Jobcentre Plus

Debate between Nigel Mills and Stephen Timms

Thursday 10th July 2014 Westminster Hall

[Stephen Timms (East Ham) (Lab)]

Like everyone who has spoken in the debate, Mr Amess, I want to say what a pleasure it is to serve under your chairmanship. I thank the Select Committee, and welcome the work that it has done on such an important topic.

It is disappointing, however, that the Government’s response to a very good report has been so negative. Of 24 recommendations only five were agreed to; five were rejected outright and the remaining 14 were partly agreed, although in quite a number of cases it struck me that the amount of agreement was very partial indeed. The Committee is right to affirm the value of a public employment service for unemployed people. Jobcentre Plus has been admired around the world, and we have been reminded, rightly, of the recent conclusion by the National Audit Office that it continues to do an efficient job. I very much concur with that judgment.

Jobcentre Plus does an efficient job. It also does a very important job. My hon. Friend the Member for Edinburgh East (Sheila Gilmore) is absolutely right to draw attention to the links between having employment and having good health. I noticed that the Prince’s Trust recently undertook research on that issue. Martina Milburn, its long-serving chief executive, makes this point:

“Unemployment is proven to cause devastating, long-lasting mental health problems among young people.”

Whether someone is in a job is a very important issue, so the task that Jobcentre Plus has is very important.

I visited Germany last year to look at the way in which youth unemployment was being tackled and visited an office in the town of Wolfsburg, Hanover, where the Volkswagen plant employs 60,000 people. I went into the office, which is jointly run by the local authority and the federal employment service, to talk about how it was supporting unemployed people, and one thing that struck me about it was that above the door it said “Jobcentre”. The people there had chosen to adopt the English term for that establishment, and the reason was that 10 years ago, when the Germans made the big reforms to their welfare system—the Hartz IV reforms—they took inspiration from what had happened in the UK. Jobcentre Plus was quite new at that time. They wanted a name that showed their ambition for a very effective, modern service, and they were inspired by the English system, so they have adopted the term “Jobcentre” for their establishments.

As we have heard, jobcentres in the UK are still doing an efficient job. Nevertheless, I am afraid that something has gone quite badly wrong in recent years. I do not think that anyone else in the world today would be inspired by what they hear is happening in our jobcentres, and the issue of sanctions, which has been highlighted in this report and debate, is a big part of the explanation for what has happened. I agree with the hon. Member for Newton Abbot (Anne Marie Morris) that it is clear that too often sanctioning goes wrong.

Of course, there are a lot of statistics about benefit sanctions. One that interested me was one that I got in a written answer on 25 March 2013 at column 986W of Hansard. I asked what the total amount withheld from jobseeker’s allowance payments as a result of benefit sanctions was, and the answer came back that the benefit withheld from fixed JSA sanctions was, in 2009-10, the year leading up to the general election, £11 million, in 2010-11 £43 million, in 2011-12 £45 million and in 2012-13, up to October 2012 only—in other words, just the first half of 2012-13—£60 million. That suggests that the amount being withheld in benefit sanctions had gone up tenfold up to October 2012, compared with the year leading up to the general election.

It is important to underline the truth that sanctions are an indispensable part of a benefits system designed to promote employment. No one should read into anything that I am saying—or, I think, what anyone else in the debate has said—that we should scrap sanctions, but there is a pertinent question, raised in this report, about whether something has gone quite badly wrong in the way in which they are being applied at the moment.

[Nigel Mills]

I apologise to the right hon. Gentleman, the hon. Member for Aberdeen South (Dame Anne Begg) and you, Mr Amess, because I need to leave for a constituency engagement shortly, but on the point that the right hon. Gentleman raises, will he therefore join me in regretting the fact that when the unions came to give evidence to us in this inquiry, they did not support sanctions having any part in the benefits system?

[Stephen Timms]

In the discussions that I have had with trade union members about this issue, the point has not been put to me that there should not be any sanctions. Sanctions have been part of the benefits system ever since the system was invented; there is nothing new about sanctions. I have not heard a case that sanctions should be entirely scrapped, but I do think that there is justified concern, partly expressed in this debate and certainly expressed by trade unions and others, including citizens advice bureaux and disability organisations, about the way in which the system is working at the moment.

We heard a good deal in the debate, and I was very interested to hear the contributions about what hon. Members have been told by whistleblowers because I have had a similar experience. One of my constituents, who works at a jobcentre, raised with me very similar concerns to the ones that we have heard about what is going on. I was very concerned by that. I forwarded her concerns to the Minister. The Minister responded, for which my constituent and I were grateful, and my constituent subsequently wrote to the Minister directly and copied me into what she said. I will quote from her letter, which said that

“staff at the Jobcentre are actively encouraged to impose benefit sanctions and are threatened with PIPs”—

I was not sure what they were, but I gather from my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) that they are performance improvement programmes—

“if they fail to get certain numbers of people off benefit per week…all too often it is the more vulnerable in society it is affecting, and probably not the customers who are too smart to be caught out by the sanctions. The large increase in people using the food banks is mainly due to the unfair benefit sanctions being imposed upon customers. I know the food bank in Hoxton has actually had to ask the JCP in Hackney to stop making so many referrals to them as they are unable to cope with the numbers”.

My constituent goes on to say that staff

“have never experienced working conditions like they have in the last few years…people who have worked so hard implementing the unpopular policies have been treated in an awful manner.”

My hon. Friend the Member for Edinburgh East raised the concerns that people have repeatedly drawn attention to that staff in jobcentres are being given targets. There have been the odd, well documented examples of where that has been the case, although in those instances Ministers have stepped in to make it absolutely clear that there are no formal targets, but it is the case, as I understand it, that in regular staff appraisals—this was confirmed, I think, in a written parliamentary answer—the number of sanctions that an adviser has issued is one of the bits of data on the table for the appraisal. Staff understand that, understandably and probably rightly, as indicating that they are, in part, being evaluated by how many sanctions they have issued—not whether those sanctions were accurate or appropriate, but whether there are enough of them. I think that it is clear that a culture has been developed in which staff are under pressure to issue more sanctions. My constituent talked about the awful working conditions. Let us be frank: that is part of the background to the industrial action taking place today.

A good deal of the external interest in this report has focused on the question of sanctions. There is no doubt that the dramatic increase both in the number of sanctions and in the amount of money taken off people—the duration of sanctions, which my hon. Friend the Member for Oldham East and Saddleworth also talked about—has been a big factor in the growth of food banks. The hon. Member for Banff and Buchan (Dr Whiteford) is absolutely right to say that no one should hide their head in the sand about that. I had not quite twigged it, but my hon. Friend the Member for Oldham East and Saddleworth made this telling point. Will people who have been sanctioned for a period of months, a year or even three years carry on signing on every fortnight just so that they appear in the claimant count? Of course they will not, and undoubtedly the claimant count is being depressed as a result.

Of course, all these reports, from whistleblowers, charities and food banks, can be and sometimes are dismissed as anecdotal. However, the pretty distressing picture that staff whistleblowers are painting is consistent with what a lot of jobseekers say. A few weeks ago, I was invited by Tesco to visit a new store with its HR director. Through the impressive regeneration model that Tesco has developed in partnership with the Union of Shop, Distributive and Allied Workers, the company had been very careful to recruit and train a large number of staff at the new store who had previously been unemployed. Tesco put them through an eight-week training course before the store opened. I was introduced to four of the staff who had been recruited in that way, and we talked about their experience. I asked them about their experience with Jobcentre Plus, and all four said that the main aim of the jobcentre had seemingly been not to help them but to catch them out and sanction their benefits. I think it is a real tragedy how badly the reputation of Jobcentre Plus has been damaged by the aggressive approach to sanctioning that has been introduced. It will take a lot to repair that damage.

In its briefing for the debate, Crisis told us about somebody called Billy

“who was sanctioned for turning up to a meeting that turned out to be cancelled and then failing to attend another appointment he knew nothing about because the letter arrived six days after the date of the interview”.

We have heard several such stories during the debate. I draw attention to the website “A Selection of Especially Stupid Benefit Sanctions”, which has pages of this stuff:

“You get a job interview. It’s at the same time as your job centre appointment, so you reschedule the job centre. You attend your rearranged appointment and then get a letter saying your benefits will be stopped because going to a job interview isn’t a good enough reason to miss an appointment.”

That one came from the Daily Mail.

“Your gran dies during the night. The next morning your partner calls the job centre and asks if you can come in the following day instead. The centre agrees, and you sign in the next day. Then you get a letter stating that you failed to sign in and would be sanctioned if you don’t reply within seven days. You reply, explaining the situation. The job centre gives you a six-week sanction for not replying.”

That one came from NetMums.

“You get a job that starts in two weeks time. You don’t look for work while you are waiting for the job to start. You’re sanctioned.”

That was from The Guardian.

“You apply for three jobs one week and three jobs the following Sunday and Monday. Because the job centre week starts on a Tuesday it treats this as applying for six jobs in one week and none the following week. You are sanctioned for 13 weeks for failing to apply for three jobs each week.”

That was from the Pontefract and Castleford Express.

“You have a job interview which overruns so you arrive at your job centre appointment 9 minutes late. You get sanctioned for a month.”

That one was from Consumer Action. As I say, there are pages and pages more on the website. Of course, those are anecdotal, but the jobcentre network now has that reputation and it will take a great deal to repair the damage that has been done.

A number of references have been made during the debate to the report that the Government commissioned. It is rather rare for the Opposition to be able to force the Government to do anything, but we were able, because the Government needed legislation quite quickly, to force Ministers to set up the review on sanctions, which was carried out by Matthew Oakley. Like everyone else, I am eagerly awaiting the report, which we thought would be published by the end of May but which has still not been published. I asked the Minister about that in a written answer the other day, and characteristically—of Ministers in the previous Government as well as in this one—the reply came back that it would be published “in due course.” Can the Minister give us any more detail? If she can, it would be welcome.

As we have heard, the Minister appeared to agree in her evidence to the Work and Pensions Committee that there should be a further review to consider not only Work programme or employment programme sanctions, but sanctions more generally. It was a disappointment to everybody that that commitment was not reflected in the Government response to the report, and I hope that the Minister might reaffirm the view that she expressed to the Committee.

It is particularly disappointing, although not surprising, that the Government have rejected recommendation 17 on page 47 of the report about recording the number of people who are signposted to food banks. There is no doubt that the increase in sanctions has played a big part in the remarkable growth of food banks over the past few years. The Committee recommended, as we have heard, that the Department should

“take urgent steps to monitor the extent of financial hardship caused by benefit sanctions, including by collecting, collating and publishing data on the number of claimants ‘signposted’ to food aid by Jobcentres and the reasons for claimants’ need for assistance in these cases.”

The way in which the Government have dealt with the Trussell Trust has been pretty disgraceful. When the Secretary of State was appointed, he rightly took a good deal of pride in announcing that he was lifting a ban on jobcentres referring people to food banks if they were in hardship and did not have enough money to buy food. I was the Minister for employment for a while, and I did not know that there was a ban on referring people to food banks, but apparently there was. The Secretary of State rightly said that that was wrong, and lifted the ban. The problem was that food banks started counting the number of people who were being referred from jobcentres and the reasons why they were being referred, which became far too embarrassing, so the Secretary of State reintroduced the ban on jobcentres referring people to food banks, although he said that it was all right to “signpost” people. I believe that the difference between signposting and referring is that when someone is signposted by a jobcentre to a food bank, they are not allowed to fill in the piece of paper issued by the food bank that states why they are being referred. The former approach enabled the Trussell Trust to collect data on how many people were being referred to food banks because they had been the victim of sanctions, benefit delays or other problems at the jobcentre, and the whole thing became too embarrassing for the Secretary of State so he said that he did not want it to continue.

It is a great shame that the Secretary of State has refused to meet the Trussell Trust and talk about the matter, because it has a number of sensible ideas about how the system could be made to work better, which would not cost the Government anything. The Secretary of State has accused the trust of having a political agenda simply, as far as I can tell, on the basis that it insists on publishing numbers about how many people go to food banks. That is a completely innocuous and public-spirited thing to do, but because the trust refuses to stop publishing that information, the Secretary of State accuses it of having a political agenda and being opposed to welfare reform.

Given that the Secretary of State has not been willing to meet the Trussell Trust, a couple of months ago I asked the Prime Minister if he would be willing to do so. He said that he would, and I am pleased to say that that meeting has taken place and the discussion was constructive and useful. Why on earth the Secretary of State is not willing to meet the trust for a similar discussion is a mystery to me, and I still hope that he might change his mind. I share the despair expressed by my hon. Friend the Member for Airdrie and Shotts (Pamela Nash) about the extent of the reliance on food banks nowadays. The Trussell Trust makes it absolutely clear that it expects the need for food banks to continue. The scale of the dependence—a million people over the past 12 months—and the rate at which it is growing are causing the trust great concern and prompting questions about whether it can cope with the demand.

I want to mention two other points that my hon. Friend the Member for Aberdeen South (Dame Anne Begg) has highlighted as the main recommendations in the report. Recommendation 21 on page 48 argues for

“the formulation of JCP performance indicators which promote and measure sustained job outcomes and better reflect the changing role of JCP consequent on the implementation of universal credit”.

The Committee makes the point—it is often suggested, and I think it is right—that the current measure incentivises behaviour that nobody wants. For example, if somebody goes in and out of claiming benefit—they do a couple of weeks’ work, then go back on benefit because the job fails, then do a couple of weeks’ work somewhere else, then go back on benefit—it makes a big positive contribution to benefit off-flow, because that person is coming off benefit a lot and the fact that they go back on benefit straight away is not picked up in the statistics. Of course nobody would regard that as a success in any meaningful sense of the word. It is certainly not what Ministers want to happen in jobcentres.

The Government’s response to that recommendation says:

“The current JCP performance metrics, focussing on off-flows, make best use of the data currently available to the Department, but do not track people once they leave benefit, as this is not cost-effective.”

That is the bit that I want to query. I do not understand why the Government are suggesting that it is not cost-effective to track what happens to people after they go off benefit, because the Government require Work programme providers to do exactly that. Work programme providers are remunerated entirely on the basis of whether somebody is in sustained work. Clearly, the Department has taken the view that it is cost-effective to require Work programme providers to find out that information, so why is it not cost-effective for Jobcentre Plus to do so? That seems to make no sense, and the Committee is right to highlight it in a recommendation. I hope that the change will be made before too long.

The other recommendation that I will mention was highlighted by the Chair of the Committee, and I agree with it. It is about segmentation. Recommendation 4 on page 44 of the report says that the DWP should

“continue to work to develop a ‘segmentation’ tool, to be conducted by Jobcentre advisers face-to-face with claimants, to allocate claimants to separate work streams according to their distance from the labour market and relative need for intensive employment support.”

I know that it is a long-held view among numerous people, including senior Jobcentre Plus staff, that segmentation is a rather illusory thing—my hon. Friend the Member for Aberdeen South used the term “holy grail”—that everybody would like to be able to do: “We would like to be able to tell how much help a person will need to get back into work, but it is unachievable in practice.” However, like my hon. Friend, I am mystified as to why it can be done in Australia but not in the UK.

I know that that point has been made to Jobcentre Plus staff, who respond by saying that Australia and the UK are different, but they are not that different. I visited Australia last September to, among other things, see how the jobseeker classification instrument worked. Nobody is claiming that it is infallible. In Australia, if someone is placed in one stream and it subsequently turns out that they need a different level of support, they can change. It is not a completely inflexible, wooden instrument, and it is certainly helpful. It means that people are more likely to get the right amount of help than if there were no segmentation. Even the length of time that someone has been out of work, which is easy to establish, is a big indicator of how much help they will need.

Of course, we already have segmentation in the UK. In the Work programme, customers are placed in different payment groups, based not on the kind of segmentation for which the Committee rightly calls but on which benefit they receive—jobseeker’s allowance or employment and support allowance. That does not necessarily tell us anything about how much help someone needs to get back to work, and in practice, as I think is pretty widely recognised, it has proved hopeless.

That is one reason why people a long way from the labour market have been so badly let down by the Work programme, as the National Audit Office pointed out last week. Among claimants of employment and support allowance who spend two years on the Work programme, the latest data suggest that the rate of failure to achieve sustained job outcomes is 93%: only 7% of those attached to the Work programme achieve a sustained job outcome.

In an earlier intervention, I asked my hon. Friend about the Government’s statement, in their response to the report, that their efforts to develop a tool have produced only 70% success. Of course it would be great if we could do better than 70%, but given that it is possible for people to change their stream after they have been streamed initially and that 70% success is certainly better than streaming people simply on the basis of what benefit they have been on, it seems to me that it strengthens the case for the Committee’s argument that it would be a worthwhile thing to do.

It would be the intention of a Labour Government, should one be elected next spring, to implement a segmentation tool as the Select Committee recommends. We would like to see it in place, again as the Committee recommends, in time for the commissioning of the Work programme’s successor. It will be possible, in designing that tool, to draw on the fantastic data that providers have gathered during their experience of the Work programme. There are now numerous rich data sets giving useful evidence about how much help individuals in a variety of circumstances need in order to get into work.

I welcome the report. The Committee has done the House and the cause of employment support a great service by providing it to us. Along with everyone here, I look forward to hearing the Minister’s response.