thousand more families will be impacted. The policy is utterly flawed. I have been assured by Minister after Minister that if we give them the evidence, they will re-examine the limit. It is time that it be re-examined. Please agree at least to look at our report and re-explore the arguments around this issue.

[Baroness Scott of Bybrook]

I thought that the right reverend Prelate would speak on this. There are no plans to change the two-child limit, as he knows, but if a new report is out, I will of course make sure that the DWP responds to it.

[Baroness Lister of Burtersett (Lab)]

My Lords, I too thank DWP staff for their amazing work. I welcome the increase in the UC standard rate but in the face of accumulating evidence of serious hardship, even hunger, among families with children—and the stated intention to help those in greatest need—why have the Government resisted growing civil society calls for an increase in child benefit or other benefits for children? Given that it takes only two months to implement the uprating of legacy benefits from when they were agreed by Parliament, will they reconsider their refusal to increase legacy benefits on technical grounds? At the very least, will they consider a one-off bonus to compensate for not doing so?

[Baroness Scott of Bybrook]

I thank the noble Baroness for her question. This is an unprecedented time. The department has looked at how it can invest more money, that is quick and simple to deliver, into the benefits system. That is what we have done, particularly with our increases in universal credit. That is the best way we can ensure that the money—£1,000 a year—is going to families with children. It has been done quickly and speedily; that has to be the way to do it.

[Lord Addington (LD)]

Will the Minister look into reports that some of the 3 million European citizens staying over here are having problems being eligible for the support of the system? If this is true, it means that people here who have contributed are not getting the support that they deserve. Can the Minister give an undertaking that this will be looked at and that we will get a cohesive answer back? This really is not on.

[Baroness Scott of Bybrook]

Yes, I will be happy to take that back to the department. It has come up before, and we should be doing some work on it with the Home Office. I will certainly take this back.

[Lord Ramsbotham (CB)]

What is the situation regarding those released from prison? Before Covid-19, they could not go to jobcentres to apply for universal credit until they had been released. The Statement said that jobcentres have not been open since 24 March, so what are released prisoners meant to do?

[Baroness Scott of Bybrook]

I do not know what they do in the prisons before they are released, but when they are released, they can go online, because universal credit is an online system. They can also use the telephony service to get advice. I will get a further briefing for the noble Lord and make sure we have information on everything that is happening and changing for prisoners, before and after they are released.

[Baroness Bennett of Manor Castle (GP)]

There is no mention in the Statement of the bedroom tax. I ask the Minister to reflect on its impact in the age of Covid-19—the impact on the education of two under-16s having to share a room; the impact on people’s mental health in these difficult circumstances; the impact if someone in the household is ill and has to self-isolate. The bedroom tax affects everybody. It is obviously difficult to reverse this quickly, but there are two things the Government could do. First, claims have 13 weeks’ grace; that could be extended, since it is impossible to move. Secondly, will the Government consider extending that period for people coming up to the first anniversary of a death, where the bedroom tax kicks in?

[Baroness Scott of Bybrook]

We have no plans to change the bedroom tax, but I will take those two issues to the department. I know that it can be an issue when people are in small houses with a large number of people self-isolating.

[Baroness Kennedy of Cradley (Lab)]

My Lords, I thank the Minister for agreeing to look into the issue raised by my noble friend Lady Sherlock as to why an anomaly exists in the way universal credit differentiates between maternity allowance and statutory maternity pay. Thousands of pregnant women are worse off. The anomaly needs to be changed. Does the Minister agree that, following the review of this policy, any subsequent changes should benefit those who have already applied for universal credit during this crisis?

[Baroness Scott of Bybrook]

I thank the noble Baroness, Lady Kennedy. I know that the Secretary of State is looking into this in detail, and I will certainly bring up the question of subsequent changes having such an effect. I will have a look at this, and we will come back with a substantive answer to those questions.

[Baroness Ritchie of Downpatrick (Non-Afl)]

My Lords, what further steps—by which I mean the introduction of new legislation—will the Minister and her colleagues take to transform welfare policies to ensure that they are applied with fairness, equality and compassion to bring about a reduction in poverty?

[Baroness Scott of Bybrook]

I thank the noble Baroness, Lady Ritchie. At the moment, I do not see any new legislation coming through. Currently, we are making sure that the welfare system works for the people who most need it during these difficult times. However, we will learn from what has happened and from the changes we have made. The Secretary of State said yesterday that we will take on board the effects of some of the changes. It is possible that we will continue with those changes, but, as we move forward, we will always make sure that the welfare state is fit for purpose and that it looks after the most vulnerable in our society.

[The Earl of Clancarty (CB)]

My Lords, there is a particular concern in the creative industries that many will not be able to return to work for a long time yet, as theatre, music and other venues will be among the last working environments out of the lockdown on account of the clearly huge difficulties around social distancing. Many of these workers are self-employed. Are there plans to extend the period covering claims for the SEISS, and indeed for the job retention scheme? Otherwise, come the summer, there will again be a significant increase in claims for universal credit.

[Baroness Scott of Bybrook]

I thank the noble Earl. I know how much concern he has for this sector. These arrangements will be kept under review the whole time. Obviously, if parts of that sector cannot come back into full production, one assumes that the Government will look favourably on them. However, we have to go step by step. As I said, we are dealing with a new phenomenon and will have to keep all these matters under continual review.

[Lord Purvis of Tweed (LD)]

The Scottish Government’s options paper, which they published today, shows very clearly that, going forward, there will be a different approach to social care, employability, and relaxing some of the social distancing measures and aspects of the lockdown. Other than the HSE reference in the Statement repeated by the Minister, which parts of the Statement cover the United Kingdom as a whole and which parts cover only England? There is now a UK-wide welfare system and a ministerial working group has been established to discuss the interaction between Scotland and England on welfare. However, it last met six months ago. Why has it not met more recently to discuss the interaction between the two? Given that the Minister has not been able to answer many questions on the Statement today, would it not be appropriate for the Government to bring this issue back to the House in government time for it to be debated fully, with substantive answers being given to all the points that have been raised?

[Baroness Scott of Bybrook]

I thank the noble Lord. Many of the points raised today have been raised before in a number of recent debates, but I am sure that there will be other debates on the welfare system as we move forward through this difficult period. As for the changes that will happen in England—they possibly differ from what is happening in Scotland at this time—we will know more this Sunday, I believe, when the Prime Minister will talk about the way forward.

[Lord Berkeley (Lab)]

My Lords, I am grateful to the Minister for her Statement. In particular I congratulate the Health and Safety Executive staff, who have produced a very wide range of important activities, all designed to keep the workforce safe. However, I suggest that the guidelines it produced on social distances are pretty feeble, because for employers who do not comply—that is practically every employer in the land—the remedy in the guidelines is that,

“we will consider taking a range of actions”,

including

“the provision of … advice … through to … enforcement”

actions. Will the employers notice any of this? Perhaps the Minister could write to say how many enforcement actions were taken against employers in the last year. Surely the answer is to have binding and enforced standards for this purpose.

[Baroness Scott of Bybrook]

I thank the noble Lord. I will get him the numbers of enforcement actions, which I do not have in my briefing pack, but if there have been any I will certainly let him know. However, much of what we are doing is in guidance and we are a country that works by consensus. It would be more difficult, and I think we would have to have more legislation, if we were to place a much stronger effect on any employer who does not comply with the guidance.

My Lords, I am going to go and turn my light on, but the noble Baroness, Lady Bull, should go on.

[Baroness Bull (CB)]

My Lords, perhaps we might have some light shed on whether any consideration has been given to a job retention scheme that operates on the basis of a part-time furlough. This would maximise the work that people can carry out during this period and support longer-term viability. It will be particularly important in the recovery period for those businesses which have to wait for other businesses to gear up. In the creative industries, for instance, post-production or special effects companies cannot fully get back to work until filming has started and content has been made. Might part-time furloughing be one way to address this?

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[Baroness Scott of Bybrook]

Yes, I thank the noble Baroness. That is a really good idea and I know that it has been brought up in other places, because some jobs will not be as full-time as they were, yet people can still get out to do useful employment. I will take that idea back to the department and come back to her when it has considered it.

[The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)]

My Lords, we have reached the end of the speakers’ list for the Statement well within the allocated 30 minutes. I thank all noble Lords for their contributions. The day’s Virtual Proceedings are complete and are adjourned.