Welfare Reform Bill

Lord McKenzie of Luton Excerpts

Tuesday 17th January 2012 Lords Chamber

[Baroness Finlay of Llandaff]

My Lords, the noble Lord, Lord Patel, and I have amendments in this group. Our noble friend Lady Meacher has spoken most eloquently to the specific problems for these age groups. This is Report stage, and we are well aware that there has already been much debate about young people who have to transition between children’s services and those for adults. However, I remind the Minister that, coming from a medical background, we have tabled our amendment because of the specific problems for those who fall ill suddenly or who are severely ill. As they transition for all their care in the medical sense, they transition also for all their life events and social interactions. They struggle to move to a degree of independent adulthood and are faced with a whole range of problems that those who are more settled either in the security of childhood or, later on, in an adult framework might not encounter so acutely. For that reason, we ask the Government to allow them to be considered separately should it be appropriate.

[Lord McKenzie of Luton]

My Lords, we have strong sympathy with these amendments, spoken to so effectively by the noble Baronesses, Lady Meacher and Lady Finlay. We had a bit of a canter around this issue in Committee, focusing particularly on 16 to 24 year-olds. I took from that debate, and the Minister may take the opportunity to confirm or deny it, that there is potentially scope within the Bill for a regulation not to require 16 year-olds inevitably to move towards PIP. If that is not the case, it is important that we clarify it, because it impacts on how we approach the amendment.

A number of questions have been posed which I should like to emphasise. The first is whether the Minister contends that the PIP assessment as currently constructed is fit. Does he believe that it would be appropriate for most 16 year-olds? The assertion is that it is not. Another issue is the extent to which there is alignment of ages for a range of things—the UN convention certainly, but care generally and education and training. Would it not be better if that alignment were brought into effect also for the purposes of the PIP and the DLA cut-off?

When somebody aged 15 is about to become 16, that is the point at which things change on the DLA journey and we move into a somewhat different regime. If somebody reaches that once PIP is up and running, do they inevitably have to apply and go through the PIP process at that point, or is there an opportunity for them to remain within DLA or perhaps migrate at a subsequent point? Otherwise, there is a real risk that these young people will the first to test the new PIP arrangements. What is the technical position there? Does somebody who wishes to make their first claim after the age of 16 have the route only to PIP and not to DLA? Would somebody currently claiming DLA necessarily be denied the opportunity to continue with that until, perhaps, the migration plan has run its course? I thought part of the noble Lord’s response to our Committee debates was that you could deal with this in part by the way people in the DLA system migrated towards PIP. One way of dealing with some of the issues that have been very validly raised in this amendment would be to use that flexibility, if it exists. If not, it seems doubly important to lock into the 18 year-old cut-off point, which is being pressed.

[Lord Freud]

My Lords, I welcome these amendments tabled by the noble Baroness, Lady Meacher, and the noble Lord, Lord Patel. They allow me just to go through how the Government intend to introduce PIP successfully for young disabled people from the age of 16. Clearly, the central question is whether 16 or 18 is the right age. In one sense, all ages are a little arbitrary here. Adulthood is defined at different ages in different contexts. The key to the decision to start PIP at 16 was based around the assessment criteria and at what stage people fit in with those, in terms of the activities that they can undergo and how we can look at them. When we looked at it with a range of experts, we concluded that you would normally expect individuals without disabilities to be able to carry out these activities independently from the age of 16. For example, you would expect a 16 year-old to be able to wash and dress themselves, to communicate with others, to plan, and to follow and make a journey. It is the age at which, currently, you expect individuals to be able to be employed full-time. There is a general expectation that they have the capabilities of adults.

The group looked at whether you would expect even younger people—I had better use that word now, rather than adults or children—to fit this assessment. They concluded that children go through several developmental stages under the age of 16, and they do that at uneven speeds. So, there was a cut-off in developmental terms between the two stages, for the purposes of this test, at 16. The other way of looking at this is that it is about trying to move people into adulthood and independence. A lot of these youngsters are living in their households but need to move to independence. Having their own independent help and their own funding in PIP at that age matches their aspirations to move into adulthood, and allows them to make their own decisions about aspects of their lives.

This is an area where, as we described in our policy document, we have set out our intentions and outlined the key principles that we have debated and agreed with stakeholders. We have set up a subgroup of the PIP implementation development group specifically to help and inform the design and testing of the new system in relation to disabled young adults. Together with the focus group work and the interviews that we have held with disabled young people, their appointees and representatives, this is the process that we have under way to get the system right. One of the most important areas where we are using the development group is around the question of how we look at the process of moving people into the 16 category and how we signpost, communicate and get awareness of the changes and then join up the support for disabled young adults and their families.

Clearly, this is not the only testing that disabled youngsters undergo in this phase of their lives. There are a number of assessments as they move from childhood to adulthood. We will ensure that all young people claiming PIP or moving on to it at age 16 have the appropriate support to allow them fully to express their needs. We know it is important that they have a parent, an advocate or a friend to accompany them to that face-to-face consultation. We are not changing anything in terms of DLA in this area. We are changing a lot of things by moving DLA to PIP, and we will be discussing some of them, but in this area we are sticking with the same age as the existing DLA arrangements.

There was an anomaly that the noble Baroness, Lady Meacher, tried to pin me down on and defied me to find a good explanation for. I have been challenged and I shall do my best. On the point about the difference between the universal credit at 18 and PIP at 16, the blunt answer is that these are different benefits for different purposes. It is important that we do not think of PIP as an income supplement; that is not what it is, and nor is it for someone who is out of work. PIP is a payment to people who are disabled who will always need extra money to live because their costs of living are higher, and we will pay it regardless of whether people are in work or out of work. That is why it is a different argument. By giving PIP earlier, we are giving youngsters their independent funding to run their own lives from that point—not from the point when they are meant to be in the workforce and fully independent—when, if they do not have a job, they will need an income supplement. That is the difference. I hope that I have risen to the challenge; I am sure that the noble Baroness will say that I have not, but I have done my best.

We are working closely with the Department for Education to explore evidence gathered so that we can have a single assessment for an education, health and care plan that can be used to support a personal independence payment claim. We are trying to get rid of all the multiple assessments.

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[Baroness Wilkins]

My Lords, I strongly support the amendment, which has the support of many disability organisations and thousands of disabled people and their families who face losing help under the Government’s plans.

The noble Baroness, Lady Grey-Thompson, has already outlined the numbers of people affected by the Government’s proposals. These people are not fakers and scroungers. Of current low-rate care claimants, DWP statistics show that 20,000 are blind, 57,000 have learning disabilities, 94,000 have arthritis, and more than 100,000 experience psychosis or psychoneurosis. These are some of the people affected, and these conditions are clearly not fake. These are the people who the Government suggest should lose support.

Disabled people have told the Government exactly what losing low-rate care could mean. Examples include people who categorically state the clear health and social care consequences of cutting DLA, as the noble Baroness, Lady Grey-Thompson, outlined. I shall cite examples of people who have commented. One said:

“If DLA was reduced or removed then I would be unable to attend doctors and hospital appointments due to the cost of getting to and from them, and my health would be severely put at risk due to not having enough money to either keep myself warm and/or fed”.

Another said:

“We would be in crisis—end of story … my son would start self-harming again”,

and that even,

“prescriptions would be out of the question”.

The amendment could help prevent an explosion of avoidable NHS and social care needs, as the noble Baroness said. Will those needs of the disabled people who are losing help be met elsewhere? I fear that no support may be available from any other public service for many of the 400,000 who will lose all their DLA. The past decade has seen a shrinking of council social care service provision through the tightening of eligibility criteria. More than 80 per cent of councils in England now help only people with critical or substantial needs. The people losing DLA may very well not be able to access care services until crises develop. This leaves families, friends and neighbours to care for them. We already have one of the highest economic inactivity rates due to informal care provision. By not accepting this amendment the Government risk ignoring the impact on carers—especially on women aged between 46 and 64 who are more likely to have to take up caring responsibilities in lieu of formal services or benefit provision.

In proposing to abolish low-rate care provision, the department appears to fail to understand or, worse, to wilfully ignore the genuine needs of disabled people and carers. The amendment would help the Government ensure that they did not simply end the lifeline of DLA for disabled people and families who are unable to access alternative help until they receive expensive NHS treatment or residential care. Accepting the amendment and devising a fairer way to share the burden of the proposed dramatic cut in DLA resources would also help the Government ensure that they do not permanently undermine disabled people and the trust and confidence of carers. I hope that the Government really mean what they have said—that we are all in this together.

[Lord McKenzie of Luton]

My Lords, I will speak just briefly on this. It seems to me that the importance of this amendment has been heightened by the documentation we got just yesterday from the DWP, which emphasised that half a million people are going to miss out under the new system compared with the current arrangements. In passing, I might say that it would have been more helpful had we had that documentation a little earlier so we could have studied it in more detail, although clearly the noble Baroness, Lady Grey-Thompson, has delved into it more deeply than I have had the chance to do.

There must be an onus on the Government to undertake some sort of assessment of the consequences for those half a million people who are not going to be able to benefit under the new system. Some of the consequences have been spelt out, such as extra pressure on social services and the health service. We know there will be loss of income tax and national insurance because DLA helps many people to stay in work or to work longer than they otherwise would. All those consequences are quite apart from the worst feature which is the human cost for people who are going to miss out who had been able to rely on funding and not just at the lower rate. It may be that most of those who fall out of the system are currently on the lower rate of DLA, but that certainly is not the case for all of them.

It seems to me that this approach reinforces the perception that is too prevalent that if you claim these benefits then somehow you are not worthy and you do not really deserve them. Half a million people will come out of the system under these proposals. What are the consequences for them? What assessment have the Government undertaken of their needs as a consequence of falling out of the system? Have they or will they look at the sort of proposal that this amendment covers so that there is some basis for bringing some redress for those people who, on any analysis, are bound to suffer as a result of these proposed changes?

[Lord Wigley]

My Lords, before the Minister gets up—I am sorry I did not get in before the noble Lord on the Opposition Front Bench, who beat me to it—I want to say a few words in support of Amendment 50ZGB moved by the noble Baroness, Lady Grey-Thompson. It provides a basic rate of daily-living payment to minimise the number of disabled people who might otherwise be totally deprived of such focused help. Listening to Radio 4 this morning and hearing the Minister from the House of Commons acknowledging that 500,000 people could be hit by these changes really brought home to everyone the significance of what we are talking about. The ending of lower-rate DLA will leave people with needs arising from their disability but without the means to pay for them.

The point was made earlier by the Minister—and I understand his point—that the day-to-day costs of living are covered separately from the additional costs of disability. The implication is that people who would be in the lower group do not have additional costs of disability, but we all know from experience that they do and they are going to be losing out as a direct result. If the Government’s intention is that so many people who have previously been recognised and acknowledged as having needs will no longer be helped to meet those needs, let them say so. I think it is a very retrograde step.

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[Baroness Browning]

In the context of this amendment and the ability of health and social services to carry out their statutory responsibilities under the Autism Act, will my noble friend agree to take a look the number of people who currently have DLA but are predicted to lose it? There is a read-across here, because small levels of support have been identified as having prevented people taking their place in society and gaining independent living.

As I mentioned previously, I am concerned that as regards those who will lose the allowance—some will and others who apply in the future will not get it—the measure is going to have an impact on the way in which we have required health and social services to implement the Autism Act. Does my noble friend agree that there will be some hardship for those who lose it and that we have to face up to that reality, and that the Government should have a clear and examined view of how they are going to square that with the new statutory responsibility?

[Lord McKenzie of Luton]

My Lords, we support this amendment, moved so comprehensively by the noble Baroness, Lady Grey-Thompson, and spoken to so effectively by the noble Lord, Lord Low. I would say to the noble Lord, Lord Newton, that in doing so we are not motivated by a belief that this is all some dastardly plot, but a belief that we need to be assured that the system does not just need to be tweaked but that it is fit for purpose before this major change is introduced.

This amendment is aimed at helping the Government get right the process of transfer from DLA to the personal independence payment. It calls for an added layer of safeguards within the process of reform, with an independent review of the plans for operation of the assessments before they start and a trial period when the assessment process first comes into effect. Crucially, it calls for the full involvement of disabled people and their organisations in this process, ensuring that they have confidence that the assessment process for the new benefit will be fair. The need for safeguards in this area has been all too fully revealed with the experience of the employment and support allowance. The noble Lord, Lord Newton, told us that he was responsible for introducing DLA—which in Committee the noble Lord, Lord Low, called an “iconic” benefit—and he should be proud of that achievement. I have some responsibility for having introduced the employment and support allowance so I cannot claim any such accolade.

It is clear that the assessment process has not been working and has caused not only distress to too many disabled people but considerable headaches for the Government. We all know that 39 per cent of appeals have led to a decision about ESA being overturned in favour of the claimant, and the unreliability of the assessment procedure has also made it difficult for the Government accurately to budget for the cost of these reforms. The Office for Budget Responsibility’s November economic and fiscal outlook states:

“ESA changes have resulted in an increase in expenditure of £1 billion by 2015-16”,

and the latest administrative data suggest that fewer people than previously assumed will be judged fit for work as a result of the initial ESA work capability assessment and the reassessment of incapacity benefit cases, and more will be placed in the support group. This accounts for around four-fifths of the increase. Other changes arise from a change in assumptions about the composition of the ESA caseload, which results in higher average benefit payments per person and higher inflows. The costs of getting this process wrong can therefore be high, and we know that the Government have benefited from the independent review of the ESA assessment process undertaken by Professor Harrington.

As other noble Lords have said, we received just yesterday the document providing further information about the second draft of the PIP assessment criteria, together with proposals on entitlement thresholds, impact modelling and case studies. While this technically fulfils the Minister’s commitment that we should get it before the Report day, as we have previously noted, there has hardly been time for detailed study and analysis—although it is hard to miss the startling figure that some half a million disabled people will be excluded from the new benefit in comparison to existing DLA arrangements. Before causing this to happen, the Government should be called to account for the impact that this may have on the disabled people who are missing out.

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[Lord Kirkwood of Kirkhope]

The noble Lord is an experienced hand and has made a very interesting speech, but it would help the House enormously if he could be tempted to give an assessment—if he was the Minister facing Amendment 50—of how long he thinks it would take to discharge the responsibilities contained in the amendment.

[Lord McKenzie of Luton]

It is clear that the Government are going to have to do some of this anyway, but in terms of an overall time period it is clearly a matter of some months rather than weeks, but not a matter of years. It depends on the determination and effort that the Government bring to bear. They have the levers and the resources to cause this to happen quite quickly, I would suggest, but there has to be full engagement with disabled people for it to be meaningful. This does not mean endless delay in the introduction but it does mean a real level of reassurance before we embark upon this very significant change.

[Lord Freud]

I will come to my conclusion first. Basically, we are doing a lot of trialling in this process and the way that this particular amendment is drawn would delay us very significantly. At the end of my speech, I will give the noble Lord the actual cost that we estimate the delays will represent.

I will spend a bit of time highlighting our approach to developing, testing and refining the assessment criteria that we already have. We have been developing those in collaboration with a group of independent experts, including disabled people and disability organisations. We had initial proposals on which we then carried out 16 weeks of consultation. We met 60 disability organisations; had 170 written responses; and carried out testing involving sample assessments of around 900 volunteers selected from current or recent DLA claimants. Both the testing and the consultation were very effective and allowed us to review, revise and improve the draft assessment criteria from that published in May. We provided a second draft in November in advance of discussing the PIP clauses in Grand Committee. Since publication, we sought the initial views of disabled people and the organisations that represent them in an informal way to listen to their thoughts. Yesterday, as promised, we published a further document detailing our initial thinking on entitlement thresholds for the rates and components of PIP. We have now commenced a formal consultation on the entire assessment criteria, including the weightings and entitlement thresholds which will last for 15 weeks.

That gives disabled people and disability representative groups the opportunity to tell us what they think the criteria will mean to them and their members and what amendments might be needed before we finalise the regulations. I can assure my noble friend Lord Newton that those regulations, which we will lay later this year, will be subject to the full affirmative procedure of both Houses. We are confident that we will be able to test the impact of these using the data we gathered during our earlier exercise. If for any reason this is insufficient, we will carry out additional testing to support our analysis. In response to a specific request from my noble friend Lady Browning, I will personally look at the impact of this on our autism obligations and I will make sure that that is done as a key part of this process.

There have been, and there remain, significant opportunities for involvement from disabled people and their organisations, and significant opportunities to influence our proposals to ensure we get them right. That, however, is not all. In terms of the delivery and operation of PIP, we intend to continue to develop a number of our operational processes in conjunction with disabled people and their representative groups through our implementation development group, which I talked about a little earlier this evening. This group has already played such an important role that it is our intention to retain its services after April 2013 in order to work with it to help evaluate the new delivery arrangements.

We have also created a number of customer research panels, made up of groups of disabled people who share similar characteristics, in order to understand, and gain an insight on, how the process impacts upon them. We will also test our operational processes in a model office environment, allowing us to see how they work without affecting individuals’ benefit entitlement. The trouble with a formal trial, of course, is that it would change what people actually get even though we are trialling. Here, by doing it in a model office, we can do it in a way that does not actually affect what they receive, but we know exactly how it will work.

We want similar arrangements to be in place with regard to the processes of the eventual supplier of the assessments of the benefit. We will be making it clear to bidding organisations that we expect them to work with disability organisations on the design of their processes, to improve the customer experience. This will be before, during and post-implementation. This will be a clear requirement in the contracts.

As well as getting the whole development process right, I recognise the value in moving away from a big-bang approach to implementation which would see both new claims and reassessments beginning in April 2013. Since the Committee stage, a significant amount of work has been undertaken to investigate the options for ensuring a sensible implementation which allows us to learn from early experience. Therefore, I can inform the House that, in addition to the pre-implementation testing work that I have already mentioned, we will limit the number of new claims for personal independence payment to a few thousand per month for the first few months of implementation. This will allow us fully to trial all the processes in a truly live environment. We are still developing the details on how we can meet our claimant target over the first few months.

Once we are satisfied that the new processes are working as intended with this reduced number, we will allow all new claims for personal independence payment to enter into the process. We will continue monitoring and reviewing the processes to ensure they are working effectively and appropriately and to see how claimants are finding the experience. We will begin to reassess existing DLA claimants in a co-ordinated way six months after the initial implementation. Again, we will stagger this process. We expect the first stage of reassessment to start in the autumn of 2013, beginning with individuals on a DLA fixed award who will need to renew their claim and those claimants who report a change of circumstances on their existing DLA claims.

At the same time, we intend to conduct a pathfinder trial reassessing individuals who would not, in the ordinary course of events, come up for reassessment. We expect the pathfinder to run for around three months to ensure the processes for identifying and contacting people and taking them through the claim processes are working satisfactorily. Allowing a small number of existing DLA claimants to advance through the reassessment process ahead of full national implementation will enable us to be sure that our approach to engaging these customers into the claims process is working effectively ahead of widening the selection. Also very relevant here is the independent review and report on the assessment that we are legislating for in Clause 87.

During Committee, the noble Lord, Lord Rix, laid an amendment seeking to increase the number of independent reviews carried out. Noble Lords will remember that I promised to take this matter away and consider it further, and I have done that. Our revised proposal is that we legislate for two biennial independent reviews within the first four years of the implementation of PIP. The first would report within two years, beginning with the date on which the first assessment regulations come into force, and the second within four years of that date. Although it is only two reviews formally in legislation, we commit to undertake a third if the second review demonstrates ongoing issues with the operation of the assessment which need to be addressed in this manner. That is a firm commitment from me and my ministerial colleagues.

In reality, in the way that we are structuring this, we are trialling it in any real sense; we are doing it on a gradual basis. If we do it in this way, we will get the assessment and wider benefit processes right; we will involve disabled people and we will learn from the earlier delivery of the benefit. We do not think, therefore, that the formal trial proposal in this amendment is necessary. However, if we do it that way, the House should know that it would push back the implementation of the benefit. Our estimate is that the loss will be £1.4 billion of savings over the reassessment window. Clearly, that has to be found somewhere else. I know that noble Lords opposite think that is funny.

[Lord McKenzie of Luton]

Could the noble Lord give us a bit more detail of that estimate? The figure of £1.4 billion seems to trip off the tongue as the cost of any amendment that we pursue.

[Lord Freud]

That is an assessment based on the delays that we anticipate from this amendment, which is actually similar to the previous amendment where I used the same figure. It would have the same effect of delaying the whole process. That is the Government’s position, having worked through the implications of the amendment.

I remind the House of where the Opposition have got to with their amendments. We estimate that as a result of the votes on amendments so far, over five years they have imposed £3.8 billion-worth of extra costs, and this amendment will take that figure to £5.2 billion.