Incapacity Benefit Migration

Mike Penning Excerpts

Thursday 3rd April 2014 Westminster Hall

[Chris Bryant (Rhondda) (Lab)]

It is a delight to serve under your chairmanship, Mr Turner, and to follow my hon. Friend the Member for Edinburgh East (Sheila Gilmore). The Minister and I agree that since she arrived in the House she has made a dramatic contribution on the issue of work and pensions, the way in which the Department functions and how the Labour party develops its policy on the issue.

I will start on a point of consensus. Everybody in the Chamber believes that the best route out of poverty for the vast majority of people is work. That is not as easy for some people as it is for others. Some people start life with phenomenal advantages, whether it is an uncle who can ring up somebody and secure a job for them, an easy route into an apprenticeship or an internship, or the financial freedom to leave university with no debt. We all agree that the social security system must be there for everybody in their time of need. We may think we will never have a moment of need in our life, but it may come suddenly. For some people it lasts for a protracted period, and for others it lasts throughout their lives.

Notwithstanding the sometimes exaggerated and sometimes deliberately misleading fulminations in the press, the vast majority of people want to live in a country in which we all put a little more into the pot to support those who have profound disabilities and who genuinely find it difficult to work and provide for themselves and their families. It is not just that we know that one day we might need to rely on that support ourselves. We also all agree that “need” is not the same thing as “want”. Sometimes people want financial support from the taxpayer, or from wherever else, but do not actually need it. Occasionally, the most supportive and honourable course is to say, “No, there is not going to be a benefit available to you, and you are going to have to pursue as hard as you can any work opportunities there might be.”

I am MP for an area in which a large number of people of working age—between 25% and 27%—are on some form of incapacity or disability benefit. That is much higher than in most areas of the country, largely because for a period one industry was entirely dominant. In four generations, that industry went from employing 75,000 men to employing nobody. Many people in Rhondda used to suffer from conditions associated with mining—particularly musculoskeletal and chest conditions—but today those who have chronic obstructive pulmonary disease are far more likely to have it because of smoking than because they worked in a mine. However, patterns of poverty and multiple levels of deprivation are, as my hon. Friend the Member for Edinburgh East said, often concentrated in areas in which one heavy industry—whether shipbuilding, iron, steel or coal—dominated and then disappeared. That creates a set of challenges for how we support disabled people through the social security system.

As my hon. Friend said, Governments of both stripes—there are three stripes now, because we have had coalition, Labour and Conservative Governments—have found it challenging to get this issue right. We want to show compassion to those who are in need, but the Treasury and the taxpayer have legitimate concerns. I have a passionate desire to see as many people as possible working who would otherwise be living in poverty, because, frankly, a life on benefits is not the fullest life available to the vast majority of people. I conceive trying to get as many people as possible into work as a socialist endeavour. I say gently to the Minister that when the Secretary of State and other Ministers suggest that Labour had no interest in people on disability benefits throughout our 13 years in government, that is a misrepresentation, and in their heart of hearts they know it.

Something else on which the Minister and I can agree is that people with disabilities face significant disadvantages in the workplace. It is not just the obvious disabilities such as blindness and deafness or being in a wheelchair that make it more difficult for people to get jobs; it is often much more difficult for people to sustain paid employment when they have a condition that is not linear, continuous or regular but has a chaotic pattern. A lot of work in former industrial areas is no longer available in those areas and people are required to travel. There are significant challenges for those with disabilities and they must be taken into consideration.

Disabilities tend to come not as single spies, but as battalions. Someone who is out of work because of one disability for more than six months is six times more likely to acquire a significant mental health problem. Mental health conditions are often the most difficult to assess in terms of need, and mental health charities have argued strongly that the best route back to mental health for the majority is going into work. It provides self-esteem, as my hon. Friend said, it socialises people so that they are not isolated at home, and it improves their financial situation. When all those issues are considered, the more we can do to get more people into work the better.

One of my biggest concerns about the cost of social security when we were in government was that it was often born in the mental health of those who were still out of work because they had no opportunity to change their situation. People on incapacity benefit often experience a double layer of anxiety because their next-door neighbours may think they are swinging the lead and automatically presume that a mental health problem is not as serious as a physical problem. Clearly that is not true, but the stigma attached to mental health is significant. Some 50% of the people we are talking about may be in receipt of benefits for conditions related to mental health or with a mental health condition on top of other problems. That is one of the most difficult problems in enabling people to get into work, and tackling it is a challenge.

I also believe, as does the Minister—I have never heard him say so, but I think he agrees—that the move we undertook before the last general election away from the old set of benefits to employment and support allowance was right. It provided greater consistency and coherence and we were right to insist that instead of assessing what someone could not do, we should assess what they could do.

[The Minister of State, Department for Work and Pensions (Mike Penning)]

As Hansard may not be able to record my nod, may I say that I completely agree with what the previous Government were trying to do before the last election? Assessment is vital, and I reiterate the shadow Minister’s point that the issue should be what someone can do rather than what they cannot do. That should apply to life in general, not just to work.

[Chris Bryant]

I am grateful for the Minister’s intervention. I am aware from my experience in the Rhondda that historically, under both Conservative and Labour Governments, when mines closed there were many men with musculoskeletal or chest problems related to their work in the mines who could no longer work in a mine or do heavy labour, but there were other jobs they could have done. In many places, it became part of the mindset that someone was either fit for work or unfit for work. Those were the only two categories. I wonder whether the phrase “fit for work” contributes to that. This may be a trite comment, but Douglas Bader worked. I know many constituents with profound disabilities who work hard every day, but others find it much more challenging. There is a mindset in some parts of the country that has been difficult to transform over the years.

Some years ago, before ESA was introduced, a man came to my surgery having been assessed as fit for work. He told me angrily that that was disgraceful because he had had a heart attack 14 years previously and two major operations, and had been on incapacity benefit since then, but he had worked all his life. I suggested that he had not worked all his life, and he said he had worked all his working life. I said that I was not a doctor and could not assess whether he was fit for work because I had no means of working that out. He said, “I knew you’d be rubbish. Everyone tells me you’re rubbish, and the worst of it is that the Labour party is so pathetic in the benefits it gives me that I have to go and mix cement on a building site every day of the week.”

What was shocking about that was not so much the fact that he did not quite understand the system and that he was clearly fit for work because he went to work every day and did manual labour, but that he thought that was a legitimate argument to put to a Member of Parliament. Fortunately, he had already given me his name and address so he was not in receipt of benefits thereafter. I hope he went on to get a proper job that was more fulfilling for him instead of going through the black market. If the ingenuity that some people have used in the black market were used in the legitimate market, we might be a far more entrepreneurial nation.

[Mike Penning]

I am sure the hon. Gentleman was coming to this, but we have all heard of such examples face to face in our constituency surgeries, although perhaps not so abruptly. Such behaviour is damaging to those who receive benefits because they are not capable or working, and infuriates disabled people who are in work and have worked all their lives. I am thinking of a proud Welshman, Simon Weston, who we all know has given so much to his country and was recently voted the nation’s most heroic figure. Not only is he an entrepreneur, but I understand that he has never taken sickness benefit at any time, even though his injuries are profound.

[Chris Bryant]

I do not want to leap from that to the suggestion that someone who is in receipt of disability benefit is not a hero. The situation often depends on someone’s family and community support, the nature of their condition and so on. Sometimes a single condition may be predictable in how it will play out for the rest of the sufferer’s life. Other conditions, particularly degenerative ones, are much more chaotic and their effects cannot be predicted.

--- Later in debate ---

[Chris Bryant]

I cannot set the alarm on nearly any of the things in my house and I have not got children to be able to do it for me—they are basic skills. I will move on, if I may.

It is also true, as I think we all agree, that poor initial decisions end up being expensive for everyone. I think Governments of whatever stripe would like to be able to improve the quality of initial decisions. As was found in the run-up to 2013, £26.3 million had been spent on the tribunal service. The Government have changed the way in which that operates, and I shall come to that later, but when 19% of appeals are still overturning the initial decision, a lot of money is effectively going down the drain on behalf of the taxpayer. I suppose some lawyers would say that paying them is not money going down the drain, but if we could improve the quality of initial decisions, whether that is down to form-filling, ensuring that the correct information is available from the very beginning, or whatever it is, we would be saving ourselves time and energy, and most importantly, saving a great deal of heartache for a considerable number of people.

I shall move on to some of the problems that exist at the moment. It is uncontested that Atos has not been a great success. I think Atos itself would say that—in fact, it has done. It has effectively put its hand up and said that it has not been a great success. We note that the Government are now ending the deal; that is an established fact, but I would like to ask the Minister a few questions and if he is not able to answer fully now, I completely understand, because the questions are relatively technical, but I should be grateful if he would write to me.

The Minister referred, I think in questions on Monday, to the fact that Atos will be paying him—

[Mike Penning]

Not me personally.

[Chris Bryant]

No, not him personally—paying the Government. Will the Minister clarify exactly how anyone is arriving at a figure and what that figure is likely to be, because it will undoubtedly affect whatever the tender process is for a new contract? Will he also lay out exactly how he thinks that new tender process will go? Does he have a time scale for it? When does he think that might be in play?

I note that Atos said that it has been worried about death threats for its staff and so on. Even if we were to take out of the equation the fact that lots of people think Atos has done a terrible job—people have been able to point to some terrible mistakes and hideous instances where people who were either already dead or nearly dead were being told that they were fit for work, which has undoubtedly inspired a great deal of anger—whoever is doing work capability assessments in future will have to make unpopular decisions, by definition, because they will be turning some people down. What assessment have the Government made of the provision that there needs to be in any tender process, or for that matter, in future ongoing relations with whatever company will be doing this, to make sure that there is protection and that security is not compromised?

Capacity is another issue. Certainly by mid-2010 or by the end of 2010, it was pretty clear that there were not enough doctors and other medical staff—or, for that matter, administrative staff—to be able to do the work at Atos, so how do we make sure in any future tender that that does not happen all over again? It means that even if the Government want to say, “We are going to do more assessments,” they are unable to do so, which is why, because of the capacity problems, the Government have had to change what they are doing about people who are already coming up for reassessment after two years. Making sure that the capacity is there from the start is an important part of it.

As I said, the Government have now suspended reassessment for those on ESA for two years. I wonder what the cost of that is now going to be. I presume that the Government have made an assessment of that, because they would have been presuming that the reassessment was there for a purpose and that it would take more people off ESA. I wonder how many people they reckon will stay on who, in a sense, they would have thought otherwise might not be on it. The Government made assumptions when they introduced the policy, which they are presumably now unbundling. What are they assessing the future cost to be for each of the future years? How many people does that affect? How many people on ESA for two years would have been being assessed now, but are not being assessed?

On cost, the Office for Budget Responsibility report states:

“ESA is higher by £0.8 billion in 2014-15 and 2015-16…because the latest evidence suggests the caseload is higher than we assumed in December, despite substantial upward revisions made at that time. We have also updated the modelling on repeat work capability assessments, which has increased our assumption about the length of time and number of claimants waiting for a repeat assessment, meaning more claims continue for longer”.

It may be that I have just answered my previous question to the Minister, because it may be that the £800 million is all to do with not doing the extra reassessments—in which case, does he have any idea when we might be able to start doing reassessments? That might be a capacity question, but that £800 million is a significant cost.

--- Later in debate ---

[Chris Bryant]

That rather chimes with what I was suggesting, and the Minister has just winked at me, for the record, so I can only assume that that was not a personal recommendation, but—

[Mike Penning]

I have a piece of grit in my eye.

[Chris Bryant]

I hope it is not a plank. Anyway, I hope that we are singing from the same hymn sheet.

I have one more serious point, which relates to mandatory reconsideration. Obviously, the Government have changed the system of appeals. We have now moved on to the system of mandatory reconsideration. There seems to be some evidence that that has meant that quite a lot of people have shifted on to JSA, because they are nervous about what will happen. That may, as my hon. Friend the Member for Aberdeen South (Dame Anne Begg) says, take them away from further support, rather than end up enabling them to get into work. I want to ask the Minister how many people that now applies to. Is the number of people seeking mandatory reconsideration higher or lower than the previous number of people who would go for appeal?

Because the Department has no fixed limit on how long the process can take, I wonder how long on average it is taking for a mandatory reconsideration to be arrived at. Someone would be in limbo, potentially, for a considerable time. We have seen that in other areas. For instance, assessments for the personal independence payment have been taking three months, six months, nine months, a year and so on. I think that all of us would be rather hesitant about allowing the Government to have a blank sheet on this and to reply whenever they felt like it.

I would like to talk about sanctions, but a debate is happening in the main Chamber on sanctions, so I think that we will leave that issue to hon. Members who are there. As I said, I hope that where the Minister is not able to provide instant answers, he will write to me. If he has not replied at the end, I will write him a letter, so he will have to write to me then anyway.

[The Minister of State, Department for Work and Pensions (Mike Penning)]

It is a pleasure to respond under your chairmanship, Mr Turner, to this wide-ranging debate on incapacity benefit migration. Let me touch on the last point made by the shadow Minister, the hon. Member for Rhondda (Chris Bryant). He knows me well enough to know that I will naturally write to him and other colleagues on any points that I do not manage to cover in my contribution. I congratulate the hon. Member for Edinburgh East (Sheila Gilmore) on securing the debate. She and other colleagues know that my door is open. She has used that opportunity to come to see me in the past, and I am sure that she will come to see me in the future.

If it is okay with you, Mr Turner, I will not go back over the history of this matter, because the hon. Lady covered it eloquently. I will touch on some of the relevant issues that are around now; obviously, some of them have existed since the system’s inception.

There will be some Members and other people who passionately believe that assessment should not take place. I disagree with them, and I think that the hon. Lady is agreeing with me, from a sedentary position, that assessments should take place; I think that that is her position.

[Sheila Gilmore]

I certainly agree that assessment should take place. I am not sure how, without assessment, we could establish that people were unwell or incapable of work, however we want to define it. The question is really about the process that we use.

[Mike Penning]

I wanted to give the hon. Lady the opportunity to clarify her position. In some cases, face-to-face assessments are what is required, unlike on IB where it was hardly ever face to face.

[Sheila Gilmore]

On the question of face-to-face assessments, one of the interesting points has been that sometimes they are better and sometimes they are not. It depends on the person. One of the things that I have come across in the past year or so is that quite a large number of people have been reassessed on paper rather than face to face, but have been placed in the work-related activity group and later discovered that not all the information was in the paperwork in the first place. I can see that we need both.

[Mike Penning]

As I said, there are some who agree with us that in certain circumstances, face to face is required. I passionately believe that face to face is not required in every case, whether in the WCA or in PIP. We have to make sure that we get it right. There are people who do not think that that should be the case.

[Julie Hilling (Bolton West) (Lab)]

I am very sorry that I have not been able to be part of the debate, because I was taking part in the sanctions debate. On that point, would it be possible to consider face to face if a different decision was due to be made? If someone was going to continue in the support group or in the WRAG, they would not need to be called in for the face-to-face interview, but if a different decision was to be made, that is when a face-to-face interview should take place.

[Mike Penning]

I am not certain that that would work, not least because decisions that had been made would also have to be reversed. The decision must be based on the evidence that is before the decision makers. I agree with many of the things that the shadow Minister has said, but it is crucial that we remember that this is not about diagnosis. The diagnosis has been done by the clinical experts. In response to the shadow Minister’s concern about a drain on NHS doctors, a lot of the assessments are done not by doctors, but by trained clinicians.

Like other hon. Members, as a constituency MP I have had correspondence about the matter, so when I took on this portfolio a couple of months ago I desperately wanted to dig down and look at it. Dr Litchfield’s report came out almost simultaneously with my arrival in post. One of the first things I did was to go off to a tribunal and listen, as a member of the public can do, to two cases being put before the tribunal judges. As I left the building, I said to my officials—I have said this in the House before—“Clearly, we are not getting decisions right.” The first case that I listened to should not have been at the tribunal; we should have sorted it out before. In the second one, interestingly enough, the Department had not seen the evidence until the morning of the hearing. Extra evidence was produced, and the judge had used his autonomy to waive the four-week rule and allow it to be presented.

I have been urgently looking at how we get the right decisions by ATOS professionals being sent to our decision makers. The final decision is made by the Department, not by Atos; Atos makes a recommendation and we look at it. I looked carefully at the quality of the decisions that were coming from our contractor, which in this case was Atos. I have said on the record several times that I was not happy at all about the quality of the decisions. Before I arrived, the Department had been putting pressure on Atos to improve quality, so we were also starting to get an ever-increasing backlog. So many cases that could have been decided through paper assessments were instead being assessed face to face. Even then, people were appealing, and because we were getting the assessments wrong, we were losing the appeals.

We will always lose some appeals, as the Chair of the Work and Pensions Committee, the hon. Member for Aberdeen South (Dame Anne Begg), knows. It is for judges to weigh up what the will of Parliament was in making regulations, and apply that to the case before them. I was keen to make sure that we got this right, because we are talking not only about taxpayers’ money, but about individuals. The shadow Minister described the welfare system as a safety net. For some people, it will be there from birth onwards, and for others it will come into play because of circumstances, events, traumas and illnesses over the course of their lives.

The shadow Minister was quite right to say that there will be things that I will be unable to answer, and other things that I will not be able to discuss because of confidentiality within contractual obligations. Regarding Atos’s decision to exit its contract early, I was pressurised by colleagues from both sides of the House to remove or sack Atos. One of the shadow Minister’s colleagues said that I should sack Atos. The problem with that was that because of the form of the contract, we would almost certainly have had to pay compensation to Atos, and I do not think that anybody inside or outside the House would have wanted us to do that. We have negotiated an early exit for Atos and have arranged for a team to work alongside its management as it continues to do the work while we exit it. I cannot simply turn off the tap, because we would have no capacity. The biggest issue with Atos has been with its management controls, rather than with its front-line decision making.

[Dame Anne Begg]

Under the original time scale, the migration from incapacity benefit to ESA was meant to have been completed by now—I believe the date was the end of March 2014—but a sizeable number of people have yet to be migrated from IB to ESA. The original contract must have worked to the original time scale, so Atos surely was not still contracted to carry out the migration, even though it was contracted to do the reassessment. Surely, an automatic break must have been built into the contract; otherwise, Atos would still have been employed even when there was no work to be done, because it was meant to have been finished by now.

--- Later in debate ---

[Mike Penning]

Clearly, as the Select Committee knows, Atos was already getting into backlogs. That is why I talked about turning off the tap—stopping the reassessments and doing only the new applications, to ensure that we got those right. By doing that, we were allowing people who needed it to get through the system as fast as possible, and we intended to get to those who already had it later, because the backlog was becoming intolerable and unacceptable.

When I made the statement last week, we also issued an invitation to tender. We had already put out an invitation to tender for multiple contractors. We cannot go as fast as we would like with Atos leaving, so we will now be seeking a tender from a single contractor, and within that process there will be the decision to move to multiple contractors. That gives us a great opportunity to make the contract into a better format than we had before. We can deal with capacity issues by making sure that we get the flow correct and take care of the backlogs. Atos is still committed to working on the backlogs as we approach the date of its exit. There are issues around the software that we are using, which is Atos’s software and which we will continue to use. The new contract gives us an opportunity to migrate to a new supplier with the capacity and the skills that we need. We also have an opportunity to learn from Dr Litchfield’s report so that we get the assessments right, particularly when it comes to mental health, which the shadow Minister mentioned.

[Sheila Gilmore]

There clearly is a capacity problem, which has been building up. The Select Committee raised that point back in 2011, when there were problems with potential capacity. Will it be more expensive to take on a new contractor to get the capacity right, or does the Minister feel changes could be made, for example on reassessments, which could keep the cost down, similar to that with Atos?

[Mike Penning]

I think we are going to have to wait for the tenders to come in, but we are asking for a contract of a different sort from that let to Atos in 2008. No Minister coming into government is allowed to see advice from a previous Administration. With hindsight, that is probably right, although I have struggled with it in the three Departments I have been in over the past four years. One difficulty is that I therefore cannot see the assumptions that Atos made, based on the bid, about how it was going to make a profit out of its part of the scheme. I can now see such detail going forward, and there will be assumptions in the contract about what the profit margins will be, but the biggest thing for me will be putting capacity and quality together simultaneously. If we do not get that right, we will end up in the position to which the hon. Lady alluded.

Capacity is important, but—this falls partly within my ministerial portfolio, but not wholly—so is getting individual help to those moved on to the Work programme. Getting that right is really important. I will write to colleagues with more up-to-date figures on where we are on that, but it is crucial that we give confidence to people who want to go into work that they can go into work. Many people think that they cannot work until we give them the confidence and skills to return to the workplace or to enter it for the first time.

Something that I have touched on a couple of times, but will mention again, is the fact that when the Prime Minister asked me to take on my new portfolio, which is very different from how previous Administrations, and indeed the current Government, have previously run things, I asked for responsibility for the Health and Safety Executive. One of the biggest reasons was that I am an ex-firefighter, so I have seen how health and safety can work to make the environment we live in much safer, but I have also all too often seen health and safety being abused and used as an excuse for why something cannot be done, whether in the leisure or commercial sector. I was passionate in thinking that if I could look after health and safety along with my other responsibilities, I could break some of the myths about why people cannot get back into the workplace, or ensure that disabled people already in the workplace did not have to leave. We are currently working on that, and that has gone down particularly well with commerce and a lot of disability groups.

There have been some myths out there about why people cannot work. It is all about confidence. That is why I have been taking the Disability Confident campaign around the country, asking employers to give people an opportunity and to have the confidence to take people on. The larger companies have always been good at that, but small and medium-sized enterprises, which employ more people in this country than all the corporates put together, have some real confidence issues. We have been ensuring that they have as much confidence as possible.

[Mr Adrian Sanders in the Chair]

It has been a real eye-opener for me to be in a position to see Atos coming away from the system and the new contracts being issued. I have tried desperately to ensure that we listen, because no matter what our political colours, I passionately believe that we need to get this right. That is true not only of me—Ministers and Governments come and go—but of all of us, because we must get the right system in place for those who need it. It must be right for the taxpayer and for those who need help.

It has been a pleasure to serve under your chairmanship for about 30 seconds, Mr Sanders. I congratulate the hon. Member for Edinburgh East on her debate.

Question put and agreed to.